WEATHER SERVICES CORP.

Should WSC continue as an information provider, or should it compete head on with the major online
players and offer is own online weather service?

o WSC should focus on the business-to business market rather than the consumer market. They are
one of the leaders in this market and they have the capabilities and resources to serve this market.
o The business-to-business market is also the most profitable market and WSC will be able to reap
much more benefits in this market than the consumer market.
o They should explore the idea of improving their online offering especially as related to the
consumer market.
o This can be done by taking advantage of improvements in broadband technology in their
information offerings on the World Wide Web.
o They should explore segmenting the market by the level of need. The range of need in the weather
market ranges from avoiding discomfort to avoiding catastrophic loss.

How would direct applications via dial-up online or websites potentially threaten existing WSC
business relationships

o Problems could arise with respect to pricing in relation to advertising.

o Problems could arise between firms in the commercial and financial on-line services due to the
conflict of interest.

How should the company develop the WSC brand? How could WSC grow the business in vertical
markets

WSC must certainly grow and strengthen their brand within this market. They must put all efforts to
instill high brand awareness and link this to the positive brand associations that they have previously
being known for. These factors include; quality of information, accuracy and speed of delivery.

An innovative way to improve brand awareness is by initially providing some basic weather
information to the consumer market with the WSC brand attached to it. Leavitt has already been
exploring these ideas with distributors such as Reuters, Dow Jones Telerate and Bloomberg to replace
their private label forecasts with the branded reports.

WSC can also explore the idea of extending the brand and product line internationally to increase the
size of the potential market.

Using the expertise of their meteorologist

What are the key challenges facing the weather industry?

o There is increased competition in the market for commercial weather companies.

o The market was very fragmented.
o The market is dependent on the raw data that is provided by the NWS.
o The private meteorologists and commercial weather companies provide the public with above 85%
of its weather forecasts yet the industry is still closely controlled by the government and does not
allow for effective competition.
o Congress had required that the NWS provide specialized services which stifle the necessary and
planned consolidation of offices under the weather service modernization process.
o The Organic Act of the national weather service was still effective even though numerous changes
have taken place in the industry since its inception in 1890. This has however recently being
amended accordingly.
o The weather service modernization plan calls for a change from a two tier system of 334 various
field offices to a one tier system with 118 larger forecast offices however this process has been
hampered by congress at the request of special interests.
o The overlapping structures of the NWS were very fragmented. These need to be centralized and
consolidated for more smoother and efficient functioning.
o Universities were subsidized by the NWS to provide weather information and they compete directly
with private information providers but they use further advantages like not paying taxes, using
student labour, getting free raw materials, getting their overhead expenses subsidized. This gives
them unfair advantage.

What was the logic behind DTN's acquisitions of WSC and Kavouras?

DTN’s mission was to become the leading business-to-business provider of real-time information
services across multiple vertical markets. These included agriculture, energy, commodity trading and
other weather sensitive industries. The company delivers on demand market information, commodity
cash prices, industry news and in-depth analysis and location specific weather to over 120000
subscribers. The acquisition of WSC and Kavouras would thus complement and support their market
offering. DTN created Meteorlogix (www.meteorlogix.com) which represents the merging of the three
weather service industry leaders: business-to-business provider DTN Weather Services, broadcast
weather expert Kavouras and long-range forecaster and climate predictor WSC.

Meteorlogix delivers real-time, location-specific weather content across three product platforms:

o Mx WeatherSpanTM creates customized, highly local on-air weather graphics that can be repurposed
with the same look and feel to the Web for the broadcast industry.
o MxVision which consists of vivid graphic displays, real-time weather content and active storm
tracking and alerting
o MxInsight which features advanced prediction and forecasting and location-specific weather
services
How might WSC/DTN differentiate itself in the marketplace?

o WSC/DTN should focus on becoming the expert service provider of choice of current and forecast
weather information. WSC have the necessary key capabilities and reputation for forecasting
accurate weather information and with the technology support of Kavouras this would be very
difficult to be copied by the market.
o They should offer the customers direct, live access to their meteorologists. This would serve as a
key differentiator in the market.
o DTN should explore the idea of offering the customer a means of having some interactive weather
information. This would get the customers more involved in the information and get move valuable
data and information out of the service. DTN has provided such an experience via the WX.com
website. Wx.com basically provides viewers with a dynamic and interactive experience including
the ability to easily overlay full motion weather maps with state and country lines, highways and
other familiar landmarks to track weather patterns. (Technology was developed by Kavouras
Weather Services)
o Make use of advertising companies like Adsmart to generate and manage a differentiation strategy
for DTN/WSC.

Should WSC/DTN pursue a vertical market strategy?

o WSC had the know-how and expertise for real-time weather information including modelling,
forecasting and graphical representation and this distinct competency can be effectively used to tap
vertical markets. These can be differentiated on the basis of usage.
o The weather service industry is some what fragmented and many service providers are dependent
on the hardware, software and models to add value to the raw data obtained from NWS. Thus if
WSC/DTN integrates vertically to also provide the necessary tools for analysis they will have a
competitive advantage in the market and add to their business model a cash generating company to
provide the necessary cash flows for managing the overall operations.
o The integrating of Kavouras into DTN will offer such an advantage. The new company (DTN
Kavouras Weather Services) would then develop, design, manufacture hardware and software for
providing weather data services to about 600 clients in the broadcast television, aviation and
government.