Page 6 - SCS May 2018 - Day 1 Suggested Solutions

CIMA MAY 2018 – STRATEGIC CASE STUDY

Experience of making acquisitions means future such deals have lower risk of failing

One of the world’s largest operators in the industry, streaming content to over 100 countries

Seems to have strong controls over subscriber access to content

Innovative in its business model and use of technology

More technically advanced than main competitors

Relatively large subscriber base gives competitive advantage as can afford to spend more on
acquiring and creating content

Focus is more on TV programmes than movies as this is popular with subscribers

Reputation for being willing to take risks in buying programmes that are different and interesting

Large catalogue of content – 1,100 TV programmes and 4,600 movies

Popularity of ‘The Politics Game’ and ‘Tumbling Down’ – attracts new subscribers

Ability to attract top writers/producers/actors to work on self-made content

Data capture from website to understand better customer demands

Strong financial position – nearly $2 billion of cash

Company has made large investment in counter-piracy technology

Recent awards for ‘The Politics Game’ increases the company’s profile

Main language in Mayland is English – makes content easier to sell into other parts of the world
without additional dubbing/subtitle costs

Weaknesses

Doesn’t currently offer facility to watch content off-line

Heavy dependence on subscription income as source of revenue

Imbalance between EDs and NEDs at Board level – weak corporate governance?

Company is involved in a number of lawsuits (although none considered serious)

Negative Press articles over unexpectedly high mobile bills due to streaming content

42 KAPLAN PUBLISHING