Directv Since Its Acquisition by AT&T Essay

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Environmental Analysis

DirecTV is a major player in a field that is changing and shifting every day. The entertainment and television world has begun to shift away from the cable television sphere that DirecTV and other satellite providers share. DirecTV really only has one direct competitor but they have a ton of indirect competitors including cable TV outlets, streaming services and DVD/Blu-Ray rental outfits. This essay will deign to conduct an environmental analysis of DirecTV. It will look at both the internal and external environments that DirecTV exists and operates in. While DirecTV is well-positioned for now, they had better be ready for the entertainment and television marketplace of tomorrow.

Analysis

The direct competitor mentioned in the introduction is Dish TV. While that company is not breaking records when it comes to their satellite revenue, they have been more than forward thinking in that they are the company being Sling TV and Blockbuster Online. While cable does seem to be fading away, Sling allows people to watch their television shows remotely. Further, the new Sling App allows people to indulge in cable and news network content without having to take on a cable subscription. As far as Blockbuster Online, the brick and mortar stores that Blockbuster had for years are long gone and Blockbuster Online pales in comparison to other streaming services like Vudu, Amazon Video, Netflix and so forth. Even so, it at least shows that Dish is not ignorant to the future of entertainment and television (Dish)(Yahoo Finance).

As for cable news outfits, there is a bit of a mix. There are Cox Communications, Time Warner Cable and Comcast, just to name a few. Comcast is an outlier in the current market as they have a corporation fusion with one of the three major legacy television networks, that being NBC Universal. Time Warner is similar but the links are much less prominent and resource-rich. This comes to the streaming services like were mentioned before. Netflix and Amazon in particular has exploded in size and scope and Wal-Mart snapped up Vudu on its way up. Hulu is a stronghold for people that keep up on their television shows. As mentioned before, Blockbuster Online is out there but not nearly as strong as the others. DirecTV, however, is not an island unto its own. Indeed, they have the same premium cable channels that the cable companies do and they are the exclusive home of NFL Sunday Ticket. It is clear that DirecTV is not ignorant to the changing television landscape as they have been offering the NFL ticket on mediums other than satellite-tethered televisions. That was a huge, but necessary, shift for them as the prior arrangement was too restrictive (Yahoo Finance).

Opportunities & Threats

DirecTV has opportunities as they are not in a position like Blockbuster was where they had a chance to catch the streaming wave in the form of being able to buy a nascent streaming service (Netflix) for a song but failed to pull the trigger ... at least not yet. DirecTV has an advantage in that they, along with Dish, are sometimes the only option when it comes to getting television access. Indeed, anyone with an unobstructed view of the sky can get satellite television while many people in rural areas are unable to get anything beyond broadcast television in many instances. In terms of threats, streaming and other new avenues of entertainment are literally taking over the marketplace and many people are "cutting the cord." Unfortunately, this would include satellite vendors like Dish and DirecTV. DirecTV will always have their niche markets where the people involved (at least for now) do not have any other good options. One thing that DirecTV should be careful about is that some entertainment options are directly incompatible with DirecTV and the company seems uninterested in fixing that. For example, those that have DirecTV and want to use TiVo are out of luck as the two service are not compatible without an RF blaster. In short, there is no integration to speak of. While the common DVR user may not have a problem with this, it is a deal-breaker for some (Tivo)(Yahoo Finance).

EFE Matrix

Opportunity

Weight

Rating

Weighted Score

Adding Streaming

20%

4

0.80

Sports Broadcast

15%

4

0.60

Tivo

10%

3

0.30

Threats

Weight

Rating

Weighted Score

Other Streamers

20%

5

1.00

Cord Cutters

20%

3

0.60

New Competitors

15%

1

0.15

CPM Matrix

Critical Success Factor

DirecTV

Dish

Comcast

Brand Reputation

7 6

8

Rage of Products

6

7

8

Customer Retention

6

6

7

Distribution Channels

8

8

8

Online Presence

8

8

8

Promotions

8

7

7

Industry Trends

As noted pervasively throughout this report, streaming is here to stay and DirecTV had better embrace it. Further, they should open up to outside vendors that do directly compete with DirecTV.

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The aforementioned TV is a perfect example. Whatever regulatory, legal or brand rivalry roadblocks exist need to be done away with. TiVo can complement DirecTV rather than be an adversary and both sides can benefit via a small surcharge for those that wish to use a TiVo DVR instead of a DirecTV DVR (Tivo). Also, DirecTV should not try to push back against streaming sites. Whether or not DirecTV ever plans to do their own streaming service or acquire an existing one, they should be as inclusive as possible. Their boxes should allow access to Netflix, Amazon Prime, Hulu and Vudu at a bare minimum. Other goods ones to make sure are included Spotify, Rhapsody and so forth. Adding or increasing ability to access social media like Facebook and so forth is also wise, whether it be via other apps for Facebook directly (Yahoo Finance).

Internal Analysis

One major development on the corporate front that has not been discussed already is that AT&T bought out DirecTV in mid-2015 for the price of $49 billion. The stated goals for DirecTV at that time, as stated by AT&T's John Stankey, was to provide a "premium entertainment experience" where people can be connected while mobile or while at home. Of course, AT&T has been a bastion of communication and other realms for quite a long time. At one time, they were so dominant that they were broken up from a corporate standpoint. At this time, they have their proverbial fingers in three big pots and the acquisition of DirecTV added a lot to one of them. Indeed, AT&T is big in the mobile phone market, the television/entertainment market and they also have their consumer electronics sphere. Their U-Verse service is a fiber/cable version of DirecTV but they have a lot of the same problems when it comes to compatibility with non-AT&T equipment. TiVo, just like with DirecTV, does not work in an integrated fashion with U-Verse (Tivo). However, one cannot deny AT&T's success. They have more than a quarter million employees worldwide and have been around since 1983. They serve about nine million landlines and about 120 million wireless ones. Their revenue was $132 billion for the year ending December 31st, 2014 and it has been on a steady ascent over the last three years even if gross profit has waffled (Yahoo Finance).

AT&T's mission is stated as follows:

"Our mission is to exploit technical innovations for the benefit of AT&T and its customers by implementing next-generation technologies and network advancements in AT&T's services and operations (AT&T).

Their vision statement is as follows:

"The AT&T global network was born of the ingenuity of AT&T Labs networking specialists who made disparate systems work together. Being the world's fastest and most reliable global network, our network is the standard against which all others are measured. To maintain our leadership in this arena, we focus on the future and aggressively pursue innovations. Our vision is to design and create in this decade the new global network, processes, and service platforms that maximize automation, allowing for a reallocation of human resources to more complex and productive work (AT&T)

Their basic business unit strategy is what one would expect and that is to capture as much market share as possible in the wireless, landline and television/satellite market. Their functional level strategy is to keep their supply chain, service delivery and so forth as streamlined and as expedient as possible. Their "stakeholders" would include anyone who owns AT&T stock, employees of the firm, customers of AT&T via any of their industries and so forth. Keeping all of those people satiated can be tough but their increasing profits and the adding they are doing to their portfolio (which includes the acquisition of DirecTV) seems to be paying dividends. The strengths of the company include that they are diversified, financially stable and they have a strong brand name image. Downsides include that they are not the clear leader in any major industries (e.g. television and wireless), DirecTV and U-Verse both have some notable technical shortcomings and the "cord cutting" trend is starting to reach a fever pitch. Even so, what they do have….....

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