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Surviving in the Media and Entertainment Industry: Viacom (Research Paper Sample)


THE PAPER PRESENTS AN ANALYSIS OF VIACOM, A MEDIA AND ENTERTAINMENT COMPANY. it explores both the external and internal environments affecting the company's performance and further, it provides future recommendations on how Viacom will improve. sOME OF THE FACTORS EXPLORED INCLUDE ITS BUSINESS STRATEGIES AND A SWOT ANALYSIS EXAMINING ITS STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS IN THE MARKET.


Student’s Name
Surviving in the Media and Entertainment Industry
Viacom is a renowned universal media and entertainment company that generates premium content and experiences for viewers all over the world. From the time it was founded, the company has adopted strategic direction that has enabled it outperform its competitors. Viacom’s mission is to become the global leader in brand entertainment across media platforms, motion and television pictures. This mission is fostered with the vision to collectively add up the company initiatives into a complete package. Most of the decisions made by the company executives are focused on long-term consequences. Notably, Viacom uses this model to look at issues as a component of a whole system. An examination of Viacom’s corporate, business, and functional strategies is critical for understanding the direction the company is heading to and whether it will have a sustainable future. Details from the case study will be used to show how the organization has evolved. The importance of this research is seen in the way it assesses the challenges facing a major media organization within a fast changing industry and also offers sustainable strategies to make the company successful in the future.
Corporate Strategies
Viacom majorly operates in the cable and television services industry, as well as the video tape production and motion picture industry. Indexed by iconic consumer brands, Viacom’s portfolio entails MTV, Nickelodeon, Paramount Pictures, Pluto TV, CBS All Access, BET and CBS, among others. Currently, the company owns the biggest portion of the television audience in the US and also prides itself for having the industry’s most extensive and important libraries of film and TV titles (Case Study 12). Viacom’s mission is to become the global leader in brand entertainment across media platforms, motion and television pictures. This mission is fostered with the vision to collectively add up the company initiatives into a complete package.
Besides providing digital video products and innovative streaming services, Viacom offers powering capacities in advertising, distribution and production solutions. Viacom excels as a learning organization through systems thinking. Systems thinking enhances a framework for the organization to have a clear bigger picture, form interrelationships, and see patterns. Viacom also presents itself as a learning organization through personal mastery. It is evident how Mr. Redstone, the CEO, always had a personal vision, representing a precise picture of the future he desired; become the leader in the generation of content and experiences for audiences all over the world. Viacom’s long-serving CEO, Redstone has presented himself as an extraordinary person with an aggressive management style due to his deep involvement with all the aspects of the firm’s operations (Case Study 5).
Business Strategies
Viacom is renowned for being an extraordinary business entity that has been developed over the years though the continuous acquisition of existing media organizations. This has helped the company to avoid some of the risks connected with starting up companies. The firm merely started as a small movie theater but has transformed over the years to become one of the biggest entertainment companies in the world.
SWOT Analysis
Viacom makes products for particular audiences with a target audience comprising of young adults and children. Viacom largely goes after this demographic group due to its sensitivity to advertising, access to easy money from parents, and wealth of leisure time. Viacom’s emphasis on this group allows for the company to show good performance. For instance, Nickelodeon sought after children in elementary school, Nick Jr. target preschoolers and TeenNick’s main demographic is preteens. Black Entertainment Television (BET) is targeted towards young African Americans and it became the first network specifically targeted towards this demographic (Case Study 8). Viacom’s strategy was amazingly successful because by dividing their viewers into niche groups, more advertising revenue was being generated. Viacom is also successful in developing tie-ins between its products. The Nickelodeon channels show advertisements for content in other channels. There are also plenty of licensed products.
Innovation is very necessary in an industry that continuously targets the attention of the youth. Viacom has failed to incorporate technology in the entertainment industry, which was okay for them in the past. However, in the changing wave of entertainment with a lot of online options and a large section of consumers watching pirated content of movies and television shows, Viacom’s capacity to remain completely profitable could be significantly affected. For instance, currently, many popular television shows use old formats (Case Study 9). Should Viacom continue using old formats in content production and distribution, it can end up losing a huge part of its market share to other companies willing to change with times and take big risks.
Viacom has a good chance to be at the centre stage for the changes to be anticipated in the entertainment industry if it positions itself well in the future and gains high market share. This cannot be ignored particularly because the company’s television networks majorly target young adults and children. Besides, this demographic is highly likely to use new entertainment technology (Case Study 8). The internet could become an outstanding tool to those individuals who use it appropriately. Advertising is also increasing, which could lead to more transaction competencies since advertising is traded in larger blocks. Viacom can increase its market share by using the locally-oriented content creators and networks.
Piracy and internet usage could drastically reduce the profits gained in motion pictures and television. Streaming websites and illegal downloads provide consumers with movie and television programming at no costs (Case Study 9). This subsequently forces Viacom to contend with its low-cost movies and television programs. Viacom could be significantly affected by this trend since its target demographic of children and young adults are the ones who are likely to comprehend new technology and also show high usage of the internet and computers. Some people have never known where to access television shows apart from the internet for free.
Functional Strategies
BCG-Growth Share Matrix
The small internet media properties like Atom Entertainment, Harmonix Music Systems, iFilm, Neopets and a virtual pet website can be considered as dogs in the BCG matrix of Viacom. These acquisitions could not compete with News Cop.’s acquisition of MySpace, a social networking company valued at about $3 billion (Case Study 7). The small internet media properties were not fast enough Viacom’s competitors to respond to the changes in internet and digital technologies, making the company’s stock price to suffer more.
Cash Cows
MTV and Nickelodeon networks can be considered as a cash cow in the BCG matrix of Viacom. MTV was widely perceived as a global brand with something unique to offer to its customers. MTV went from being a video channel that purely produced music to a channel that promoted new forms of innovative programming to attract many young audiences, for instance, Road Stories, Beavis and Butthead, which were also integrated with music videos. In 1989, the MTV networks acquired 15% of all the funds driven into advertising.
Both Paramount and CBS can be referred to as stars in the BCG matrix of Viacom. The acquisition of Paramount Pictures for US$9.9 billion turned Viacom into among the top worldwide providers of branded entertainment content. Paramount offered Viacom with strategically significant theatrical content assets. The act of acquiring Paramount was an example of an upstream vertical integration strategy from theatrical display to theatrical content. Viacom also acquired CBS with the main aim of capitalizing on its advertising synergies. CBS’s entertainment assets provided Viacom with access to a huge number of channels which it could use to reach the largest number of listeners and viewers (Case Study 10). Viacom implemented a horizontal integration in 2001 during its acquisition of BET. The acquisition represented the network segment that Viacom would approach since the network was majorly targeted for African Americans.
Question Marks
Blockbuster is a question mark in the BCG matrix of Viacom. Soon after Blockbuster was bought, it ran into an intense competition with new competitor video chains like Hollywood Video, which created price wars in different markets. The revenues earned by Blockbuster were flat. Costs were rising and the prospects for a good cash flow to cover the company debts were not successful.
Internal and External Environment of Viacom
Value Chain Analysis (Internal Environment)
The value chain in Viacom’s market starts by creating the initial product through production and writing of motion pictures. Independent writers bring their content to the producers, for instance, Viacom’s Paramount Pictures, after which the film is produced. The next stage in the value chain is the content distribution, which the film producers can also control. The production companies issue their movies to home entertainment stores and theater chains like Bl...

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