MBA Coursework ('10)- scored the only Distinction in a class of 84 students.

1. ELECTRONIC AGC FORM
SCHOOL OF MANAGEMENT
SECTION 1: STUDENT TO COMPLETE
I.D. No: ENROLMENT/START DATE :
099018609 09/2009
PROGRAMME: MODULE: MODULE CODE:
MBA(FT) Strategy, Business and MN No Module Code
Information
STUDENT DECLARATION: In submitting work to the University you are agreeing to the following
statement:
“I declare that this assignment is my own work, that all sources of reference are acknowledged in full and that it
has not been submitted for any other course“.
SECTION 2: TUTOR TO COMPLETE: COMMENT & GENERAL ASSESSMENT
Presentation Presentation
shows a Presentation is
Presentation Presentation shows an
Presentation of polished, disorganised.
carefully and satisfactory attempt to
assignment and coherent Purpose and
logically showing organise in a
clarity of structure. meaning of
organised. organisation logical manner.
expression Thoughts and assignment is
Thoughts and and coherence. Meaning
ideas are unclear and/or
ideas clearly Language apparent, but
clearly is poorly
expressed. mainly fluent. language not
expressed. expressed.
always fluent.
Fluent
Tutor to mark by inserting a X academic
in the appropriate box.
Attention to the Has addressed Has addressed Has address Some of the Answer fails to
purpose of the the purpose of the purpose of the purpose of answer address the
assignment the assignment the assignment the responds to the question set.
comprehensivel coherently and assignment. purpose of the
Tutor to mark by inserting a X y and with some question.
tion.
in the appropriate box.
Critical analysis of The assignment Clear Demonstrates Limited Lacks critical
literature/theory demonstrates application of some critical evidence of analysis of
application of theory through analysis of critical analysis. theory. Purely
critical analysis. critical analysis relevant theory. Tendency descriptive.
Tutor to mark by inserting a X Arguments are of the topic towards
in the appropriate box.
Illustrations: Use Appropriate Some use of Some use of A little use of Very little use
of examples are examples. Well examples. examples. Little of examples.
examples/evidenc fully and reliably integrated and Some integration and No
e. integrated and evaluated. integration and evaluation. evaluations.
Tutor to mark by inserting a X evaluated. evaluation
in the appropriate box.
Analytical and Good Some evidence Limited None or
Conclusions. clear understanding of the conclusions unsubstantiate
conclusions well shown in conclusion only partially
ly d conclusions.
grounded in summary of being grounded n
theory and arguments supported by theory/literature
Tutor to mark by inserting a X

2. in the appropriate box.
Comments (first and second markers):
Tutor marking this assignment Date of marking Mark Awarded Grade Awarded
(dd.mm.yyyy)
NAME OF MARKER % Grade
SECTION 3: STUDENT’S ASSIGNMENT (TO BE COMPLETED BY 5680 words
STUDENT)
WORD COUNT. To include everything except the AGC Form, references and appendices.
No of words = Five Thousand Six Hundred and Eighty words.
Student to insert assignment below:
Strategy Coursework Page 2

3. 2010
Strategic Analysis of Television News
Industry in India
Mehul Verma
University of Leicester
1/29/2010
Strategy Coursework Page 3

4. STRATEGIC ANALYSIS OF TV NEWS INDUSTRY IN INDIA
TABLE OF CONTENT:
1. Executive Summary ………………………………………………………………………………………………..5
2. Introduction……………………………………………………………………………………………………………..5
3. Objective of the report…………………………………………………………………………………………….6
4. Research methodology…………………………………………………………………………….……………….6
5. Industry Landscape…………………………………………………………………………………………………..8
6. Industry Analysis…………………………………………………………………………………………………….10
7. Competencies for Existing Firms……………………………………………………………………………..19
8. Strategy for New Entrant………………………………………………………………………………………..24
9. Conclusions…………………………………………………………………………………………………………….26
10. Bibliography……………………………………………………………………………………………………………27
Strategy Coursework Page 4

5. Executive Summary
The ‘Television News Industry’ in India is defining an exciting space for strategic activities
unfolding with deregulation in the sector and opening up of the market to intense competition. The
objective of this paper is to conduct a strategic analysis of the ‘Television (TV) News Industry’ in
India. The study conducts an industry analysis, evaluates industry dynamics, assesses market
potential, sustainable demand and competition and scope of the industry are conducted in light of
PESTLE and SWOT Analysis. Value addition in the industry is evaluated to consider the strategic
viability of investment returns in this sector. Practically feasible and strategic solutions have been
analysed for the existing firms to improve their competition. The key findings of this study reveal
that the TV news industry is projected to continue to be the major contributor to the overall
industry revenue and is estimated to grow at a CAGR rate of 18% cumulatively over the next five
years. Overall, the sector is projected to reach £30 billion by 2013 (FICCI PwC Report: 2009). The
Indian TV News sector is worth £12 billion and is expected to reach £15.78 by 2012 (FICCI PwC
Report: 2009). Considering the promising growth potential, untapped rural penetration, annual
turnover, rising demand, this project has been analyzed to be a strategically viable venture for a
new entrant who can develop a sustainable competitive advantage, as suggested in this paper.
Introduction
The TV news industry started in 1980s, and moved on to deregulation and economic liberalization
of 1991 to face intense competition due to technological advancement and convergence in the past
decade. Growth factors expanded the TV news industry to 50 news channels across the nation, to
provide news service to a population of 60 billion people (Census Report: 2009). The television
news industry emerges to be the largest constituent with 41% share in the Media and
Entertainment industry (FICCI PwC Media Report: 2009). At least 10 more 24-hour news channels
with average annual returns of 11% are expected to launch over the next 5 years. (FICCI–PwC
Report: 2009).
Convergence of entertainment, telecommunications and technology are opening up new avenues
for growth, further intensifying competition by identifying new markets. As can be inferred from
(Grant, 2008:209), this industry can adopt at ‘blue oceans strategy’, by exploring new markets.
Strategy Coursework Page 5

6. This paper has selected the ‘Television News Industry in India’ for analyzing the present and future
scope of growth and investment returns in this rising sector. The ‘TV news Industry’ is a part of
the ‘Media and Entertainment (Service) sector’ according to Standard Industrial Classification
(Government of India), covering the geographical boundaries within India.
Objective of the report
The objective of this study is to analyse the TV news industry landscape with reference to the
leading 3 firms in this industry dominate over 70% of the total market share. The paper proposes
some strategic recommendations for performance improvement to the existing firms. The study
concludes with a strategic viability analysis for potential investment, proposing recommendations
to a new entrant.
Composition of the paper
This paper is divided into three main categories:
The focus of the first part (Part A) of the paper will be to define the industry landscape; conduct
industry analysis evaluate the present state of environment to access the profitability of the
industry. This examination is held in the light of strategy tools like- PESTLE, SWOT Analysis and
Industry Life Cycle analysis.
The next section (Part B) will discuss growth strategies that firms in this industry might adopt, by
the use of use of Market Segmentation, Vertical Integration Benefits, and Resource based view,
Product Differentiation and Strategy of Innovation, evaluating challenges for growth.
The final section (Part C) of this paper will consider the strategies a new entrant can adopt to enter
this industry.
Research Methodology
This paper will conduct an industry analysis of nature of competition of three 24-hour TV news
channels that offer nation-wide coverage of ‘news and current affairs’. These channels are located
in New Delhi and operate in both English and Non-English languages.
Strategy Coursework Page 6

7. Data is collected from Ministry of Information and Broadcasting (MIB), Government of India(GoI)
website, research study and data study conducted by research firms, academic journals. Time
scale analysis is involved for relevant comparisons.
Top 3 news channels in India and their market shares
(Television Audience Measure (TAM) Report: 2009)
Channel TV News Group Market Share
Doordarshan News 33%
(Government of India)
(English and Hindi)
Zee News 20%
(Zee Telefilms Private Limited)
New Delhi Television 17%
(NDTV Media Pvt. Ltd)
Part A
Defining Industry Landscape: Identification of Major Players
Strategy Coursework Page 7

8. India has 50 news channels catering to about 60 billion population owning, 100 billion television
sets. With convergence giving way to latest communication technologies, the industry is expected
to grow by 32% in 2012 (FICCI-PwC: 2009).
Potential Customers
At least 75 million homes in rural India do not have access to television, indicating the hidden
potential in ‘going rural’. Gaps like poor power supply hinder with the expansion potential (TRAI,
2008). Rise in low cost TV sets and growing potential power with the people is expected to add 40
million potential customers by 2012 (FICCI-PwC Report:2009)
Suppliers
The TV news industry heavily depends on the satellite or wireless distribution channels for the
coverage of its area. The dominance of Cable TV operators, Conditional Access Service Providers,
Satellite TV service owners, is increasingly being taken over by convergence service providers like-
Direct to Home digital TV, Internet Protocol TV, Internet live streaming, mobile update alliance
providers. These suppliers mediate in distributing media content by the TV news industry to the
viewers/user of information.
Source of Revenue and Market Demand
There are primarily two sources of revenues
Channel Viewership Chart
in TV news channel, viewership
10% 7%
Viewership
5%
(subscriptions) and advertisements. 2.50%
5% 2% Series 1
0% Column1
Viewership: Price charged by the consumers 2006 2007 2008 2009 Column2
is in form of ‘Time & duration’ spent on TV Year
viewing. Example, the graph reveals the time
spent on News viewership increased from 2% (2006) to 11% (2009), a rise of 450% in 3 years
(TAM Report:2009).
Strategy Coursework Page 8

9. Subscription: Advertisers seek a wider mass
ers
80% 67%
Advertisement Revenue
coverage and focus on firms with strong
60%
36% distribution and networking for content
40%
dissemination. For example, the advertisement
,
20%
0% revenue jumped by 86% (2008-09) due to
08' 09' corporate advertisement inflow (TAM
Year
Report:2009).
Trend Analysis Assessment of recent and future changes
Analysis:
Current trend in the industry
Diversification: The industry is characterised by diversification in business operations while firms
use the ‘Path Goal Dependence’ to continue to carry out specialization in their operations.
Convergence: New media opportunities driven by technological innovation is givi
giving opportunities
to offer the multiple benefits of convergence. For example SMS news alert, cricket scores etc are
example-SMS
innovative ways to make consumer experience more valuable.
Rise in Foreign Direct Investment Regulatory relaxation in FDI cap (26%), rising GDP of the
Investment- ,
country offers a safe haven for global investors to align with Indian TV news companies
companies.
Foreign media participation (content
(content-sharing) has started to show indications for long
long-term
contracts and exchange benefits to establish. For Example, Reuters signed a content sharing deal
with NDTV in 2007. Wall Street Journal collaborated with ‘HT Media’ to open up a new print
venture ‘LiveMINT’ in 2006.
Future Outlook
Demand for the improved quality ‘High Definition TV’ format of TV broadcast with technological
convergence are expected to have far
far-reaching effects and a potential to rise revenue generation
ise
in this industry to £50 billion by 2015 (FICCI-PwC Report: 2009). FDI inflow and global media
participation is expected to continue to rise by 33% in the next 5 years (FICCI PwC Report: 2009).
Strategy Coursework Page 9

10. Hence, TV News industry has a bright outlook for expansion possibilities in the next 10 years and
scope to capture unexplored rural and sub-urban markets.
TV News industry analysis
This part of the paper will conduct the industry analysis by determining the industry dynamics by
strategic analysis of Porter’s 5 forces of Competition (1980) and Brandenberger and Nalebuff’s
Value Net Analysis (1996). Relationship between suppliers, distributors and competitors who might
destroy a firm’s profits are analysed using Porter’s 5 Competitive Force study. Value Net analysis
describing firm’s relationship with suppliers, distributors, and competitors and suggests ways to
enhance firm profits. Upon industry analysis, PESTLE & SWOT analysis are conducted for TV news
industry.
Analysis of Industry Dynamics
“For the firm to make profits, it must create value for its customers” (Grant, 2008:66). In order to
create value, the firm must understand its customers, suppliers, and competitors. This part of the
paper conducts industry dynamics study by Porters Five Forces of Competition (Porter, 1980).
Analysis 1: Growth of Competition: Porters 5 Forces Model
Channel Viewership: Revenue(£)(bln) Threat of New Concentration of Buying Power of
Entrant Industry Suppliers
Buying Power Rivalry among
of Buyers existing firms
DD News 33% 5.5 Strong network Captures both Offers Direct to
rural and urban Home service,
markets no threat of
suppliers
Zee News 20% 3.5 Offers bouquet Heavy Offers Dish TV
of channels concentration in services, no
regional markets major threat
Strategy Coursework Page 10

11. 17% 2 Ability to Popular in Urban Internet
swallow masses protocol TV,
smaller players new media tool
Buying power of Suppliers: The TV news industry has the dominant presence of over 500 channels
with over 50 in the news space that are diversified across more than 22 regional languages.
Advertiser’s powers: Each of the firms competes for viewership and advertisement revenues. In
order to reach out to large sections of the audience, the advertisers choose the firms with best
distribution links. However, advertisers have a wide choice amongst the competing firms depending
on the target audience being reached out. Hence, one of the most crucial suppliers, i.e., the
advertiser has a high bargaining power in TV news industry.
Distributors Powers: News is distributed by the media distributors like cable and satellite tv
operators, Digital TV and direct-to home broadcast service providers, who transmit the news
through local satellite links. So, distributors have a high bargaining power as they are responsible
for pricing the product (TV news), to the customer.
Demand: Viewership is highly fragmented in TV News industry due to diverse languages and
cultures, preferences and time devoted to TV viewing by various consumers. Demand for
customised news programmes and regional specialization, are increasing viewership patters.
Concentration: TV News space is characterised by high concentration of the rival firms, competing
for better visibility and customers’ popularity.
The broadcast of news is a highly differentiated area with each of the rival firms competing for the
air-time. While content and news-packaging may widely differ, but ultimate goal of each of the
competing firms is mass visibility.
Strategy Coursework Page 11

12. Most of the firms have experiences set of journalists and a selected team of professionals with
which, the firms establish their name in the market as the ‘face of the channel’. This is regarded as
a crowd-pulling strategy to attract viewership. Similarly content of the programmes is seeking a
concentration towards popular genres- like – cricket, scams, celebrity shows, gadgets, lifestyle
shows. However, the industry has high attrition rates with growth in industry, opening up better
opportunities to staff.
Industry Rivalry
Competitors: Not only is the competition confines to timely delivery of accurate information, but
the highly competitive market place with cash-rich media houses vertically integrating the
potentials of content distribution along with the earlier task of news production. Ex. Zee Television
started its Direct-to Home in 2005 and is now successfully competing against Internet Protocol
Television (IPTV). Many firms have exposures into the stock markets -Bombay Stock Market (BSE).
Excess capacity and exit barriers: Being a capital intensive industry, usually the same framework of
technology can be used to diversity the news channel and target an entirely new set of customers.
However, such integration will require a long-run planning and then effective targeting of the
market. Hence, usually for many firms, in the absence of diverse markets, the capacities are put
for single use only.
Threat of New Entry: Heavy capital cost of setting up TV News firm itself acts as a barrier to new
entrant. However, break-even may only come after long gestation periods (5-7 years) when the
channel becomes profitable.
Conclusions to Porters’ Five Force Analysis: TV News industry is
highly competitive with new players making an entry enough to
sustain the competition. While consumers and advertisers have a
wide range of choices, yet try to focus around the dominant players in
the industry. However, this needs the behaviour of complements to
access the nature of competition.
Strategy Coursework Page 12

13. Analysis2: Brandenberger and Nalebuff’s Value Net Analysis
The unexplored potential in the complementary firms has been identified by (Brandenberger and
Nalebuff, 1996:117), defining the room for profitable cooperation. For example, 5 Force Analysis in
TV News industry predicts intense rivalry for viewership. But the Value Net introduces the
possibility of cooperation among TV news channels to expand distribution and acceptance of
standardized HDTV formats. At the same time it predicts cooperation with suppliers (cable
operators, Dish TV operators and convergence service providers) to boost the channel coverage
and distribution to existing and newer markets.
The missing force in Porters Analysis: i.e., presence of complements stands critical for the analysis
of TV news industry and is represented by growth of convergence technologies. The availability of
broadcast news is no more restricted to television sets, but be easily accessed on mobile handsets
in forms of live broadcast by the 3G enabled services or SMS alerts. Many consumers are
subscribing to ‘Breaking news’ alerts or remain updated on cricket scores via ‘Cricket LIVE’ or even
make their stock purchases and sales decisions via stock alerts.
The rise of the role of complements has begun to influence the structure of the industry landscape.
In fact, TV news companies have entered into business understandings with leading
telecommunications companies. This has emerged to be a win-win situation for the firms,
associated complement companies (telecommunication companies) and finally the customers.
It can thus be analyzed that creation of value to the customers has increased by the increase in
competition between the six forces.
Firms can resort to Coopetition and encourage technology standards to be set for the industry.
Currently, the industry is united for pressing on the government for regulatory relaxation and
cooperation from suppliers (cable operators, channel distributors, and multi-service operators,
Satellite communications Providers and convergence facilitators). Further, firms can improve
efficiency jointly. For example, offering bouquet of channels by Zee News, not only packages the
offer to the viewer attractively, but also reduces the distribution costs for the firm.
Analysis 3: PESTLE Analysis
Strategy Coursework Page 13

14. Political Factors: The political factors include political stability in the country, trade and tariff
restrictions, which play an influential role on growth of business. This is especially, relevant when
the business is highly capital intensive like that of TV news industry. Being a service driven
industry, the use of Political Influence and Public Opinion tools suggested by (Kotler, 1992), have
their relevance on functioning of this industry.
Economic Factors: Economic cycle of the country has a significant impact on the industry as high
capital commitment and long run commitment to viability of the project make it a critical
consideration for TV News companies. For Example, Reliance Media Pvt Ltd and Videocon industries
postponed their plans to launch the TV news channels during the financial meltdown of 2008. Most
channels cut costs by 30% during 2008 due to the financial meltdown (FICCI-PwC Report: 2009).
Social Factors: Social factors such as age, demography, culture, lifestyle, working class etc has
been an important determinant in deciding the target
audience. The TV industry strives to customize programs to
suit the preferences of the target customers.
Technological Factors: Advancement in technology has
greatly impacted the industry landscape, infusing in tough
competition.
Legal or Regulatory Factors- With deregulation opening up
new markets, are creating better opportunities.
Strategy Coursework Page 14

15. Channel Political Economic Social Technological Legal Environmental
DD News Voice of Annual Consumer CAS, DTH, Government Regulation of
budgetary preference Convergence regulation, media content
the
allocation s
government Economies for Better Regulated of
Rise in standards Scale opportunities freedom of
of living of with expression,
people deregulation being a
government’s
channel
Zee News Influence of Financially New media Innovation and Rising Enjoys freedom
ruling party strong base experience adaptability to taxation rates of expression
new technology
Rise of low-cost
TV sets Expected
growth in
Power scarcity in
subscription
rural areas
revenues
NDTV Political Corporate Changing Expected Foreign Market Power
parties have Advertising is viewership growth from based on Size
media
an impact on influences by patterns diversification,
Deployment of
corporate economic cycle new products
holding
Rising unused
strategies, offerings
restriction
awareness resources
increase in Foreign media
literacy collaboration
rates
Strategy Coursework Page 15

16. Analysis 3: SWOT
Economic growth, De-regulation Fragmented market
Rising demand, Demand for specialisation
Convergence Poor quality check
Growing consumerism, Excessive diversity
Better technology Weakness
Strength
Opportunity
Threat
Commonwealth games
broadcast, FDI Growth of internet
Technology
Excessive choice for
New Media Applications
Consumers
Further deregulation
Strengths:
Rising economic growth rate is leading to a higher dispensable income of the growing middle-class
of the population. With improvement in lifestyle of customers, their demand for quality
entertainment continues to grow. Demand for customised entertainment and current affairs with
improvement in literacy rates and awareness has created immense scope for electronic media
industry to rapidly expand. Clearly, this indicates a rising demand.
The industry is witnessing a growth in demand for TV news audience and hence there are
“strategic windows of opportunity which means that there are only limited periods during which
the fit between the key requirements of a market and the particular competencies of a firm
competing in that market are at an optimum” (Abell, 1978:21). So, investment in a market must
be based on timing when the strategic window is open. Also, the scale of investment and decision
on the direction of the investment must be carefully evaluated with respect to the demand.
De-regulation and encouragement in foreign media participation has strengthened the scope of
alliances and partnerships with the international players and has also empowered the industry
financially. Due to rise in financial capabilities, emergence of high-end and latest communications
Strategy Coursework Page 16

17. technologies are moving at a fast pace. Clearly, this indicates availability of resources to sustain
rising demand.
Democratic framework of India recognises ‘Press’ as the Fourth Estate of the nation. This has
made the TV news industry highly independent, with the thrust on raising issues in the right
perspective. The power to create public opinion comes inherited in the system.
Weakness:
Owing to diversity of country with different languages, varied target customer groups, rising
demand for customised programmes combining entertainment and information, has made the TV
news industry highly fragmented. Highly competitive space has led to erosion of profitability for
some firms.
Setting up an electronic news Media Company may costs huge capital requirements, whereas
distribution of content may take a high proportion of cost. As sustained visibility is the key to
success in a highly fragmented market.
While the suburban and rural belts can emerge out to be greener pastures for the future, poor
electricity supply, problem in connecting remote areas may turn out to be costly task for the firms.
Opportunities
Scope for further changes in the industry landscape with de-regulation and sustained participation
of international media players, there is a tremendous scope for growth in this sector.
Technological advancements are making the possibility of connecting remote areas, a reality. The
positive future outlook may give scope for better collaboration.
The TV news industry may be highly competitive, but on issues like thrust on de-regulation, unity
in proposing the Government’s Ministry of Information and Broadcasting for foreign media
participation, all the firms in the industry get united.
With the growth of the industry, improvement in creative output, better reach to the audience,
interactive media initiatives, there is a rising inflow of talented staff, creative professionals, staff
Strategy Coursework Page 17

18. salary structures, job satisfaction has improved. This indicates the creation of knowledge as a
resource that can be strategically explored.
Threats:
New media initiatives like growth of internet as a source of much faster and widely accessed
medium, is posing a threat to the TV news industry. Many views choose watch other entertainment
programmes and catch up for news headlines on television. This greatly reduces the TRP ratings or
the viewership rating points.
However, the share of television access is amongst the highest in the primary media delivery
channel space.
Rise of firms in the media industries are exposing the viewers to excess of choices, giving rise to a
possible threat of lacking customer loyalty. Customers have begun to feel they are being
bombarded with too much information.
Application of SWOT Analysis:
Channel Strength Weakness Opportunity Threat
DD News wide distribution Bureaucratic New Media government
structure applications, support
fully digitalized studios
by 2012 Slow movement Direct to home changes in
in procedures to satellite political regime
Allocation from under
pass communications
the 11th five year plan.
Corruption in Awaited
Use of Digital Satellite
system Commonwealth
News Gathering(DSNG)
Games in HDTV
for the modernization
Format
of Satellite Earth
Stations worth £15.11
Strategy Coursework Page 18

19. cr.
Zee News High viewership Increase in Robust growth consumerism,
ratings operating costs: number of factors
advertising
Offers a complete Rising content Digitisation (rollout spend,
bouquet of channels to costs per hour of CAS and DTH)
content pricing
viewers, MSOs and the with cable
Higher employee
DTH players. Ex: the penetration will
technology &
costs
company has offerings increase from 70
regulation
in news, comedy, mln homes in 2006
Problem of
music, sports and to around 113 mln competition
Attrition
fashion, regional news homes by 2011.
channels
Slow rollout of
source:
CAS
equitymaster.com
NDTV Association with a Share price fall by Diversification into Declining
foreign broadcaster slowdown specialty channels viewership and
revenue share
Oldest in the market Financial stakes
acquired by
Bombay Stock
Kingfisher Group
Exchange Listed
company
Key Finding: Creation of Value
It can thus be analyzed that in the highly concentrated market of TV news industry, initiative
taken up by one or more dominant firms is quickly being adapted by the other firms in the
industry. In order to compete amidst high competition, the firms must closely understand the
competitor by way of competitive intelligence through regular analysis of data forecasting
competitor’s future strategies, “predicting competitor’s reactions and determining ways to
influence competitor’s behaviour” (Grant, 2008:67).
Strategy Coursework Page 19

20. Industry life Cycle Analysis
On the Industry Life Cycle curve, the TV
news industry is in its growth stage as
marked in the graph. As the industry
opened up only about 15 years back, the
real growth has started to show since the past 5 years. Burgeoning rise in new firms in the
market, benefits of technology coupled with innovation of convergence have started to
position the growth phase of the industry.
PART B
Competencies required by existing firms to be successful
This part of the paper analyses 5 strategies that the existing firms can adopt to emerge out
successful.
Strategy 1: Concentration on Market Segmentation
Some segments are more attractive than the others
Currently, a majority of the national news space is concentrated with 24-hour news channels. But
application of market segmentation, by segmenting homogeneous consumer tastes and targeting
them by offering specialist program mix. Detailed analysis suggests the hidden potential of the
untapped regional markets for info-tainment programmes (programmes with a combination of
news and entertainment) from the Tier II and Tier III cities or suburban markets. Based on
geographical expand of population, language, socio-political environment, the firms can carefully
target such emerging markets. For example, the business wing of Zee News identified the need for
‘Commodity-focused programs’ in the sub-urban cities like Surat (Gujarat), Jalandhar (Punjab) etc.
Zee news now dominates the viewership in these cities (rose by 67% in 2009) by focusing on
agriculture- education and commodity trading based news programmes.
Strategy Coursework Page 20

21. Thus diversification with specialization can be an effective strategy for the firms to achieve
viewership. Interestingly, this also results in better advertisement revenues for the firms.
Further, “operation within the existing capacity can give rise to economies of scale in production”
in advertising and distribution of news in certain concentrated segments than others (James &
Trautman, 1990:13).
Hence, the strategy to classify the target market into submarket on the basis of their
attractiveness and focusing on the most profitable segment will add to the TV news firm’s
profitability and will help them have competitive advantage.
Strategy 2: Vertical Integration Benefits
Vertical integration refers to a firm’s ownership of vertically related activities (Grant, 2008:350). In
TV news industry this is of critical importance. The assumption behind theory of vertical
integration is “reduction in transaction cost and attainment of market share by taking over the
competitors” (Ahn & Litman, 1997:13). Usually the media houses own and telecast, however
vertical integration can be extended to distribution of content. Some firms exploited the benefit of
first mover advantage by bringing out to the market, a combination of media production skills and
technological innovation attained in distribution. Firms possessing the required technology of
broadcast and distribution can integrate their resources to reach out to the viewers creating a cost
differentiation, achieving a substantial reduction in the transaction costs. For example, Zee News
enjoyed the ‘first mover advantage’ by initiating Direct–to-Home initiative satellite distribution has
used the technological know-how to directly reach the consumers houses.
Secondly, it makes the firm gain a competitive advantage over its rivals due to its complete chain
of broadcast and network facilities. In fact, other rival channels are tying up with DTH
arrangement to reach to all those consumers who subscribe to DTH services.
An entrant may be able to “influence the existing structure of the market by totally reversing the
dominating market behaviour” (Melesko, 2004:299)
Strategy Coursework Page 21

22. Costs associated with vertical integration: Restructuring the editorial content, exploring gaps in
consumer choices, innovative concepts in distribution and advantageous advertising pricing
schemes can be better sought methods.
STRATEGY 3: RESOURCE BASED APPROACH
It may be useful to focus on the core-competencies of the business in a way that such a focus
would help the firm to assemble its news production and broadcast capabilities in a way to
experience a better vertical integration of its resources, such a move will also create barriers to
entry for the firm (Prahalad & Hamel, 1990).
In the fast changing competitive environment, firms need to consistently evolve and innovate to
retain and increase viewership. As indicated by (Grant, 2008), that ‘the greater the change in
external environment, the more likely it is for the firm will depend on its internal resources and
capabilities to create a secure foundation for long term strategy’. “External environment is
responsible only for 8% of the changes, and rest 92% comes from within the firm” (Jackson,
2009: Lecture 5).
It is not the size of the firm’s resource base, which is primary determinant of capacity; it depends
on the firm’s ability to leverage its resources effectively by the means of converging, balancing and
cooptetition (Prahalad & Hammel, 1990).
To adopt this, the firms must analyze their key strength on the basis of existing resources and
capabilities, and develop future growth and expansion strategies around them.
The TV news firms must analyse their key strengths- in terms of tangible/ intangible/human
resources. For example, NDTV employed a talented team of investigative journalists. The company
based 55% of its programs around environment-based news stories and broadcasted them in
interesting case study based 30 minutes programmes. Within 3 months (May-July 2008) of the
launch, coupled with innovative advertising, the viewership of the programme increased by 37%
(TAM Report: 2008).
Strategy Coursework Page 22

23. The resource based view of strategy has further been supported for its “coherence and integrative
role that places it well ahead of other mechanisms of strategic decision making” (John Kay: 1999).
STRATEGY 4: PRODUCT DIFFERENTIATION
Using conjoint analysis, i.e. process of analyzing the strength of the customer preferences, for
different product attributes. This strategy can be used to re-design news program mixes with
understanding of customer’s tastes and preferences. This strategy is useful in forecasting viewer’s
choices and reinforces the findings into offering right products to the rising demand.
STRATEGY 5: USE OF INNOVATION AS A SOCIAL MARKETING TOOL
Concepts of social marketing involving nationwide participation can help the firms develop on its
potentials. This further means the use of resources of the firm to deliver new methods.
For example, the print edition of Times Now, The Times of India Group started with nationwide
series of campaigns- ‘Lead India’, ‘Teach India’ involving nationwide participation of their viewers
and readers. It promoted the idea of ethical issues like ‘each one, teach one’ and also gave a
majority population to add to the intellectual simulation being generated by the power of
communication medium.
Past trends of demand for news is giving way to customised bundling of information and
entertainment popularly known as ‘info-tainment’. For example, 30 minute news shows on DD
NEWS on Personal Finance (Morning Bell- a half an hour show on expected trends from stock
market) / Commodity Trading ‘Insight into Futures Trading’. Similarly, one-minute news capsules
are being designed to give value for time to the viewer.
Main Findings
Is assessment in line with actual profitability? This part of the paper captures the attractiveness of
the industry. This will be analysed with regards to how the industry structure determines
competitive behaviour and that in turn affects the profitability of the industry.
Strategy Coursework Page 23

24. Thus we know that the nature of competition is high, this drives the margins low but, application
of right strategy may help the firms to emerge out profitable.
Part C
Recommendations: Strategy for a new entrant
As a new entrant into the TV news industry is in search of market visibility, they may begin by a
‘Product Differentiation Strategy’ in that the emergent strategy must be used as a ploy
to define a competitive edge in the overcrowded market. The company may consider a
capital investment of a minimum of £1.5 crore and at the end of 5 years, this investment can give
returns of £2 crore at the growth of 33%. To begin with human resource, the company must hire
key anchors and reporters from leading rival channels in that they give an established recognition
to the new channel. This may incur the firm high initial costs, but the company can earn better
recognition. Next, the company must carefully evaluate the circles with high demand for and
developing an interesting program mix with news value and entertainment.
A good amount of spending on innovative marketing, pre and post-launch media campaigns
inviting corporate leaders to the launch event will the curiosity of the viewers and thereby pull in
potential advertisers.
The program mix for discussions and chat shows must tag-in celebrities, business leaders, and
influential political leaders and follow seamless advertising offered by Integrated Marketing
Communications (IMC), across various multi-media mediums and thus advertise heavily in the
dailies about its special news-hours.
The new entrant must launch itself on the celluloid screen with unique logo, channel identification,
fresh colour and improved screen(less cluttered TV screen differentiating itself from the regular
news channels). In all- it must relate to a fresh thinking in the mind of the viewer!
The Development Plan
Keeping in mind, the rising need for specialization across the diverse markets, the TV news firms
may choose to develop their programming content in 2 specific areas:
Strategy Coursework Page 24

25. a) National reach with news focus and
b) Specialist categories- like NDTV Lifestyle, Zee Business News channel.
Such a move will foster fuller capacity utilization with a better exploration of the knowledge
resources. Program content could be made more interactive with quiz questions rewarding gift
hampers, viewer interactivity may be increased. Citizen Journalist concept initiated by CNN-IBN
was a successful idea as it increased interactivity space for the viewers.
This is a way of garnering ‘Differentiation Advantage’ for the firms and helps them avoid being
‘caught in the middle’. However, constant evolution would be the key to sustain differential
advantage.
Use of Social marketing for promoting influential concepts – This is an innovative strategy by
watching and managing the pattern of demand. Usually during specific program telecast like-
national and assembly elections, Parliament sessions, National budgets, cricket match series,
festivals, national disasters, unforeseen circumstances like terror strike coverage/ accidents etc,
the viewership increases. Also during annual examinations (March) or university examinations
(March-May), the viewership patterns fall as consumers time preferences on entertainment
reduces.
Such cyclical changes in demand structures can be well watched and effectively handled. For
example, starting helpline service during national disasters or programs designed to cope with
examination stress can help to maintain the pattern of demand.
Test decision to enter- select entry vehicle, will compare costs to entry vehicle
Ideally a new entrant will have to have the required content competence, integrated technology
and effective distribution to make its presence felt.
In order to beat the competition in the TV news media industry, a new entrant will need to
have the latest technology with excellent distribution networks. Internal resources of the firm-
Strategy Coursework Page 25

26. editorial and technical skills of the work staff will have to be more competent.
Constant innovation by the use of convergence could be the key to beating the competition.
Dominance in presence to be captured by innovative advertisement, corporate excellence
awards sponsorship, industry round table conferences pulling in the corporate leaders. Further
news segments and programs to be culled out of this.
Conclusion
The analysis conducted for the TV News Industry reveals the current profitability levels of the
industry and the performance of the firms with regard to the competitive forces. The two
competitive forces- ‘Rivalry among the Existing Firms’ and ‘Buying Power of Customers’ has been
analysed to be fairly high. So, the existing firms can pursue ‘Market Segmentation’, ‘Product
Differentiation’ and ’Vertical integration. Using resource based view, and social marketing, these
firms can trigger actions that improve structural attractiveness. Whereas, a new entrant should
possess competitive advantage of technology and knowledge to meet the challenges posed by the
changing industrial landscape. Hence, it can be learnt that, the new entrant must be prepared to
take on the opportunities emerging out of deregulation of the sector, must channelize foreign
investment inflow and benefit from the technological innovations of convergence, new media
techniques and Integrated Communications Technology (ICT). With sustainable growth and
expansion scope in the current economic scenario, a new project can hence be analyzed to be
yielding positive results.
Bibliography
Abell, D. F. (1978) ‘Strategic Windows’ Journal of Marketing, 42(3):21-26
Strategy Coursework Page 26

27. Ahn, H. & Litman, B. R. (1997) ‘Vertical integration and consumer welfare in the cable industry’
Journal of Broadcasting & Electronic Media 41(4):453–477
Brandenberger, A. & Nalebuff, B. (1996) ‘Co-opetition’ New York: Currency Doubleday
Chopra, Y. & Dasgupta, K. (2008) ‘The Indian Entertainment and Media Industry: Unraveling the
potential’ 25th annual edition of the Indian Entertainment and Media (E&M) Industry Report by
FICCI and PricewaterhouseCoopers, New Delhi, India
Dertouzos, J.N. & Trautman, W.B. (1990) ‘Economic Effects of Media Concentration’ Journal of
Industrial Economics 39(1):1-14
Grant M. R., Contemporary Strategy Analysis 6th Edition Oxford: Blackwell Publishing
Hirschman, A. O. (1964) ‘The Paternity of an Index’ The American Economic Review 54 (5): 761
Jackson, P. (2009) ‘Strategy Lecture 5’ University of Leicester, School of Management
Joint study report by AC Nielsen & Kantar Media Research (2009) ‘Television Audience Measure
Report: 2009’ available online at http://www.tamindia.com/ (accessed 22.12.2009)
Kay, J. (1999) ‘Mastering Strategy: Based Strategy’ Financial Times 27th September, pp.1
Kotler, P. (1992) ‘Marketing Management’ 11th Edition, New Jersey: Prentice Hall
Melesko, S. (2004) ‘Vertical Integration and Excess Capacity: Investment Policies and Decisions by
Swedish Regional Newspapers’ Journal of Media Economics 77(4):295-308
Porter, M. (1985) ‘Competitive Advantage: Creating and sustaining superior performance’ New
York: Free Press
Porter, M. (1990) ‘The Competitive Advantage of Nations’ New York: Free Press
Prahalad, C. K. & Hamel, G. (1990) ‘The Core Competence of the Corporation’ Harvard Business
Review, 68(3):79-91
Exchange rate used: 1 GBP = 75.1544 INR (as on December 22, 2009)
http://www.equitymaster.com/detail.asp?date=10/10/2007&story=3 accessed on 26.01.2009
Government of India Census Report: 2009 http://www.censusindia.net/ accessed on Dec 20, 2009
Strategy Coursework Page 27

28. Images: gettyimages.com, googleimages.com, accessed 28.01.2010
Image of company logo: www.ddindia.com; www.zeenews.com, www.ndtv.com accessed on
January 28, 2010
---------END---------
Strategy Coursework Page 28