Comcast Cable Company: Strategy Review

Company Profile

Comcast was founded in 1963 as a single-system cable operation. It has grown to become the largest provider of cable services in the US. It is also one of the world’s leading companies in telecommunication. The main operations of the company are in broadband cable, commerce, and content. The company offers fast internet connection, clear broadband phone service, digital services, and another innovative programming. It is a public company headquartered in the Great Philadelphia Area and has about 100,000 workers (Comcast, 2009). The three major products offered are internet connections, digital voice calls, and cable TV.

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Environmental analysis

With the growing demand for telecommunication services in the modern-day, an assessment of the environmental aspects becomes necessary. The business environment is very dynamic based on the constantly evolving needs for better and more convenient services. The industry is highly liberalized. Conservation of the natural environment has become a major issue in the industry. Pressure is mounting on all players to pursue environmentally friendly ways of offering their services with a key recommendation being the unifying of the use of telecommunication infrastructure. This could affect us by enabling even more players to join the business hence driving down the revenues due to increased competition.

The two major environmental forces likely to affect us are the entrant of numerous new competitors as well as rivalry among the competitors. This is expected to drive down prices to very low levels which could prove untenable in the future. The need to share information as well as keep in touch in the face of globalization presents the need for even greater connectivity globally. Opportunities are expected to increase even more due to the high rate of globalization meaning that future growth is still very possible.

Industry Information

The telecommunication industry is probably the fastest growing industry today. It is comprised of hardware manufactures, software vendors, and players focusing on interconnectivity. The industry has evolved into a multibillion-dollar industry in a span of 30 years. It’s mainly built on constant innovations that seek to fulfill the needs of the clients. Products offered have proved to have a very short life cycle requiring the development of new products as well as modifications to the existing ones. Currently, there is aggression towards acquiring more customers especially by the broadband providers in a bid to secure their future revenues.

The future of the industry is promising. With the penetration of the services almost complete, the future will be built on even greater inventions and cost reduction measures. The main beneficiaries will be clients and telecommunication companies not left behind in innovations.

Currently, the cost of physically installing a plant to offer services as well as buying licenses is very high. Consequently, only large companies can afford to offer the services. This has for some time acted as a barrier to entry into the industry. However, this is bound to change in the future as the sharing of infrastructure gains momentum.

Two main factors in Porter’s “five Forces” model visibly impact the organization. First, is the Supplier power, a high concentration of suppliers of telecommunications services is slowly emerging. This is poised to result in a lower client base for each supplier meaning lower revenues. It also presents a greater likelihood of the increment of costs relative to total purchases in the industry. Secondly, a high degree of rivalry is in the offing. The large initial investments present a case whereby once in the business, exit becomes difficult. The losses may be so large hence businesses are unable to quit easily. This continues to present a platform for higher concentration in the industry and as the industry grows, the rivalry will constantly increase. This may result in cases of overcapacity in many firms. Brand identity and product differentiation are the main tools used in wading off the intense rivalry in the industry.

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Corporate mission

It refers to the intended purpose for which a business exists. The mission statement is very helpful in giving the purpose of the existence of the business.

The mission of Comcast Cable Company is to offer the most reliable customized digital and other IT-related products to clients. The company constantly invests in research so as stay ahead of the competition. This ensures a constant roll-out of new and exciting services to the clients. Indeed, great value is placed on customer satisfaction and royalty. The company focuses on creating a wide and loyal customer base to drive its growth.

Corporate Analysis and Appraisal

This involves performing a Strength Weaknesses Opportunities and Threats (SWOT) analysis on the entire business entity in order to come up with appropriate strategies aimed at improving the status of the business.

Undertaking a corporate appraisal in the company would mean conducting an analysis of the strengths, weaknesses, opportunities, and weaknesses. The strengths would include, the high market share already taken up by the company, the brand identity created through the years, the highly talented staff members driving innovations in the company as well as the immense experience in the business.

The weaknesses would include the high gearing ratio (level of debt) prevalent in the company and the high overhead costs incurred in the company relative to other companies. These depict an unhealthy business. Opportunities would be in the constantly emerging needs of information technology (IT) related services globally while threats could be the increased competition as well as the pressure for environmental conservation which could force legislation on enforcing sharing of infrastructure.

The measurement of past performances would be based on the rate of acquiring new clients, the numbers of additional products introduced, the rise in revenues as well as the profitability levels.

Gap analysis in our industry is conducted by first taking into consideration the combined potential usage of the services by one individual taking into consideration the diversity in the needs and application of our services. It involves finding out the maximum potential usage of the services we offer and extrapolating this with the number of potential clients. Figures on the number of potential clients in our organization got through a series of market surveys combined with demographic data.

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The company has over the years experienced a reduction in the unit cost of production. This has mainly resulted from the many innovations carried out by the company’s employees as well as the increasing market share through promotions and advertising. The lowered unit costs have resulted in increased competitiveness for the firm

The marketing function of the company is very vibrant. It is charged with the responsibility of linking sales, development, and customers to the company’s executive management. The marketing department is closely interlinked with the research department to facilitate to sharing of crucial data on the developments outside the company so as to ensure prompt reactions to changes in consumer behavior. Indeed, the department is also closely interlinked with all other departments in the company as this helps to drive the entire company towards achieving common goals. A cross-sectional marketing team has been very useful in achieving this. Everyone influences his/her department to work towards fulfilling customer specifications.

Internal marketing audits are common at the firm. They target the efficiency of the entire work process in relation to the customers’ satisfaction. Customer relations management, reliability, and quality of products are central to the audit.

General Marketing Strategy

The company has a few strategies designed to position the firm favorably in the future. First, the company is contemplating acquiring one of the competitors who seem to have a well-structured business model. The aim here is to expand the market share even more while at the same time ensuring that competition reduces. The firm also invests and maintains a highly trained workforce by ensuring adequate compensation to talented workers. This ensures the competitiveness of the products offered in the market.

Presently, the company’s goals include, improving customer service, improving the consistency in the provision of the services, and more importantly diversification into even more services. This has informed the product objectives taken by the firm.

The firm is constantly strategizing on product development for new products and further penetration for existing products. This is with the aim of ensuring an even stronger grip on the market share in the telecommunication industry.

The overriding corporate strategy focuses on innovation and market expansion.

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Marketing Research Techniques

Marketing research techniques are methods of gathering, analyzing, and recording data relating to marketing products and services.

The company constantly monitors the trends in the industry by constantly assessing the evolving needs of customers. The customers determine which direction the industry takes. Consequently, the company engages the clients constantly through established correspondence so as to ensure prompt and accurate responses. Feedback is also constantly solicited to obtain customer views and use them to make improvements. Also, constant analysis of the emerging frontiers of operations is conducted to keep the company up to date.

Industry sales a well as market shares are determined through the existing records in terms of subscriptions and sales levels for the existing players in the industry. The company has a comprehensive intelligence system used to gather information about the competition as well as the general economic environment and its implications. An elaborate team of researchers gathers information on the trend of the industry and projects future situations. The information is synthesized and passed on to senior managers who make decisions guided by the reports. This means that resources are allocated to exploring future viable projects way before their time comes thus keeping the company ahead of time (‘What is Competitive Intelligence?” 2000)

Market Strategy

The market strategy involves developing a cause of action that seeks to optimize the sales revenues and minimize risks. It may be through the scope of the targeted clients, the geographical coverage, or even such characteristics as an occupation.

Comcast has a wide scope in the market. It ranges from the young to the old. Entertainment services are offered parallel to the digital services and software offered to companies and individuals. This means that all categories of customers are served by the company in at least one of its products. This diversity is a major source of strength for the company.

Geographically, the company is situated in Philadelphia, a city in Pennsylvania in order to take advantage of the high business activities that offer opportunities in the application of IT in the eastern part of America. The company is also highly committed to its big customers. Companies and individuals who offer a certain lower limit of sales are entitled to various discounts as well as preferential treatment while resolving their queries.

Market Segmentation Strategy

A market segment is a group of people sharing certain characteristics that cause them to have similar products. This could be due to demographics, location, and other features.

The company has a form of market segmentation based on the type of customer. In offering high-speed internet connectivity, the company focuses on two major groups of customers. First is the corporate world, while the second is the households. Services offered to companies include interconnectivity of offices to enhance communications, fast and safe data transfer through private lines and teleworking options. Still, within the business segment, some sub-segments in terms of the size of businesses have been established with customized products dedicated to each. The segments are the small businesses having less than 20 employees, the medium businesses having between 20 and 100 employees, and finally the larger businesses. Household products are mainly on entertainment and facilitation of social interaction through cable TV, the digital Voice service, and the Comcast triple play (Comcast.com 2009).

Positioning Strategy

Positioning strategy involves influencing the mind of customers in order to visualize what one is offering in relation to the market situations and competition.

Comcast has come up with a strong brand name that has kept it a distance from competition. Emphasis has been on the superiority of the brand in all aspects hence not comparable to any other. The digital voice service is branded as the number one in clarity. Also, twelve features have been incorporated in the calls service. A feature called Powerboost used in internet connectivity is put across as one which makes the already fast internet connectivity even faster. Still, the company describes its cable TV as one having “tons of favorite channels and free movies” a phrase deliberately crafted to position the product as superior (Comcast 2009).

This has ensured that the products are seen as being of much better quality than those of competitors. The company has undertaken to clearly define the type of customers targeted and the unique selling points for all its products. It has then created awareness in the market.

Promotion Strategy

It involves choosing a specific target market and developing an appropriate promotional mix to influence it.

The company engages in intense advertising over print media, electronic media, and also via television. This is combined with promotions including discounts as a measure to boost sales, especially towards the business sector. The promotional strategies are mostly influenced by the nature of the products offered. The effectiveness of advertising efforts is assessed based on the resultant changes in the rate of uptake of the company’s products in the period during and after the advertising. A campaign aimed at the internet connectivity segment will be evaluated by looking at the resultant increase in the number of subscribers in the period after it ends.

The company’s sales force is structured in a way that guarantees the most possible contact with the customer. Various sales personnel are dispatched to cities and towns in the US where correspondent offices are situated. Through the elaborate network, customers can interact with staff continually thus feedback is guaranteed. The sales personnel are paid in tandem to their level of success in sales. Bonuses are offered to top performers in a bid to motivate them. Winning new clients is the core focus of the sales team. Still, the selection process of the sales personnel is largely biased to favor aggressive and highly competent candidates. In fact, the lowest level of education required is a degree. Annual reviews of the performance of the sales personnel are conducted and bonuses, as well as salary increments, effected on high performers.

Distribution Strategy

The company uses a direct distribution strategy in availing its products to customers. Customers purchase most of the company’s products online hence eliminating the need for intermediaries. This eliminates intermediaries hence ensuring who must also make a profit thus maintaining low costs. However, payment centers are strategically positioned in all areas of operation to ease the payment process by customers. The product life cycle can influence the direct channel arrangements in that if a product‘s usefulness is deemed to be over, the company may involve intermediaries to foster the sale of that product while it concentrates efforts towards developing the emerging acceptable product.

Pricing Strategy

For completely new products the company sets a price geared towards profit maximization. As competition grows the price lowers and is stabilized at a level where the fixed and variable costs associated with the product are fully covered to ensure the viability of the service.

The elasticity of demand for the company’s products is very high. The presence of close substitutes means that slight increases in the price will result in a disproportionately more decline in the level of demand for the products. Consequently, the most appropriate pricing strategy for existing products is cost-plus pricing. This is the best strategy to ensure prices are competitive for the company. However, prices are flexible to suit different categories of clients, and more importantly, most services are accessed on-demand hence the customer is fully in control of his/her bills. In this industry, a price reduction by one major competitor results in a reduction in the price by others. However, the reverse is not true. Price increment by one competitor leaves the others at the same level as a measure to woo clients from the company which raises the price. This means that prices are very rigid in the industry.

Conclusion

As can be seen, Comcast Company is well placed to handle the future. The strategies applied by the company point to the preparedness of the company towards the future. Opportunities arising in the future are well anticipated for and proactive steps are taken to advantageously position the company so as to take full advantage and grow even further. Considering that computers are increasingly becoming a basic necessity in any household or business, the future presents a scenario where the best innovators will last and Comcast is evidently in this category. The wide scope of customers as well as products lowers the risks facing the company meaning that the company is healthy and well able to exploit opportunities and also expand its scope of operation in the future.

References

Comcast.Comcast.com 2009. Web.

What is Competitive Intelligence? 2000.

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