Introduction
Time Warner is one of the giant media companies globally, and like every dream of any company, it is growing every day. The company had recorded much growth from when it was established. The company did not start as a leading company in the media industry but traces its roots to when it was founded as a tiny form and eventually started taking shape. It has experienced a power shift, but the change came with benefits. Though it has not always been smooth for the company, it has always found its way through the industry and emerged victoriously.
Time Warner traces its roots back to 2000 when it merged with the America Online making it one of the most significant mergers the world had seen (Eisenach& Timothy, 2017). During that time, Time Werner was worth 163 billion dollars while America Online was worth 120 billion dollars. In 2004, the company produced total revenue of more than forty-two billion dollars, an increment of six percent from the last year. The growth was attributed to the company’s massive investments and assets ranging from film studios and cable services. In 2005 Time Werner sold cable packages to over eleven million people globally, which shot the cable revenue by twelve percent. However, customer growth has stagnated over the years due to increasing industry competition. Today, the company is employing new measures to combat the situation, like offering digital phone services to its buyers to address the rising shift of people to advanced technology. The media company is packaging videos for its customers and providing high-speed data to improve customer experience (Malone& Turner, 2010). Although the company experienced losses of nearly forty-five million dollars, it is hoping to get back on track and improve its revenue situation in the coming year. It is worth noting that the company falls at the thirty-second place of fortune companies and is willing to do more to up their rankings.
Time Warner’s business markets, including the company’s data business, have been increasing due to the increasing demand from customers. It has been making a great profit with sales rising by more than six percent. It now serves more than thirteen million customers, a nine percent jump. The company is finding it easy to collect revenue from the data speed sector and is seeking to upgrade the service to even more fast speed. The demand is due to customers shifting from cable packages to internet packages. To keep this customer demand trend, the company has to maintain the high internet speed. The company also has warner media and studios, which constitutes the company’s television series and motion development, production, and programming.
Warner Bros studio has a division, which offers different services like television and animation entertainment. There are also sister assets, including the comic book company and turner networks. Warner news and sports media institutes of the company’s global news and sports networks like CNN, AT&T SportsNet, which encompasses all regional sports channels, and the Turner sports. The company’s sales and distribution are the general overseers of the company’s marketing, content creation, licensing, distribution and sales. Warner Media oversees the company’s domestic channels and is also responsible for the company’s linear and commercial business activities.
The company has several rivals in business-like, it competes with genera; cable and broadcast networks in America and free air to air networks across the globe. Its websites and networks compete for advertising with other print and outdoor display networks. It also competes with other media companies for viewers’ attention and subscription. The company competes with rivals such as Netflix, Startz, and Showtime (Miller, 2001), who are proving to be giants in the industry in recent times. To combat this competitive situation, the company uses different strategies like differentiation and market focusing strategy to achieve full competitive advantage. In the case of differentiation strategy, the film production and network sector are broad and have many audiences. It is the work of the company to use innovative ideas to differentiate itself from its competitors.
Products in the film industry are similar, and it gets common for the audiences because of getting the same content from all media companies. To remain relevant, a company has to package these products differently and give them to the customer differently from rival businesses. Timo warner company recognizes the need to have unique products for their customers for the sake of easing competition. That is why the company embraces innovation and creativity in the various products. The company has taken up different combinations of strategies like cost strategy and differentiation strategy to combat the rising levels of competition. The focusing technique creates room for customer base growth and sales extension for the company by relying more on the most intensive augmentation strategies.
Cost strategy involves lowering costs of accessing products from the company and dropping so that the company’s products are still viewed as quality products from the consumers and the company reducing but still getting enough revenue to run the company. The cost strategy is the primary strategy that Time Warner company uses in various consumer markets. It allows the company to grow its market space by targeting middle-class and low-income earners, which make up the largest class of people accessing the company’s products. Affordability of the Warner company products is critical because most of these customers place high importance on the pricing of the products. The company able to address this situation provides a solid space for keeping up their competitive advantage (Flew& Gilmour, 2003).
Differentiation strategy allows the Time Warner company to emphasize the unique features it has to offer and address the customers’ issues like health issues. The company has been able to succeed in using this strategy because it can study the changing wants of the buyers and, therefore, act. Also, under the company being an old brand in the industry, the company can understand the demands of the changing market through extensive experience. The company’s logo differentiates the company from its rivals because it creates a strong image in the buyer’s mind. Although the company changes the logo from time to time, the message has remained the same to differentiate. These are some of the policies that Time Warner uses to curb the rising menace of competition.
Significant areas that influence the decisions made by the Warner company include the finance sector because it determines the business alignment with the external markets and helps the company in strategic planning formulation of policies and how they are to be implemented, and most importantly, in decision making. Time Warner company is focused on applying strategic planning in their company. It is essential because it is all about resource allocation and would not be necessary if the resources were not enough, which explains why financial planning and performance play a significant role in the company’s decision-making. Different departments in the company require more investments like the marketing department, and therefore the company can monitor their spending through their decisions.
Decisions making processes relating to mergers like that of Time Warner are among the vital strategic decisions that the company has to make because if a single decision is made in a rush with no critical thinking placed on it, then it could lead to massive fallout and failures within the company. Development of behavioral strategy in decision making because of the advancements it brings to the merging situation. Being a merger, Timo Warner comprises essential players in the industry who are critical people in the external market and have a role in decision-making (Kauser et al. 2020). The behavioral strategy is primarily influenced by sociological processes that influence human interaction, influencing how decisions are made in the company.
Technology has dramatically changed at Time Warner company because of innovations in the industry. The company has developed video service apps delivered through television sets. The company has partnered with T.V. companies like Samsung and L.G. to make this a success. It became the first company to deliver multichannel video through the internet to fill the gap of the increasing usage of mobile applications. The customers can get a one-of-a-kind experience of the multichannel video. The company also delivered unique digital cable content, which the buyers have accepted.
These technology changes were bound to happen because Tech communications are no longer based on worn-out equipment like the copper wire but can be connected through data and the internet and videos transmitted over fiber optics (Flew, T, & Gilmour, 2003). The company faces lots of challenges involving these technology changes. Data security is a concern at Time Warner company because of the changes. With huge chunks of data being stored electronically, it poses the risk of breach. If this data is gotten by other businesses and used, it may pose unhealthy risks to the company. Time Warner created audience management systems to achieve digital marketing platforms, but this has posed the problem of maintaining third-party technologies, updating when new versions arise, and the need to keep educating the employees on multiple versions the company adopts to keep up with recent trends.
Reference
Kumar, R. Analysis of wealth-Time Warner Inc. Strategic Financial Management Casebook. (523-559 ). DOI:10.1016/B978-0-12-805475-8.00020-3
Malone, D., & Turner, J. (2010). The merger of AOL and Time Warner: A case study. Journal of the International Academy for Case Study, 16(7), me Warner A_case_study https://www.researchgate.net/publication/291711379_The_merger_of_AOL_and_Ti
Eisenach, A, J., &Timothy. (2017). Effects of the AT & T -Time Warner Transactions on competition in Premium Channels Industry. White Paper for the Us Department of Justice
Miller, E, S. (2001). The Impact of Technologies Change on Market Power and Market Failures in Telecommunications. Journal of Economic Issues, 35(2). https://www.jstor.org/stable/4227670
Flew, T., & Gilmour, C. J. (2003). A tale of two synergies: an institutional analysis of the expansionary strategies of News Corporation and AOL-Time Warner. Australia and New Zealand Communication Association (ANZCA03): Designing Communication for Diversity. https://core.ac.uk/download/pdf/10872703.pdf
Kauser, S., Gordon., Nadia, K., Papamichail, &Reddy, C. (2020). Analysis and Improvement of M & A Decision Making Process In The High Tech-Sector. Journal on Behavioral Strategy Perspective,1(39) https://www.researchgate.net/publication/341735836
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