MGT 527 Fall 2018: Business Analysis of Charter Communications

This report provides a comprehensive business analysis of Charter Communications, examining its position within the cable and telecommunications industry. It begins with an introduction and an overview of the company, followed by an in-depth analysis of the industry landscape, including market trends and competitive dynamics. The report then delves into the external environment using PESTEL analysis, assessing political, economic, social, technological, environmental, and legal factors impacting the company. An internal environment analysis is also conducted, exploring the company's strengths and weaknesses. Furthermore, the report includes a SWOT analysis to assess the company's strategic position and concludes with a summary of key findings. The report utilizes information from the year 2018 and prior, providing a detailed view of the company's strategic context at that time.

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Analysis of Charter Communications

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Introduction
Environment analysis of any organization is considered as major tool through which strategies of
the organization are formulated, managed, and changed as per requirements. It mainly includes
two aspects that are internal and external analysis, and both the analysis are important in terms of
ensuring the growth and competitiveness of the organization. This assignment mainly discusses
the internal and external environment analysis of the Charter communication, an organization
which operates its business in the Cable and telecommunication Industry.
Structure of this assignment mainly includes the Brief description of the Charter communication,
industry overview in which organization operates its business, external environment and industry
analysis which is improved on the basis of previous assignment. It also discusses the internal
environment analysis and literature review on strengths and weakness of the organization, and
also the effect of strengths and weakness on the performance and competitiveness of
organization. Further, it discusses the SWOT analysis of the organization and at the end brief
conclusion is stated in terms of concluding the key facts of the paper.
Brief Description of Organization
Charter Communication (CC) was established in 1933 by Barry Babcock, Jerald Kent, and
Howard Wood. All three were formed executives of Cencom Cable Television in St. Louis,
Missouri. This organization was also incorporated in the Missouri stated in the year 1933.
Presently, CC is the second largest cable provider in USA, as this organization achieved growth
with the help of innovation and acquisitions of the properties related to cable. Recently, it
completes the transactions with the Time Warner Cable and Bright House Networks. This name
of charter comes from the founding of Charter Communications, Inc. in 1993, and even though
organization has grown and evolved on number of levels from last two decades, then also roots
of this organization is embedded from early days of cable industry (Charter Communications,
2018).
Charter Communication is the fastest growing organization of USA in terms of TV, internet, and
voice arena. This organization contributes in the growth of economy of USA and also ensures
innovations for their customers so they are able to get the required information and
entertainment. The main aim of this organization is to give better products at better value, and
they do this by simplifying their offerings and pricings so that it becomes easy for the customers
to choose the best products.
In context of achieving these goals, this organization further commits to create jobs in America.
CC employs almost 95000 workers, and out of these workers almost 12% are veteran and 45%
are people of color. All these employees served almost 26 million customers in 41 states. From
the year 2012, CC employed almost 22000 U.S. workers and they aim to hire 20,000 more by the
year 2020.

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In terms of ensuring that customers are able to access the content of best nature on all those
platforms on which they want. Combined organizations make investments of almost $23 billion
in technology and infrastructure from the year 2014. The outcomes of these investments are
effective in nature, as this organization offers fastest base broadband speed of
Telecommunications & cable industry. In next five years, CC focusing on extending the network
to almost 2 million new customer locations and also by updating the combined company’s Time
Warner Cable and Bright House Networks to be all-digital just like Charter’s network (Charter
Communications, 2018).
Industry Overview
The industry in which CC operates is highly competitive over decades, and become more
competitive in recent years. However it also provides number of new opportunities to the
organizations operates its business in this industry.
From last five years, cable providers in the US industry reflect the growth by 0.2% in terms of
reaching the revenue of $100 billion in 2018. At the similar time, there are number of business
which has been declined by -1.0% and the number of employees has been declined by-1.6%
(IBIS World, 2018).
Cable industry traces its base from 1940s, as at that time license is required to broadcast any new
TV stations, the proprietors of the appliance store began offerings his rural customers which are
basic forerunners for present cable services. 60 years later, almost 85% of American households
subscribe to any type of TV-pay services. There are number of peoples which are relying on their
local cable companies for basic phone and internet services. Investors hold the choice between
the providers of landline and satellite broadcasters. Usually, traditional cable organizations rule
in those areas which have high population (Value line, no date).
On the other hand, Telecommunication service market of USA mainly includes the fixed-
network services and mobile services, and this had a value of almost 1.4 trillion U.S. dollars in
2017 and this is forecasted to grow almost 1.46 trillion dollars by the year 2020.
From last 15 years, mobile and voice technologies are become more important, as it is expected
by market that they gain space on continuous basis in the telecommunication service industry,
and this happen because number of mobile connections across the globe might reached to 9
billion by the year 2020 that is almost twice from the statistics of 2009. Another key for CC in
this industry is the wireless data, and this can be said because investments related to the wireless
data across the globe might reach to 500 billion dollars by the year 2019 (Statista, 2018).
The telecommunication industry of USA disappoints its investors in the year 2017, but it shows
the sign of improvements from the fourth quarter of 2017, as this is the time when major stocks
of this industry performs well in the market. It must be noted that all four national carriers of this
industry gained the postpaid subscribers in the last reported quarter.

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Further, it is necessary to understand that this industry is highly capital intensive in nature and
because of this any investment in all the tangible, intangible, and real property will ultimately
provide advantage to the telecom carriers. This would encourage the telecom operators in terms
increasing the investment for capital expenditure (NASDAQ, 2018).
Maximum times, CC competes with the organizations which have very less regulatory burdens,
better access to financing, good personal resources, good resources for marketing, favorable
recognition of brand name, and also the strong connections with the customers and regulatory
authorities. Enhancement of consolidation in the cable industry and also the cancellation of the
particular ownership rules give additional advantages to few of their competitors in different
ways such as easy access to financing, resources, and other efficiencies. Residential video
services of the organization faces the competition from different sources and this includes
services related to direct broadcasting satellite and some other organizations also which deliver
mobiles, television shows, and other video programming’s over the broadband internet
connections to TVs, computers, etc. Residential internet services of the CC face competition
from the phone companies’ DSL, FTTH and wireless broadband offerings and also from other
companies which offer different form of online services which further includes the wireless and
satellite-based broadband services (Charter Communications, 2018).
External Environment & Industry Analysis
PESTEL analysis of Charter communications is the strategic tool which is used for evaluating
the macro environment of the industry in which organization operates its business. PESTEL
mainly includes the political, economic, technological, environment and legal factors which
directly or indirectly affects the macro environment of the CC. Further, it discusses the porter
five forces in terms of evaluating the industry dimensions for ensuring effective strategy of the
organization.
PESTEL analysis
Political Factors- The political factors involves high amount of risk for the telecommunication
industry and cable industry. The traditional political factors in terms of telecom industry are the
ones which deal with the regulations, networks, licensing, national radio spectrums, and
particular nations trade barriers. Usually, it affects the network operators and the effect in this
context has been felt less by different equipment’s and service providers. However, few factors
work in the favor of this industry such as privatization and deregulations.
FCC imposes number of regulations on the cable and telecommunication industry, and it
becomes necessary for CC to comply with these regulations. All these regulations impose
additional burden on the organization and in case organization fails to perform then it will face
severe complications. Following are the regulations which directly or indirectly affect the
performance and competitiveness of the CC-

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 Obligation in terms of giving the equal employment opportunities in USA.
 Standards related to customers services.
 Standards related to technical services.
 Mandatory blackout dates in terms of particular network and syndicated programming.
 Restrictions related to political advertisements.
 Changes occurred in the ownership rules, as it gives direct advantage to few competitors
of the organizations.
 Inside wiring and exclusive contracts for MDU.
 Licensing facilities (Charter Communication, 2017..
 Additional requirements which governed the video description and closed captioning.
Each and every regulations stated above restrict the business practices in different forms and it
also imposes additional cost on the business.
Economic factors- CC is exposed to the risk associated with the economic conditions of their
present and potential customers, the potential financial instability of the customers of the
organization and their financial ability in terms of purchasing their products. The role of
economic factors is important in terms of the telecommunication industry. Recession hit the
telecom sector, as people were cutting down the telecom spending during the recession.
Cutbacks related to landlines had grown during the recessions while the growth the cellular
services had slowed. After the pass of recession, spending’s related to consumer on telecom is
back on track. By 2009, people had stopped cutting down the expenses related to telecom uses.
In the year 2016, things becoming good and with the economic revival, as this means that things
are changing across the globe.
At the time of general economic downturns, CC faces increased cancellations of their customers
or the unfavorable changes in the mix of the purchased products. This further includes the
increase in number of homes that mainly replace their video services in terms of internet-
delivered which directly impose negative impact on the ability of the organization to attract its
customers.
Weak conditions in economy further effects the ability of organization to gain new video
subscribers, as it enhance the dependency to the large extent on growth in the area of occupied
housing and service. It must be noted that, this is influenced by both local and national economic
conditions of USA.
Social Factors- Shared beliefs and attitudes play significant role in the driven the way through
which marketers at CC will understand the customers of the given market, and the manner
through which these marketers design the marketing message for their consumers. Following are
the social aspects which need to be taken care by the CC in terms of avoiding the negative
impacts of these factors on the performance and competitiveness of the organization-

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 Regular training to the employees and ensures well-being of the employees working the
organizations.
 Ensure that business operations complied with the regulations, and further support the
fair and healthy competition in the industry.
 Ensure the diversity in the workforce by giving equal employment opportunities in the
communities.
 Need to analyze the class structures, hierarchy, and power structures in terms of ensuring
the offering of the products and services (Hosein Rezazadeh Mehrizi and Pakneiat, 2008..
Technological conditions- Technology is the factor which affects the industry of cable and
telecommunication in fastest way, as it disrupts all the organization operates its business in the
stated industries. In case of charter Communication also technology play important role in the
growth and competitiveness of the organization, as number of steps are taken by this
organization also in terms of dealing with the technological challenges imposed by the industry-
 CC focus on selling the videos and online advertisement inventory to local, regional, and
national advertising customers and also the fiber-delivered communications and also
managed the information technology solutions to the large enterprise customers.
 CC ensures the effective programming for their customers in the form they want and at
the time they required in terms of any device. This can be understood with the help of
example, DVR services help the customers in digitally recording the programming and to
pause and rewind the live programing. Further, Customers can use the spectrum TV
applications and programmer authenticated applications (Charter Communication, 2017.
Environment factors- Telecom sectors major contributed in the e-waste every year, as in the
light of the level of e-waste generated by both service and equipment providers, it is necessary
for the CC to focus on the waste management and reducing the footprint on environment. Large
numbers of investors are investing in reducing the intensity of carbon, as there an organization
which implements the additional 24 MW of green energy by the year 2025. As they make the
direct contribution to the production of e-waste, as CC needs to focus on the recycling of device.
This helps in reducing the negative impact on the environment and become the organization
more sustainable in nature.
Legal factors- Legal environment in US is strict in terms of both telecom industry and cable
industry, as numbers of regulations are imposed on the organization operates in this industry.
There are number of legal factors which directly affect the working of CC in this industry, and
non-compliance of these factors directly results in severe consequences.
On December 2017, FCC introduces new regulations in terms of the broadband internet access
providers. It must be noted that, broadband service providers are obliged by the Communications
Assistance for Law Enforcement Act ("CALEA") in terms of configuring their networks in such
manner as it facilitates the law enforcement ability of the organization, accurate legal

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authorization, etc. Further, there two legal methods and both the methods are alternative in
nature for carrying the local broadcast television stations on cable systems. Federal must carry
the regulations require the cable systems to carry the local broadcast stations (charter
Communication, 2017.
Porter five forces model
Following are the five forces which drives the industry in which Charter Communications
operates its business-
Entry of New Competitors Threat- barriers related to market entry are low, as existing carriers
had major cost advantages to the new entrants from government institutions and because of this
market regulations support the new participants from entering or competing into the market.
Threats of substitute- Threat of substitutes are high in this industry, as each and every product
offered by CC face the threat of substitute in the telecom and cable industry. TV broadcasts are
substituted by the Netflix, as this can be considered as major threat for the cable connections.
Further, voice communications are threatened by the messengers such as Whatsapp.
Bargaining power of buyers- buying power of buyers in this industry is high and this happen
because of the increase competition and new entrants. As buyers have number of options and
they are not obliged to being loyal to any one organization.
Bargaining power of Suppliers- There is number of suppliers in the telecom industry of USA
and because of this bargaining power of these suppliers is low, but few factors are there which
gives high power to the suppliers such as innovative technology, good quality, and efficiency in
cost.
Existing competition- Another important force is the existing competitors, as there are number
of competitors which directly influence the moves the CC such as Comsat. This organization
stands on the 1st position of this industry and gives tough competition to its competitors (Charter
Communications, 2016).
Internal Environment Analysis
CC made the headlines in the late may 2015 at the time when it announces its plans to purchase
the Time Warner Cable (TWC) for $55 billion. The Stamford, Connecticut-based cable
telecommunications corporation on its detector for years, and Comcast Corporation (CMCSA)
also failed to acquire this because of these regulatory issues. At this time, charter made the smart
move and this deal made the organization 2nd largest cable and internet provider in the United
States. Because of this merger, charter gains almost 12 million subscribers in the significant
areas such as New York, Dallas, and Los Angeles markets. Through this charter solidified its
position and ensure long term growth prospects of the organization. This reflects major strengths
of the organization in the industry in which it operates (Charter Communication, 2015).

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This acquisition and other initiatives taken by organization directly affect the future performance
and provide competitive advantage to the organization. It ensures growth in revenue at the end of
decade. Internet service of charter further drives the business of the organization. Further, its
strengths are reflected from the boost occurred in the cable properties in Los Angeles and New
York City. It must be noted that, both the deals done by the organization includes the profitable
sports broadcasting rights.
There are some short term investments and decisions made by the organization also contributes
in positive manner for the business, as it allow the organization to offer number of improved
services to the customers such as they offers residential and commercial customers a digital
voice, data, and telephone package. All these services mainly provide the greater bandwidth and
higher definition video. We further think that short term investments in the digital infrastructure
ultimately benefit the organization in long run (Friederiszick, 2008.
There are few weaknesses also which affects the profitability and success of the organization in
negative manner such as lack of customer satisfaction. Charter communication is the customer
center organization, and this is the biggest reason because of which organization needs to focus
on its customer service. Poor customer services, hidden costs, and high cost on rental
equipment’s and number of complaints which are launched against this organization, and all
these complaints directly affects the reliability and trust of customers in negative manner. If
these practices are conducted in the similar manner, then it definitely affects the profitability and
long term sustainability of the organization in negative manner.
SWOT Analysis
Strengths- There are few strengths of the organization which not only supports the performance
of the organization, but also ensures competitive advantage for the organization such as
organization has made more interesting deals in the year 2017 such as addition of Bright House
Networks and above stated Time Warner Cable. The bright house networks were purchased for
$10.5 billion in cash and stock, and result in the enhanced coverage for the Charter in the
Midwest and other regions of Florida. On the other hand, later deal ensures the leading position
in New York City and alters it into California’s leading cable provider. Strength of the
organization further reflects through the short-term investments made by the organization in
terms of ensuring best services for the customers (Charter Communication, 2016). All these
strengths of the organization ensure competitiveness of the organization and ensure competitive
advantage for it over its competitors.
Weakness- Weakness in operations must be considered by the organization while framing its
strategies such as low profitability of the organization is the continuous stress for the
organization and its shareholders, as this is one of the biggest prospects which adversely affect
the portfolio of the organization. Another issue faced by organization is the lack of customer
satisfaction, and this is the area which required the focus of the organization on priority basis.

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Poor services to customers and hidden costs are the major issues faced by the organization, and it
is necessary for the organization to resolve these issues on immediate basis (Phadermrod,
Crowder & Wills, 2016).
Opportunities- There is number of opportunities which can be grabbing by the organization in
terms of ensuring long term sustainability of the organization such as above stated acquisitions
allow the organization to ensure better margins and subsequently better results for its
shareholders, as both the deals gives the major market areas to the organization. Further, Charter
further make announcement related to its rebranding of residential services in the year 2013, as
this allowed the company to ensure substantial reserves in terms of updating its coaxial cable
network. With this developed infrastructure and better servicing, organization can ensure best
services for their customers and overcome from their weakness.
Threats- Threat of substitute products and existing competition is high for the organization, and
relevant steps must be taken by the organization for managing both the threats in effective
manner. As each and every product offered by CC face the threat of substitute in the telecom and
cable industry such as TV broadcasts are substituted by the Netflix, as this can be considered as
major threat for the cable connections. Further, voice communications are threatened by the
messengers such as Whatsapp (Value line, 2015).
Conclusion
After considering the facts of this paper, it can be said that this organization becomes the leader
in the telecommunication and cable industry because of its effective strategies, as it conducts the
effective evaluation of its internal and external factors in terms of enhancing its performance and
gain competitive advantage for itself. Presently, CC is the second largest cable provider in USA,
as this organization achieved growth with the help of innovation and acquisitions of the
properties related to cable. Recently, it completes the transactions with the Time Warner Cable
and Bright House Networks. Because of this merger, charter gains almost 12 million subscribers
in the significant areas such as New York, Dallas, and Los Angeles markets. Through this charter
solidified its position and ensure long term growth prospects of the organization. This reflects
major strengths of the organization in the industry in which it operates. There are some short
term investments and decisions made by the organization also contributes in positive manner for
the business, as it allow the organization to offer number of improved services to the customers
such as they offers residential and commercial customers a digital voice, data, and telephone
package.
There are few weaknesses also which affects the profitability and success of the organization in
negative manner such as lack of customer satisfaction. Charter communication is the customer
center organization, and this is the biggest reason because of which organization needs to focus
on its customer service. CC is unprotected to the risk related with the economic circumstances of
their present and potential customers, the potential financial instability of the customers of the

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organization and their financial aptitude in terms of purchasing their products. In the year 2016,
things becoming good and with the economic revival, as this means that things are changing
across the globe. At the time of general economic downturns, CC faces increased cancellations
of their clienteles or the unfavorable changes in the mix of the purchased products.
References
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https://ir.charter.com/static-files/766daee3-5ff2-410d-b535-193acc66bcd5.
Charter Communications, (2017). Annual Report 2017. Retrieved from
https://ir.charter.com/static-files/1446750d-6d85-4e23-8746-37e56a565e81.
Charter Communications, (2018). About Charter. Retrieved from
https://newsroom.charter.com/company-profile/.
Charter Communications, (2018). About Us. Retrieved from https://policy.charter.com/about/.
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ysis.aspx#.W_koITgzbIV.
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