Critically examine the relationship and the need for compatibility between corporate strategic and functional management policies.
Analyse the internal and external influences on corporate objectives and strategy.
Demonstrate the need for flexibility in strategic management and the practical limits of quantifying corporate strategy.
The report undertaken is to analyse the organization structure with different strategies that the Warner Bros adopted. The report highlighted the models that could be helped in analysis like the pastel analysis for situation analysis, porter’s five forces and porter’s generic strategy for competitive analysis, swot analysis for the analysis of internal environment and Ansoff matrix for strategy evaluation. However, the report gives an overview of the working of the company to the changes that will be helpful if adopted like the partnership strategy or cost effective strategy. However, the study highlighted the problem associated with the technology that the company needs to keep on changing to catch the interest of the customers. The recommendations that could be best suitable would be the need of changing global conditions, meeting the growing technology, looking into for short-term strategies and the decision of movies according to the target population.
Warner Bros Entertainment Inc. is a wide based entertainment company, which is fully integrated and has achieved global leadership in all forms of entertainment whether it is licensing, distribution, introduction, marketing or creation. However, Warner Bros is one of the subsidiaries of Time Warner Company that is home to a successful collection of brands in the world (Warnerbros.com, 2016). In this report, the strategic analysis will be done based on the vision and mission, macro and micro environmental factors within the Film & TV Entertainment segment as well takes advantages of opportunities within these segments and different strategies and options opted for its execution. Nonetheless, the report is carried out to analyze the feasibility, acceptability and suitability of the strategies adopted and their execution. However, the evaluation will not only help in understanding the growth of the subsidiary company but will also examine the strategic benefits and issues.
The objectives of any organisation revolve around the official and the operational goals that it performs to undertake that can be explained as vision and mission statement (Krajewski, et al., 2013).
Warner Bros vision and mission statement are given as:
Vision – The significant and continuous growth of the company in the long run with the production and distribution of the various diversified portfolio of products offered (Warnerbros.com, 2016).
Mission – The mission statement of Warner Bros Company can be defined as follows.
To maximise log term profits with a focus on sales, marketing and creative efforts on prioritized characters and properties that are likely to generate strong sales
To build the brand with the retailers foe the consumers
Align with selected licenses such that working with retailers, partners, licensees and other divisions of Time Warner Company.
Building a portfolio to remit different brands and opportunities (Grünig and Kühn, 2015).
The strategy that incorporates and continues to adhere has guided the company well in investing and being home to best content, leading in digital innovation, allocating and operating capital efficiently and expanding the international presence of the Warner Time Company with its subsidiaries (Warnerbros.com, 2016).
The macro environment studies the external analysis of the company with a checklist to analyse on the political, economic, socio-cultural, technological, environmental and legal facets of the environment. The report presented to the board of directors will be analysed on the impact of these facets of the environment to be used in the decision-making by the senior management and board of directors (Kohler, 2013).
Political Factors – The political alignment at local and national levels have regulations imposed on the film and entertainment industry because the production can range up to millions of dollars from the emerging markets. The industry is facing a continuous pressure from the industrial groups transmitting certain channels of the film and entertainment. However, this is not only impacting TV but film production even as the consumers wish to get more than required (Katkin, 2013).
Economic Factors – The Warner Bros subsidiary company operates on an expensive platform while facing trade deficit in the economy. The regulations have cost the advertising price to rise creating an issue by increasing money stakes and operating in a risky environment. However, the cost is a one-time expenditure but in meantime, the company can increase its revenue. With the increasing GDP to 17,419 US billion dollars, depleting unemployment rate to 6.2% and with a slight increase in the inflation rate from 1.5% in 2013 to 1.6% in 2014 shows a favourable environment for the Warner Bros company to diversify its products portfolio (Gran 2016).
Socio-cultural Factors – The changes in value is one of the key factors that changes the market. The increasing influence and the change of watch movies from big screen to laptop screen is a common phenomenon, but the major challenges are faced in geographical locations. The industry deals with attitude as well as changing tastes and preference in the selection of movies, animation, comic books and brand licensing (Cattani et al., 2012).
Technological Factors – The change in technology is facing an increase in popularity of 3D, 4D and 7D technology. The formation of DVD formats has enhanced the promotional base of the company. The company is good at building a diversified portfolio of products, which helps in getting a positive response from the customers and increasing the integration of IT with different stages of movie production (Lamb, et al., 2014).
Environmental Factors – The environment plays a sufficient role in the Warner Time subsidiary company. Nevertheless, with increasing eco-tourism and global warming, the issues are affecting the locations for the production of movies and workshops for comics and distribution as all products and inputs need to be eco-friendly (Christoff and Eckersley, 2013).
Legal Factors – Legally, the regulators act as watchdogs on the activities of the organization such that the legal barriers imposed to enter the emerging markets. The issues that highlight the slow production of the company are the licensing issues and intellectual property concerns. The regulators such as FCC and MPAA charge huge subscriptions from the customers in United States, which has led to revenue and now the Time Warner Company is opting to diversify its portfolio to phone companies in the area of the franchise (Katkin, 2013).
The competitive analysis of Warner Bros can be analysed on Michael Porter’s five forces to judge the overall competitiveness of five separate factors using the effective tool. The rivalry can be analysed on the based model in Figure 1.
Figure 1 Porter’s Five Forces
Source: (Moore, 2014)
Bargaining power of suppliers – This is assumed to be high in the Warner Bros Company being an entertainment and film industry where there is competition due to a unique pattern that is served by the actors as suppliers as well as human resources. According to this approach, the A rated actors have been attracted towards franchises of Warner Bros like Batmen, Harry Potter, Lord of the Rings, etc.
Rivalry among existing competitors – The rivalry in Warner Bros is majorly high between the industries of entertainment and film because of competitors like Walt Disney Studios, Paramount Picture Corporation, Fox Filmed Industries and many more.
Bargaining power of buyers – The power of buyers also comes in the high category as the customers do not have any switching costs for Warner Bros. that is energized by profusion offers in the industry (Dudovskiy, 2014).
Threat of substitute products – Warner Bros has a diversified portfolio that itself offers a wide variety of products like comic books, video games, short films, animation and also includes the recognition of social networking sites like Twitter, Facebook and YouTube.
Threat of New Entrants – The threat of new entrants is moderately low due to the cost barriers to entering the market is high. Nevertheless, the technological advancement of the internet has provided low cost barriers in turn increasing the threat of new entrants (Magretta, 2013).
According to the Porter’s Five Forces, Warner Bros has a strong control over market and has moderately less competition from the new entrants to compete with. Above and all, the company’s popularity is gaining superiority.
The internal analysis highlights the SWOT analysis a company faces from its internal structure as well as external structure. Warner Bros is a subsidiary company whose viability is analyzed in the market with the effectiveness that a company holds. The chart below in Figure 2 can explain the internal analysis for the Warner Bros Company.
Figure 2 SWOT Analysis
Source: (Chu et al., 2010), (Dudovskiy, 2014)
The business functions can be described as the internal functions of a company that helps to carry out the mission of the company. However, business functions can be internal; as well as external. Internal functions are the components of the company and external functions are those which are supplied by an outside agency. The Figure 3 general business functions of a company.
Figure 3 Business Functions
Source: (Woodcock, 2016)
The following three business processes that the company needs to expand and is more effective are marketing, production and quality and public relations.
The Warner Bros basic goal is to analyse and maintain its lead by broadcasting growing demand and legitimate business while utilizing technology changes and innovating new business models developing television landscape, including ad-sustained video-on-demand, wireless and broadband, and has digital division agreements with all of the broadcast networks in place (Serdarov, 2015).
The company is based on to provide well-established franchises globally to improve profit margins. However, the business function that the company lays stress on is TV production and cable which the company intends to grow to double by 2018-2019 (Tsujihara, 2014).
The target market of Warner Brothers is quite vast in the marketing and distribution of film featuring in more than 30 countries varied among different age groups with operating offices and spread over more than 120 international territories. However, Warner Bros is called a global leader and justifies its vast non-ending market. The wide spread is either in theatres or combination with joint ventures or partner companies. Warner Bros Pictures produce a slate of 18-22 slate of movies each year by employing a business paradigm that could lessen the risk and keep the customers intact with full distribution rights (Warnerbros.com, 2016)
Porter’s Generic Strategy Framework is one of the popular tools to analyse the need for competitive analysis in the company. However, the need to use this analysis is to pursue the cost efficiency strategies and product differentiation strategies in a particular customer section. However, the company chooses a strategy that maximises the profit by offering products at lower prices with exceptional quality (Solaimani and Bouwman, 2012). The Warner Bros Porter’s Generic Strategies can be defined and explained with the help of Figure 4 below.
Source: (Smith et al., 2014)
According to Warner Bros, it does not follow a defined strategy as it only engages in the diversification of products in quality as well as delivery. However, the quality of films, entertainment and animated products belong to the diversification of nature of ideas and narrative when communicated as well as catching the attention of A-list actress and actors. The diversification on the company’s perspective is achieved based on consumption and delivery focusing on entertainment and media of digitisation. The popular series produced by Warner Bros are Vampire Diaries, Rizzoli and Isles, Big Bang Theory, Mentalist and Two and Half Man that have attracted critics because of the high level of originality (Warnerbros.com, 2016).
The strategic choices can be elaborated by the Ansoff Growth matrix that offers four different growth alternatives for a firm to grow. The Figure 5 below will help in analysing the market and products for Warner Bros.
Figure 5 Ansoff Matrix
Source: (Dudovskiy, 2014)
The growth strategy is different with every industry. Warner Bros the followed the policy of market penetration and product development at its initial stages for producing entertainment shows. However, due to the following of this strategy, Warner Bros acclaimed a lot of success for the following of this strategy in the season of 2012 and 2013. Hence, just the adoption of this strategy made Warner Bros get 30% of the TV broadcast in US (Ir.timewarner.com, 2016). The result was growing and according to the annual report of 2013, Warner Bros acquired 55% share of Shed Media Plc in UK is known to be one of the foremost firms in entertainment. Now, recently, Warner Bros also follows diversification strategy because of the diversified portfolio that exists with the company on quality and delivery content as well as the amusement of films and consumption of services and products as stated in porter’s generic strategy framework (Heinemann, 2015).
The strategic evaluation of the Warner Bros can be based on the strategy adopted in Ansoff Matrix as it can be outlined that though Warner Bros follows a strategy that either is product development or diversification, it looks good only on paper but in reality, there is some risk involved in the process. The risk can be analysed based on the changes in technology concerning studio executives with laying stress on the three dimensions of strategic evaluation namely suitability, feasibility and acceptability (Vrontis, 2016).
Suitability – On this factor, Warner Bros might not stand to it for a longer of time because of the changing environment and the advanced technology that has been enhancing day after day.
Feasibility – On this factor, the success of the company can be fluctuating because of the change in demand of consumers that would wish to experience new technologies every day and that would not be possible, as the production cost will increase. However, the company does not follow cost effective policies that could help in controlling cost (Serdarov, 2015).
Acceptability – The acceptability may even decline when the feasibility principle would suffer. Nonetheless, the fact prevails that film industry margin is only successful if the creation of content is new and catches the eye of the customers. However, a decline in demand will lead to a decline in revenue as well leading the company to company’s downfall in future (Time Warner, 2014).
The recommendations that could help Warner Bros Company to strategise their strategies are given as follows:
One possible alternative is to finance productions so that the company can succeed because the strategies are best fit for short-term. Investors and others would be hesitant if the partnership strategy is enacted. However, the best way to meet the demands would be collaborating in films and work on its development. In production, one studio fights over details that lead to communication conflicts and clashes in ego to meet their demands. Nonetheless, partnerships should opt or delegation of activities should be proper (Serdarov 2015).
The other major issue that could need a suggestion would be the decision of movies according to the selection process based on the age, ratings, international and demographical need. The chartbuster movies should include multiple genres to plea to huge audiences who can know-how multiple emotions in a single production of the film. Hence, successful movies tend to cover action, comedy, tragedy, and romance collectively (Chu et al., 2010).
The risks are common in any organization who is facing success but with weak domestic and global conditions and disturbance in markets, the marketing and costing will continue to increase and will get difficult to built feature film. However, the option of adopting cost-effective strategies would be beneficial because it will help in earning profit but making fewer expenses that could hamper the organization (Warnerbros.com, 2016).
Finally, if the business does not persist in following its foundation values that is striving for innovation and brilliance in storytelling, then the results will display shingle and resilience in tricky situations in the future (Serdarov, 2015).
The report has performed the strategic analysis of the vision and mission, macro and micro environmental factors, internal analysis and different strategies and options opted for its execution. However, when analysed on the feasibility, acceptability and suitability of the strategies adopted, it came out that the strategies followed might only favour in the short run than in long run. However, the recommendations suggested will help the company to maintain and achieve success in long-term.
Conclusions
The report has performed the strategic analysis of the vision and mission, macro and micro environmental factors, internal analysis and different strategies and options opted for its execution. However, when analysed on the feasibility, acceptability and suitability of the strategies adopted, it came out that the strategies followed might only favour in the short run than in long run. However, the recommendations suggested will help the company to maintain and achieve success in long-term.
The strategic report on Warner Bros. mentions the problems of changing environment and advanced technology. The growing environment needs a more skillful environment that could provide delegation over authorities on expansion in studios or undertaking any area of its domain, accessibility to multiple genres to plea to huge audiences, the need to meet the global conditions by cost effective strategies whether it is high substitutability of the product or rivalry amongst competitors. Lastly, following foundation values to follow innovation. to keep the dominance in market intact.
Cattani, G., Ferriani, S., Frederiksen, L. And Täube, F., (2012). Management.
Christoff, P. and Eckersley, R., (2013). Globalization and the Environment. Rowman & Littlefield Publishers.
Chu, M., Jo, Y., Liu, N. and Tan, J. (2010). Warner Bros. Entertainment. [online] scf.usc.edu. Available at: https://www-scf.usc.edu/~yoanjo/warner%20bros.pdf [Accessed 4 Mar. 2016].
Dudovskiy, J. (2014). Ansoff Growth Matrix – Research Methodology. [online] Research Methodology. Available at: https://research-methodology.net/ansoff-growth-matrix/ [Accessed 4 Mar. 2016].
Dudovskiy, J. (2014). Warner Bros. PESTEL Analysis – Research Methodology. [online] Research Methodology. Available at: https://research-methodology.net/warner-bros-pestel-analysis/ [Accessed 4 Mar. 2016].
Dudovskiy, J. (2014). Warner Bros. Porter’s Five Forces Analysis – Research Methodology. [online] Research Methodology. Available at: https://research-methodology.net/warner-bros-porters-five-forces-analysis/ [Accessed 4 Mar. 2016].
Dudovskiy, J. (2014). Warner Bros. SWOT Analysis – Research Methodology. [online] Research Methodology. Available at: https://research-methodology.net/warner-bros-swot-analysis/ [Accessed 4 Mar. 2016].
Gran, (2016). U.S. Economic Outlook. [Blog] Focus-Economics. Available at: https://www.focus-economics.com/countries/united-states [Accessed 4 Mar. 2016].
Grünig, R. and Kühn, R., (2015). Stakeholder Analysis and Revising the Mission Statement. In The Strategy Planning Process (pp. 77-83). Springer Berlin Heidelberg.
Heinemann, F., 2015. Corporate Accelerators: A Study on Prevalence, Sponsorship, and Strategy (Doctoral dissertation, MASSACHUSETTS INSTITUTE OF TECHNOLOGY).
Ir.timewarner.com, (2016). Time Warner – Investor Relations – Annual Reports. [online] Available at: https://ir.timewarner.com/phoenix.zhtml?c=70972&p=irol-reportsannual [Accessed 4 Mar. 2016].
Katkin, M. (2013). External Analysis of Time Warner Inc. in the Entertainment and Film Industry. [online] wordpress.com. Available at: https://michaelkatkin.files.wordpress.com/2013/08/twx-external.pdf [Accessed 4 Mar. 2016].
Köhler, I., 2013. Strategic marketing analysis of Walt Disney’s Parks and Resorts.
Krajewski, L.J., Ritzman, L.P. and Malhotra, M.K., (2013). Operations management: processes and supply chains. Pearson.
Lamb, C., Hair, J. and McDaniel, C., (2014). MKTG 8. Cengage Learning.
Magretta, J., (2013). Understanding Michael Porter: The essential guide to competition and strategy. Harvard Business Press.
Moore, K. (2014). Use Porter’s Five Forces to Widen Your View on Competitive Forces. [online] Business 2 Community. Available at: https://www.business2community.com/marketing/use-porters-five-forces-widen-view-competitive-forces-01010538#wTKBQ5lR1g1yzuxE.97 [Accessed 4 Mar. 2016].
Serdarov, V. (2015). A Critical Evaluation of the Strategy of Warner Bros.. [online] moviepilot.com. Available at: https://moviepilot.com/posts/2902036 [Accessed 4 Mar. 2016].
Smith, M.W., Sun, W., Sutherland, J. and Mackie, B., 2014. Game Advertising: A Conceptual Framework and Exploration of Advertising Prevalence. The Computer Games Journal, 3(1), pp.94-123.
Solaimani, S. and Bouwman, H., (2012). A framework for the alignment of business model and business processes: a generic model for trans-sector innovation. Business Process Management Journal, 18(4), pp.655-679.
Time Warner., (2014), Our Strategy. [online] timewarner.com. Available at: https://www.timewarner.com/company/strategy [Accessed 4 Mar. 2016].
Tsujihara, K., CEO – Warner Bros. (2014) Time Warner Inc. Investor Meeting, p.3-6, p.8, p.11-13, p.27-34, p.42-53
Vrontis, D. (2016). EMI and Time Warner. The Analysis of the Industry as a Key Factor to Strategic Formulation. [online] Academia.edu. Available at: https://www.academia.edu/389605/EMI_and_Time_Warner._The_Analysis_of_the_Industry_as_a_Key_Factor_to_Strategic_Formulation [Accessed 4 Mar. 2016].
Warnerbros.com, (2016). Company Overview. [online] Available at: https://www.warnerbros.com/studio/about/company-overview [Accessed 4 Mar. 2016].
Warnerbros.com, (2016). Warner Bros. Entertainment Inc.. [online] Available at: https://www.warnerbros.com/studio/divisions/warner-bros-entertainment-inc [Accessed 4 Mar. 2016].
Woodcock, B. (2016). Business Functions. [online] Kent.ac.uk. Available at: https://www.kent.ac.uk/careers/workin/business-functions.htm [Accessed 4 Mar. 2016].
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download