How well placed is HBO to sustain its recent success in the entertainment industry?

This document critically evaluates how well placed HBO is to sustain its recent success in the entertainment industry. It discusses strategic decision making, three dimensional strategic analysis, first mover advantage, product and process innovation, and sustaining competitive advantage. Recommendations for HBO's future success are also provided.

CORPORATE STRATEGY
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Table of Contents
Component 1 is in Poster......................................................................................................................3
Component 2........................................................................................................................................3
Critically evaluate how well placed is HBO to sustain its recent success in the entertainment
industry........................................................................................................................................3
Strategic decision making...........................................................................................................3
Three Dimensional strategic analysis..........................................................................................4
First mover and first mover advantage........................................................................................4
Product and Process Innovation..................................................................................................5
Sustaining Competitive Advantage.............................................................................................5
Recommendations ...............................................................................................................................6
References ...........................................................................................................................................7
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COMPONENT 1 IS IN POSTER
COMPONENT 2
Critically evaluate how well placed is HBO to sustain its recent success in the entertainment
industry
Strategic decision making
As per the recent articles placed on HBO, it has been identified that HBO is facing complex,
ever changing climate with more innovative competitors than before. Though the channel is
critically acclaimed, widely popular and highly profitable, still it needs to adjust the telecast
according to the changing market for TV entertainment (Cai, Jo and Pan, 2012). HBO has become
known for setting the standard for smart and intense telecasts and through this, channel's TRP has
been increasing continuously. Hence, as a result of this creative freedom, HBO has been working as
a creative playground that represents all the telecasts of Hollywood channels. There are basically
three factors that leads the channel into pressure and all the three factors are mentioned in the below
section:
Eroding consumer buying power: Income level of middle class American households has
been increasing and that leads people to pay less for TV serials and movies (Marshall, 2013). As per
the reviews, Americans pay less for entertainment at home; thus this has dropped television demand
for the first time ever. Many Americans are looking to cut spending in any way they can and cable
TV are often at the top of the list for spending cuts.
The end of the home box office: The number of movies telecasting at HBO has been
increasing and due to that, a large part of programming at HBO hampers (Yousafzai, Hussain and
Griffiths, 2014). People have more choices than ever for how to watch movies as soon as they
release in theaters and they do not need to subscribe to HBO anymore. Thus, according to market
trend, HBO is able to acquire box office benefits from all the telecasts.
New competitors for premium TV: At the same time, HBO is also facing intensifying
competition in the original TV production business. Showtime and Starz have created acclaimed TV
series of their own like Dexter and Weeds. HBO is a very strong brand; however the brand alone is
not enough to help companies overcome their challenges. Therefore, the brand can lose relevance
with the customers for all sorts of reasons that are often beyond the control of the brand managers.
Thus, in order to manage these strategic aspects, HBO has informed all its investors that
they would be offering a stand-alone digital subscription to customers outside of the usual cable
distribution model (Thompson and et.al., 2013). In such context, Time Warner has indicated that the
firm would be targeting typical millennial who have the capability to pay for such subscribed
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channels. Media and entertainment is a rapidly changing industry; thus in response to that, IBM
solution provide market leading analytics capabilities to ensure a sustainable consumer experience.
Three Dimensional strategic analysis
The three dimensional strategic analysis of the HBO which make it television network wide
in the entertainment industry. The following are the three dimensional strategic analysis are -
Financial Strength – The financial strength of the HBO is increasing as their financial
capacity is to gain growth in the entertainment industry. The TRP of this network is increasing as
the channel provides various series like movies, TV serials, reality shows, comedy acts,
documentary based series and concert shows (Purce, 2014). The other channels are also subscribed
to this channel to produce their broadcast in a better way. All this factors lead to the financial
strength of the HBO which increase their financial profitability in the entertainment industry.
Relative Market Share – The market share of HBO has been increasing since the channel is
able to telecast all sorts of serials. HBO includes upgraded information on mobile application for
the easier access to those internet users who don't buy TV package channel. The profit margin of
HBO is increased which lead to many opportunities in the international markets.
Relative Market Strength - The market strength of HBO is that it is the latest Hollywood
blockbuster in the entertainment industry. Over 150 countries, HBO broadcast its series. It also have
special characteristic of involving in the merchandising actively. The features of movies, serials,
documentary based series, comedy acts, concert shows, boxing shows make it made for cable
channels more effective to gain the market share (Marshall, 2013). The kind of series produce by
this television network enhance their viewers and it also underpins their position in television
network.
First mover and first mover advantage
First mover is the advantage gained by the initial and significant occupant of a market
segment and it may also be refereed to as technological leadership. Not all the first movers are
rewarded and if the first mover does not capitalize on its advantage, its first mover disadvantages
leave opportunity for new entrants to enter the market. This is also essential in terms of competing
more effectively and efficiency than the first movers (Lee, Singal and Kang, 2013). HBO has been
managing success aspects as first mover advantage where in chief emphasis has been given towards
technological leadership. As per the concept, the diffusion of innovation can diminish the first
mover advantages over time through workforce mobility, publication of research and informal
technical communication. HBO has been involved in telecasting range of movies and TV serials and
this enhance revenue of the channel; thus as a result, different production houses have been
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sponsoring the channel for more telecast of serials and reality shows.
Product and Process Innovation
HBO can be regarded as a innovative service provider since the channel telecasts all sorts of
serials, movies and reality shows. In terms of product innovation, HBO has been entering into
diverse episodes so that all types of programmes can be displayed. From last many years, HBO has
been telecasting major TV serials such as Friends, The Larry Sanders Show, The Sopranos and Six
Feet Under (Johnson and et.al., 2013). Among these serials, HBO has also entered into comedy
shows so that all types of serials can be displayed to the customers. Hence, in such respect, it can be
said that the cable channel had developed a slogan to highlight the differentiation factor of the
original programming that it has been putting on the channel. In terms of product innovation, HBO
has been introducing high definition serials which helps in acquiring deals from numerous
production houses.
Sustaining Competitive Advantage
HBO has been managing its business position in competitive market place through
telecasting reality TV serials and other movies (Hacklin, Battistini and Von Krogh, 2013).
Apparently, 3D animation movies have been affecting the entertainment industry because it brings
numerous changes to the specific industry. At the same time, the level of competition is also
increasing since there are varied technological drivers that manages the industry and it also assists
the channel to broadcast popular TV shows.
3 D animations firms cover the wide area in the entertainment industry (Fisher III and
Oberholzer-Gee, 2013). It is based on the computer animated films appear three dimensional on the
film screen. The advancement of technology in making the 3D films and the graphic and web
designing of the films make it unique in the film screen. HBO is a television network which consists
of theatrically based movies, television series, documentaries, boxing series, and concert specials.
The impact of 3D animation films require the advancement of technology but for HBO it is not
possible to produce many of the shows on 3D. HBO offer its viewers 3D films as a part of the
television network. The production of the 3D films is more complex which is difficult for the HBO
to produce its television network in complex way (Christopherson, 2013).
For HBO, it would face the high satellite cost and reducing their bandwidth requirements.
HBO is not intent to repeat the broadcast to face the competition when high definition was enter the
market with the standard definition. The another impact of 3D animation films on HBO is the
technology catch up with the network. In broadcasting the series and movies, there are multiple
formats which are follow but the 3D films make their films in a more magical way and the graphic
designing of the films appear in the film screen (Cai, Jo and Pan, 2012). The broadcast of the 3D
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films handled correctly for the better quality of movie which have an impact on HBO to handle the
broadcast correctly. If they are not handled correctly, the result might hamper efficacy of the
channel. For making the 3D content for television is not easy for HBO and cost of producing the
series is very high. To test the distribution infrastructure on 3D have an impact on the HBO.
RECOMMENDATIONS
 HBO should make more innovation in the networking aspects where in the channel should
subscribe to other telecasts.
 Since 3D and animated films are increasing; therefore HBO must emphasize on telecasting
HD films. This can assist HBO to acquire attention from the clients because most of the
clients prefer to watch high definition serials.
 Hence, as a overall service provider, HBO should implementing wide range of changes in
the channel chiefly for the purpose of customer convenience.
 The more creative risk in the market increases its content in the next few years (Negus,
2013). The innovative ideas of broadcasting the various series increases their market share
in the entertainment industry. Thus, chief emphasis should be given towards innovative and
creative aspects.
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REFERENCES
Cai, Y., Jo, H. and Pan, C., 2012. Doing well while doing bad? CSR in controversial industry
sectors. Journal of Business Ethics, 108(4), pp.467-480.
Christopherson, S., 2013. Hollywood in decline? US film and television producers beyond the era
of fiscal crisis. Cambridge journal of regions, economy and society, 6(1), pp.141-157.
Fisher III, W.W. and Oberholzer-Gee, F., 2013. Strategic management of intellectual
property. California management review, 55(4), pp.157-183.
Hacklin, F., Battistini, B. and Von Krogh, G., 2013. Strategic choices in converging industries. MIT
Sloan management review, 55(1), p.65.
Johnson, G. and et.al., 2013.Exploring strategy text & cases. Pearson Higher Ed.
Lee, S., Singal, M. and Kang, K. H., 2013. The corporate social responsibility–financial
performance link in the US restaurant industry: Do economic conditions
matter?. International Journal of Hospitality Management, 32, pp.2-10.
Marshall, L., 2013. The 360 deal and the ‘new’music industry. European Journal of Cultural
Studies, 16(1), pp.77-99.
Negus, K., 2013. Music genres and corporate cultures. Routledge.
Purce, J., 2014. The impact of corporate strategy on human resource management. New
Perspectives on Human Resource Management (Routledge Revivals), 67.
Thompson, A. and et.al., 2013. Crafting & Executing Strategy 19/e: The Quest for Competitive
Advantage: Concepts and Cases. McGraw-Hill Education.
Yousafzai, S., Hussain, Z. and Griffiths, M., 2014. Social responsibility in online videogaming:
What should the videogame industry do?. Addiction research & theory.
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Bibliography
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industry-in-2013/#gref
http://mashable.com/2012/12/09/innovation-index-jon-m-chu-entertainment/#YhQaK.CyBPq6
http://www.pastemagazine.com/blogs/lists/2015/05/the-best-hbo-series-of-all-time.html
https://www.smartadvantage.com/blog/hbo-under-pressure-how-they-are-competing-and-staying-
relevant/
http://www.fool.com/investing/general/2014/05/08/for-hbo-comedy-is-becoming-a-competitive-
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