Home     About Us    Contact Us     Contribute     Privacy
Mutual Funds
Related Categories
Tip of the Day

Tip of the Day Make Your Own Meals

Make Your Own Meals - We all enjoy going out for dinner, but when it becomes a habit due to a busy schedule or kid's desires, it can become extremely...

read entire tip

Recently Added
Other Great Sites

Cable Industry Analysis

Last article, I laid out how to analyze a company according to Michael Porter's widely used framework for evaluating industries. In this article I will analyze the cable business of Comcast, which Warren Buffet just bought a stake in, to see how it stakes up to the test  (Note that we are just talking about the core cable operations and not the rest of the businesses the company is in. If we actually analyzed the entire company in order to buy we would have to look at all their operations, as well as the price).

1. Threat of entry The company has high fixed costs to enter their business. It takes billions of dollars to build a network such as theirs and many more billions to maintain that network. The company does have some competitors but it doesn't seem as if a smaller firm will have much chance of coming in to take market share away from Comcast in the near future.Grade: A+

2. Bargaining power of suppliers Since Comcast is one of the only outlets for providers of content (such as HBO MTV etc.), they have a strong bargaining position with their suppliers (which are the stations themselves). They have even more power with the suppliers of their equipment since they are such a large player in their industry. Recently, satellite has diminished some of the company's power with content providers as the recent war at rival Cablevision over Yankees games has shown.Grade: B

3. Bargaining power of buyers Comcast has continually been able to raise prices, a sure sign of their power with consumers. If you want cable, this is one of the only games in town. Recently, it has become even harder for consumers to switch as cable has started to offer you phone service, cable service and internet service rolled into one. Most people would rather pay up rather then go through the pain of switching all those things at once.Grade: A-

4. Availability of substitutes Up until a few years ago, this was relatively nil. In recent years consumers have had the choice of cable or satellite. This war has been a bitter one and both products eventually will probably end up being about the same. Yet it looks like satellite or cable will be the only choice for years to come leaving us with only 2 choices, which is much better than most industries.Grade: B-

5. Competitive rivalry While there is some rivalry with satellite that has resulted in price cutting, it hasn't been too excessive and prices are continuing to rise even with the war. There are fears that either satellite or cable will wipe the other out or engage in massive price cutting but it doesn't seem to be happening; both products have their appeal and those who wanted one or other have probably already made that choice. Unless something major happens or one starts to aggressively cut prices it doesn't look like the rivalry will be too unhealthy. Grade: B

Conclusion: It would seem that while Comcast (the company) might be a good bet because of their recent moves into other industries, the core cable business is just a tad above average in terms of profitability. You would probably need to watch and see how destructive the cable/satellite war actually turns out to be before the industry looks really attractive.

Discuss It!
1 2 3 >

Tsippora said:

I assume this article was written some years ago, before the advent of FIOS. I wonder how the analysis would look today?

Dennis Ballard said:

Cable TV is going to be gone in our home if they keep broadcasting ads over the top of programming. It is disgusting to pay $100.00/mon and have to put up with "popups" trailers, logos, and now ads across images on the screen. There is plenty of free HD Programming off air if this continues.

real racing 3 | hungry shark evolution said:

This is very interesting, but it is necessary to click on this link:

Dissertation Writing service UK said:

This article is very attractive & informative.

bee suits said:

Well this is such an industry where most of you would not have thought about at all. I hope it would certainly be of great use to the people. I will be something that is going to be of a much greater cause.

UN65JS8500FXZA said:

Threat of entry The company has high fixed costs to enter their business. It takes billions of dollars to build a network such as theirs and many more billions to maintain that network.

inflatable bed reviews said:

I enjoy your website. Outstanding distribute. It is rather correct, men and women must figure out how to find out ahead of they can find out. lol i am aware this kind of looks amusing nonetheless it really is many obvious...

Dissertation Writing service UK said:

The article is ineed interesting and informative :)

volver con ella said:

Wonderful site and I wanted to post a note to let you know, ""Good job""! I’m glad I found this blog. Brilliant and wonderful job ! Your blog site has presented me most of the strategies which I like. Thanks for sharing this.

galata bars said:

Thanks for sharing this great and good information with everyone.

????????????? said:

How did you can avail the give your dream a shape with the help of make your move Adword India's No 1 online business experts.

Free Recharge said:

This was really an interesting topic and I kinda agree with what you have mentioned here!

how to clear acne fast said:

Who know about it very few people know this. Success for you....!!!

heartoftexascremations.com said:

Advantageously, the article is really the best on this notable topic. I harmonize with your conclusions and will thirstily look forward to your approaching updates

Fort Lauderdale criminal attorney said:

yes. Your information is good. it friendly and very helpful to me. I hope to read the next article of your most recent.

learn more said:

I want you to thank for your time of this wonderful read!!! I definately enjoy every little bit of it and I have you bookmarked to check out new stuff of your blog a must read blog!!!!

www.sytropinbonus.com said:

Our website is number 1 in Case Study help, Case Solution & Case Analysis Help. Feel free to contact us to get your case studies done.

facebook said:

There tend to be not many people who can certainly write not so simple posts that artistically. Continue the nice writing.

Web Developer said:

hi this is priya in this blog is a given the best informetion thanks for the given info.

xmas hampers said:

I really enjoyed reading your article here, thanks for the good insight and keep posting more.

Most Popular Articles
Most Popular Definitions
Daily Definition

Definition of the Day NASDAQ

Definition: The NASDAQ is a modern stock exchange that consists of a highly computerized system that allows buyers and sellers of stocks to be paired together automatically.  Unlike the New York Stock Exchange, there aren't floor brokers here. TeenAnalyst Advice: The NADAQ is a completely electronic stock exchange.  If you visited...

read entire definition




Home     About Us    Contact Us     Contribute     Sitemap


Copyright © 2009 TeenAnalyst.com