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Media Industry Competitive Forces

The bargaining power of buyers for Time Warner Cable is moderate as customers have many options for entertainment content from different providers. However, buyers are becoming more informed and have low switching costs between providers. The bargaining power of suppliers to Time Warner Cable is low as the company has significant control over pricing, though it maintains good relationships with suppliers. Suppliers are dependent on the cable industry for profits. Threat of new entrants is high for Time Warner Cable due to increasing demand for media streaming websites like Netflix. However, establishing new operations in the media industry requires significant capital and supply chain development. Threat of substitute products is also high as internet access allows easy access to films and TV through browsing sites. Theater

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98 views2 pages

Media Industry Competitive Forces

The bargaining power of buyers for Time Warner Cable is moderate as customers have many options for entertainment content from different providers. However, buyers are becoming more informed and have low switching costs between providers. The bargaining power of suppliers to Time Warner Cable is low as the company has significant control over pricing, though it maintains good relationships with suppliers. Suppliers are dependent on the cable industry for profits. Threat of new entrants is high for Time Warner Cable due to increasing demand for media streaming websites like Netflix. However, establishing new operations in the media industry requires significant capital and supply chain development. Threat of substitute products is also high as internet access allows easy access to films and TV through browsing sites. Theater

Uploaded by

Alvin Dimasacat
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Memo 3 :

The Porter’s Five Forces Analysis of Time Warner Cable Bargaining Power of Buyers The bargaining
power of buyers is an important force and is moderate for the Time Warner Cable. Customers have to
choose among different companies to spend.They can subscribe to different broadcast networks,
subscription networks and films, they have the broad range of choices.This makes the customers
preference as an important factor.This clearly indicates that bargaining power of consumers play a role
when high quality services are not provided by the company, this indicates the drop in the consumers,
advertising and hence market share (Katkin, 2013). The quality of the products is important to the
buyers and these buyers make frequent purchases.The buyers nowadays are becoming more
informed.The low switching cost between forms are causing lack of customer loyalty and retention.This
makes the bargaining power of buyers a weaker force within the

Bargaining Power of Suppliers

The supplier’s bargaining power in the industry is low and hence favorable for Time Warner Cable.The
suppliers in this industry are mainly celebrities, fine arts academies, sports agents, IP licensing, creative
artists and performers.These suppliers have control over prices to some extent, but major control is with
Time Warner and the other companies.However, the company maintains good relationship with its
suppliers, as this is an integral part.They help the company in growing and providing the best
entertainment to the customers (Green, 2019). The industry in which cable operates is an important
customer for its suppliers.This means that the industry’s profits are closely tied to that of the
suppliers.These suppliers have to provide reasonable pricing.This makes the bargaining power of the
suppliers a weaker force within the industry. Threats of New Entrants Threats of the new entrants have
to be seen high in case of Time Warner Cable.This is mainly because of the increasing demand in media
streaming websites.However, Time Warner has licensing agreement with the entertainment suppliers
like Netflix.As the stakes of the Netflix are growing.Despite of the fact of growth in demand, establishing
the business and operation in the media industry is not easy.Huge capitalization is required as a start-up
cost.Furthermore, effective supply chain is needed to be established along with high distribution
networks. There are numerous technicalities involve in this field. Huge companies are already capturing
the market share.It is difficult for the new entrants to compete with them (Katkin, 2013). Threats from
the Substitute Products Threats from the substitute products are high for the Cable service
providers.This is mainly due to the economies of scale achieved by the introduction of different mix of
channels.The use of internet has been increased.All the films and television programs are easily
accessible on the browsing sites.Internet is one of the main substitutes.Moreover, change in the
consumer preference like Theatre is increasing. People prefer to watch the new film or programs in the
most qualitative and relaxing way in theatre (Green, 2012). Rivalry of Existing Players Time Warner Cable
is known to be a film, tv and network entertainment.It faces intense competition from rivals like News
Corporations, Viacom Inc., Walt Disney etc.The competitive rivalry for this company is strong as in the
past decade have been introduction to new services which has created price competition.This is mainly
due to the competitors’ sizes and the audience they are attracting.Market tactics and sales promotion
had led a huge influence on market diversification leading to competition amongst few top market
players.Slow market growth in the US along with proposed merger and acquisitions have made the
competitive rivalry a big threat for the company revenue and market positioning. (high)

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