RodgersCompany Analysis
CompanyOverview
Accordingto various reports, Rogers Communication is arguably one of theleading diversified businesses in the Canadian communication andmedia sector that are owned by the public. Most of the resultsreported are from operations in four major segments of the companythese are wireless, media, business solutions and cable segments.
Thecompany provides a broad range of services to both individualconsumers and businesses these include wireless voice and datacommunications, cable television, data networking services,high-speed Internet, and cable telephony (Rogers.com, 2016). Thecompany also provide some services to both radio and televisionbroadcasting such as over-the-air and “over-the-top” (OTT)programming through the Internet and mobile applications,multi-platform shopping, trade publications, digital media, consumermagazines, entertainment and sports media.
Mostof the company’s operations, as well as the sales, are in Canada.The company boasts of having a diversified, highly skilled, talentedworkforce of more than 26,000 workers. The headquarters of thecompany is in Toronto, Ontario and it also has some offices spreadacross Canada.
TheVision and Strategy of the Company
Rogers’svision is to contribute to the community, economy and society in ameaningful way. The hierarchy of the goals in this organization hasthe following goals and objectives of departments, strategicobjectives, the organizational vision, and mission. The vision of thecompany is the basis of the company’s hierarchy of goals, and thevision has been at one time described as a goal that is highlyinspiring, overarching and also a long-term goal (Rogers.com, 2016).
Thevision of this company states the relationship of the company’score spirit with the company’s sustainable operation, and it alsoacts as a compass to point the direction that the company wishes togo. Quite literally, the company has its vision at the point of itsstrong corporate citizenship, that is, Corporate SocialResponsibility (CSR).
Inthe company’s website, the Rogers Company expects itself to be anexcellent organization that will contribute to the welfare of theiremployees, shareholders, customers and even their neighborhoods inthe communities (HKIB,2012).The company is working on ways to be a better citizen and model inthe business world. The company also believes that they cannot beexempted from learning new strategies and growing their corporatesocial responsibilities besides business activities. Therefore, thecompany has kept on building and reinforcing on their CSR practicesand also adopting more rigorous and systematic strategies in carryingout their CSR. Furthermore, the company also holds a strong view thatthe starting point of CSR also lies in doing what they have alwaysdone best, that is, increasing the great value that they add to theircustomers’ lives through their great variety of products andservices.
Atthe moment, the key Corporate Social Responsibility priorities (CSR)of Rogers Company are product stewardship, worker relations,transparency of the customer, community investment, supply chainethics and climate change. Although the vision of Rogers Company canseem to be a far-away and a sort of unreachable wish that will likelytake a very long time to be accomplished, it is, not entirely true asthe vision statement can be as simple as it is, when the vision ofthe company equals the Corporate Social Responsibility (CSR). It islikely at some point that the company may find it long and difficultto complete their social responsibility that will serve to satisfyall individuals in the communities (Alshafai,Falenchuk, & Cusimano, 2015).It is highly beneficial that the company is conscious of the socialresponsibility to contribute and give feedback to the community,society and economy in an honest and meaningful way.
PESTLEAnalysis for Rogers Company
Thisanalysis is the analytic framework that is used by organizations toexamine the external macro environment. The acronym (PESTLE) standsfor Political, Economic Socio-cultural, Technological, Legal andEnvironmental factors that can affect the business climate of anorganization (50MINUTES.COM.,Minutes, Cadiat, & Probert, 2015).
Thepolitical factors that can affect the business environment of anorganization include the effects of laws, the policy decisions thataffect the way business is done and taxes on businesses. (Analyst,2015). For instance, the 2001 Act on Anti-terrorism, Crime, andSecurity sets certain limits on air schedule and passenger flights inCanada, United Kingdom and the surrounding regions (CombatingTerrorism Center, 2015). Also, the sanctions on anti-terrorism forcedthe company to adhere strictly to the laws for it to maintain itsBrand image, consumer confidence, and profits.
Economicfactors that play a role in the company’s business environmentinclude the credit crunch, the weak performance of the currencyagainst major currencies such as the dollar, and the Euro has led toa decrease in the company profits. The crisis in Europe also resultedin a great decrease in company spending lose of jobs, and a reducedspending by the consumer (Coche,Nyholm, & Petre, 2011).
AlthoughRogers Company has been reputed as the leading provider of servicesin the media and communications sector, a great number of people inCanada are over 45 years of age. Increased rates of unemployment havealso resulted in a decline in the number of internet and dataconsumers (Asad,n.d.).
Technologicalfactors affecting the company’s business environment are quite afew. Technologically, Rogers Company is yet to experience a greatchallenge in its field. The company has continually innovated newways and strategies in keeping up with the changing technologicalenvironment (Rees,2011).The company’s climate has also faced challenges with emergingenvironmental factors. Environmental factors such as the governmentlegislation on energy consumption and noise pollution have led to newdevelopment and adoption of new strategies in the media andcommunications sector (Powellset al., 2015).
TheExternal Analysis- Macro-environment trends
Atthe moment, Rogers Company is competing with major companies such asTELUS, Bell Canada, and Shaw Communications Company. There are alsonew entries in the sector that are providing the same services andproducts as Rogers but at relatively lower prices. Rogers Company,however, has an upper hand since it is currently the only companythat utilizes both the GSM and HSPA technology (Powellset al., 2015).
Anotheradvantage that the company has over the other companies is that itoperates in three areas. The first area is Wireless this includesthe wireless and data communications services. Rogers Company is alsothe largest wireless provider in the country. The second area isCable. Rogers Company is at the moment one of Canada’s leadingprovider of cable television services and also a provider ofhigh-speed internet access, video streaming, and telephony service.
Thelast one is media. Media includes the radio and televisionbroadcasting, magazines and trade publications, sports entertainmentand televised shopping. Media is the main player in the company’sdistribution channels, which is composed of more than 3,500Rogers-owned, dealers and retailing outlets. The company alsoprovides valuable customer care services to its customers (Lam,2014).The goal of the company is to increase its subscribers and become thebest media and communications provider. According to various reports,there was an average of 70 subscribers out of 100 people in 2010 ascompared to 25 subscribers per 100 people in 2000. Also, during therecession, the media and communications industry is one of thesectors that were able to get through the recession and make profits.Therefore, the media and communications industry is one that wherebythe consumers go first, this means that the consumer can decide tocut their spending on other goods and services by comparing theservices provided by different companies. Thus, if Rogers has anestablished brand image, then it is hard for new entrants to get aplace in the market share.
ForRogers to overcome the challenges, it should make use of the overalllow-cost provider strategy. The company should put in place thisstrategy to solve its business and financial issues. This strategyhas various benefits, including customer satisfaction, strengtheningof the company’s market position and the ability of the company tomove towards its competitor. The company can also include thosefeatures and services in packages that are important to its consumers(Koumparoulis,2012).The company would also lower the prices for its products andservices, and there will be a drop in the number of rivals as well asa more accessible market which would, in turn, lead to an increase inthe company’s sales and revenue. By adopting these strategies, thecompany will have completed its mission strategy of adding greatervalue to the lives of its consumers by providing new and readilyavailable products and services.
Porters5 Forces
Thefive forces analysis brings into perspective the assumption of thecritical factors determining a firm’s competitive aspect of power.These types of power involve both the supply and the buyer power. However, amidst all these powers rivalry in competition and threatsof newer entrants and substitution set in.
Canadautilizes the wireless service industry as its highest profit-earningsector in the globe. Lynch prioritizes this industry as the leaderregarding profitability among the first world nations (Arline,2015).The leading three carriers attain on average a profit ratio that iscalculable as revenue by the income before tax and depreciation. Theyregistered almost fifty percent of the first world nation’s averageof about thirty percent.
Onthe other hand, the average margin of America was above thirtypercent as the second nearest nation was Italy, which attained aboveforty percent on average. The perfect measure of the performance ofthe industry shows that Canada comes second behind the first greatestpaid across the globe of fifty-three countries. The mean amount comesto above sixty dollars unlike that of other nations which areslightly above forty US dollars. This is the section that willutilize the Porter’s 5 Forces as a model to look into the causesoutside the lucrative industry of Canada.
Rivalry
Theaspect of rivalries across the wireless industry is quite moderate.As per the top three carriers across the nation, they captured up toclose to a hundred percent as per the market ratings while each isranging between thirty and forty percent (Encyclopediaof Management,2012).From this explanation, it is evidently very high regarding theconcentration of the industry that makes it lesser competitive asreflected by the high profits across the industry. Additionally, thelevel of growth in the market has seen a strong rate of above fifteenpercent in the past decades. Organizations keep multiplying throughthe expansion of the market this is possible since there are lesserfights amongst each other’s share of the market.
Aparticularly overarching issue pertains to the rise in the rivalryespecially due to the nature of differentiation of airtime and otheressential services. These services include identifying callers andvoice mailing. The data bundle services are quite different as perthe speed of downloading. However, speed can be altered based onseveral other factors like the type of handset, geography anddifferent conditions of the environment (Fung,2014).Network congestion too contributes to this issue.
Duringthe study of up to three major carriers in the region, the websitesreflect very similar data rates. On the other hand, the individualspresent can create adverts of higher level speeds that helps the firmto pull closer the subscribers of the network. Therefore, this turnsup into the absence of differentiation. Carrier services and voiceservices will be the major ones to be affected especially seen inadverts and other brands brought into use.
Becausecompanies buy post-pay acquisitions, they are likely to keep themunder a contract of about one up to three years. Competition to getnewer acquisitions has been so great that competitors seek to bringclose promotions and create bigger expenses in the market. Thepresent market maintains the possibility of growth, increase andrivalry for many reasons (Fitzpatrick,Nguyen, & Cayan, 2015).
Initially,the rate of inclusion has risen as seen by the number of users whoapply the concept for the first time that keeps shrinking. Peoplehave grown lesser resistant to using their mobile phones. The otherreason in the industry includes the reason for higher competitionthat facilitates the influx of newer entrants as seen in the pastdecade auctions of the spectrum (Iles& Zhu, 2012).
Thesefactors have all contributed to the rise in consumption and evenretaining of customers. They reflect recognition of the desire tocome up with the longer term relations, especially at the currenttime ensuring that the subscribers are still loyal even in futureespecially seen by the newer entry and arrivals that raise the ratesof penetration that soar higher now (Koumparoulis,2012).
Threatsof entry
Thisindustry has a moderate threat regarding entry. Capital expenditureneeds to be shared through network infrastructure brought togetherwith the restrictions on non-resident ownership. This alone causes abig financial barrier towards the entry of newer entrants. The rulesof the government involve the restriction into the opportunities ofnewer entrants towards the competition present in the market. This ismade possible through the acquisition of spectrums through auctioningoff the competition processes that appears sparingly (Lam,2014).
Onthe other hand, the government has chosen to provide for the lowerbarriers towards the entry into the industry resulting in the threatof entering the industry through its rise from low levels to evenmoderate. High amounts of capital expenditures need to be builtthrough facilitating the wireless network. Finance has since been thebiggest threat and barrier to market entry. For competition tothrive, big networks should be constructed. Potential risks areamongst longer payback periods and obsolete technologies because ofthe incumbency saw in digging into the latest technology ("Porter`sFive Forces: Assessing the Balance of Power in a Business Situation,"2016).
MobileVirtual Network Operators are averted towards the obstacle even ifthey depend on the incumbency controlling the modern facilities andanother spectrum. These incumbent populations rely on the sunk costadvantage that is seen through networks that have been built. Theinvestment will then be recouped regarding revenues from othersubscriber bases.
Thesecret towards compounding the barriers include bringing inrestrictions on foreign ownership. The law calls for up to eightypercent of the voting shares in the telecommunication carrier. Thegovernment is presently reviewing them, though. Another rule is thatthe firm must get access to the spectrum (Rees,2011).This is made possible through licensing that cost dearly and adds tothe burden of the organizations financially before getting returnsfrom subscribers. The government has brought into several perspectiveregulations that are lower than the barriers set. The entry threatsare moderate while the governmental actions are intentional towardslowering the barriers and encouraging the entering of new entrants.
Powerof suppliers
Theirpower is moderate too. The bigger suppliers are amongst networkequipment provision, handset manufacturing, and the government andprofessional employees. Relatively, inadequate networking equipmentresults in this industry highly dominated by larger players. Lowcompetition levels cause pressure amongst suppliers because there isan ability to negotiate stronger terms through wireless carriers(Powellset al., 2015).
Themanufacturers keep positions of power amongst the operators.Operators seek to look into reducing the cost of purchasing handsetsthis arises from the little size in comparison with other operatorsin The US. The Canadian firms acquire handsets produced in massesthrough large operations and payment of more to buy phones. Thehigher costs of the acquisition include handset subsidies provided toattract newer customers. These manufacturers of handsets offercarriers in the globe through operating in the market of Canada(Powellset al., 2015).
Suchcarriers rely on the manufacturers to provide the newest gadgets thatare pleasant to customers who get themselves in negotiation withmanufacturers. Apple, for example, can demand a carrier to sell adevice through subsidy programs to potential clients. Newer devices,on the other hand, can lead the manufacturers into harder positions.Manufacturers depend on carriers to distribute the handsets who yieldconsiderable power.
Powerof buyers
Themobile industry has registered the buyers’ power as low. Theindustry is full of barriers that switch most customers into longerterm contracts through subsidies and needs for incentives to propelrenewals. The other competitors seek to match their prices throughreduction of incentives to clients. These customers offer up to sixtydollars on average per month through negotiation power in the marketto which they subscribe through health potential to grow (Rees,2011).
Customerscould have the incentives to change if contracts have ended upunhappy with services of customers. However, the substitution wasreduced since a person was expected to keep their loyalty even withchanges of providers. The power of the buyer is lower than the marketexpansion over the year.
Threatof subsidies
Thesesubstitutes rely on the functioning of technological creationimplying that their threat is moderate. Wireless operators improvethe utilization of opportunities such as new technology. Throughextensive networks created, the wireless operators could finallybegin to compete with others and their municipalities ("Porter`sFive Forces: Assessing the Balance of Power in a Business Situation",2016).Wireless operators can shift into higher levels of the presentcapital expenditure. Technology also helps the non-operational firmsthat enter the market as experts.
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