¶ … direct broadcast service provider as well as broadcaster, operating in the United States. The company launched its satellite service over two decades ago. Since then, the company has been able to transmit satellite television as well as audio to households across the United States, Latin America and the Caribbean markets. These services correspond to those rendered by several local TV stations, broadcast TV networks, subscription TV services, private video providers and satellite radio services. The consumers who subscribe to these services have access to several different channels. Therefore, DirecTV's rival companies include satellite-based services and cable television services. In the past year, AT&T acquired DirecTV making it a subsidiary at a price of $48.5 billion (Yu, 2014). The following paper will employ different tools to undertake a strategic analysis and selection of strategies encompassing DirecTV.
BCG Matrix
The main purpose of the BCG matrix is to pinpoint high-growth opportunities by classifying the company's products in relation to rate of growth and market share. By making the most of positive cash flows in products or services with high potential, a business can get the most out of market-share growth prospects (Arline, 2015). The BCG matrix splits product groupings into four segments centered on their market share and market growth. Considering that it was impossible to determine precise and current market share numbers for DirecTV's product groupings, the matrix was altered in relation to sales growth groupings representations and how commercial they are. As a result, classifications were apportioned under four distinctive portfolio sections:
1. Stars
Product grouping that exhibit high sales growth and has a significant contribution to total profits.
2. Question marks
Product grouping exhibiting high sales growth but has a minimal contribution to total profits
3. Cash cows
Product grouping exhibiting low sales growth but at the same time has a significant contribution to total profits
4. Dogs
Product grouping exhibiting low sales growth and has minimal contribution to total profits or nothing at all.
I. Stars -- Large Market/High Growth
DirecTV Latin America
III. Cash Cows -- Large Market/Low Growth
DirecTV USA
IV. Dogs -- Small Market/Low Growth
DirecTV Caribbean
The BCG Matrix indicates that the DirecTV USA is the source of income of the company. In 2013, the company was able to generate about 6 billion in revenue from subscribers in the United States. On the other hand, the rising stars looming on the horizon is the DirecTV Latin America. In the same year, the company was able to generate about $1.6 billion in revenue from subscribers in Latin America. The most underperforming category for the company is DirecTV Caribbean, which is the new business category (DirecTV, 2016).
Grand Strategy Matrix
The Grand Strategy Matrix was used to cultivate different strategies for DirecTV's different business units. As an outcome, product groupings fall under four dissimilar quadrants in relation to their competitive position and market growth. Different strategies can be selected from each of the four quadrants.
i. Quadrant I
This encompasses product groupings with a strong competitive position and fast market growth.
ii. Quadrant II
This encompasses product groupings with a weak competitive position but has fast market growth.
iii. Quadrant III
This encompasses product groupings with a weak competitive position and has slow growth in the market.
iv. Quadrant IV
This encompasses products with a strong competitive position but have slow growth in the market.
Fast Market Growth
Quadrant II Quadrant I
1. Market Development 1. Market Development
2. Product Development 2. Product Development
3. Liquidation 3. Backward Integration
4. Forward Integration Weak Competitive Position
Strong Competitive Position
Quadrant III Quadrant IV
1. Cost-cutting 1. Associated Diversification
2. Associated Diversification 2. Unassociated Diversification
3. Unassociated Diversification 3. Joint Ventures
4. Liquidation
Slow Market Growth
In this case, DirecTV would be grouped under Quadrant…
BCG Matrix According to the BCG Matrix, the electronics category is a question mark characterized by low market share, but potential high growth. In this instance, a decision must be made to invest heavily, sell off or invest nothing and generate whatever cash is possible (BCG Matrix). Appliances, on the other hand, are cash cows enjoying high market share, but little growth. Because growth is low, investments should be kept to
BCG Matrix Strategic Management The BCG Matrix: An overview and a hypothetical situation The Boston Consulting Group (BCG) Matrix is an efficient way to visually represent a company's portfolio of goods and services, and provides a way for organizations to evaluate their strategic possibilities. The BCG Matrix classifies a company according to three primary business interests or units (BCG Matrix, 2012, Net MBA). The Matrix is represented in the form of four quadrants:
BCG Matrix, an analytic tool designed and named for the Boston Consulting Group, provides insight into corporate strategy regarding a company's operating units and products. The focus of the matrix is on "market growth and market share of the organization's product portfolio relative to their largest competitor" (NetMBA.com. N.D. PP. 1). Companies should according to the matrix, allocate capital to portfolio investments which are in a fast growing market that
Items such as the potential partner's track record for development efficiency was a definite strength. In contrast, one weakness was the sharing of profits once the product went to market, as well as the fact that our company would not have sole ownership of the product. There was the opportunity to bring the product to market ahead of any potential competitors, plus the opportunity to develop a relationship that
SWOT The BCG index was designed to help managers determine how departments were performing in their company (NetMBA, 2002). The matrix is a simple calculation that labels the departments as a star, question mark, cash cow or dog. These designations have specific meanings as to the market position and cash flow. The company in question has had two departments analyzed using the BCG matrix. The question is to the efficacy
3. Limitation of individual model - synergies obtained by combining strategic analyses models All analysis models presented in the previous chapter represent useful but not exhaustive methods of deciding the future of a company or its products. As there is no perfect model, the joint usage of them might bring most value to the company. Ansoff analysis generally assumes that diversification will bring higher returns when higher levels of risks are undertaken (diversifying
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now