Figure 1: ITV Diagram
ITV is a broadcasting company of the United Kingdom (UK) which develops its own content and distributes this content on various platforms, launched 1955 as an independent television which its origin lied on the passing of Television Act of 1954. The company claims that it operates the largest commercial family channels in the UK and delivers its own produced content and creates channels across other platforms globally. ITV uses its own hub to deliver and use broadcasts in the whole world. All the functions of the company are managed by revenue generated from advertisements. In the UK broadcasting and programming industry, this company has the largest share in UK TV advertising market by 47.6%. The company has also successfully attracted visitors to visit more than 21.7% share of viewing in the year 2017 (ITV, 2018).
The core family channel of ITV is key commercial channel for company as it delivers 99% of all commercial audience, which stands at over five million. Different ITV channels target different market segments and demographics. ITV hub is considered as an over top service which helps company to provide its services on available platforms including its website.
Focusing on revenue of the company, it has produced £3.1 billion dollars in 2017. It is essential for the company to produce better outcomes which can help to sustain its market position (Bloomberg, 2018).
SWOT is referred to as analysing the internal environmental factors.
It is imperative for an organization like ITV to do SWOT analysis to know the internal as well as external environmental factors that may make an impact on the company. Some of the strengths, weakness, opportunities,and threats of ITV are therefore analysed below:
ITV (TV network), in addition to giving network services, is also involved in publishing merchandising, home entertainment, licensing business and international distribution, by its involvement in distribution regarding DVD entertainment majorly in the United Kingdom (Bellman, et. al. 2012). BBC is the key market competitor which has an old reputation in the market and proper brand image in the UK broadcasting and programming industry of the UK.
The company also has high as well as effective brand equity that helps in attracting various customers to the company and this helps in increasing growth and productivity. On the other side BBC is focusing on the latest and updated programmers to retain the interest of the customers (customer awareness).
The company is also involved as a producer of the most famous shows of the world such as ‘Who wants to be a Millionaire’. On the other side BBC has a strong brand image in the UK which helps the company provide better service. BBC is a largest broadcaster of the UK from the long time history of the UK broadcasting and programming industry.
ITV also has strong documentary programs also has a widely and diverse followers through its entertaining features targeted to different demographics example ITV news channel TV, ITV channel weather, CITV (Children’s ITV) etc.
Weakness of the company is its shift from the social content and move into the production. ITV are not able to do this in an appropriate manner and have faced various issues or problems that have made a negative impact on its business (Hobeika, et. al., 2012).
The ITV is also not producing high quality content in current times, on the other hand BBC’s key weakness is that most of its information is based from the different current affairs and this produces negative messages in the targeted viewers. It is affecting the customer satisfaction of the company. This part is confusing. Need to be focused, not sure whether you mean ITV or BBC,. The focus should be on ITV, BBC should be looked at as a threat and a competitor.
Another weakness of the company is that it does not have its own network and satellite spectrum to provide or produce directly to the targeted audience unlike virgin media who does have direct satellite.
The company also has less presence in various continents like Africa, the US,and Asia. They are not able to do their business in an effective manner and this is considered as a hindrance to their business expansion.
Internationalization– This is a major opportunity for the company which can help the company to expand its business in the international market. ITV can use new market entry strategies to enter various new markets to enhance its potential business. ITV can merge with an organization which is working in the broadcasting and programming industry of the UK.
Digital media – It is essential for the company to work on their market needs and demands from their audience. Digital platforms are the most effective way to share video content with targeted audience and provide better experience for customers. The ITV Company can utilize the social media platforms to enhance its approach to targeted consumers (Küng-Shankleman, 2012).
The company has to pay a high amount of flat fees for the purpose of the network programming which is one of the main weakness of ITV (TV Network). Due to this, they have to make use of a major portion of their revenue and these impacts the overall profit and success of the company. BBC, which is the biggest rivalry of the ITV, has a high operational cost which is affecting on the company’s profits and sales.
Market competition –
This is a major threat to the position of the ITV in the UK. Give examples to demonstrate market competition and this is increasing market rivalries for the organization. It is essential for the company to make changes in line with current policies, innovations and strategies to retain its position in the UK.
On-demand video –
Different online channels are available in the market which is providing on-demand customized videos to targeted customers in the UK and in the international market. ITV is not providing this type of services in the UK which is becoming a major threat for the company (Pagani, 2013).
Porter five forces of ITV
The analysis of Porter five forces is a strategic management tool which is used to identify certain levels of profitability of specific organization. The managers of the ITV Plc. used this tool to increase the profits of the company. This strategy can increase the competitive advantage for the company and long-term profits in the industry of media (E and M, 2014). The forces given by the porter gives a great impact on the media industry of UK like ITV and determines the profitability of a company like ITV or media industries in general. Main forces given by Porter are described below-
The threat of new entrants
The new entrants play a crucial role in the media because they bring innovation into the media industry and proffer new ways of doing things. This threat can pressurize media industries to reduce the costs and lower its pricing strategy. This can give profits to the customers who patronize the media industries. Therefore, ITV Plc. needs to manage all the challenges and make proper barriers to give safety to its competitive edge of the company (Lee, et. al., 2012)
The organization tackles the threat of new entrants by managing economies of scale so that it can lower the fixed cost per unit and by the innovation of various products and services in the organization.
Threat of substitutes
The organization needs to face the threat of substitutes when new products and services can fulfill the requirements of the customers in different ways. By this, the profits of the organization can suffer. If the differences are created in the presenting of products and services then the threat of substitutes can occur in the specific company.
The ITV Plc. can tackle the threat of new substitutes by understanding the requirement of customers, also understanding the supply and demand chain. Enhancing the switching cost and becoming service-oriented. This threat can be managed by all these systems discussed and the threat of new substitutes is removed from the organization.
Bargaining power of customers
This process occurs due to the demands of customers since customers are demanding a lot. Generally, customers need the best offers at lower prices. This can further give more pressures to the ITV Plc. and reduce the profitability of the ITV Plc. The company needs to manage the bargaining power of its customers as well as its various offers and discount. The company can manage the power of customers by utilizing certain strategies which are described below-
By innovating new products for customers because these can seek different discounts for the company therefore maintaining the bargaining power of customers.
By maintaining a large base of customers. This process can decrease the bargaining power of customers because the diversity and volume of customers would not let the company be threatened by the exit of few customers.
New products can also reduce the threat of competitors in the market by making sure new programs are created and interesting programs been televised to suit different viewers.
Bargaining power of suppliers
Most of the organizations in the media industry make the purchase of raw materials from different suppliers. Suppliers who are at the dominant position can make a reduction in the earning of the ITV Plc’s margins in the market. Strong suppliers in the sector of the consumer service make use of their negotiating power in order to make an extraction of high prices from the market in the field of media. The major influence of high bargaining power of supplier is that it will decrease the media’s profitability.
ITV Plc can tackle suppliers’ bargaining power with the support of various considerations:
By developing an effective chain of supply with various suppliers.
By doing experiments with the design of the product with the utilization of different materials so that if there will be an increment in the price of one raw material then the organization can shift to another.
Rivalry among the existing competitors
If there is the intense rivalry among the existing competitors in the industry then this will invariable affect negatively the overall profit and price of companies in such industry. ITV Company is making operations in the competitive media industry. This competition takes noteof the company’s long-term profitability. Major competitors of the company are STV group, sky, and BT group. They are the biggest rivalries that are making an impact on the revenues of the company.
With the support of the different strategies, ITV can tackle intense rivalry within the existing competitors in the industry of media. These strategies are:
By developing a sustainable differentiation which means providing great, reliable and responsiveness to its audience which is a way to provide a competitive superior level of customer value.
By creating a scale so that they can compete in a more effective manner.
By making collaboration with the competitors to make increments in the size of their market acquisition instead of been competition with a small market.
This is an analytical tool which is used in the analysis of the external business environment of the media industry (macro evenironment). ITV which is a British free-to- air television channel in the UK has different external forces which are analyzed here in the report -
The political factor has a huge effect on the broadcasting and programming industry of the UK. ITV is a broadcasting company and political change which can be a reason for the organization to implement some significant change. Taxation policies are determined by government interference and this can affect the business of the company (Carter, 2018).The political factor has a high influence on ITV especially due to the fact that ITV is a service provider in the EU countries also. The Brexit process has a major effect on the process and operation of ITV in the EU countries. After BREXIT all of the EU countries will be considered as foreign countries in which people cannot access the channels.
This factor creates a huge effect on the business organization. The growth rate of the country affects the organizational potential to get business. In the year 2017, the annual growth rate of the UK was 1.66% which was a little bit down from the previous year (Statista, 2018). Decrease and increase in the annual growth in gross domestic product (GDP) indicates the direction of the market for the year. Decline in the annual growth rate affects negatively on the purchasing power of the UK residents. These are the targeted audience of ITV. The current unemployment rate is at 4.1% in the UK which is a decrease from previous years. It indicates that graduates are employed in the work and successfully contributing to enhancing the gross production of the country (Trading Economies, 2018). It helps to enhance the potentials of customers to take up the ITV hub subscription.
Social factors have a huge effect on the broadcasting industry as these factors affect the TRP of the shows broadcasted on the different channels of the ITV. Shared beliefs in the society can affect organizational outcomes and profits as well. Lifestyle, attitudes, beliefs etc. are considered in the social factor which has significant effects on organizational outcomes (Giffordand Nilsson, 2014).
ITV needs to embrace new technologies to achieve competitive advantage. Give examples of new technologies It has a huge impact on the organizational outcomes and the process of production. Broadcasting and programming industry is hugely affected by technological factors. Regular innovative changes in the technology have affected the industry which has necessitated organizations to make changes. It is essential for the company to make changes in its technology to provide better services to the targeted customers. Use of social media and ITV hub is also provided by the technological change in the broadcasting and programming industry. ITV is telecasting its video content by the different platforms which are implemented by the innovative technological change. The technological change generates a need for financial investment in the renovation and transformation of the technology.
Different legislation and regulation are developed in the broadcasting industry which must be considered by ITV in the UK. Employee’s benefits related legislation is essentially considered by the broadcasting indutry which can help companies like ITV to make significant changes. Employment law must be complied with ITV and ITV must work within the legal ethical framework. (Communication Act 2003) is developed mainly for organizations which are working in the broadcasting industry of the UK (WalesOnline, 2015). Need to consider conforming to Government laws, what to advice and not to advertise. Laws of other countries where they advertise
It also contains a huge effect on the broadcasting industry. Sending and receiving information in ITV is based on the internet and data transferring from satellite stations. Bad environment conditions in ITV or other broadcasting industry can influence the organization’s ability to keep broadcasting of the video content regularly in the country. The cable network is mainly affected by the environmental challenges which have emerged time by time in the UK and it affects ITV channels because most of his channels are also on cable networks even if it is also on free view. Give examples of the environmental factors to demonsrtrate full understanding.
It is a major aspect which is affecting the ITV in the UK. Different companies are working in the broadcasting and programming industry which is creating rivalries for the ITV. British Broadcasting Corporation (BBC) is the biggest rivalry for ITV in the UK. Both of the companies want to be in the first position in the UK. ITV has the first position in the UK broadcasting industry during the peak hours by taking 31.6% shares and BBC is on second with the 27.7%. ITV has a strong grip on the market and it enhances its percentage of shares during the peak hours. STV group is also another competitor of the ITV which has strength of 503 employees and $134 million annual revenue from its business activities (Owler, 2018). Sky is broadcasting and programming organization in the UK which is also a tough competition for ITV in the UK (Owler, 2018).
Marketing is a broad and significant function of the organization which includes market research, promotion, distribution and pricing of the products and services. There are specific methods which can be used for the promotion of products as well as services, which is referred as communication mix.
ITV also uses the extended marketing mix to enhance the attention and market capture in the UK. The extended marketing mix for the company is given below:
ITV has different channels which are the product of the company. It is essential for the company to manage the share of viewers on each of the channels to retain its success. ITV, ITV2, ITV Be, ITV3, ITV4, CITV, ITV encore are the different channels of the company on which it produces the video content (ITV responsibility, 2018). ITV Hub is also a product of the company which is an application for regular viewers of ITV to provide them a service to watch shows anywhere in the UK. BBC One, BBC Two, BBC Three, BBC Four, CBBC, CBeebies, BBC News, BBC Parliament and BBC Alba are the different channels of the BBC. BBC is providing a higher number of channels as compared to ITV. It is essential for the company to enhance the range of programmes and channels which can help the company to provide a better service to customers (customer awareness) and delivery of quality products.
Product advertising and promotion through various types of channels are considered in this section which are given below -
It is a significant core part of the marketing communication mix which focuses on the promotion of the business, products, and services in the targeted market. Electronic and print media are usually used under the advertising process (Todorova, 2015). ITV uses the television advertising of its programmes to get the attention of the targeted audience on the programmes. It helps to keep the TRP and viewer shares on the different timeslots.
Personal selling –
Add also some points how ITV promote its products on personnel selling. You need to look at more This organisation uses this to promote their programmes in the public domain. ITV has different channels free to air and paid subscription and it is essential for the company to retain the attention of the viewers on all of the programmes.
Discounts and promotions –
It is a technique which is used by companies to enhance the sales of the products by creating lucrative offerings for the targeted audience of the company. ITV hub is a paid subscription on which ITV provides discounts to retain users and enhance the subscribers of ITV hub.
Public relations –
You have not answered this question effectively. Do some research to find out what public relations is and how ITV does .It is an effective way to develop a better brand image in the targeted market of the company which can help the company to boost its sales (Castronovo and Huang, 2012). The company is eliminating its negative effect on the environment which is helping the company to develop a positive brand image. Greener programming, workforce, footprint other companies use ITV as a platform to promote their products etc. which are the different programmes which are coordinated by ITV to sustain the environmental, benefits and create a better brand image in the targeted audience.
This factor is focused on the use of employees in the organisation to provide services to the customers. In the case of ITV, most of the programmes are based on the UK and European culture so it uses most of the characters and actors from the UK. It helps ITV to keep the interest of the people in the programmes and also to retain the viewers by providing programmes according to their interest.
Process –ITV has its own studios and working units to produce programmes for the targeted audience of UK. It is an effective process used by the company to produce quality outcomes for the UK and EU nations’ audience of the programmes.
Figure 2 : ITV Logo
ITV has its logo to make a physical presence in the market. All of the programmes which are promoted on the channels and ITV hub have its logo. It is essential for the company to show its physical presence to the targeted market which can help the company to influence the customers and market which will create customer awareness and branding.
The relevance of marketing communication mix with the ITV and its influence on the policy and decision making
It is a huge significance for the ITV to promote their business and new video content on different platforms. Mainly it is focused on the electronic media to promote its new programmes on its different channels. Marketing communication mix helps the company to enhance the share of viewers in the peak time. Application of the communication mixes affects the organizational decision making and policies as well. Marketing and promotions related decision is affected by the marketing communicational mix in the ITV.
Critical evaluation of the effectiveness of the organization’s response
Discuss the effectiveness/benefits of ITV using the marketing communication mix
Downside or disadvantages of IV using marketing communications mix ?
According to the Hogg (2012), the organizational response contains a huge significance to keep the balance of the external forces and changes made by the organization. ITV has to consider the enhanced market competition which can help the company to make an effective change in its current policies and strategies to beat it.
Areas for the improvement in the response of the organization
It is essential for the company to make effective changes in light of the current response on market competition. This is an area where the company is on the back step and which can affect the organization. It is essential for the company to produce a quick response against the external forces to implement effective changes in the organization. Give examples ITV has to be more responsive against the promotions and marketing which can help to eliminate market rivalry. ITV has not used any specific promotion and marketing strategies to decline market rivalry. Give examples and make it clear
On the basis of the above report, it is concluded that enumerated external market forces create a significant effect on organizations’ productivity and performance. It is analyzed by the report that market competition is key factor which can affect the organization’s position in the industry as well as the revenues of the organization. Technological change is also the key factor which has compelled broadcastingorganizations to make changes in the current process of work. Use of different platforms is needed for technological advancement of ITV broadcasting and programming. Use of marketing communicational mix is significant for an organization to retain its position in the industry. It is analyzed that ITV has a huge scope to enhance its status in organizational response. This report has highlighted the forces that can have impact on the internal business of ITV. The ITV is required to produce a highly quality content and provide a competitive superior level of customer value to achieve the competitive advantage within the media industry especially the broadcasting industry.
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