Viacom Strategic Analysis

ViacomStrategic Analysis

Table ofContents

Executive Summary 4

II. VISION AND MISSION STATEMENTS 6

III. EXTERNAL ENVIRONMENTAL ANALYSIS 6

b. Social, Cultural and Demographic Factors 7

c. Political, Governmental and Legal Factors 7

d. Technological Factors 8

IV. INDUSTRY ANALYSIS 9

Porter’s Five Forces Model 9

V. INTERNAL ENVIRONMENT ANALYSIS 13

A. Organizational Culture 13

B. Functional Capabilities 14

C. Management 14

D. Planning 14

E. Staffing 14

F. Control 15

G. Marketing 15

I. Production / Operations 18

J. Research and Development 19

K. Information Technology 20

L. Strengths and Weaknesses 21

M. Generic Strategies Used 21

VI. DESCRIPTION OF STRATEGY 21

A. Product Line 22

B. Distribution Policies and Channels 22

C. Promotion 22

D. Pricing 23

E. Value Chain 24

VII. COMPETITIVE ANALYSIS 24

i. Competitive Situation 24

Table Four: Competitive Analysis 24

ii. Competitive Environment 25

Significance of Imports 25

iii. Competition from outside the industry 25

iv. Demand Analysis 26

v. Changes in Market Structure 26

vi. Constraints 26

vii. Buyer Behavior Characteristics 27

VIII. ANALYSIS OF STRATEGY 27

A. Opportunities and Threats 27

B. of the Key Opportunities and Threats 29

C. Balanced Scorecard 30

D. Identifying Strategic Alternatives 31

E. Alternatives 31

IX. IMPLEMENTING YOUR SUGGESTED STRATEGIES 32

A. Organizational Structure 32

B. Human Resource Policies 32

C. Information Technology 32

D. Challenges in Implementation of the Changes 33

ViacomStrategic Analysis

Executive Summary

Viacom Inc is an American Company that deals with cinema and cabletelevision. It is a global entertainment company that connects to theindividuals via television programs, short-form video, motionpictures, games, social media and entertainment content. It conductsits operations on two primary segments, the media networks, andfilmed entertainment (Kumar, 2012). Media Networks providesentertainment products to the consumers. Further, it has the mandateof acquiring and distributing programming to audiences in multipleplatforms. The company, founded by Sumner Redstone in the year 2005has its headquarters in New York (Tudor, &amp Meehan, 2013). Thecompany has witnessed significant growth from the time of itsformation. Through the operations conducted in over one hundred andsixty countries, it has been able to connect with audiences throughproducts they offer to the market (Gershon, &amp Suri, 2004). At theFilmed Entertainment segment, the organization produces, acquires,finances and distributes the motion pictures under ParamountClassics, Paramount Vintage, Insurge Pictures, Nickelodeon Moviesbrands and MTV films (Steinbach, 2014). Paramount Pictures producesand distributes filmed entertainment shows and television shows(Carr, Muthusamy, &amp Owens, 2012). The growth of the company inthe recent years can be attributed to some of the partnerships theyhave made with other organizations. For example, it launched a globalpartnership with SnapChat. The team of leaders responsible for thesuccess of the organization includes Philippe Pierre Dauman, who isthe Executive Chairman, President, and Chief Executive Officer.Thomas Dooley is the Chief Operating Officer, Wade Davis, ChiefFinancial Officer, Michael Fricklas, is the General Counsel and ScottMills is the Chief Administrative Officer and Executive VicePresident. The company has established itself in the industry throughthe acquisition of various firms such as British broadcaster Channel5 in the year 2014.

The paper entails a strategic analysis of the organization. Variousaspects of the company would be analyzed as a way of providing abroader understanding on the milestones achieved by the organization.The highlights an analysis of the organization’s vision and missionstatement. Further, an external audit will be conducted where issuessuch as threats and opportunities that exist for the firm. Further,the effect of the external factors on the operational activities ofthe organization. Focus will be on how the factors have affected thedemand patterns, nature of products and services offered, businessesacquired and the marketing strategies of the organization. Next, thepaper will conduct an industry analysis where factors such as thehistorical trends within the past ten years would be analyzed.Porter’s Five Forces model will be used when it comes to conductingthe analysis. Strategies employed by the organization would beexamined that makes it stand out when it comes to efficientlyconducting its business activities. An environmental analysis of theorganization will further be conducted. Under the section, theorganizational cultures, functional capabilities, management,marketing, financial standing, strengths, and weaknesses will beperformed. The paper will further do a competitive analysis of theorganization, and a corresponding analysis of the strategies employedby the company to attain the goals of the organization will beperformed. Finally, there would be a recommendation of strategiesthat aims to improve the manner in which the organization conductsits operations. The recommendation will be followed by an elaborationof how to implement the strategies that have been suggested for theattainment of goals that have been set by the company.

  1. VISION AND MISSION STATEMENTS

Viacom’s goal is to be the world’s leading, brandedentertainment company across television, motion pictures, and digitalmedia platforms. We focus on our consumers, enhancing our existingbrands, developing new brands and executing on our multiplatformstrategy to reach this objective and sustain growth. By capitalizingon our creative strengths and deepening our relationships withaudiences, advertisers, distribution affiliates, talent, andlicensees, Viacom is positioned to achieve continued or greaterglobal success”.

  1. EXTERNAL ENVIRONMENTAL ANALYSIS
  1. Economic Factors

Various economic factors have a crucial role to play in the strategicmanagement of Viacom. The fundamental variables that have an effecton the operation of Viacom are the inflation rates, tax rates, fiscalpolicies and the interest rates. The inflation rate has an impact onViacom as it dictates some wages, workers would demand from theorganization (Xu, 2014). Particularly, a high inflation would meanthat the employees demand high salaries, a move that affects theprofits of the organization. Interest rates, on the other hand,dictate the ability of the organization to borrow from the banks.High-interest rates would mean that Viacom has to brace for a highcost of borrowing by Viacom Company unlike when it comes tolow-income interest rates. Further, the tax levied by the governmentimpacts on the overall profits realized by the organization. If thegovernment were to levy high taxes, it would mean that Viacom has toincur high costs to meet the tax demands. Fiscal policies introducedby the government have an effect on consumer’s ability to purchasecommodities (Hansen, 2013). Particularly, if the government were tolevy high taxes on goods, it would mean that the capacity to purchasethem becomes difficult. After the global recession defined by highinflation rates, the company has survived and is recovering.Strategies have been laid that seek to improve the state of theorganization when it comes to doing business.

  1. Social, Cultural and Demographic Factors

Socio-cultural factors have had a profound effect on the overalloperation of activities at Viacom. The company operates in anentertainment industry negating the need to come up with productsthat appeal to the customers. The first factor that affects themanner in which the organization is the age distribution of thecustomers. Various films and television show to appeal to differentcustomers based on the particular age groups. The company has themandate of ensuring that the content they release to the marketresponds to the particular age group (Yao, 2012). Such a strategy hasresulted in the company coming up with shows that appeal to children,young adults, adults and the senior citizens. Next is the concept ofrace. It is vital that Viacom is sensitive to the needs of thecustomers by ensuring that they release content that is not perceivedas being discriminatory. The shows released for the audiences must beappealing to all who have the opportunity to watch. Viacom has takenthe initiative of ensuring that they publish content that appeals toall races and is not determined to be discriminatory (Yao, 2012). Thesocio-cultural and demographic factors are crucial when it comes toViacom introducing their strategies. The company has to ensure thatit responds to the needs of all its customers based on theirdemographics. The entertainment content released must correspond tothe individual requirements of the customers.

  1. Political, Governmental and Legal Factors

Viacom has the mandate of ensuring that they operate by the Federaland State laws that are in existence. The first factor that affectsthe strategic decisions at Viacom is the government regulations. Forexample, there is the aspect of content released by the company to bewatched by those of different age groups. Notably, children under theage of eighteen are prohibited from watching particular televisionshows. In making decisions, the company has the mandate of ensuringthey factor the regulations that have been set in place by thegovernment. Further, political stability is an essential factor whenit comes to strategic decision-making. Fortunately, Viacom operatesin an environment that can be considered as stable politically(Gershon, &amp Suri, 2004). However, it still is crucial for theorganization to set mechanisms that prepare it for any eventualities.Finally, there is the aspect of labor legislations. The manner inwhich Viacom treats its employees must be in line with theregulations set by the government regarding the labor laws. Failureto operate within such auspices may result in restrictions beinglevied on the organization affecting its overall operations,

  1. Technological Factors

Viacom Inc. has the mandate of ensuring they comply with thetechnological changes that are being witnessed in the industry. Thecompany offers entertainment content to consumers and other mediaproducts as well. Because of the same, it becomes mandatory that theyconform to factors that will put them at the edge when it comes totechnological compliance. The first factor that is of significance isexpenditure on research and development. The company must takemeasures to invest in research and development when it comes to theoverall concept of technological advancements. Further, it is crucialthat it focuses on technological efforts that make it stand out. Forexample, the content released to the consumers must be of highquality. The quality can be guaranteed by the nature of thetechnology involved when it comes to the production of the particularcontent. Viacom must ensure that they are at par with their primarycompetitors by making sure that they use the technology that issimilar or better than that used by its competitors (Gershon, &ampSuri, 2004).

  1. INDUSTRY ANALYSIS

Porter’s Five Forces Model

Viacom operates in an environment where it has to deal with the needto compete with other players in the industry. Various factors affectthe manner in which activities are conducted. Porter’s Five ForcesModel is used to elaborate the factors that influence the manner inwhich operations are conducted. Through the analysis of Porter’sFive Forces model, it is evident that the film and TV entertainmentsegment fits perfectly to the industry.

  1. Competitive Rivalry

The strongest of the forces that play a crucial role is the aspectof competitive rivalry. Viacom Inc faces competition from variousfirms such as Time Warner Inc and The Walt Disney Company. Further,there is competition from companies such as NBCUniversal. Viacom Inchas the mandate of ensuring they come up with a strategy that makesit stand out when it comes to the overall manner in which theyconduct activities. The widespread competition it faces from thefirms negates the need to introduce a strategy that gives it acompetitive advantage. The companies make up to 80% of the industrywith firms such as Time Warner capturing 9.8% of the overall marketshare. It is mandatory that the organization understands the natureof competitive rivalry that is in existence so that they learn how toachieve the highest profits despite the competitive rivalry that iseminent. Growth within the industry depends on how each of the firmsconducts the business activities. Particularly, there is the aspectof acquisitions and advertising expenses. Viacom must come up withways through which they can neutralize the competition that existsfrom the other. Ways to which such a move can be attained ispartnering with other firms so that they can streamline theirprograms for customers at a lower price (Gershon, &amp Suri, 2004).Through the same, it would be possible to achieve competitiveadvantage over the companies.

  1. Threat of New Entrants

The threat of new entrants is the other factor that plays a crucialrole when it comes to the determination of growth in the industry.There is a continuing demand for media streaming sites. Because ofthe same, firms have had an interest in joining the industry. Viacommust ensure that they come up with ways through which they can securethe streaming rights. Companies such as Time Warner Inc took aninitiative of obtaining the licensing agreements with suppliers suchas Netflix and Amazon. Viacom should strive to ensure such rights sothat they can block away entrants into the industry (Alexander, Havercome, &amp Mujtaba, 2015). The decision to secure the licensingagreements would mean that the company has the benefit of earningrevenue from subscribers. Through the same, it would be possible forthe organization to witness growth in the manner in which theyconduct operations. Further, through revenue earned from other mediaproviders, Viacom would be well placed in eliminating opportunitiesfor advertising revenue gained through the use of TV andentertainment content released to the public. Viacom has to factor inthe issue of firms such as Netflix and Amazon joining the industry.The move by the organizations to start offering such services meansthat Viacom has to deal with the competition that emanates from theactivities they conduct (Xu, 2014). A strategy that can be employedby the company includes increasing the cost of production. Throughthe same, it would be possible to eliminate entry of other firms.Such a measure would be advantageous to Viacom since they have todeal with minimum competition.

  1. Threat of Substitutes

Another factor to be considered is the threat of substitutes.Currently, with the increases in technological advances, there hasbeen a growing number of media that is available. Most of thecompetitors and entrants also serve as substitutes. The same arisesdue to the economies they create via the mix of the delivery channel.The existence of the substitutes means that the consumers have analternative when it comes to the services they will seek. Viacom hasthe mandate of ensuring they find ways through which they canneutralize the introduction of substitutes. Other cases ofsubstitutes that are eminent are the ability to access entertainmentcontent through the internet. Also, consumers have the option ofaccessing films through the web. It is essential that Viacomconsiders such factors when it comes to strategic decision-making.Through the same, it would be possible to ensure they remain relevantto the market and continue to realize high sales regarding profits.The other substitute that may have a significant impact on the mannerin which Viacom operates is the increase in the use of theater. Mostconsumers are opting to go watching films in theaters compared toaccessing content through television programs. The increase inavailability of theaters makes them the most appropriate forcustomers. The growth in popularity of films shown in the theatershas made many consumers resort to their use. Consumers perceivewatching films through theaters as appealing compared to when itcomes to the use of TV programming. Such is a factor that has to beconsidered by the company when it comes to making decisions.

  1. Bargaining Power of Customers

The bargaining of the customers in the media and entertainmentindustry is moderate. Consumers have the power to choose on wherethey would spend their finances. Further, customers have theauthority to choose from the different subscription networks andfilms to watch. Because of the same, there is a high chance ofcreation of an enormous impact on the ratings that affect theadvertising expenditure. Viacom must ensure that they offer customersthe best quality services especially when it comes to the nature offilms and television shows that are showcased. Customer’sbargaining power enters into play in a state where the organizationdoes not produce the high-quality products. Viacom needs to realizethe importance of providing quality services to the consumersespecially regarding the TV films and entertainment content released. Viacom has come to determine that the satisfaction of the customerneeds is a significant factor as it dictates the number of clientswho end up subscribing to their services. The manner in which Viacomdelivers content to the customer would dictate how many of them wouldopt to subscribe for their services. In forming part of theorganization’s strategy, it is crucial that the organizationunderstands what appeals most to the customers. Viacom furtherrecognizes that the ability to efficiently meet the standards desiredby the customers will make it possible for them to remaincompetitive. Contrary to the same, if it turns out that theorganization is unable to address the individual concerns of thecustomers, it could result in it making losses since services aresought elsewhere.

  1. Bargaining Power of Suppliers

Finally, there is the aspect of bargaining power of suppliers. Viacomoperates with different suppliers in the industry. Notably, in theentertainment and filming industry, suppliers include celebrities,schools, performers, creative artists and IP licensing. The suppliershave a high degree of control when it comes to the manner in whichViacom as an organization operates. Particularly, there is theconcept of the cost of services they would demand to be paid by thecompany. If the suppliers were to charge highly, such a move wouldsignificantly affect the returns earned by Viacom. It is essentialthat Viacom takes control of the suppliers. They can do so byensuring that the sign up to the best services offered by thesuppliers. The nature of services provided by the suppliers woulddictate the type of content that is released to the audience. Viacomcan come up with a strategy that seeks to subject the suppliers tooffer the best quality services as a way of ensuring that theymaintain the clientele base. Through such means, it would be possiblefor the organization to take control of the suppliers in theindustry. The ability to influence the suppliers means that theycontrol how activities are conducted in the industry. A highbargaining power of suppliers means that they dictate how operationsare carried out. It is for the same reason that Viacom must takemeasures that seek to give it the opportunity to control thesuppliers in the market.

  1. INTERNAL ENVIRONMENT ANALYSIS
  1. Organizational Culture

Viacom has taken the initiative of making the employees the priorityin all that they decide to undertake as an organization. The patternof behavior in the organization is that the employees be treated withthe highest esteem considering the nature of roles they play. Viacomattributes the success of the organization to the nature of employeesthat operate. The employees have been described as a team ofindividuals who are creative thinkers, doers, and dreamers who playthe crucial role when it comes to propelling the organization togreater heights. The organization further acknowledges the fact thatits employees have been fundamental when it comes to making it apremier media and entertainment company across the United States andthe globe at large.

The organizational culture attribute to Viacom is the need to havethe rest of the team members embrace global diversity in all formswhile seeking to maintain the exclusive workforce. Respect foremployees at Viacom is extended towards ensuring that the culturesand values held by each of the employees are respected. Through thesame, the organization has been able to attain the goals that it hasset because its employees are motivated to conduct perform the dutiesassigned to them in a diligent manner. Also, Viacom believes that thecreative culture they have developed in the organization is crucialtowards the attainment of excellence in all that the organizationdecides to venture. The organizational culture that has beenformulated in the organization has been essential when it comes toensuring that the firm achieves the goals that it has set. Theculture has impacted on the strategic decisions that have been madeby the organization as it has to consider the opinion of theemployees and what works best for them before implementing the same.

  1. Functional Capabilities

The functional model of any given organization is fundamental as itdetermines the ability of the organization to achieve the goals thatit has set. Companies strive to fill the gap between the strategythat is employed and how to execute it. The functional capabilitiesare crucial particularly as it can serve as the source of expertisefor the organization. Viacom stands out in the overall manner inwhich the structures within the organization have been set. It hastried to differentiate itself when it comes to the manner in which itconducts activities in the entertainment industry.

  1. Management

Viacom has a sound team of the Directorate headed by the VicePresident, who undertakes the mandate of encouraging the rest of theteam on the need to achieve the strategies that have been set by theorganization. The corporate management operates concerning theorganizational culture to help in the achievement of the strategicgoals.

  1. Planning

Viacom previously planned on investing in research and developmentwhere they sought to understand the nature of products that bestappeals to the customers. The organization was successful as itgained a broader understanding of what works best for theorganization. The staff members took the initiative of heading theresearch and development activities to help in understanding themarket best.

  1. Staffing

Human resource department at Viacom is diverse when it comes to theoverall manner in which they conduct activities. The company hasfurther laid out an outline through which they do the process ofhiring of staff. Viacom has ten steps that entail the recruitment ofstaff. The ten steps is an indication of the thorough aspect withwhich the organization conducts hiring employees.

  1. Control

Viacom has a set of policies that dictates the overall manner inwhich they operate. Controls have been placed at different levels andemployees expected to adhere to the same. Particularly, they have thequality control department that has the mandate of ensuring thatproducts released to the market pass the standards that have beenset.

  1. Marketing
  • Customer Analysis

Viacom has a diverse clientele base. The fact that they operate in anentertainment industry means that the organization has many clientswho would be appealing to hire their services. The customers differin age groups and gender depending on the nature of television showspresented. Children, young adults, adults and the elderly subscribeto the products based on the nature of services that are offered.

  • Supply Chain

The primary suppliers of Viacom are Amazon, Sony, Nickelodeon,Nielsen, and Brightcove. Viacom has a proper supply chain managementthat serves to enhance the manner in which the supply chain processactivities are conducted. Each of the suppliers provides specificservices that they have been mandated. For example, Brightcove offerscloud services while Sony has offered to stream TV to Viacomconsumers.

  • Pricing

Viacom is a price leader when it comes to the entertainment industry.The organization stands out when it comes to the nature of servicesthey offer. They dictate the overall prices but are subject to theregulations by government and stakeholders.

  • Market Research

Viacom has invested significantly in marketing research. The primarygoal of the same is to ensure that the organization understands theoverall dynamics in the market. Areas that of interest to theorganization are understanding its main competitors, customer needsand the overall trends in the market.

  • Social Responsibility

Viacom has taken initiatives to ensure that they operate in aresponsible manner. They have four primary sections that they haveoffered to focus. They include education, health, and wellness,environment and citizenship (Tsourvakas, 2016). The organization hastaken the initiative of impacting positively on the society while atthe same time making the brand relevant.

  1. Financials

Table One: Financials

2005-12

2006-12

2007-12

2008-12

2009-12

2011-09

2012-09

2013-09

2014-09

2015-09

TTM

Revenues (USD Mil)

9,610

11,467

13,423

14,625

13,619

14,914

13,887

13,794

13,783

13,268

13,001

Gross Margin %

50.7

47.2

44.6

39.9

44.3

47.2

49.6

50.7

52.5

48.2

50.5

Operating Income

2,366

2,772

2,936

2,523

2,904

3,710

3,901

3,836

4,082

3,112

3,564

Net Income

1,257

1,592

1,838

1,251

1,611

2,136

1,981

2,395

2,391

1,922

2,227

Earnings Per Share

1.67

2.22

2.72

2.00

2.65

3.59

3.69

4.84

5.43

4.73

5.58

Dividends

0.80

1.05

1.15

1.26

1.46

1.60

Working Capital

244

-406

-441

-340

679

1,319

1,023

2,936

1,317

804

Table Two: Viacom KeyFinancial Ratios for the Period 2005-2015 (Profitability)

Margins % of Sales

2005-12

2006-12

2007-12

2008-12

2009-12

2011-09

2012-09

2013-09

2014-09

2015-09

TTM

Revenue

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

Gross Margin

50.70

47.16

44.64

39.92

44.29

47.24

49.64

50.71

52.54

48.24

50.50

R &amp D

Other

2.70

3.19

2.92

2.77

2.87

2.78

1.70

2.39

1.89

3.23

1.70

Operating Margin

24.63

24.17

21.87

17.25

21.32

24.88

28.09

27.81

29.62

23.45

27.41

Net Int Inc &amp Other

-0.50

-3.99

-2.66

-4.57

-4.61

-3.12

-3.10

-2.30

-4.12

-4.59

-4.43

Table Three: ViacomInc Annual Data on Weighted Average Cost of Capital(2005-2015)

Dec05

Dec06

Dec07

Dec08

Dec09

Sep11

Sep12

Sep13

Sep14

Sep15

WACC

0.00

0.00

10.24

8.25

9.82

8.07

6.42

6.68

5.38

7.84

Data Source:Yahoo Finance

  • Discussion on Financials

The information presented is an indication of the ability of the firmto manage itself financially. The revenues have been increasing fromthe period of 2005 through to 2015. The data is further aconfirmation of the ability of the organization to raise capital bothin the short term and the long term. The organization has had asteady flow when it comes to the increase in profits except in theyear 2011 when there was a decline in the overall profits earned bythe organization. The same could be attributed to a decline in salesearned by the organization. The dividends earned by shareholders havebeen increasing from the year 2011 to 2015.

  1. Production / Operations

Viacom has been an operation for a prolonged duration of time. Theorganization stands out when it comes to the overall manner in whichthey conduct the operations. The ability to effectively conduct theoperations determines its ability to achieve the strategies that havebeen set by the firm. Emphasis is on areas such as low productioncosts. The decision by the organization to emphasize on the sameemanates from the need to ensure that high profits are realized.Also, there is the concept of focusing on the production of qualityproducts. Viacom has taken the mandate of ensuring that the nature ofproducts and services offered by the organization are the best.Through the same, it would be possible to compete favorably with itsprimary competitors (Küng, 2008). Also, the decision to emphasize onhigh-quality products means that most of the customers would becontented with the services being offered. The same would translateto the attainment of high sales.

Further, Viacom has taken the mandate of working on its customerservices to ensure that the clients are assured of the besttreatment. The company has established a customer care servicesdepartment that helps address the concerns raised by the customersregarding the nature of services they are offered. The goal of theorganization is to ensure that the customers are contented with theservices. As part of a scheme aimed at achieving customersatisfaction, the organization has a customer care section thataddresses the customer concerns. Finally, because the organizationoperates in an environment where they have to keep abreast with thetechnological advancements, it is mandatory that they adopt to thesame. The company has a technological competency that ensures theyreleased products to the market that makes it stand out.

  1. Research and Development

Viacom has taken the necessary measures that ensure they gainknowledge on the overall market trends. The company has not investedsignificantly in research and development. However, there areinstances where the company has taken measures that aim atunderstanding the overall marketing trends. Particularly, the companyuses the focus groups and other tools including the surveys to gain abroader understanding of how the market operates. The decision to doso aims at ensuring the company gets to learn about what applies bestto the consumers and the organization takes the mandate of meetingtheir needs based on results from the research.

The company is dependent when it comes to the handling of resultsthat are derived from the research. Notably, the results obtainedfrom the same are used when it comes to the introduction ofstrategies that seek to improve the overall manner in whichactivities are conducted. However, Viacom has not committed manyresources when it comes to research and development. Because of thesame, the organization has not been able to gain a competitiveadvantage because it misses out on information that may be used toimprove the way in which they conduct their activities. The firm hasadequate research and development facilities but seems not to utilizethe same to their advantage. Viacom has instead focused on otheroperational activities with a little focus on research anddevelopment. The nature of products offered by the organization arecompetitive. Consumers desire to have access to entertainment contentthat stands out. Because of the same, it reflects the fact that theproducts offered by the organization are competitive technologically.

  1. Information Technology

Viacom Inc has a department in charge of information technology. Thecompany has a Chief Information Officer, who is responsible for ITmatters within the organization. The company appointed David Kline tobe the Vice President and Chief Information Officer. The appointmentof the individual is an indication of the commitment of theorganization to the IT functions.

Viacom Inc is taking steps that seek to consolidate the enterpriseresource programs as a way of ensuring that they execute the varioustask. The presence of the software in the organization helps inensuring that business activities are conducted efficiently.

The information systems within Viacom are aimed at streamliningoperations that are performed. The organization has adopted thetechnology that is available as a way of promoting the operationswithin the company. The fact that the organization deals with theprovision of entertainment content to consumers means theorganization has to adapt to the technological changes that areavailable. The firm uses the technological prowess at their disposalfor their competitive advantage. Viacom is endowed with the abilityto offer the best services because of the nature of services that arebeing offered.

  1. Strengths and Weaknesses

The analysis conducted identifies the milestones that have beenachieved by Viacom. The consideration of the ideas presentedindicates the strength of the organization. There are sections wherethe organization may have to make changes. For example, the lack ofinvestment in research and development means the organization doesnot utilize its potential to capacity.

  1. Generic Strategies Used

The company employs the strategies aimed at promoting the nature ofservices offered to the clients. Further, there is the concept ofconsidering the needs of the employees. Through the same, it ispossible that they would be motivated to work toward attainment ofthe goals set by the firm.

  1. DESCRIPTION OF STRATEGY

Viacom operates in an environment where they have to have anelaborate strategic plan that enables it to achieve the targets thatthey have set. There are various areas where the organization canemploy strategies to help improve the overall manner in whichactivities are conducted. Further, the strategies used must be inline with the goals the organization seeks to achieve. Also, it iscrucial to understand the strategies that are used by theorganization’s competitors. For example, Viacom operates in anenvironment where they have to deal with other firms offering thesame service. The strategies they employ must be better than thatused by its primary competitors (Chan-Olmsted, 2006). The areas offocus when it comes to the nature of strategy used by theorganization are product line, distribution policies and channels,promotion, pricing, recommended strategies and value chain.

  1. Product Line

Viacom offers a variety of services in the media and entertainmentindustry. For example, there is the aspect of the firm providing arange of programs to consumers. Viacom airs a range of programs thathave many similarities. The ultimate goal of the same is to ensurethat the firm attracts a large clientele base. Because of the closerelation of the products being offered, it is possible to capturemany customers seeking to get the same services.

  1. Distribution Policies and Channels

Viacom has taken measures that see to it that they have an elaboratepolicy when it comes to the manner in which services are distributedto customers. For example, the organization has formed a partnershipwith organizations such as Sony, Amazon, and Nickelodeon on how theprograms can be aired to the consumers. The decision to bring inthird parties when it comes to distribution of commodities ensuresthat the customers can access services in the best way possible. Thepresence of the distribution policies is confirmation of the stanceof the organization when it comes to ensuring that the services theyoffer reach the customers. Viacom has to make sure that they employ adistribution strategy that gives them an advantage over other firmsin the entertainment and filming industry. The channel used to getthe products to the customers dictates how many of them wouldsubscribe to the organization. For example, there is the aspect ofdifferent programs being aired for the consumers. Viacom needs towork out ways to which they identify the different customers aresubscribing to their products and determine the best way to have themaccess the same (Rice, 2015).

  1. Promotion

Promotional strategies is a crucial component when it comes tomarketing. Promotional strategies are vital since they dictate thenumber of customers who seek the services that are being offered bythe firm. There are various promotional strategies that Viacom canemploy as a way of ensuring they attract many customers to theorganization. For example, through social media, it is possible forthe organization to promote the products that are being offered. Itis direct marketing as many customers have access to such socialnetworking sites. Further, the organization can employ the productgive ways when introducing new programs to the consumers. Viacom mustuse the strategy especially if it has to launch a program. The factthat the organization operates in an entertainment industry meansthat they have to add new products due to changes that occur. Viacommust take advantage of the various promotional strategies in place toensure they get many consumers to subscribe to their services (Band,2013). Through the same, it would be possible to realize high sales.Further, Viacom can utilize the provision of gifts to consumers as away of encouraging them into making purchases.

  1. Pricing

The price charged for commodities is a crucial strategy for any givenorganization. Viacom has come up with a strategy through which theyoffer special prices that are favorable to the customers. It isessential that Viacom considers that if they fail to charge the rightprice for the services they offer, consumers are at liberty to go toother firms offering the same (Band, 2013). Of significance is theneed to identify the most appropriate prices that appeal to thecustomers and levy the same for the services provided. Viacom alsoneeds to consider the price charged by its primary competitors sothat they can decide on what to charge its consumers.

The four identified cues are crucial when it comes it comes to thedetermination of the product’s position in the future. Theapplication of the appropriate strategy for the four signals ishelpful when it comes to helping the organization achieve the goalsthat it has set. However, it is crucial to conduct an assessment todetermine the best strategy that can be employed.

  1. Value Chain

Chart on How to Improveon its Value Chain

Source:https://www.google.com/url?sa=i&amprct=j&ampq=&ampesrc=s&ampsource=images&ampcd=&ampcad=rja&ampuact=8&ampved=0ahUKEwiDzebc1cTMAhXJAxoKHblLBb4QjRwIBw&ampurl=http%3A%2F%2Fstandaloneinstaller.com%2Fdownload-viacom-value-chain-software&amppsig=AFQjCNGkJfbx66ja8jOqgPf-xdofOAybxg&ampust=1462597274169787

  1. COMPETITIVE ANALYSIS
  1. Competitive Situation

Viacom operates in an environment characterized by three primarycompetitors. The Walt Disney Company, Time Warner Inc and NBCUNIVERSAL MEDIA, LLC are the main competitors of the organization.The other major competitors in the industry are CBS Corporation andComcast Corporation. The ranking of the competitors regarding themarket share brings out the following information.

Table Four: Competitive Analysis

Company

Market Cap. (in millions)

Price Per Share

VIA-B

23,974.8

37.38

CBS

16,128.1

16.84

CMCS

59,147.0

20.04

DIS

61,081.4

36.51

NWSA

41,547.9

13.64

TWC

18,447.8

61.54

TWX

33,409.5

29.49

Data Source:Yahoo Finance

  1. Competitive Environment

Viacom Inc.’s media networks compete with other distributed cablenetworks, digital distributors, and a broad television network. Thecompetition is done for the advertising revenue with the cable andthe broadcast television networks, social media, press, and radioprogramming. The programming services further compete with otherfirms when it comes to the concept of the market share. Companiessuch as CBS Corporation also provides the programming services, forthe same reason, they have to compete with Viacom Inc to get theaudience to watch their programs. Competition cuts across the boardwhere firms strive to get viewers of different age sets to watch theprograms that they are showcased. Competition is also eminent when itcomes to the creation of content. Viacom Inc has to compete with thefirms for directors, writers, actors and the producers. Such is areflection of the concept of the widespread competition that thefirms have to deal with when it comes to the provision of theservices. There is also the idea of competition to the new programideas and how to acquire popular programs. The nature of environmentthe company operates is characterized by widespread competition atdifferent angles.

Significance of Imports

Imports play a crucial role when it comes to the industry in whichViacom operates. Particularly, there is the concept of getting ideasfrom other sources. The organization may not have the expertise andthe personnel to accomplish efficiently the tasks that are beingconducted. In such an instance, it becomes mandatory to seek theservices of other firms that can provide the same (Yao, 2012). Theonly option to achieve the same is through the acquisition of theimports. It is an indication of the crucial role played by importswhen it comes to the facilitation of activities in the firm.

  1. Competition from outside the industry

There is competition from outside the sector in which Viacomoperates. Social media has become the primary choice for many ofthose who wish to conduct advertising. The availability of the socialnetworking sites such as Twitter and Facebook presents a significantchallenge to the organization since most advertisements are carriedout through such means. Further, the availability of the advertisingwebsites is the other form of competition that exists for Viacom. Thecompetition witnessed from the sources out of industry decreases theoverall revenues earned by the organizing.

  1. Demand Analysis

Overall, Viacom commands a greater percentage of sales revenue asdepicted by the information in the table. Through the same, it meansthe organization earns a high amount of revenue that translates toincrease in profits (Band, 2013). Despite the competition that may beimminent, the company does well when it comes to achieving high salesin the organization.

The product salesforecasts indicate the likelihood of an increase in revenues of theorganization. The same can be attributed to the diversification ofthe organizations business activities. The company should introducestrategies that enable it to compete favorably with the rest of thefirms. With the increase in technological advances, people resort toquality services. Viacom must ensure that they come up with waysthrough which they can take advantage of the situation to increasetheir sales (Yao, 2012).

  1. Changes in Market Structure

Variations in the market structure are bound to be witnessed in thecoming years. With new firms expected to join the industry, there isbound for change to be observed regarding the process through whichmarketing is conducted. Also, a growing number of young viewersprefer watching particular programs. Viacom must ensure that theyrespond to the same.

  1. Constraints

The primary obstacle to the growth of provision of entertainmentcontent is competition from the social networking sites. Most peopleprefer going to YouTube where they can watch videos while othersprefer live streaming to get access to the videos.

  1. Buyer Behavior Characteristics

The buyers are the television audiences that cuts across thepopulation. Purchase influencers can be the artists, contentcreators, anchors and the television show anchors. They play acrucial role in making people decide to watch a particular program.

  1. ANALYSIS OF STRATEGY
  1. Opportunities and Threats
  1. Marketing Opportunities
  • New Product

Viacom must ensure that they come up with ways through which they canincrease their revenues. The first strategy that can be employed isthe introduction of new products. Owing to the increase in the levelof competition particularly in advertising and programming, it ismandatory that Viacom comes up with ways to which they can enhancetheir revenues (Xu, 2014). The introduction of a new product willserve to increase the overall revenues earned by the organization.Through the same, the organization stands to benefit from an increasein the sales that translates to a rise in the income collected.Viacom could decide to seek the services of its marketingprofessionals such that they can come up with ideas on the best planto venture.

Further, there isthe concept of improvement of the products that the company offersits customers. The quality of the goods provided has a significantrole to play when it comes to increasing the overall sales that areearned by the organization. The same does arise out of the fact thatthe customers would be contented with what is being offered by theorganization making them seek the products. It is an efficientstrategy that can benefit the organization through the sales. Productimprovement serves best since the ultimate goal is to attractcustomers who have not been seeking to buy from the organization (Xu,2014).

  • Improvement in Customer Service

Customer satisfaction should be the target of any given organization.Viacom must come up with ways through which they can improve themanner in which the customers are treated. Identification of thecustomer needs is an efficient way through Viacom can enhanceservices offered to them (Yao, 2012). The company should conduct amarketing analysis to determine what appeals to the customers.Through the same, it would be easier to provide services that aresatisfactory. Improvement of the customer services at the company mayserve to increase the number of those who seek products from themwhile at the same time increasing the level of loyalty on the part ofthe customers (Xu, 2014). Further, there is the benefit of the imageof the organization being enhanced for the manner in which they treattheir customers. The advantage of the same is an increase in thenumber of clients who subscribe to the products from theorganization.

  • Diversification

The diversity of business activities at Viacom may be appropriate ifthe company aims at increasing their revenues. For example, theorganization could invest in other ventures apart from the media andentertainment industry. Through the same, it would be possible toexperience the new opportunities that are available to otherbusinesses. Viacom will benefit from an increased revenue in theorganization (Hill, &amp Jones, 2012). Challenges may accompanydiversity by through the application of the appropriate strategiesit would be possible for the organization to realize the benefitsfrom the side activities they engage. The increase in the level ofcompetition experienced in the industry negates the need to come upwith ways through which the organization can caution itself againstany unwelcome eventualities.

  • Line Broadening

Finally, Viacom can take the initiative of broadening on the productlines they are engaged. Currently, the organization deals with mediaand filming activities. It could be mandatory for the organization tobroaden on the product line as a way of ensuring that theorganization realizes high revenues through the expansion.

  • Cost efficiency opportunities

Viacom needs to improve their logistical effectiveness as a way ofenhancing the manner in which they conduct business. The improvementof the logistical activities within the organization has the benefitof improving the manner in which operations are conducted.Streamlining of logistical operations is a crucial component of anybusiness organization (Yao, 2012). There is the advantage of timesaved when it comes to the way issues are handled in theorganization. Logistics covers a broad section of the organization.If the company fails to have an elaborate mechanism through which thelogistical issues are handled, it could result in inefficiencies(Hill, &amp Jones, 2012). Notably, the organization could witnesschallenges when it comes to logistical matters such as theft ofmaterials and ineffectiveness in record keeping. Viacom must ensurethey utilize the available technology to ensure they attaineffectiveness when it comes to the improvement of logistical issues.

  1. Summary of the Key Opportunities and Threats

Viacom benefits from the continued increase in the number of peoplewho view TV programs such as shows and films. Further, theentertainment industry continues to grow with the number of artistsgrowing by the day. Through the same, there is evidence that theorganization would benefit from the availability of content. It meansthat the TV programs shown may continue being relevant because ofavailability of content. Such is an opportunity for the organizationto grow by taking advantage of such chances.

However, there are crucial factors that pose a significant threat tothe growth of the organization. Particularly, there is the concept ofentry of other firms and availability of substitutes. Such a movepresents a significant challenge as Viacom has to ensure that theydeal with the issue to remain relevant in the market. Further, thereis the concept of theaters that are coming up where people can watchplays and films (Hill, &amp Jones, 2012). The emergence of suchfeatures in the industry means that consumers have an alternative. Itis essential for the organization to ensure that they offer customersservices that are better than that which is provided by thesubstitutes. The strategy introduced in the firm should serve to makeit possible for the company to adapt to the available alternativesdespite the threat that they pose.

  1. Balanced Scorecard

The balanced scorecard identifies the need to view the organizationfrom four different perspectives. The identification of the aspectsshould be followed by the development of metrics and their analysis. About the SWOT analysis conducted, the organization needs to setobjectives and goals that seek to improve the overall way in businessactivities are done. The first target is to adapt to the changingtechnological advances to ensure that they improve the manner inwhich operations are performed at the organization (Yao, 2012). Theorganization needs to do extensive research and developmentactivities to ensure that they get to understand the technologicaltrends in the industry. Further, there is the concept of an increasein some content creators such as the artists. Viacom could takeadvantage of the same to hire them as a way of increasing the salesin the organization.

In dealing with the threats, Viacom could ensure that they improvethe manner in which they deliver content to its viewers. Theorganization should come up with ways that seek to address theindividual concerns of the customers. Through the same, it would bepossible for the company to maintain its clientele base while at thesame time getting new clients who seek their products. It is crucialfor Viacom to introduce products that stand out against that ofothers.

The organization should further strive to continue investing in theiremployees. A happy team of employees is fundamental to therealization of the goals that have been set by the organization (Yao,2012). It is mandatory that the company focuses on providing theemployees with an environment that encourages them to give their bestwhen it comes to the task they are assigned.

  1. Identifying Strategic Alternatives

Viacom has the mandate of ensuring they achieve the goals that theyhave made. The overall objectives of the organization are to ensurethat they make profits from the activities they are conducting. Thegoals set should aim at transforming the organization in the nextfive years. The first objective for the organization is an increasein the overall sales in the activities the organization is engaged.For example, the organization undertakes activities in the filmingand entertainment industry. The organization should aim at increasingthe overall number of individuals who seek services from theorganization. An increase in the overall proportion of customers whoget services from the organization would be beneficial when it comesto increasing the overall revenues of the organization (Nelip, 2012).The rise in the sales numbers should translate to an increase in theprofits attained by the organization.

  1. Alternatives

Viacom could work towards ensuring they come up with ways to whichthe sales, profits, and an enormous market share can be achieved.Product improvement will be the most efficient way through which theorganization can achieve the goals that they have set. Through thesame, there are chances that customers would seek the services of theorganization. Further, sales and profits can be increased by thedevelopment of new products. Viacom should go beyond what they areoffering in the market to the provision of regular services to thatwhich stands out in the market (Hill, &amp Jones, 2012). Thedecision by Viacom to do would result in an increase in the overallsales achieved by the organization. The same would further beaccompanied by the ability of the firm to command a greater marketshare.

  1. IMPLEMENTING YOUR SUGGESTED STRATEGIES

Implementation of the goals that have been set at Viacom negates theneed to alter certain structures within the organization. The companycan achieve the goals that it has set by making changes at differentsections of the organization.

  1. Organizational Structure

Change in organizational structure is a prerequisite toward theattainment of the goals that been laid down. The changes ought to cutacross the different departmental sections at the organization.Viacom should restructure the customer service department as a way ofensuring that the manner in which the customers are served issatisfactory (Yao, 2012). Further, the organization may have to hirea team of professionals who have knowledge of public relations sothat they bring skills aimed at treating customers to theirsatisfaction.

  1. Human Resource Policies

The human resource department needs to be restructured. The personnelworking at Viacom must be motivated to enable them to deliver theirbest when it comes to ensuring that the strategies that have been setare achieved. The manner in which the personnel is treated is crucialas a way of ensuring that they are willing to be part of the teamthat attains the goals for the organization. Human resource can comeup with policies such as the provision of incentives to encourage thepersonnel to work towards achieving identified goals (Skumanich,2014). Further, policies could entail coming up with a compensationscheme that motivates the employees.

  1. Information Technology

Viacom may have to restructure its information technology systems asa way of ensuring that they achieve the goals that have been set. Thecompany provides media and entertainment content to the consumers.Because of the same, it could be mandatory to have a system thatensures the organization is enabled to achieve the strategies thathave been set.

  1. Challenges in Implementation of the Changes

Various benefits are imminent if Viacom were to implement thestrategies that have been highlighted. However, despite the benefits,the company ought to brace for challenges when it comes to theoverall manner in which the changes are to be achieved. The firstproblem regards the issue of finances. Viacom may have to increasetheir expenditures when it comes to ensuring that they transform themanner in which activities are conducted (Hill, &amp Jones, 2012).For example, there is the concept of introducing a compensationscheme for the employees. Such would mean that the organizationinvests in he employees. It could represent a significant challengeto the organization. Also, the fact that they are restructuring themarketing department to include an elaborate customer servicedepartment would mean the organization invests more in the venture.

Also, there is the aspect of improvement of the products offered byViacom. It could be vital for the organization to invest more inproducts that they offer. Because of the same, Viacom may need toincrease the number of finances they inject to the organization withthe goal of ensuring that they achieve the goals that they have set.

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