slides powerpoint & summary

General information

Viacom, Inc. is an American media corporation that mainly deals with cinema and cable television. At the moment, market statistics place the company at sixth position in broadcasting and cable companies based on revenue (Stempel, 2012). The company history traces its operations in the 1950s when CBS Corporation (CBS) instituted a department that could handle the syndication of various television programs it offered. The current version of its business came into place in 2005 after breaking off from CBS Corp. It is now comprised of multiple networks such as Viacom Media Networks, Paramount Pictures, and BET Networks. By the help of this brands, the company can reach more than 700 million subscribers in more than 160 nations (Sweeney, 2008). The major stake control of the company is Sumner Redstone together with CBS via its National Amusements, Inc. Reporting of its operations and results is done by the help of two major operating divisions; Filmed Entertainment and Media Networks. The following unit comprises 73% of the company revenues in the fiscal year 2014, while the former fill the other part the balance by the various businesses such as theatrical, home theater, and television licensing (Fixmer, 2008).

Environmental analysis

Political

According to Rainey, (2016) together with the reviews from Glassdoor, (2010) it is evidence that Viacom is experiencing more of internal politics rather than politics from the state. Rainey, (2016) reports that management groups from various department rival due to downsizing activities by the top management. Also, there is the issue of firing the most experienced personnel to have other cheaper workforce options, that is, new staff, to ensure they pay less for compensation. The management fails to offers 'transferable skills' platform as it says due to political influence that tend to deny the workforce the needed support. Employees are therefore forced to learn from an unforgiving curve unless they are very skilled. The company needs to start giving some clear goals from the word go to its staff more so on-job training. The management should understand that the high turnover may be coming at the expense of a damaging work culture. Most importantly, they should communicate with its workforce whenever there is an abrupt staffing change that seeks to ensure they encourage stability in the company structure.

Technological

Being a media and entertainment company, Viacom has employed a vast number of technologies and modern ones to keep up with the completion. This technology has ensured that its media networks are reaching it's multi-million worldwide subscribers. Being the oldest film studio in America, it has tested various techniques for many centuries to create many of the most loved motion pictures and turn it into a major world producer and supplier of filmed entertainment.

By the help of television and digital media technologies, the company and its brands are now connecting with kids, youths and adults as it assist them to develop original and genuine content for the different audience groups. Also, Viacom Media Networks forms the largest collection of ad-supported cable networks in the country by audience share.

Social

Being a big company, Viacom has established itself as a dominant force to reckon. Viacommunity, Viacom's corporate social responsibility (CSR) unit has been doing a lot to leverage the power of it's' brands to shift actions to more socially inclined matters.

The unit partners with local and national agencies, institutions, foundations, community groups, and corporations, to address an extensive collection of issues and causes that range from sustainability, HIV/AIDS to gender parity issues. The company is the industry leader in handling complex problems by transforming moments into movements. Every year, Viacom have an international day of service where they invite members of its workforce to give back to the societies in which they operate and live. Additionally, the company has another impressive move where it has committed itself to foster social and environmental justice on a yearly basis by the help of dynamic programming, wide-ranging actions as well as the promotion of the current community programs (Glassdoor, 2010). Viacom's networks encompass various cultural audience and workforce groups of all ages, races, backgrounds, sexual status and genders. It is due to this reasons that the firm has been devoted to celebrating diversity and advocate for recognition and inclusion in ensuring each has a voice.

Legal

In 2015, the Paramount and VM Network units together with legal affairs department restructured to ensure that legal expertise is transferred across all business departments to give lawyers a wider exposure and ensure that their expertise is more widely deployed across the studio and television networks. Currently, departmental task forces are focusing on wide-ranging issues such as managing outside counsel, litigation, diversity, automation, competition law and the art and craft of the deal. The company is now automating most of its workflows, such as payment of bills and tracking of deals and deal terms and also launching online department portals to rationalize daily connections that are becoming a model of the organization (Spangler, 2016).

Porter analysis

Threat of entry

Among the most notable features that characterize a competitive advantage are the barriers to entry into an industry. A higher threat of entry is when the industry is too expensive for new businesses to make entrants due to high barriers (Shaw, 2016). On the other hand, when the industry has reduced and non-expensive barriers, then it becomes cheaper for a new business to enter the market.

For the case of Viacom, high capital requirements are meaning that a company needs to spend quite a hefty amount of money to be in a position to compete in the market; this factor affects Viacom positively. The mass media industry has a high learning curve making new firms spend time and money to study the market before they are well equipped to make entrants hence a positive impact of Viacom competition. Also, economies of scale help are one factor that helps organizations to lower their cost when they produce the next unit of output as it will cost less. When new firms enter the mass media industry, they will incur the high cost of production since they have few customers and hence smaller economies of scale. With Viacom boasting of millions of subscribers and a vast scale of production, this factor impact on it positively as it puts potential entrants away. Having a weak distribution network translate to a more expensive means of moving goods around while some goods/services never reach the end customer. Viacom has built a strong distribution network that positively affects it comparing to new firms (Shaw, 2016).

Bargaining power of suppliers

For any company, cost saving is reliant on cuts of purchasing price on the materials delivered by the suppliers. Nevertheless, whether there is cost saving cost is essentially dependent on the power of suppliers. If the firm is made to purchase from a single or limited supplier base, then the supplier (s) have bigger power during the negotiation of prices (Hose, 2013).

In the mass media industry, there is a high level of competition between suppliers which reduces the prices to producers such as Viacom. Also, the availability of a diverse number of substitute inputs makes sure that the suppliers have a lesser bargaining power over producers as a result of the competition between the substitutes with the competition positively impacting on Viacom.

Bargaining power of buyers

A buyer often engages the seller in a price negotiation especially when they purchase in large quantities and from a smaller sized entity. A bigger company has many customers which eventually increase its bargaining power as compared to small companies who rely on few customers for survival (Shaw, 2016).

Viacom has a broad spectrum of customers and distributors hence have a little dependence on either. This ensures that the distributors have less bargaining power on its products and services while customers lack bargaining leverage. Also, its customers appear to cherish the company's products making them pay more for these products and hence positively impacting on its bargaining power. When there are large numbers of customers, no one customer tends to have bargaining leverage.

Threat of substitute products

This factor is often overlooked since issues of direct competition are observed and monitored differently. However, the potential new products/services may come to a surprise to the existing businesses. Viacom is in an industry where competitors produce different products and services, making it difficult for customers to find comparable product or services that will satisfy their needs. Also, there is a limited number of substitutes making it difficult for customers to find other products/services that meet their needs.

Rivalry among established firms

Having established local rivals is a key driver to the formation and sustenance of a competitive environment. Rivalry can be intensive when there is an increase in new entrants, a high fixed cost of winning profit, and selling products and services at the same. Few competitors translate to fewer entities competing in the same market and resources which positively impact on Viacom.

Description of product/service strategy

Viacom produces and distributes motion pictures, television programming, as well as entertainment content using some of the well-known and household entertainment brands. Their strategic focus is on its audience to ensure they provide the entertainment the consumers wants to experience, when and how they want to experience it (Rainey, 2016). The major components of their strategy include:

1. Enhancing and expanding their brands globally by creating and acquiring new programming and channels, popular motion pictures and other entertainment forms like video game offerings.

2. To strengthen their relationships with their advertisers, cable, online, satellite, and mobile partners, to work in togetherness and come up with better ways of serving their audience groups.

3. The keep on expanding and monetizing the online and mobile entertainment platforms.

4. To rationalize their motion picture segment by the type and some films produced, placing a focus particularly on franchise properties and associated marketing strategies to capitalize on global production, distribution, and digital opportunities.

5. Come up with a continued operational discipline throughout the business to ensure there is a generation of efficiencies and effectiveness in executing their strategies.

In connection with the above efforts, Viacom intends to foster a diverse and creative culture that will enable them to continue developing unique and innovative content for the audiences to maintain their position as market leaders.

Pricing strategy

Any business must make a decision on the type of pricing strategy to use when selling its product and services. Prices are set for various reasons, among them is to defend the business in an established market or from new entrants, to advance its market share within the current market, to make entrants into a new market, etc. Viacom pricing strategy is engrossed on the mere goal of maximizing its profitability for the goods and services it offers the market. Pricing is there a critical component in the theory of marketing strategy mix. Price assist the consumers in viewing the standards of a firm based on the price tag they place on their products hence contributing to the creation of an exceptional reputation in that market. The decision of the business on the price of its products as well as the pricing strategies affect the decision of the consumers on whether or not to make purchases (Hose, 2013).

Viacom slightly employs predatory pricing strategy which intends to aggressively drive out competitors from the market by capturing more market share and attaining high economies of scale to ensure their product offerings, as well as costs, are at the minimal hence making it difficult for competing firms to catch compete in the market (Fixmer, 2008). Also, being a dominant force in the market, it has widely adopted price leadership where it's leading the way in determining prices due to the limited competition. This strategy is focused on generating a particular rate of return on its investments.

Advertising and promotion strategy

Advertising strategies are aimed at selling product and as a communication means between the company and the consumer. Such strategies intend to give consumers the information they need to make a purchasing decision. On the other hand, promotional strategies aim to harness an interaction between the company and the consumers so that the company can increase its sales by attracting more customers (Hose, 2013).

Viacom has embraced the vast number of advertising strategies ranging from Print (e.g. newspaper), Audio (e.g. radio), video (e.g. YouTube channel), World Wide Web (e.g. click ad), direct mail and outdoor advertisements (e.g. billboards). In a new development, Viacom announced a deal that involves an advertising firm, where Viacom will be given accessibility to Roku's audience data to allow the firm to offer targeted advertising to its different audience groups. This deal seeks to be a long-term advertising strategy that will help Viacom to build its brand name and increase its sales over time (Lynch, 2016).

Also, the company has employed various promotional strategies such as Branded Promotional Gifts, After-Sale Customer Surveys, Causes and Charity through Viacommunity initiatives, Mail Order Marketing and Social media. All this has assisted the company in promoting its product and service while positioning it in a favorable light. More specifically, Viacom has widely used the available social media platforms to promote its products. In recent developments,Viacom's' marketing and creative content unit has struck a deal with a technological startup firm, Canvs to empower its social media marketing. Canvs categorize social media comments into more than fifty emotional classes and use a four million words and phrases dictionary that is inputted into millennial slang and social media short-hand (Spangler, 2016).

Distribution and logistics

Distribution and Logistics ensure that the storage and allocation of goods are organized and that the right products and services reach the intended destination on time and within budget. Also, the unit ensures that issues of transportation, warehousing, stock control, and flow of goods are well monitored. Viacom has understood and integrated its entire supply chain so that it can easily coordinate different affiliated entities effectively and communicate with its suppliers and distributors in an efficient manner.

Ad/Website/Social Media for product/service

Advertising being one of its product offerings, Viacom has taken steps to offer advertisers a guarantee for the impact the social media can give them. Using a program called Echograph, Viacom will give clients the reach to data regarding influencers, age, engagement, and gender as well as the popularity of hashtag, etc. Echograph comes to back Viacom Velocity, an integrated customized content unit that was previously announced by the company that comes up with branded content campaigns to be distributed across the various networks it runs.

This means that Ads placed by Viacom will have its viewers retweeting them and also adding their emotions while gifting and sharing with friends, something which is not easy to quantify at the moment. The ultimate goal for Viacom is to move quickly and turn predictive on its social media platforms. With the program at its early stages, the company is yet to give out any formalized plans for what will take place in the case it fails to meet the guarantees (Poggi, 2014).

In a different development, Viacom data scientists and marketers are working hard to isolate the strong connection between marketing and analytics and how it can use Ad and social media data in a better way to meet its business goals. Viacom has shared how the company is leveraging data to stimulate growth and how its marketing unit is employing advanced data products in the market.

Also, the previously discussed Viacom Velocity program is a full unit that is dedicated to branded content. The unit is working closely with the marketing department in the different networks contained in Viacom portfolio. The main content part of this division, creative solutions, aims to serve as a knowledge base of new ideas while the other part intends to work with the existing talent (Thielman, 2014).

Analysis of major competitors

Media Networks

Viacom media networks mainly compete with many distributed cable networks, networks and digital distributors and broadcast television. The media networks rival for advertising revenue share with other broadcast and cable television networks, other mediums like websites, social media, apps, online platforms, print and radio programming (Sweeney, 2008). Each and every programming offering faces competition for audience share with respective competitors that target the same group.

Filmed Entertainment

Viacom Filmed Entertainment sector competes for audience share on motion pictures as well as other entertainment content released by major studios, film producers, and entertainment and consumer spending openings. The competitive position of the company is primarily dependent on the quantity and quality of the produced films, the distributed films as well as the marketing success and public reaction. The company also compete for the best talent to fill positions of producers, directors, actors, writers, and even film scripts which are very important to the success of the company (Spangler, 2016).

Competitors

In the two main segments that Viacom operates, some of its competitors include; CBS Corporation, Time Warner Inc., Time Warner Cable Inc., and Comcast Corp, Time Warner Cable Inc., Scripps Networks Interactive, Inc., Discovery Communications, Inc., Walt Disney Co, Cablevision Systems Corp, and Twenty-first Century Fox, Inc.

Market Share

Despite the deteriorating revenue, Viacom Inc. has an increasing market share in the segments it operates as shown in the table below:

Viacom and competitors market share and revenue figures

Company	Total Revenue	Market Share
Viacom Inc.	36.16 %	4.55 %
Cbs Corporation	49 %	6.18 %
Time Warner Inc.	15.76 %	4.93 %
Time Warner Cable Inc.	4.96 %	1.03 %
Comcast Corp	3.03 %	2.26 %
Scripps Networks Interactive, Inc.	69.32 %	1.93 %
Discovery Communications, Inc.	52.93 %	3.16 %
Walt Disney Co	16.08 %	8.17 %
Cablevision Systems Corp	2.18 %	0.14 %
Twenty-first Century Fox, Inc.	26.41 %	6.46 %
Graham Holdings Co	8.81 %	0.3 %

Source: (CSIM, 2016)

Company SWOT

Strengths

Entertainment Brands

Viacom has quite some network and film lines that meets needs of consumers from different demographics. Event after struggling in the market and capitalizing its content in the midst of a changing consumer taste, the company has advanced on upstarts and is poised to be the next mass media conglomerate. After adding Pixar, Lucas film, and Marvel Studios, the company has bolstered its position in the mass media market (Harrington, 2015).

Weaknesses

Reliance on Cable Television

Similar to its competitors, Viacom is being challenged by defies in cable programming sector. It younger audiences is now shifting to other costs effective alternatives such as Netflix and Hulu to enjoy similar programming and other media platforms such as YouTube is continuing to pressure these old guard media firms to streamline their strategies. Viacom is the hardest hit with Media Networks unit being the biggest part of its business. Viacom reported a $785 million write-down linked to low ratings on most of its programs such as "Entourage" and "CSI," leading to mass employee layoffs, consolidation of some of its media units and a delay in the authorization of the $20 billion share repurchase.

Original Content

Viacom is struggling to come up with new television franchises since the former CEO Mr. Freston left as he was the one approving, South Park, The Real World, and SpongeBob Square pants. The different networks are not able to come up with other major entertainment franchise that can stimulate ratings (Harrington, 2015).

Opportunities

International Growth

With the current shift of spending the domestic pay-tv landscape with technology, there is a major growth potential to be witnessed on an international scale. Viacom management has shown its interest to increase its global presence by supporting top-line growth over the years. The mushrooming media markets in India and Africa are the primary target for a long-term growth opportunity with the United Kingdom being the next region of the firm's international expansion.

Digital Media

Viacom has shown that it will continue to develop its digital media services to match the viewing trends. As depicted by its platform agnostic strategic plan, Viacom has sought business relationship from various non-Nielsen data firms. Some researchers, like Rentrak, gather and sell data derived from different platforms, and may, therefore, need help from Viacom to offer services in matching advertisers with viewers, which will auger well for the future of its digital media plans (Harrington, 2015).

Threats

Cable Bundle coming to an end

In 2015, firms operating in the pay-tv market were forced to deal with issues of poor ratings. In the beginning, the held to the belief that a major migration is still years away. However, after a series of substandard profits reports, most of them including Viacom have compelled to reconsider this case as it may be the end of the cable bundle.

Executive Succession

Sumner Redstone still has the voting power in the company as so is the case with CBS. Corp. Lately, now aged 92 and absent from the public eye. The once most vocal defender and advocate in the industry, the absence of Mr. Redstone are stirring up increased uncertainty concerning the aging tycoon's succession issue (Harrington, 2015).

Company Financial Analysis

Comparing the results of Viacom sales to that of its competitors, the company has reported an increase in Total Revenue in the second quarter of 2016 by 1.6 % with most of its competitors experiencing reductions in revenues in the same quarter. Also, with net margin standing at 14.16 % Viacom has achieved higher profitability in the industry (CSIM, 2016). The table below shows this and other financial insights.

Viacom Inc. and Competitors Financial Data

COMPANY NAME	REVENUE	NET INCOME	NET MARGIN	CASH FLOW
Viacom Inc.	12,397.00	1,493.00	14.16 %	-1,078.00
Graham Holdings Co	2,091.07	-80.03	9.73 %	-618.99
Scripps Networks Interactive, Inc.	3,337.52	939.53	26.14 %	-954.89
Cablevision Systems Corp	6,535.73	225.16	5.75 %	70.52
Discovery Communications, Inc.	6,472.00	1,193.00	24.3 %	-47.00
News Corp	8,292.00	250.00	4.9 %	0.00
Cbs Corporation	14,303.00	1,583.00	12.87 %	-144.00
Time Warner Cable Inc.	29,888.00	1,859.00	7.98 %	590.00
Twenty-first Century Fox, Inc.	27,326.00	3,016.00	9.12 %	0.00
Time Warner Inc.	27,903.00	4,056.00	13.68 %	-626.00
Comcast Corp	78,023.00	8,727.00	10.9 %	-679.00
General Electric Company	116,615.00	11,821.00	8.37 %	-42,039.00
APROX. MARKET	333,183.32	35,082.66	10.53 %	-45,526.36

Source: (CSIM, 2016)

Future Trends

Once a dominant force in Hollywood, Viacom-owned Paramount, is currently enduring hard times due to stiff completion from firms like 20th Century Fox and Disney's Buena Vista (Lynch, 2016). However, going into the future, this situation will drive the management of Paramount parent Viacom, to pick up strategies that are deployed on struggling businesses so that they reduce the exposure and raise profit margins to offset its down debt .

With the impending digital explosion as the traditional media conglomerates brace for the ultimate impact and badly looking for survival strategies, the media businesses will scramble to escape the disaster and enter the digital code (Harrington, 2015). Viacom, which has been under scrutiny by researchers at Wall Street and by the press due to the current failures have started embracing the creative and technological hurdles already, and the impending disruption may find it much prepared to be among the companies that will survive.

Currently, Viacom argues that despite the struggling networks, its brands is still dominant among the young audiences (Yu, 2016). Going into the future, consumers will stop using the cable bundles entirely, or shift to other skinny bundles as they seek content. However, the young viewer's group will remain hungry as it is harder for them to drop pay-tv for other substitutes such as Netflix hence assuring Viacom survival in the future.

Recommendations for the future

Based on its weakness, Viacom should develop its strategies based on this weak points while embracing the growth opportunities to ensure that it reclaim its position as the industry leader. Some of the recommendations are as follows:

1. Viacom should reduce its reliance on cable television and diverse its offerings to newer forms to ensure that it taps its audiences who are now shifting to other cost effective alternatives.

2. Viacom should invest in training and incubation of talents to make sure that it handles its current problem of creating new original television franchises such as South Park, The Real World, and SpongeBob Square pants.

3. With the current shift of ending the national pay-tv landscape with technology, Viacom should start embracing international growth potential by venturing into mushrooming media markets such as India and Africa.

4. Viacom should place more emphasis on developing digital media content to match the viewing trends.

Conclusion

Viacom is evidently a dominant force in the mass media and advertising market owing to its past success stories and current wide subscriptions. However, most of its networks have been faced with significant challenges that need to be addressed to secure the future of the company. The current revolutions such as the changing consumer preferences will continue being a challenge due to the high investment in the old forms of content delivery. Altogether, the experience, connections, customer base and constrained industry will serve the company well in its strategies of reclaiming its lost glory.

References

CSIM. (2016). Viacom Inc. Competitiveness. Retrieved from CSI Market: http://csimarket.com/stocks/compet_glance.php?code=VIA

Fixmer, A. (2008). Viacom May Pull Channels Off Time Warner Cable in Contract Spat. London: Bloomberg.

Glassdoor. (2010). Viacom Reviews. Retrieved from Glassdoor: https://www.glassdoor.com/Reviews/Employee-Review-Viacom-RVW579175.htm

Harrington, R. (2015). Viacom, Inc.: A Short SWOT Analysis. Retrieved from Value Line: http://www.valueline.com/Stocks/Highlights/Viacom,_Inc___A_Short_SWOT_Analysis.aspx#.WBNfyeB97IV

Hose, C. (2013). Promotional and advertising Strategies. Retrieved from Small Businesses: http://smallbusiness.chron.com/top-ten-promotional-strategies-10193.html

Lynch, J. (2016). Viacom Strikes Advertising Deal with Roku as Its TV Ad Revenue Falls. Retrieved from AdWeek: http://www.adweek.com/news/television/viacom-strikes-advertising-deal-roku-its-tv-ad-revenue-falls-171122

Poggi, J. (2014). Viacom Looks to Set Social Media Guarantees. Retrieved from Advertising Age (Adage): http://adage.com/article/media/viacom-set-social-media-guarantees/292571/

Rainey, J. L. (2016). Viacom Finally Announces Philippe Dauman Ouster, Thomas Dooley Promotion. Variety.

Shaw, L. (2016). Viacom Board Said to Plan Strategic Review. Retrieved from Bloomberg: http://www.bloomberg.com/news/articles/2016-09-07/viacom-board-said-to-plan-all-day-strategy-review-hire-advisers

Spangler, T. (2016). Viacom to Track Emotional Responses to Social Ads, Content. Retrieved from Variety Editions: http://variety.com/2016/digital/news/viacom-canvs-emotional-social-media-ads-1201687790/

Stempel, J., & Adegoke, Y. (2012). Viacom wins reversal in landmark YouTube case. Reuters.

Sweeney, M. (2008). Google and Viacom reach a deal over YouTube user data. London: The Guardian.

Thielman, S. (2014). Viacom Is Creating a Full Division Devoted to Branded Content. Retrieved from Ad Week: http://www.adweek.com/news/television/viacom-creating-full-division-devoted-branded-content-155115

Yu, R. (2016). Viacom's future is as murky as management turmoil. Retrieved from USA Today: http://www.usatoday.com/story/money/2016/06/26/viacoms-future-murky-management-turmoil/86349716/