Strategic Analysis of Shaw Communications: A Case Study Report
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Case Study
AI Summary
This case study analysis examines Shaw Communications, focusing on its strategic decisions and market position within the telecommunications industry. The analysis begins with an external assessment, including PESTEL analysis, economic indicators, and Porter's Five Forces, evaluating the competitive landscape and industry trends. It then delves into an internal analysis, encompassing financial performance, strategic effectiveness, SWOT analysis, and value chain analysis, identifying key strengths, weaknesses, opportunities, and threats. The study identifies a strategic issue and proposes alternative solutions, culminating in a final recommendation for Shaw Communications' future strategic direction. The report includes detailed appendices with financial data, market analysis, and strategic group mapping, providing a comprehensive overview of Shaw Communications' business environment and strategic challenges.
Running head: CASE STUDY ANALYSIS AND REPORT
Case study analysis and report
Name of the student
Name of the university
Student ID
Author note
Case study analysis and report
Name of the student
Name of the university
Student ID
Author note
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CASE STUDY ANALYSIS AND REPORT
Table of Contents
Appendix:...................................................................................................................................2
A. Company’s External analysis:...............................................................................................2
1. PESTEL..................................................................................................................................2
2. Economic indicators...............................................................................................................3
3. Porters five forces and their impact.......................................................................................3
4. Factors driving change and their impact................................................................................4
5. Key success factors................................................................................................................5
6. Strategic group map analysis.................................................................................................5
7. Company outlook based on the assessment of the industry...................................................6
B. Company’s internal analysis..................................................................................................7
1. Financial analysis...................................................................................................................7
2. How well is the company present strategy working............................................................13
3. SWOT analysis.....................................................................................................................14
4. Value chain...........................................................................................................................15
5. Identification of one strategic issue......................................................................................16
Introduction:.............................................................................................................................17
Analysis:...................................................................................................................................17
Alternative:...............................................................................................................................18
Recommendation:....................................................................................................................19
References and Bibliography list:............................................................................................21
Table of Contents
Appendix:...................................................................................................................................2
A. Company’s External analysis:...............................................................................................2
1. PESTEL..................................................................................................................................2
2. Economic indicators...............................................................................................................3
3. Porters five forces and their impact.......................................................................................3
4. Factors driving change and their impact................................................................................4
5. Key success factors................................................................................................................5
6. Strategic group map analysis.................................................................................................5
7. Company outlook based on the assessment of the industry...................................................6
B. Company’s internal analysis..................................................................................................7
1. Financial analysis...................................................................................................................7
2. How well is the company present strategy working............................................................13
3. SWOT analysis.....................................................................................................................14
4. Value chain...........................................................................................................................15
5. Identification of one strategic issue......................................................................................16
Introduction:.............................................................................................................................17
Analysis:...................................................................................................................................17
Alternative:...............................................................................................................................18
Recommendation:....................................................................................................................19
References and Bibliography list:............................................................................................21
CASE STUDY ANALYSIS AND REPORT
Appendix:
A. Company’s External analysis:
1. PESTEL
1.1 Political factors’
The deal of selling Shaw media to Corus would be contrary to the past practice in the
telecommunication industry of Canada. Therefore, the idea of selling the media to Corus
would not align with the regulations of telecommunication industry. Several divisions of
Shaw such as cable television, broadband internet and telephone are regulated by different
Canadian regulations.
1.2 Economic factor
There is an increase in household spending on the telecommunication services and in
light of such increase, the company is experiencing an increase in the demand growth of
services of Shaw communication. The standard industry practice of bundling two or more
services would enable the company to derive the benefits from economies of scale (White et
al. 2017, p.3).
1.3 Social factor
The declining consumption of traditional television services has resulted in the overall
TV business at the annual rate of 5% that has been consistent with the trend (White et al.
2017, p.5). In addition to this, the fastest and largest growth in the connectivity of consumers
among the household of Canada has resulted in holding significant foothold in the wireless
phone market.
1.4 Technological factor
The demand of services of Shaw communication has increased because of the
advancement in the technology that has enabled consumer to watch anything and anywhere.
1.5 Environmental factor
The internet service of Shaw communication is delivered through using fiber coaxial
cable network and such network has high resistance to electronic signal pollution, shielding
effectiveness and improving attenuation.
1.6 Legal factors
The cable television division of Shaw communication is impacted by the Canadian
radio communication and telecommunication commission and this has impact on the network
serving the provinces of Alberta and British Communication. Such commission also requires
the company to access to their owned media content from all the providers of
telecommunication.
2. Economic indicators
This section outlines three economic features that impact the business of Shaw
communications:
Appendix:
A. Company’s External analysis:
1. PESTEL
1.1 Political factors’
The deal of selling Shaw media to Corus would be contrary to the past practice in the
telecommunication industry of Canada. Therefore, the idea of selling the media to Corus
would not align with the regulations of telecommunication industry. Several divisions of
Shaw such as cable television, broadband internet and telephone are regulated by different
Canadian regulations.
1.2 Economic factor
There is an increase in household spending on the telecommunication services and in
light of such increase, the company is experiencing an increase in the demand growth of
services of Shaw communication. The standard industry practice of bundling two or more
services would enable the company to derive the benefits from economies of scale (White et
al. 2017, p.3).
1.3 Social factor
The declining consumption of traditional television services has resulted in the overall
TV business at the annual rate of 5% that has been consistent with the trend (White et al.
2017, p.5). In addition to this, the fastest and largest growth in the connectivity of consumers
among the household of Canada has resulted in holding significant foothold in the wireless
phone market.
1.4 Technological factor
The demand of services of Shaw communication has increased because of the
advancement in the technology that has enabled consumer to watch anything and anywhere.
1.5 Environmental factor
The internet service of Shaw communication is delivered through using fiber coaxial
cable network and such network has high resistance to electronic signal pollution, shielding
effectiveness and improving attenuation.
1.6 Legal factors
The cable television division of Shaw communication is impacted by the Canadian
radio communication and telecommunication commission and this has impact on the network
serving the provinces of Alberta and British Communication. Such commission also requires
the company to access to their owned media content from all the providers of
telecommunication.
2. Economic indicators
This section outlines three economic features that impact the business of Shaw
communications:
CASE STUDY ANALYSIS AND REPORT
2.1 Growth rate- Over the past five years, the internet product customer service of
Shaw communication experienced growth with an average of 2% increase annually. The
home product of Shaw also experienced a strong growth along with the growth in the demand
of overall telecommunication services. The growth of revenue from cellular consumption of
data has increased and it is expected that such growth rate would be moderated because of
greater access of public Wi-Fi (White et al. 2017).
2.2 Number of rivals- Shaw communication is one of the large ownership groups in
the consumer telecommunication market of Canada. The rivalry of Shaw communication
includes TELUS, Bell, Rogers and Videotron along with some other largest entities such as
Cogeco Inc, Brag Communication Inc and Manitoba telecommunication services (White et
al. 2017, p.6).
2.3 Economies of scale- The standardized industry practice that requires bundling of
two or more services would provide benefits to Shaw communications in terms of economies
of scale (White et al. 2017, p.3). In addition to this, customers signing up for multiple
services are provided increased discount which would result in increasing revenue for
company.
3. Porters five forces and their impact
3.1 Competitors
The industry in which the Shaw communications operates is very competitive and the
overall profitability position of company is impacted by this particular factor. The market is
dominated by small number of large group of ownership. Total number of competitors of
Shaw communication is less and they comprised of TELUS, Rogers, Bell and Videotron. The
connectivity portfolio of Shaw would be enhanced by the acquisition of WIND which is an
independent provider of cellular phone network (White et al. 2017, p.5). Therefore, it can be
inferred that the degree of competitive rivalry is moderate.
3.2 Supplier
Over the past few decades, significant media assets have been acquired by the
telecommunication player of Canada. However, the benefit of media content and owning of
connectivity is unclear in Canada and incapability on part of organization to own media
contents can results in differences in the services and products offered. Therefore, supplier
has lower bargaining power (White et al. 2017).
3.3 Consumer/Buyer
The bargaining power of customers of Shaw communication is moderate as it is
preferred by the customers not to split their telecommunication services. It is easier for
company to retain and gain customers because of the adoption of industry standard practice.
However, the prevailing competitive pressure and introduction of new devices and services
from the competitors poses a challenge for the company to retain their customers.
3.4 Substitute
The threat of substitute of product and services is intensive because the competitors
are able to offer similar products and services to the customers. It is so because the
competitors of Shaw communication offer products and services capable of equally satisfying
the demand of customers.
3.5 Entry
2.1 Growth rate- Over the past five years, the internet product customer service of
Shaw communication experienced growth with an average of 2% increase annually. The
home product of Shaw also experienced a strong growth along with the growth in the demand
of overall telecommunication services. The growth of revenue from cellular consumption of
data has increased and it is expected that such growth rate would be moderated because of
greater access of public Wi-Fi (White et al. 2017).
2.2 Number of rivals- Shaw communication is one of the large ownership groups in
the consumer telecommunication market of Canada. The rivalry of Shaw communication
includes TELUS, Bell, Rogers and Videotron along with some other largest entities such as
Cogeco Inc, Brag Communication Inc and Manitoba telecommunication services (White et
al. 2017, p.6).
2.3 Economies of scale- The standardized industry practice that requires bundling of
two or more services would provide benefits to Shaw communications in terms of economies
of scale (White et al. 2017, p.3). In addition to this, customers signing up for multiple
services are provided increased discount which would result in increasing revenue for
company.
3. Porters five forces and their impact
3.1 Competitors
The industry in which the Shaw communications operates is very competitive and the
overall profitability position of company is impacted by this particular factor. The market is
dominated by small number of large group of ownership. Total number of competitors of
Shaw communication is less and they comprised of TELUS, Rogers, Bell and Videotron. The
connectivity portfolio of Shaw would be enhanced by the acquisition of WIND which is an
independent provider of cellular phone network (White et al. 2017, p.5). Therefore, it can be
inferred that the degree of competitive rivalry is moderate.
3.2 Supplier
Over the past few decades, significant media assets have been acquired by the
telecommunication player of Canada. However, the benefit of media content and owning of
connectivity is unclear in Canada and incapability on part of organization to own media
contents can results in differences in the services and products offered. Therefore, supplier
has lower bargaining power (White et al. 2017).
3.3 Consumer/Buyer
The bargaining power of customers of Shaw communication is moderate as it is
preferred by the customers not to split their telecommunication services. It is easier for
company to retain and gain customers because of the adoption of industry standard practice.
However, the prevailing competitive pressure and introduction of new devices and services
from the competitors poses a challenge for the company to retain their customers.
3.4 Substitute
The threat of substitute of product and services is intensive because the competitors
are able to offer similar products and services to the customers. It is so because the
competitors of Shaw communication offer products and services capable of equally satisfying
the demand of customers.
3.5 Entry
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CASE STUDY ANALYSIS AND REPORT
The opportunity for new entrants in the telecommunication service sector of Canada is
restricted due to the regulation of spectrum of government. Companies are well positioned to
offer discount to customers for subscribing to the range of connectivity services which makes
it difficult for new entrant to compete in the initial stage. In addition to this, it is required by
the telecommunication companies holding media assets to provide equal access to the owned
media content which makes it difficult factor for new entrants. Therefore, threat of new
entrants is intensive (White et al. 2017).
3.6 Overall strategic impact
From the analysis of all the five forces of porters, it can be inferred that major factor
influencing the profitability of Shaw Communication is the competition from its rivalry. It is
also required by the company to swiftly respond to changes in the needs of customer by
identifying the change in trend.
4. Factors driving change and their impact
4.1 The media and connectivity industry is changing dramatically because of
widespread high speed access of internet to the homes and increasingly to the mobile devices
of consumers. Due to this, most of the companies are holding media assets that help them in
gaining an equal access to their owned media contents.
4.2 The intensive applications of bandwidth have resulted in growing demands of
consumers for greater bandwidth and access to higher speed internet. There is significant
increase in the demand of telecommunication services because of increase in demand for the
bandwidth that helps in delivering data intensive services such as photo sharing, web
browsing and video streaming (White et al. 2017, p.5).
4.3 The household is solely relying on the wireless phone services and heightened
competition has significantly affected the market of wireless phone market. In change of the
industry trend of the telecommunication services, the company is employing a pure play
connectivity that helps company in offering a complete range of services along with
substantial increase in the wireless services (White et al. 2017, p.7).
From the analysis of the drivers of industry change, it can be observed that the Shaw
communication shifting to providing broader range of wireless services would align the
business growth with the growth in demand for such services. It would be profitable for the
company to adopt the approach of pure play as it would help in incorporating the strategic
impact of the drivers changing the industry.
5. Key success factors
5.1 The Go Wi-Fi initiative of Shaw communication has helped in enriching the
customer service as it offered an alternative to rely on the mobile data services that are
expensive. The internet subscriber of Shaw at no extra charge had an access to approximately
75000 access points (White et al. 2017, p.3). It was expected by the company that the
introduction of such initiative would be a differentiating factor competing with bundling and
price
5.2 Strong growth was witnessed by Shaw from the home phone product with total
number of subscribers for the product reaching to 1.38 million in year 2014. This added to the
revenue generation of Shaw Communication.
The opportunity for new entrants in the telecommunication service sector of Canada is
restricted due to the regulation of spectrum of government. Companies are well positioned to
offer discount to customers for subscribing to the range of connectivity services which makes
it difficult for new entrant to compete in the initial stage. In addition to this, it is required by
the telecommunication companies holding media assets to provide equal access to the owned
media content which makes it difficult factor for new entrants. Therefore, threat of new
entrants is intensive (White et al. 2017).
3.6 Overall strategic impact
From the analysis of all the five forces of porters, it can be inferred that major factor
influencing the profitability of Shaw Communication is the competition from its rivalry. It is
also required by the company to swiftly respond to changes in the needs of customer by
identifying the change in trend.
4. Factors driving change and their impact
4.1 The media and connectivity industry is changing dramatically because of
widespread high speed access of internet to the homes and increasingly to the mobile devices
of consumers. Due to this, most of the companies are holding media assets that help them in
gaining an equal access to their owned media contents.
4.2 The intensive applications of bandwidth have resulted in growing demands of
consumers for greater bandwidth and access to higher speed internet. There is significant
increase in the demand of telecommunication services because of increase in demand for the
bandwidth that helps in delivering data intensive services such as photo sharing, web
browsing and video streaming (White et al. 2017, p.5).
4.3 The household is solely relying on the wireless phone services and heightened
competition has significantly affected the market of wireless phone market. In change of the
industry trend of the telecommunication services, the company is employing a pure play
connectivity that helps company in offering a complete range of services along with
substantial increase in the wireless services (White et al. 2017, p.7).
From the analysis of the drivers of industry change, it can be observed that the Shaw
communication shifting to providing broader range of wireless services would align the
business growth with the growth in demand for such services. It would be profitable for the
company to adopt the approach of pure play as it would help in incorporating the strategic
impact of the drivers changing the industry.
5. Key success factors
5.1 The Go Wi-Fi initiative of Shaw communication has helped in enriching the
customer service as it offered an alternative to rely on the mobile data services that are
expensive. The internet subscriber of Shaw at no extra charge had an access to approximately
75000 access points (White et al. 2017, p.3). It was expected by the company that the
introduction of such initiative would be a differentiating factor competing with bundling and
price
5.2 Strong growth was witnessed by Shaw from the home phone product with total
number of subscribers for the product reaching to 1.38 million in year 2014. This added to the
revenue generation of Shaw Communication.
Market share
Price
High
Low
High
Videotron
TELUS
Roger
Shaw
Bell
CASE STUDY ANALYSIS AND REPORT
5.3 The purchasing of Canwest Global communication Corporation by Shaw
communication made later a vertically integrated company that help in delivering customers
through the connected platforms and creating contents. Such acquisition has helped in
accelerating revenue generation.
6. Strategic group map analysis
6.1 This section provides depiction of how the industry rivals are positioned with the
help of strategic group mapping.
Strategic positioning of telecommunication companies:
(Source: created by author)
6.2 The rivals are positioned in terms of market share and the pricing of the products
they offer to the customers. Roger has built its own media assets which has made it a largest
publishing company of Canada. Across most of Canada, TELSUS shared cellular network
coverage and emphasized on providing customized service that lead to increase in price of the
products and services offered (White et al. 2017, p.7).
6.3 From the analysis of case, it can be said that the companies are well positioned in
terms of subscribing to range of connectivity services. Merging of Shaw Communication and
Corus would result in holding the share of English television that is comparable to Bell
Canada and such deal has significant potential revenue synergies.
7. Company outlook based on the assessment of the industry
7.1 Impact of macro forces on company
Price
High
Low
High
Videotron
TELUS
Roger
Shaw
Bell
CASE STUDY ANALYSIS AND REPORT
5.3 The purchasing of Canwest Global communication Corporation by Shaw
communication made later a vertically integrated company that help in delivering customers
through the connected platforms and creating contents. Such acquisition has helped in
accelerating revenue generation.
6. Strategic group map analysis
6.1 This section provides depiction of how the industry rivals are positioned with the
help of strategic group mapping.
Strategic positioning of telecommunication companies:
(Source: created by author)
6.2 The rivals are positioned in terms of market share and the pricing of the products
they offer to the customers. Roger has built its own media assets which has made it a largest
publishing company of Canada. Across most of Canada, TELSUS shared cellular network
coverage and emphasized on providing customized service that lead to increase in price of the
products and services offered (White et al. 2017, p.7).
6.3 From the analysis of case, it can be said that the companies are well positioned in
terms of subscribing to range of connectivity services. Merging of Shaw Communication and
Corus would result in holding the share of English television that is comparable to Bell
Canada and such deal has significant potential revenue synergies.
7. Company outlook based on the assessment of the industry
7.1 Impact of macro forces on company
CASE STUDY ANALYSIS AND REPORT
The profitability position of Shaw communications is considerably impacted by the
several macro forces. The strategic move of company to merge with Corus is not aligned with
the past practices of telecommunication industry that might lead to backward vertical
integration into the content and this might affect the stability of business (White et al. 2017,
p.9).
7.2 Company fit with economy traits
It can be seen that the growth of companies are impacted by the introduction of wide
range of products and services due to increase in the demand of such services on part of
customers. There has been an increase in the internet subscribers without incurring extra cost
which would help in maintaining the cost of proving goods and services.
7.3 Company’s ability to make above average profits
The expansion in the connectivity services of Shaw by employing Internet protocol
and launching of wired home phone services has helped in connecting the subscribers to
internet and television at faster pace as against their competitors. In addition to this, the
acquisition of WIND would give company a significant foothold that would lead to increase
in generation of revenue by meeting the customers demand. Shaw communication has
received spectrum license at lower cost for acquisition of WIND that would benefit regulator
and government by favoring more competition in the mobile market of Canada (White et al.
2017, p.9). However, the question is posed in terms of financing of such strategic move as it
would require huge amount to be spent. Therefore, from the analysis of the Porters five
forces, it can be inferred that the company has potential to generate profits above average. It
is required by the company to take an effort for increasing the subscriber of wireless
telephone for increasing the revenue and thereby profits.
7.4 Company’s competitive advantage
One of the competitive advantages that are enjoyed by the Shaw communication is
lower cost of production. This can be explained in terms of initiative taken for Go Wi-Fi
which has considerably led to an increase in the Internet subscription. In addition to this,
Shaw communication was the first company to offer internet services to the residents of
Calgary residents. The home phone product of Shaw was stronger compared to its competitor
and by leveraging the existing backbone network would help in benefitting the company by
enabling it to enjoy the economies of scale (White et al. 2017, p.3). Therefore, Shaw
communication enjoys competitive advantage in terms of its product and launching of some
initiative sin particular areas benefiting household.
7.5 Current position in the market
The current positioning of Shaw communication can be evaluated from the strategic
group mapping. The market share of Shaw communication is lower than Bell Canada and
other competitors such as TELSUS and Roger. In the year 2015, Bell has the highest number
of television subscriber followed by Shaw communication and Rogers. The internet
subscriber for Shaw is lower than its two competitors that is Rogers and Bell. In addition to
this, Shaw has the lowest wireless telephone subscriber compared to its rest of the
competitors. The portfolio of the product owned by Shaw is lower than Bell and that of
Corus. Therefore, it can be inferred that the company needs to work on increasing the
subscriber of wireless telephone.
The profitability position of Shaw communications is considerably impacted by the
several macro forces. The strategic move of company to merge with Corus is not aligned with
the past practices of telecommunication industry that might lead to backward vertical
integration into the content and this might affect the stability of business (White et al. 2017,
p.9).
7.2 Company fit with economy traits
It can be seen that the growth of companies are impacted by the introduction of wide
range of products and services due to increase in the demand of such services on part of
customers. There has been an increase in the internet subscribers without incurring extra cost
which would help in maintaining the cost of proving goods and services.
7.3 Company’s ability to make above average profits
The expansion in the connectivity services of Shaw by employing Internet protocol
and launching of wired home phone services has helped in connecting the subscribers to
internet and television at faster pace as against their competitors. In addition to this, the
acquisition of WIND would give company a significant foothold that would lead to increase
in generation of revenue by meeting the customers demand. Shaw communication has
received spectrum license at lower cost for acquisition of WIND that would benefit regulator
and government by favoring more competition in the mobile market of Canada (White et al.
2017, p.9). However, the question is posed in terms of financing of such strategic move as it
would require huge amount to be spent. Therefore, from the analysis of the Porters five
forces, it can be inferred that the company has potential to generate profits above average. It
is required by the company to take an effort for increasing the subscriber of wireless
telephone for increasing the revenue and thereby profits.
7.4 Company’s competitive advantage
One of the competitive advantages that are enjoyed by the Shaw communication is
lower cost of production. This can be explained in terms of initiative taken for Go Wi-Fi
which has considerably led to an increase in the Internet subscription. In addition to this,
Shaw communication was the first company to offer internet services to the residents of
Calgary residents. The home phone product of Shaw was stronger compared to its competitor
and by leveraging the existing backbone network would help in benefitting the company by
enabling it to enjoy the economies of scale (White et al. 2017, p.3). Therefore, Shaw
communication enjoys competitive advantage in terms of its product and launching of some
initiative sin particular areas benefiting household.
7.5 Current position in the market
The current positioning of Shaw communication can be evaluated from the strategic
group mapping. The market share of Shaw communication is lower than Bell Canada and
other competitors such as TELSUS and Roger. In the year 2015, Bell has the highest number
of television subscriber followed by Shaw communication and Rogers. The internet
subscriber for Shaw is lower than its two competitors that is Rogers and Bell. In addition to
this, Shaw has the lowest wireless telephone subscriber compared to its rest of the
competitors. The portfolio of the product owned by Shaw is lower than Bell and that of
Corus. Therefore, it can be inferred that the company needs to work on increasing the
subscriber of wireless telephone.
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CASE STUDY ANALYSIS AND REPORT
B. Company’s internal analysis
1. Financial analysis
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Current ratio has fallen from 0.95 in year 2014 to 0.52 in year 2015
which implies that the ability of company to pay off its current
obligations has reduced. This implies that Shaw communication's
ability to pay its bill using current liabilities has reduced and thereby
it may face difficulty in payment of bill. The total amount of current
liabilities has increased and it is required by organization to have
increased floe of income for meeting the short term obligations.
B. Company’s internal analysis
1. Financial analysis
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Establ
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health
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comp
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Current ratio has fallen from 0.95 in year 2014 to 0.52 in year 2015
which implies that the ability of company to pay off its current
obligations has reduced. This implies that Shaw communication's
ability to pay its bill using current liabilities has reduced and thereby
it may face difficulty in payment of bill. The total amount of current
liabilities has increased and it is required by organization to have
increased floe of income for meeting the short term obligations.
CASE STUDY ANALYSIS AND REPORT
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The debt to equity ratio has fallen from 1.82 in year 2014 to 1.69 in
year 2015. This implies that the usage of debt as against equity to
finance its operations has reduced. Therefore, Shaw communication
has the capacity to raise capital. It is expected by the company to
make capital investment in business network, consumer and media
division services. However, the capital expenditure is decreasing
year on year along with investment in aggregated capital fund.
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The financial health of Shaw communication implies that the
company utilizes their assets and capital efficiently for financing the
operations and generating return. From the analysis of the financials
of Shaw communication, it can be inferred that the company has
competitive advantage in terms of their financial position. The
financial performance of Shaw has enabled them to make a
continuous investment in growth. Certain financial guidance is
provided by the company for future performance that helps in
assessing the expected financial and operational performance of
company. However, such guidance might not be appropriate for
some other purposes.
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e
ca
pa
cit
y
to
rai
se
ca
pit
al
?
Bal
anc
e
Sh
eet
L
ev
er
ag
e
Establ
ish
curren
t
financ
ial
health
of the
comp
any
The debt to equity ratio has fallen from 1.82 in year 2014 to 1.69 in
year 2015. This implies that the usage of debt as against equity to
finance its operations has reduced. Therefore, Shaw communication
has the capacity to raise capital. It is expected by the company to
make capital investment in business network, consumer and media
division services. However, the capital expenditure is decreasing
year on year along with investment in aggregated capital fund.
•D
o
th
e
fin
an
ci
als
pr
ov
id
e a
co
m
pe
titi
ve
ad
va
nt
ag
e?
H
o
w
?
Me
tric
s
rel
ate
d
to
KS
Fs
D
ep
en
ds
Establ
ish if
the
comp
any's
strate
gy is
a
succe
ss
The financial health of Shaw communication implies that the
company utilizes their assets and capital efficiently for financing the
operations and generating return. From the analysis of the financials
of Shaw communication, it can be inferred that the company has
competitive advantage in terms of their financial position. The
financial performance of Shaw has enabled them to make a
continuous investment in growth. Certain financial guidance is
provided by the company for future performance that helps in
assessing the expected financial and operational performance of
company. However, such guidance might not be appropriate for
some other purposes.
CASE STUDY ANALYSIS AND REPORT
•
W
ha
t
ar
e
th
e
im
pli
ca
tio
ns
of
th
e
fin
an
ci
als
fo
r
fut
ur
e
str
at
eg
y
an
d
fo
r
th
e
ex
ec
uti
on
of
str
at
eg
y?
Me
tric
s
rel
ate
d
to
ide
ntif
ied
fut
ure
str
ate
gie
s
D
ep
en
ds
Draw
concl
usions
about
future
strate
gy
It can be observed from the statement of financial position that total
amount of current assets have reduced year on year which is
affecting the liquidity position of company. Therefore, it is required
by the company to increase the amount of assets owned by company
for improving its liquidity position. However, based on the
forecasted free cash flow and available credit facilities, it is expected
by the company to have sufficient liquidity for funding the upcoming
obligations and operations generated in the fiscal year. Moreover, it
also expected by Shaw to have sufficient borrowing capacity and
generate free cash flow to refinance maturing debt and financing
foreseeable plans of business.
•H
o
w
do
es
th
Co
mp
ara
tiv
e
An
Pr
of
ita
bi
lit
y
Establ
ish if
the
comp
any's
strate
The efficiency position of Shaw communication is better compared
to its competitors because the company has been more efficiently
utilizing the assets to generate income and revenue. In addition to
this, the financial leverage of Shaw competition is lower than that of
its competitors except Corus which has lower debt in its capital.
However, the ability of company to generate income by utilizing its
•
W
ha
t
ar
e
th
e
im
pli
ca
tio
ns
of
th
e
fin
an
ci
als
fo
r
fut
ur
e
str
at
eg
y
an
d
fo
r
th
e
ex
ec
uti
on
of
str
at
eg
y?
Me
tric
s
rel
ate
d
to
ide
ntif
ied
fut
ure
str
ate
gie
s
D
ep
en
ds
Draw
concl
usions
about
future
strate
gy
It can be observed from the statement of financial position that total
amount of current assets have reduced year on year which is
affecting the liquidity position of company. Therefore, it is required
by the company to increase the amount of assets owned by company
for improving its liquidity position. However, based on the
forecasted free cash flow and available credit facilities, it is expected
by the company to have sufficient liquidity for funding the upcoming
obligations and operations generated in the fiscal year. Moreover, it
also expected by Shaw to have sufficient borrowing capacity and
generate free cash flow to refinance maturing debt and financing
foreseeable plans of business.
•H
o
w
do
es
th
Co
mp
ara
tiv
e
An
Pr
of
ita
bi
lit
y
Establ
ish if
the
comp
any's
strate
The efficiency position of Shaw communication is better compared
to its competitors because the company has been more efficiently
utilizing the assets to generate income and revenue. In addition to
this, the financial leverage of Shaw competition is lower than that of
its competitors except Corus which has lower debt in its capital.
However, the ability of company to generate income by utilizing its
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CASE STUDY ANALYSIS AND REPORT
e
co
m
pa
ny
pe
rf
or
m
co
m
pa
re
d
to
its
co
m
pe
tit
or
s?
aly
sis
Ef
fi
ci
en
cy
L
ev
er
ag
e
S
pe
ci
fi
c
In
du
str
y
O
pe
ra
ti
ng
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
shareholder investment is lower compared to its competitors Roger
and Bell which has higher return on equity.
The return generated in equity for Shaw communication is higher
that the return generated by its competitors. This is indicative of the
fact that the company is more efficient in utilizing its shareholder
investment for generating return or income compared to its
competitors. The cash flow of Shaw communication is higher than
many of its competitor such as Bell, Roger and Corus which implies
that there is enough generation of cash that helps in meeting the
current obligations. Moreover, the interest coverage ratio of Shaw is
higher at 5.15 compared to its competitors that have lower coverage
ratio. This higher interest coverage ratio is indicative of the fact that
the company is generating enough earnings for meeting the payment
of interest and they are less vulnerable to the increase in rate of
interest. Therefore, from the analysis of all the ratios, it can be
inferred that the financial health of Shaw communication is better
than its competitors.
•
W
ha
t
is
in
cr
ea
si
ng
–
re
ve
nu
e,
de
bt,
co
sts
,
et
c.?
W
ha
t
is
Lo
ngi
tud
ina
l
A
ny
th
at
ha
ve
m
aj
or
ch
an
ge
ov
er
ti
m
e
Establ
ish if
the
comp
any's
strate
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
It can be seen from the longitudinal analysis that the revenue
generated from sales of goods is increasing. Furthermore, the cost of
goods sold is also experiencing an increasing trend. In addition to
this, the long term debt of Shaw communication has also increased
which implies that the financial leverage of company has increased.
e
co
m
pa
ny
pe
rf
or
m
co
m
pa
re
d
to
its
co
m
pe
tit
or
s?
aly
sis
Ef
fi
ci
en
cy
L
ev
er
ag
e
S
pe
ci
fi
c
In
du
str
y
O
pe
ra
ti
ng
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
shareholder investment is lower compared to its competitors Roger
and Bell which has higher return on equity.
The return generated in equity for Shaw communication is higher
that the return generated by its competitors. This is indicative of the
fact that the company is more efficient in utilizing its shareholder
investment for generating return or income compared to its
competitors. The cash flow of Shaw communication is higher than
many of its competitor such as Bell, Roger and Corus which implies
that there is enough generation of cash that helps in meeting the
current obligations. Moreover, the interest coverage ratio of Shaw is
higher at 5.15 compared to its competitors that have lower coverage
ratio. This higher interest coverage ratio is indicative of the fact that
the company is generating enough earnings for meeting the payment
of interest and they are less vulnerable to the increase in rate of
interest. Therefore, from the analysis of all the ratios, it can be
inferred that the financial health of Shaw communication is better
than its competitors.
•
W
ha
t
is
in
cr
ea
si
ng
–
re
ve
nu
e,
de
bt,
co
sts
,
et
c.?
W
ha
t
is
Lo
ngi
tud
ina
l
A
ny
th
at
ha
ve
m
aj
or
ch
an
ge
ov
er
ti
m
e
Establ
ish if
the
comp
any's
strate
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
It can be seen from the longitudinal analysis that the revenue
generated from sales of goods is increasing. Furthermore, the cost of
goods sold is also experiencing an increasing trend. In addition to
this, the long term debt of Shaw communication has also increased
which implies that the financial leverage of company has increased.
CASE STUDY ANALYSIS AND REPORT
de
cr
ea
si
ng
?
W
ha
t
ar
e
th
e
im
pli
ca
tio
ns
?
•Is
th
e
co
m
pa
ny
in
a
he
alt
hy
or
un
he
alt
hy
po
sit
io
n?
Im
pli
ca
tio
ns
?
Inc
om
e
Sta
te
me
nt
Bal
anc
e
Sh
eet
Ca
sh
Flo
w
Sta
te
me
nt
A
ny
th
at
su
pp
or
t
po
sit
io
n
Establ
ish if
the
comp
any's
strate
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
The total amount of income generated by company has increased
which implies that the increasing cash flow would help in meeting
the needs of company. Furthermore, the balance sheet of Shaw
communication is strong and is capable of raising additional debt.
•O
ut
sta
nd
Lo
ngi
tud
ina
A
ny
th
at
Establ
ish if
the
comp
Some of the outstanding trend has been witnessed in the component
of income statement that is other income, business and intersegment
elimination. Outstanding trend can also be witnessed in equity and
other investment of company.
de
cr
ea
si
ng
?
W
ha
t
ar
e
th
e
im
pli
ca
tio
ns
?
•Is
th
e
co
m
pa
ny
in
a
he
alt
hy
or
un
he
alt
hy
po
sit
io
n?
Im
pli
ca
tio
ns
?
Inc
om
e
Sta
te
me
nt
Bal
anc
e
Sh
eet
Ca
sh
Flo
w
Sta
te
me
nt
A
ny
th
at
su
pp
or
t
po
sit
io
n
Establ
ish if
the
comp
any's
strate
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
The total amount of income generated by company has increased
which implies that the increasing cash flow would help in meeting
the needs of company. Furthermore, the balance sheet of Shaw
communication is strong and is capable of raising additional debt.
•O
ut
sta
nd
Lo
ngi
tud
ina
A
ny
th
at
Establ
ish if
the
comp
Some of the outstanding trend has been witnessed in the component
of income statement that is other income, business and intersegment
elimination. Outstanding trend can also be witnessed in equity and
other investment of company.
CASE STUDY ANALYSIS AND REPORT
in
g
tre
nd
s
in
da
ta
?
l ha
ve
m
aj
or
ch
an
ge
ov
er
ti
m
e
any's
strate
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
2011 2012 2013 2014 2015
Revenue
Consumer 3850 3945 4036 3768 3752 81% 79% 78% 72% 68%
Media 891 1053 1106 1096 1080 19% 21% 22% 21% 20%
Business 0 0 0 484 766 0% 0% 0% 9% 14%
Intersegment eliminations 0 0 0 -107 -110 0% 0% 0% -2% -2%
Total 4741 4998 5142 5241 5488 100% 100% 100% 100% 100%
Cost of revenue -1959 -2036 -2022 -2092 -2174 -41% -41% -39% -40% -40%
Gross profit 2782 2962 3120 3149 3314 59% 59% 61% 60% 60%
Employee salaries and benefits -751 -835 -900 -945 -987 -16% -17% -18% -18% -18%
Amortization -736 -808 -854 -765 -895 -16% -16% -17% -15% -16%
Operating income 1295 1319 1366 1439 1432 27% 26% 27% 27% 26%
Interest expense -335 -330 -311 -271 -283 -7% -7% -6% -5% -5%
Other income(expense) -207 -14 12 27 25 -4% 0% 0% 1% 0%
Income before tax 753 975 1067 1195 1174 16% 20% 21% 23% 21%
Provision for income tax -205 -214 -283 -308 -294 -4% -4% -6% -6% -5%
Other income 14 0 0 0 0 0% 0% 0% 0% 0%
Net income 562 761 784 887 880 12% 15% 15% 17% 16%
Common size comprehesnive income statement
ASSETS 2011 2012 2013 2014 2015
Current assets
Cash and cash equivalent 443 427 422 637 398 4% 3% 3% 5% 3%
Receivables 443 433 469 474 464 4% 3% 4% 4% 3%
Inventories 97 102 96 119 60 1% 1% 1% 1% 0%
Other current assets 279 89 208 103 87 2% 1% 2% 1% 1%
Total current assets 1262 1051 1195 1333 1009 10% 8% 9% 10% 7%
Non current assets 0% 0% 0% 0% 0%
Net property, plant and equipment 3200 3242 3370 3652 4220 26% 25% 26% 28% 29%
Equity and other investment 13 13 10 60 97 0% 0% 0% 0% 1%
Goodwill 815 715 698 698 1506 7% 6% 5% 5% 10%
Intangible assets 6955 7355 7153 7198 7459 56% 58% 56% 54% 51%
Other long term assets 281 346 306 309 273 2% 3% 2% 2% 2%
Total non current assets 11264 11671 11537 11917 13555 90% 92% 91% 90% 93%
Total assets 12526 12722 12732 13250 14564 100% 100% 100% 100% 100%
Common size statement of financial position
2. How well is the company present strategy working
Shaw communication is considered to be one of the marketing pioneers and the
introduction of concept of product differentiation helps in meeting the customer requirement
in a precise manner. A range of value added natural resources has been developed by Shaw
communication and the growth founded on the new markets and innovation is sustained by
the processing expertise, quality of products and knowledge of markets acquired by the
in
g
tre
nd
s
in
da
ta
?
l ha
ve
m
aj
or
ch
an
ge
ov
er
ti
m
e
any's
strate
gy is
a
succe
ss
Draw
concl
usions
about
future
strate
gy
2011 2012 2013 2014 2015
Revenue
Consumer 3850 3945 4036 3768 3752 81% 79% 78% 72% 68%
Media 891 1053 1106 1096 1080 19% 21% 22% 21% 20%
Business 0 0 0 484 766 0% 0% 0% 9% 14%
Intersegment eliminations 0 0 0 -107 -110 0% 0% 0% -2% -2%
Total 4741 4998 5142 5241 5488 100% 100% 100% 100% 100%
Cost of revenue -1959 -2036 -2022 -2092 -2174 -41% -41% -39% -40% -40%
Gross profit 2782 2962 3120 3149 3314 59% 59% 61% 60% 60%
Employee salaries and benefits -751 -835 -900 -945 -987 -16% -17% -18% -18% -18%
Amortization -736 -808 -854 -765 -895 -16% -16% -17% -15% -16%
Operating income 1295 1319 1366 1439 1432 27% 26% 27% 27% 26%
Interest expense -335 -330 -311 -271 -283 -7% -7% -6% -5% -5%
Other income(expense) -207 -14 12 27 25 -4% 0% 0% 1% 0%
Income before tax 753 975 1067 1195 1174 16% 20% 21% 23% 21%
Provision for income tax -205 -214 -283 -308 -294 -4% -4% -6% -6% -5%
Other income 14 0 0 0 0 0% 0% 0% 0% 0%
Net income 562 761 784 887 880 12% 15% 15% 17% 16%
Common size comprehesnive income statement
ASSETS 2011 2012 2013 2014 2015
Current assets
Cash and cash equivalent 443 427 422 637 398 4% 3% 3% 5% 3%
Receivables 443 433 469 474 464 4% 3% 4% 4% 3%
Inventories 97 102 96 119 60 1% 1% 1% 1% 0%
Other current assets 279 89 208 103 87 2% 1% 2% 1% 1%
Total current assets 1262 1051 1195 1333 1009 10% 8% 9% 10% 7%
Non current assets 0% 0% 0% 0% 0%
Net property, plant and equipment 3200 3242 3370 3652 4220 26% 25% 26% 28% 29%
Equity and other investment 13 13 10 60 97 0% 0% 0% 0% 1%
Goodwill 815 715 698 698 1506 7% 6% 5% 5% 10%
Intangible assets 6955 7355 7153 7198 7459 56% 58% 56% 54% 51%
Other long term assets 281 346 306 309 273 2% 3% 2% 2% 2%
Total non current assets 11264 11671 11537 11917 13555 90% 92% 91% 90% 93%
Total assets 12526 12722 12732 13250 14564 100% 100% 100% 100% 100%
Common size statement of financial position
2. How well is the company present strategy working
Shaw communication is considered to be one of the marketing pioneers and the
introduction of concept of product differentiation helps in meeting the customer requirement
in a precise manner. A range of value added natural resources has been developed by Shaw
communication and the growth founded on the new markets and innovation is sustained by
the processing expertise, quality of products and knowledge of markets acquired by the
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CASE STUDY ANALYSIS AND REPORT
company (White et al. 2017, p.6). The value proposition of customer offered by the Shaw
communication varied in accordance with the service provided and targeted customers. The
customer centric strategy adopted by the company helped in providing trusted service to
customers. The key resources of Shaw that has helped in creating differentiating factor from
its competitor include its infrastructure, technology, trademark, licensing and goodwill. The
company makes some of the most significant expenses in purchasing of goods and services
and adopts suitable strategy to control its cost.
The strategy of Shaw communication is to differentiate their services from
competitors and increasing the value proposition of the products. In the current scenario,
Shaw is restructuring its business and they look forward to grow their wireless business
divisions. The reorganizing of business to the business and consumer divisions is intended to
gain a competitive position in the market. The continued development of Go Wi-Fi and
further investment in some advanced network position helps in delivering content
experiences and leading network to the high valued customers (White et al. 2017, p.3). For
improving the end to end customer experience, the growing network services of business is
aligned with the focus on selling the complete portfolio of new and existing products and
services. Shaw communication has provide coverage in high many high traffic public places
by adding value to the proposition broadband by extending the customer network with the Go
Wi-Fi initiative. Furthermore, for improving the end to end customer service, the company
continued to take initiative and aligned the operations of customer care into the expertise
centers.
3. SWOT analysis
3.1 Strength-
The acquisition of WIND mobile would help the company in adding to the existing
connectivity for the business of satellite and cable television, landline telephone
services and internet and thereby enhancing the connectivity portfolio of Shaw (White
et al. 2017, p.1).
Holding of significant media assets by the company helps company in complying with
the standard of the Canadian radio television telecommunication services.
Shaw benefits from the economies of scale and they are capable of retaining
customers by using the industry practice of bundling two or more services.
Stability in revenue generation from Shaw media and has significant potential revenue
synergies. Moreover, the balance sheet position of company is strong and it can
handle additional debt burden.
3.2 Weakness-
There is a likelihood of Shaw to backward vertically integrated into content.
The only internet product of Shaw that experienced growth is the customer service
which impacts the overall growth of the company.
Shaw has lost its 83000 landline customers because of negative impact of the
household trend and competition because of negative subscription of landline phone
(White et al. 2017, p.3).
Fall in value of current assets which is impacting the liquidity position of company.
There has been considerable fall in the number of television subscriber compared to
the competitors for which the subscribers are increasing year on year.
Compared to the competitors, the total number of wireless phone subscribers of Shaw
communication is considerably low.
company (White et al. 2017, p.6). The value proposition of customer offered by the Shaw
communication varied in accordance with the service provided and targeted customers. The
customer centric strategy adopted by the company helped in providing trusted service to
customers. The key resources of Shaw that has helped in creating differentiating factor from
its competitor include its infrastructure, technology, trademark, licensing and goodwill. The
company makes some of the most significant expenses in purchasing of goods and services
and adopts suitable strategy to control its cost.
The strategy of Shaw communication is to differentiate their services from
competitors and increasing the value proposition of the products. In the current scenario,
Shaw is restructuring its business and they look forward to grow their wireless business
divisions. The reorganizing of business to the business and consumer divisions is intended to
gain a competitive position in the market. The continued development of Go Wi-Fi and
further investment in some advanced network position helps in delivering content
experiences and leading network to the high valued customers (White et al. 2017, p.3). For
improving the end to end customer experience, the growing network services of business is
aligned with the focus on selling the complete portfolio of new and existing products and
services. Shaw communication has provide coverage in high many high traffic public places
by adding value to the proposition broadband by extending the customer network with the Go
Wi-Fi initiative. Furthermore, for improving the end to end customer service, the company
continued to take initiative and aligned the operations of customer care into the expertise
centers.
3. SWOT analysis
3.1 Strength-
The acquisition of WIND mobile would help the company in adding to the existing
connectivity for the business of satellite and cable television, landline telephone
services and internet and thereby enhancing the connectivity portfolio of Shaw (White
et al. 2017, p.1).
Holding of significant media assets by the company helps company in complying with
the standard of the Canadian radio television telecommunication services.
Shaw benefits from the economies of scale and they are capable of retaining
customers by using the industry practice of bundling two or more services.
Stability in revenue generation from Shaw media and has significant potential revenue
synergies. Moreover, the balance sheet position of company is strong and it can
handle additional debt burden.
3.2 Weakness-
There is a likelihood of Shaw to backward vertically integrated into content.
The only internet product of Shaw that experienced growth is the customer service
which impacts the overall growth of the company.
Shaw has lost its 83000 landline customers because of negative impact of the
household trend and competition because of negative subscription of landline phone
(White et al. 2017, p.3).
Fall in value of current assets which is impacting the liquidity position of company.
There has been considerable fall in the number of television subscriber compared to
the competitors for which the subscribers are increasing year on year.
Compared to the competitors, the total number of wireless phone subscribers of Shaw
communication is considerably low.
CASE STUDY ANALYSIS AND REPORT
3.3 Opportunity-
The significant strategic move for Shaw to become a pure play full connectivity
company and departing from the normal industry practice would help the company in
offering a range of service offerings. Such range of services would enable the
company to gain customers.
The share price of Shaw communication is witnessing an increasing trend over the
years which provide opportunity to company for raising the capital using equity
financing.
Offering a complete repertoire of connectivity services after the acquisition of WIND
mobile that would strengthen the position of company.
There has been continuous increase in the typical weekly user of internet division
which would provide an opportunity to increase its revenue by putting an effort to
increase the subscription of customers in the internet division.
3.4 Threat-
Selling of Shaw media would result in giving up the ability of company to generate a
stable source of cash flow and to use its own content for leveraging the connectivity
assets. This can be considered as one of the threats to the business of Shaw
communication.
Bell poses a major threat to the business of wireless telephone subscribers of Shaw
communication.
The existing categories of product can be threatened due to new environmental
regulations.
Therefore, from the analysis of various strengthen and weakness of Shaw
communication that certain capabilities and resources can be both weakness and strength at
the same time.
4. Value chain
The value chain analysis of Shaw communication is comprised of primary activities
and secondary activities. The primary activities of the company comprised of
3.3 Opportunity-
The significant strategic move for Shaw to become a pure play full connectivity
company and departing from the normal industry practice would help the company in
offering a range of service offerings. Such range of services would enable the
company to gain customers.
The share price of Shaw communication is witnessing an increasing trend over the
years which provide opportunity to company for raising the capital using equity
financing.
Offering a complete repertoire of connectivity services after the acquisition of WIND
mobile that would strengthen the position of company.
There has been continuous increase in the typical weekly user of internet division
which would provide an opportunity to increase its revenue by putting an effort to
increase the subscription of customers in the internet division.
3.4 Threat-
Selling of Shaw media would result in giving up the ability of company to generate a
stable source of cash flow and to use its own content for leveraging the connectivity
assets. This can be considered as one of the threats to the business of Shaw
communication.
Bell poses a major threat to the business of wireless telephone subscribers of Shaw
communication.
The existing categories of product can be threatened due to new environmental
regulations.
Therefore, from the analysis of various strengthen and weakness of Shaw
communication that certain capabilities and resources can be both weakness and strength at
the same time.
4. Value chain
The value chain analysis of Shaw communication is comprised of primary activities
and secondary activities. The primary activities of the company comprised of
CASE STUDY ANALYSIS AND REPORT
4.1 Inbound logistics- Most of the inbound logistic activities of Shaw communication
has been outsourced and such activities are associated with storing, receiving and
disseminating the product inputs.
4.2 Outbound logistics- The finished products of company is distributed to final
buyers and channel partners. Such activities include scheduling, warehousing, processing and
network for distribution.
4.3 Operations- Shaw has a record of being a strong operator as they are able to
manage their capital in an efficient manner. They make continuous effort for capitalizing and
identifying the efficiency opportunities.
4.4 Marketing and sales- Some of the sales and marketing activities of Shaw
communication comprised of selling of services such as home product, broadband product
and internet division services. The promotional amounts incurred by the business resulted in
falling customer revenue
4.5 Services- The broadband product of Shaw communication has a differentiating
factor in terms of providing superior service. Creation of innovative services are enabled by
the company with the exceptional customer service being a key differentiator in the
competitive environment. Providing customer service is always at the foundation of company
and the Wi-Fi initiative has differentiated the service of broadband. The rate of customer
division increased driven by the organic growth in the business network services. The media
division services improved because of business network services and conventional airtime
revenue resulting from strong customer growth (White et al. 2017, p.4). For the enterprise
data services, significant capabilities was gained by Shaw communication and also helped in
gaining immediate expertise in the growing marketplace.
The supporting activities of Shaw communication include the following:
4.6 Infrastructure of firm- Infrastructure services is one of the major business lines
of Shaw communication. The acquisition of ViaWest has led to the formation of business
infrastructure services that provided growth platform for data and cloud centre services for
business customers. The continuous development of Shaw Go Wi-Fi initiative and further
investment in network positioned that are advanced and help in delivering leading network
services. Furthermore, the business infrastructure service division helped in generating
revenue. However, such increase in revenue was partially offset by the decline in revenue of
media and consumer division.
4.7 Human resource management- The competitive advantage of company is
affected by the human resource factor.
4.8 Technology development- Shaw communication is significantly impacted by the
development of technology. The connectivity services of company are expanded by the
adoption of internet protocol switching technology. Such services of company are becoming
popular among customers. The acquisition of ViaWest has provided the company with a
growth platform in the data centre sector of North America which has been considered to be
another step in expanding the technology that offered the mid market enterprises in the
market of Canada (White et al. 2017, p.2). Furthermore, the network capacity of the company
expanded by moving forward on the technology roadmap. The organization has also
developed number of next generation advertising solution with the evolvement of media to a
media organization from traditional broadcaster. This helped in ensuring that the evolving
expectations of clients are met by the advertising opportunities.
4.1 Inbound logistics- Most of the inbound logistic activities of Shaw communication
has been outsourced and such activities are associated with storing, receiving and
disseminating the product inputs.
4.2 Outbound logistics- The finished products of company is distributed to final
buyers and channel partners. Such activities include scheduling, warehousing, processing and
network for distribution.
4.3 Operations- Shaw has a record of being a strong operator as they are able to
manage their capital in an efficient manner. They make continuous effort for capitalizing and
identifying the efficiency opportunities.
4.4 Marketing and sales- Some of the sales and marketing activities of Shaw
communication comprised of selling of services such as home product, broadband product
and internet division services. The promotional amounts incurred by the business resulted in
falling customer revenue
4.5 Services- The broadband product of Shaw communication has a differentiating
factor in terms of providing superior service. Creation of innovative services are enabled by
the company with the exceptional customer service being a key differentiator in the
competitive environment. Providing customer service is always at the foundation of company
and the Wi-Fi initiative has differentiated the service of broadband. The rate of customer
division increased driven by the organic growth in the business network services. The media
division services improved because of business network services and conventional airtime
revenue resulting from strong customer growth (White et al. 2017, p.4). For the enterprise
data services, significant capabilities was gained by Shaw communication and also helped in
gaining immediate expertise in the growing marketplace.
The supporting activities of Shaw communication include the following:
4.6 Infrastructure of firm- Infrastructure services is one of the major business lines
of Shaw communication. The acquisition of ViaWest has led to the formation of business
infrastructure services that provided growth platform for data and cloud centre services for
business customers. The continuous development of Shaw Go Wi-Fi initiative and further
investment in network positioned that are advanced and help in delivering leading network
services. Furthermore, the business infrastructure service division helped in generating
revenue. However, such increase in revenue was partially offset by the decline in revenue of
media and consumer division.
4.7 Human resource management- The competitive advantage of company is
affected by the human resource factor.
4.8 Technology development- Shaw communication is significantly impacted by the
development of technology. The connectivity services of company are expanded by the
adoption of internet protocol switching technology. Such services of company are becoming
popular among customers. The acquisition of ViaWest has provided the company with a
growth platform in the data centre sector of North America which has been considered to be
another step in expanding the technology that offered the mid market enterprises in the
market of Canada (White et al. 2017, p.2). Furthermore, the network capacity of the company
expanded by moving forward on the technology roadmap. The organization has also
developed number of next generation advertising solution with the evolvement of media to a
media organization from traditional broadcaster. This helped in ensuring that the evolving
expectations of clients are met by the advertising opportunities.
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CASE STUDY ANALYSIS AND REPORT
4.9 Procurement- At Shaw communication, procurement activities include activities
that are intended to purchase inputs such as machineries, raw materials and other information
system.
From the analysis of above activities of value chain, it can be inferred that the cost
structure of company is competitive. Shaw communication is able to provide traditional
wireless network with Wi-Fi and considerable lower cost. Such cost advantage provides
company with competitive advantage position.
5. Identification of one strategic issue
Strategic issue is the fundamental challenge faced by the organization which would
impact its structure, mission, stakeholders, process and mix of product and services. One of
the strategic issues that would be faced by Shaw communication is merging of Shaw media
with Corus for some combination of Corus shares and cash. It is required to carefully
consider the deal structure for selling Shaw media to Corus. In addition to this, such deal is
regarded contrary to the past practice of telecommunication industry in Canada. Therefore,
whether selling of Shaw media to Corus and adopting a pure play approach would be a
strategic move by Shaw communication?
Introduction:
The report is prepared to present an analysis of internal and external environment of
Shaw communication. The present strategy of Shaw Company are evaluated in terms of its
resource capabilities, differentiating factor cost control and value propositions provided to
customers. Shaw communication operates in telecommunication industry which offers quality
and competitive telecommunication services to the people of Canada. The industry is
characterized by the availability of some the most efficient and advanced broadband internet
and wireless services. There are some of the strategic issues that are faced by Shaw
communications which has been identified such as giving up of the connectivity assets and
media contents. The selling of media assets to Corpus poses a question as they need to take
into account the structure of deal. Shaw communication is currently intending to implement
the pure play connectivity strategy which is regarded as the significant move. Therefore, the
scope of the report is basically to identify the strategic issues faced by Shaw communication
and identifying the alternatives for responding to such issues.
Analysis:
This section demonstrates the issues that have been identified from the internal and
external analysis of the Shaw communication.
The analysis of PESTLE framework depicts that the Shaw communication the
company is economically and socially efficient as they are able to enjoy the
economies of scale and their service and products are aligned with the requirement of
customers (1.2 and 1.3). One of the strategies of Shaw which intends to sell its media
assets to the Corus might be contradictory to the past practices of telecommunication
industry of Canada which might result in incompliance with the standard and that
could affect the seamless running of the business. The technology offering made by
Shaw communication is expanded by the acquisition of ViaWest that provided with
4.9 Procurement- At Shaw communication, procurement activities include activities
that are intended to purchase inputs such as machineries, raw materials and other information
system.
From the analysis of above activities of value chain, it can be inferred that the cost
structure of company is competitive. Shaw communication is able to provide traditional
wireless network with Wi-Fi and considerable lower cost. Such cost advantage provides
company with competitive advantage position.
5. Identification of one strategic issue
Strategic issue is the fundamental challenge faced by the organization which would
impact its structure, mission, stakeholders, process and mix of product and services. One of
the strategic issues that would be faced by Shaw communication is merging of Shaw media
with Corus for some combination of Corus shares and cash. It is required to carefully
consider the deal structure for selling Shaw media to Corus. In addition to this, such deal is
regarded contrary to the past practice of telecommunication industry in Canada. Therefore,
whether selling of Shaw media to Corus and adopting a pure play approach would be a
strategic move by Shaw communication?
Introduction:
The report is prepared to present an analysis of internal and external environment of
Shaw communication. The present strategy of Shaw Company are evaluated in terms of its
resource capabilities, differentiating factor cost control and value propositions provided to
customers. Shaw communication operates in telecommunication industry which offers quality
and competitive telecommunication services to the people of Canada. The industry is
characterized by the availability of some the most efficient and advanced broadband internet
and wireless services. There are some of the strategic issues that are faced by Shaw
communications which has been identified such as giving up of the connectivity assets and
media contents. The selling of media assets to Corpus poses a question as they need to take
into account the structure of deal. Shaw communication is currently intending to implement
the pure play connectivity strategy which is regarded as the significant move. Therefore, the
scope of the report is basically to identify the strategic issues faced by Shaw communication
and identifying the alternatives for responding to such issues.
Analysis:
This section demonstrates the issues that have been identified from the internal and
external analysis of the Shaw communication.
The analysis of PESTLE framework depicts that the Shaw communication the
company is economically and socially efficient as they are able to enjoy the
economies of scale and their service and products are aligned with the requirement of
customers (1.2 and 1.3). One of the strategies of Shaw which intends to sell its media
assets to the Corus might be contradictory to the past practices of telecommunication
industry of Canada which might result in incompliance with the standard and that
could affect the seamless running of the business. The technology offering made by
Shaw communication is expanded by the acquisition of ViaWest that provided with
CASE STUDY ANALYSIS AND REPORT
the growth platform along with expansion on the network capacity by moving forward
on the roadmap of technology (4.8).
One of the issues that have been identified from the analysis of the case of Shaw
communication is their ability to finance the expansion of WIND mobile. For this
purpose, the company is divesting its resources to become a pure play communication
company that would help in financing the acquisition and expansion of such strategy
move (7.3). Therefore, selling of media assets for financing such acquisition poses a
question to Shaw in terms of financing. It is therefore required by the company to
carefully consider the deal in terms of number of shares and cash generated.
The growth of company is challenged due to the competitive pressure faced by its
competitors with significant progress made by them in lure of becoming an enhanced
connectivity provider (3.6). The growth is challenged given the secular pressure on
the wireless division of company. The changes in organization are brought because of
changing expectations of customer and new technologies.
Alternative:
The decision of management to enter into the wireless business is intended to improve
the competitive position of Shaw communication. It can be observed from the
analysis of financials of company and strong balance sheet that their leverage position
favorable and they have the capability of taking additional debt burden. Therefore,
apart from selling of the media assets to the Corus which again poses a big question
about its success, the company can raise capital or increase the capital investment by
raising the debt or increasing their borrowing.
Pros:
Increase in capital investment would make enough funds available to finance the
strategic move.
Cons:
A further increase in the total amount of debt would not be favorable for business as
this would increase the financial leverage of business and increased reliance on debt
would make it difficult to meet its obligations using the shareholder money.
Shaw communication can cope up with the increased competitive pressures from their
competitors by increasing the size of the portfolio of their products offered to the
customers. The products should be categorized based on the target customers who
include high end customers, business customer, low end customers, household and
public sector customers. It is well understood that there would be quite differences in
the requirement of services and product by these targeted customers. Increasing the
size of product portfolio would assist Shaw in serving their customer base by
improving the speed to market for new services and cutting the cost of operations.
Pros:
The customer facing system and process should be improved that helps in improving
efficiency which would enhance the promise of company to deliver exceptional
customer services (7.1).
Therefore, the transformation of business by way of increasing the product portfolio
would help in serving the customer base.
Cons:
This enhancement of product portfolio would result in incurring the additional cost
that would push up the operational cost and thereby total cost of production.
The strategic move of Shaw communication to become pure play Telecommunication
Company or pure play connectivity provider also poses some challenge. This
the growth platform along with expansion on the network capacity by moving forward
on the roadmap of technology (4.8).
One of the issues that have been identified from the analysis of the case of Shaw
communication is their ability to finance the expansion of WIND mobile. For this
purpose, the company is divesting its resources to become a pure play communication
company that would help in financing the acquisition and expansion of such strategy
move (7.3). Therefore, selling of media assets for financing such acquisition poses a
question to Shaw in terms of financing. It is therefore required by the company to
carefully consider the deal in terms of number of shares and cash generated.
The growth of company is challenged due to the competitive pressure faced by its
competitors with significant progress made by them in lure of becoming an enhanced
connectivity provider (3.6). The growth is challenged given the secular pressure on
the wireless division of company. The changes in organization are brought because of
changing expectations of customer and new technologies.
Alternative:
The decision of management to enter into the wireless business is intended to improve
the competitive position of Shaw communication. It can be observed from the
analysis of financials of company and strong balance sheet that their leverage position
favorable and they have the capability of taking additional debt burden. Therefore,
apart from selling of the media assets to the Corus which again poses a big question
about its success, the company can raise capital or increase the capital investment by
raising the debt or increasing their borrowing.
Pros:
Increase in capital investment would make enough funds available to finance the
strategic move.
Cons:
A further increase in the total amount of debt would not be favorable for business as
this would increase the financial leverage of business and increased reliance on debt
would make it difficult to meet its obligations using the shareholder money.
Shaw communication can cope up with the increased competitive pressures from their
competitors by increasing the size of the portfolio of their products offered to the
customers. The products should be categorized based on the target customers who
include high end customers, business customer, low end customers, household and
public sector customers. It is well understood that there would be quite differences in
the requirement of services and product by these targeted customers. Increasing the
size of product portfolio would assist Shaw in serving their customer base by
improving the speed to market for new services and cutting the cost of operations.
Pros:
The customer facing system and process should be improved that helps in improving
efficiency which would enhance the promise of company to deliver exceptional
customer services (7.1).
Therefore, the transformation of business by way of increasing the product portfolio
would help in serving the customer base.
Cons:
This enhancement of product portfolio would result in incurring the additional cost
that would push up the operational cost and thereby total cost of production.
The strategic move of Shaw communication to become pure play Telecommunication
Company or pure play connectivity provider also poses some challenge. This
CASE STUDY ANALYSIS AND REPORT
proposed measure of the company should be guided by the fundamental importance of
strong growth and creating optimal conditions for having universal access to the
connectivity of broadband. With the approach of company to become a pure play
connectivity provider, the company should be committed to make investment in
growing the businesses of broadcasting distribution and thereby should make robust
investment.
Pros
Such strategic move would help in enhancing their competitive advantage of the
company.
Cons:
The proposal of wireless levy is contrast to the objective of government that would
help in extending the accessibility of telecommunication services to the wide base of
consumers of Shaw communication.
Complying the measures taken by organization with the government objective
requires making some adjustments on other aspects of business.
Recommendation:
The analysis of SWOT of Shaw communication identifies that there exist some
weakness and threats that should be addressed by organization.
Shaw communication should take efforts to increase the number of subscriber of
wireless phone because compared to its competitors; the company has lowest number
of subscriber. There should be continuous innovation in the wireless phone and
providing customers with data centric offerings. Efforts should be taken to make
significant improvement in the wireless network so that the increasing demands of
customer base are satisfied (3.2). Efforts should be taken by organization that would
add distinctive features to their product so that it is able to create differentiating factor
from its competitors. Telecommunication companies are motivated to innovate
because they can exercise property control over any innovations made by
organization. Moreover, innovation should be supported through broader range of
services and products because innovation would help company in gaining competitive
advantage. With the development of innovative platforms, the content ownership
becomes more important and such innovation intends to increase the value
proposition of customers and create differentiating factor from its customers.
Nevertheless, the company being a vertically integrated is positioned to benefit from
both distribution and content consumption.
The resources of organization should be efficiently allocated for enhancing the value
proposition of customers. Sufficient investment should be made by Shaw
communication in advancement of technology to deliver content experiences and a
leading network to the high value customers (B.2). More efforts should be taken for
building up on the strategic objectives of maximizing the shareholder value and long
term growth. There should be a creation of culture of making absolute continuous
improvement who would lay the foundation of improving the service of customers.
The company should concentrate on the critical strategic issues ranging from target
market to the capabilities and resource that would help in yielding sustainable
competitive advantage (4.5). The true sources of competitive advantage should be
combined with the strategies of successful business unit so that the pocket of
opportunities can be identified. Innovation can be one of the greatest sources of
competitive advantage particularly in telecommunication industry. For achieving
continuous innovation at scale, the company should develop the process, governance
proposed measure of the company should be guided by the fundamental importance of
strong growth and creating optimal conditions for having universal access to the
connectivity of broadband. With the approach of company to become a pure play
connectivity provider, the company should be committed to make investment in
growing the businesses of broadcasting distribution and thereby should make robust
investment.
Pros
Such strategic move would help in enhancing their competitive advantage of the
company.
Cons:
The proposal of wireless levy is contrast to the objective of government that would
help in extending the accessibility of telecommunication services to the wide base of
consumers of Shaw communication.
Complying the measures taken by organization with the government objective
requires making some adjustments on other aspects of business.
Recommendation:
The analysis of SWOT of Shaw communication identifies that there exist some
weakness and threats that should be addressed by organization.
Shaw communication should take efforts to increase the number of subscriber of
wireless phone because compared to its competitors; the company has lowest number
of subscriber. There should be continuous innovation in the wireless phone and
providing customers with data centric offerings. Efforts should be taken to make
significant improvement in the wireless network so that the increasing demands of
customer base are satisfied (3.2). Efforts should be taken by organization that would
add distinctive features to their product so that it is able to create differentiating factor
from its competitors. Telecommunication companies are motivated to innovate
because they can exercise property control over any innovations made by
organization. Moreover, innovation should be supported through broader range of
services and products because innovation would help company in gaining competitive
advantage. With the development of innovative platforms, the content ownership
becomes more important and such innovation intends to increase the value
proposition of customers and create differentiating factor from its customers.
Nevertheless, the company being a vertically integrated is positioned to benefit from
both distribution and content consumption.
The resources of organization should be efficiently allocated for enhancing the value
proposition of customers. Sufficient investment should be made by Shaw
communication in advancement of technology to deliver content experiences and a
leading network to the high value customers (B.2). More efforts should be taken for
building up on the strategic objectives of maximizing the shareholder value and long
term growth. There should be a creation of culture of making absolute continuous
improvement who would lay the foundation of improving the service of customers.
The company should concentrate on the critical strategic issues ranging from target
market to the capabilities and resource that would help in yielding sustainable
competitive advantage (4.5). The true sources of competitive advantage should be
combined with the strategies of successful business unit so that the pocket of
opportunities can be identified. Innovation can be one of the greatest sources of
competitive advantage particularly in telecommunication industry. For achieving
continuous innovation at scale, the company should develop the process, governance
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CASE STUDY ANALYSIS AND REPORT
and skills required for achieving the set targeted objectives. In addition to this, the
sustainability of company is also dependent upon the regulatory regime and policies
of government. Any new generation network should be built by company by
dissecting the role of government and analyzing the role of such regulation on the
business (7.5). Therefore, Shaw communication can achieve competitive advantage
by developing the strategy that focuses on achieving continuous innovation and
complying with the policies and regulations of government.
Shaw communication is required to enhance their profitability position required to
meet the business expansion and sustain their business in light of competitive pressure
faced by the organization. The top priority of the company is to make continuous
investment in wireless network and it is required to make increased spending on the
spectrum deployment. It is ascertained that the strong operating income would result
from the combined effort of cost saving and generation of revenue. For this purpose,
there should be a disciplined approach to cost savings across the organization.
Therefore, efforts should be taken to closely monitor the cost and enhancing their
ability to generate cost efficiency. Furthermore, strategic approach should be adopted
by the business for managing the cost on global scale by participating the purchasing
opportunities. However, some of the factors that might create impact on costing are
because of newly adopted along with amendment of regulations and policies.
and skills required for achieving the set targeted objectives. In addition to this, the
sustainability of company is also dependent upon the regulatory regime and policies
of government. Any new generation network should be built by company by
dissecting the role of government and analyzing the role of such regulation on the
business (7.5). Therefore, Shaw communication can achieve competitive advantage
by developing the strategy that focuses on achieving continuous innovation and
complying with the policies and regulations of government.
Shaw communication is required to enhance their profitability position required to
meet the business expansion and sustain their business in light of competitive pressure
faced by the organization. The top priority of the company is to make continuous
investment in wireless network and it is required to make increased spending on the
spectrum deployment. It is ascertained that the strong operating income would result
from the combined effort of cost saving and generation of revenue. For this purpose,
there should be a disciplined approach to cost savings across the organization.
Therefore, efforts should be taken to closely monitor the cost and enhancing their
ability to generate cost efficiency. Furthermore, strategic approach should be adopted
by the business for managing the cost on global scale by participating the purchasing
opportunities. However, some of the factors that might create impact on costing are
because of newly adopted along with amendment of regulations and policies.
CASE STUDY ANALYSIS AND REPORT
References and Bibliography list:
White, R.E., Rowe, W.G. and De Sousa, J., 2017. Shaw Communications: Becoming a
Connectivity Pure Play?. Ivey Publishing.
References and Bibliography list:
White, R.E., Rowe, W.G. and De Sousa, J., 2017. Shaw Communications: Becoming a
Connectivity Pure Play?. Ivey Publishing.
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