Time Warner Company: Case Study Analysis Case Study

Exclusively available on Available only on IvyPanda® Made by Human No AI

Introduction

The current case describes the problem of technology obsolescence and the inability to sell services due to technological progress. Time Warner Cable is a large company serving approximately 16 million customers in New York, Southern California, Texas, the Midwest, and the Carolinas (Baye & Prince, 2021). The company provides cable television services, which were popular before the development of certain technologies. Today, companies such as Netflix offer the viewer a convenient subscription option without the need for cable TV, but only the Internet. Thus, the company’s sales began to fall as people switched to an alternative and more convenient option.

Discussion

In addition, Google and YouTube have begun to take a stand as they offer an ad-free alternative actively. All this led to the fact that the company began to be forced out of the market, which would inevitably lead to bankruptcy. Moreover, it is worth mentioning that modern services offer to watch them on all devices of the client, which is also a significant advantage. If one orders specific channels on cable TV, then the price will be significantly higher. Thus, subscription services win even in terms of price.

As a result, one may notice that the competition could lead to a price war creating a level of 0 profits. Not surprisingly, in such cases, management has to come up with an exit strategy. For a more effective evaluation of this process, it is necessary to consider its definition. The exit strategy implies the most efficient, low-cost, and painless exit from the company’s current market (Soundaian, 2019). It includes retaining as many of the positives you have gained during the performance. An effective exit can be undertaken in several ways, such as selling assets at an above-average price, a profitable merger, or a profitable takeover of the business. However, it is worth noting that the exit strategy does not affect the overall negative aspect of exiting the market, namely the termination of activities, which always incurs losses.

Talking about how low prices need to be to get out of the market, one should consider the rule of profitability. It includes the ratio of income and expenses, and as long as there is a minimum profitable income value, one should not exit the market. In addition, the company needs to take into account the immediate financial reserve, namely, when the exit from the market occurs before the profit ratio is negative (Pehrsson, 2020). It should be done in order to avoid the financial difficulties that can be encountered with a risky exit. Thus, the recommendation for the pricing policy includes such low price indicators that the minimum profit is maintained. However, prior to the exit, it is necessary to leave a margin of profit values ​​for a smoother transition.

Conclusion

To conclude, one might notice that technological progress may not be beneficial for some companies and businesses. It includes cases where advances in technology result in a company not being able to afford to provide relevant services. In order to avoid such a situation, it is necessary to carry out analytical activities and, depending on the need, implement new developments. In this case, Time Warner was faced with the fact that the competitors offered better options both in terms of price and in terms of service efficiency. As a result, the company was unable to exist in the market, and a merger took place, which affected development and profitability.

References

Baye, M., & Prince, J. (2021). Managerial economics and business strategy. McGraw-Hill Education.

Pehrsson, A. (2020). Competitive international strategy: Key implementation issues. Routledge.

Soundaian, S. (2019). Strategic marketing management. MJP Publisher.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2023, November 20). Time Warner Company: Case Study Analysis. https://ivypanda.com/essays/time-warner-company-case-study-analysis/

Work Cited

"Time Warner Company: Case Study Analysis." IvyPanda, 20 Nov. 2023, ivypanda.com/essays/time-warner-company-case-study-analysis/.

References

IvyPanda. (2023) 'Time Warner Company: Case Study Analysis'. 20 November.

References

IvyPanda. 2023. "Time Warner Company: Case Study Analysis." November 20, 2023. https://ivypanda.com/essays/time-warner-company-case-study-analysis/.

1. IvyPanda. "Time Warner Company: Case Study Analysis." November 20, 2023. https://ivypanda.com/essays/time-warner-company-case-study-analysis/.


Bibliography


IvyPanda. "Time Warner Company: Case Study Analysis." November 20, 2023. https://ivypanda.com/essays/time-warner-company-case-study-analysis/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1