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2a. BSB Vs Sky

This document summarizes a case study comparing BSB and Sky, two competitors in the satellite television market in the UK. It analyzes the companies using Porter's Five Forces framework and identifies Sky as a major potential competitor given its resources, capabilities, and goals. It recommends ways BSB could have created barriers to Sky's entry, such as locking up content rights, and advises that both companies made strategic errors and are now losing money.

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0% found this document useful (0 votes)
561 views10 pages

2a. BSB Vs Sky

This document summarizes a case study comparing BSB and Sky, two competitors in the satellite television market in the UK. It analyzes the companies using Porter's Five Forces framework and identifies Sky as a major potential competitor given its resources, capabilities, and goals. It recommends ways BSB could have created barriers to Sky's entry, such as locking up content rights, and advises that both companies made strategic errors and are now losing money.

Uploaded by

i06leale
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Case Study: BSB vs Sky

WWW.SBS.OXFORD.EDU EDUCATING LEADERS FOR 800 YEARS

DipSI
Dr Pegram Harrison University of Oxford 26 Jan 2011

Five Forces Framework: Porter

Threat of entry

Bargaining Power of Suppliers

Intensity of Rivalry

Bargaining Power of Buyers

Threat of Substitution

Dr Pegram Harrison

DipSI

Which of the 5-forces is the biggest constraint on profits? Would you advise fighting or exiting? to BSB? to Sky?

Dr Pegram Harrison

DipSI

Was Sky an obvious potential entrant? How does one identify potential competitors? Look beyond position to resources (5-Forces + expanded framework)

resources

capabilities

actions
Dr Pegram Harrison DipSI

goals
4

Was Sky an obvious potential entrant? How does one identify potential competitors? Look beyond position to resources (5-Forces + expanded framework) Skys resources and capabilities 2nd largest media conglomerate in the world (film library, production facilities, studios, papers) Strong cash flow Cosy with Thatcher government Skys recent actions Move from print to electronic media (esp satellite) elsewhere English speaking focus, but print only in 2nd biggest market (UK) British market knowledge (ITV in mid-1970s, DBS bid) Skys goals and assumptions Murdoch is a megalomaniac, not classy, boxing without gloves
Dr Pegram Harrison DipSI 5

Was Skys entrance obvious? Dunh!

Sky (News Corp) was a HUGE potential competitor displaying all sorts of pre-dispositions to enter, with enormous resources at its disposal. Larger Lesson: Think of potential entrants. How will they behave, and why?
(Nahapiet and Goshal, 1998)

Can you identify those at head of queue, before they declare their intentions?

How will you prepare for, or prevent their entry?


Dr Pegram Harrison DipSI 6

Creating Barriers to Skys entry

Locking up film rights before a competitive bidder arrives Marketing efforts to differentiate BSB, esp from BBC Accelerating launch date Cutting costs (Marco Polo house?) Pre-selling satellites Leasing space on Astra instead of launching own satellites Better partners?

Larger lessons: Beware narrowing options. Early defence is more effective. Strategic analysis brings real pay-offs.
Dr Pegram Harrison DipSI 7

Advice to BSB and Sky?

BSB made some important strategic errors: Assumed entry barriers were higher than Sky did, or than they actually were Didnt raise those barriers Now, both are losing money! What do you recommend?

Dr Pegram Harrison

DipSI

Final Lessons

Always recognize potential competition


Anticipate, dont react Understand both economic and behavioural incentives In analysis, aim to be robust not exact.

Dr Pegram Harrison

DipSI

Game Theory Game: Win as Much as you Can!

Round Choice Score Cuml Choice

Score Cuml Choice

Score Cuml Choice

Score Cuml

1 2 3 4 5 (3x) 6 7 8 (5x) 9 10 (10x)

A B B A A B B A B B

-20 -10 -10 -30 -30 -10 -10 -50 -10 100

-20 -30 -40 -70 -100 -110 -120 -170 -180 -80

B B B B B B B A B A

20 -10 -10 10 90 -10 -10 -50 -10 -300

20 10 0 10 100 90 80 30 20 -280

A B B B A B B B B B

-20 -10 -10 10 -30 -10 -10 150 -10 100

-20 -30 -40 -30 -60 -70 -80 70 60 160

B B B B A B B A B B

20 -10 -10 10 -30 -10 -10 -50 -10 100

20 10 0 10 -20 -30 -40 -90 -100 0

Dr Pegram Harrison

DipSI

10

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