essentially “ licensed monopolies ” B u s i n e s s F i n a n c e
Read the case study below and answer the three questions in 2 pages using your notes from the attached textbook chapter 1. please use APA style.
The Cable Company
Rachel Peterson knew she faced several major challenges as she took the job of marketing director for CableNOW. The company was the sole cable provider for six communities in northeast Louisiana. All of the cities were essentially “licensed monopolies” in the sense that no other cable company could compete within the city limits. In spite of this edge, however, competition was becoming a major problem.
Satellite television was the primary competitor for CableNOW’s customers. Both DirecTV and the Dish Network had set up operations in the six communities. The two providers were able to charge lower prices for basic services. They had also started to compete by offering price reductions on installations. This made switching from cable to satellite much easier for local residents.
CableNOW’s primary selling point was in the delivery of programming during bad weather. Thunderstorms and snowstorms completely disrupt a satellite signal. Severe weather is common in that part of Louisiana; however, the weather events do not affect a cable picture. CableNOW also held a competitive advantage because the company offered local business and real estate listings to subscribers. The firm also was able to provide local radar and weather forecasts during the “Local on the 8s” segments on the Weather Channel. The satellite companies could not provide these special options.
When Rachel took the job, she knew another issue was about to unfold. CableNOW had been able to transmit each city’s local channels as part of the basic cable package. Until this year, the satellite companies could not. Dish Network was changing the mix. Dish Network had just signed a contract to provide the local stations to subscribers. DirecTV did not offer local stations but did offer a greater number of channels in the company’s basic package. As a result, Rachel knew she had her work cut out as the marketing department struggled to maintain share in each city.
What image or theme should CableNOW portray to subscribers?
Can you think of a way to emphasize the advantages CableNOW has in an advertising program?
Do you believe CableNOW will survive these changes over the next 10 years? Why or why not?