Core Issues:

- Expand the base of UTV in the Indian market and scale up operations in an existing vertical as well as
to start a new vertical.
- Expand in international markets through a partnership with a foreign studio.
- Acquire promising companies in India and abroad and then expand and strengthen its base.

Current Strategy:

- International strategy

- UTV is looking for diversification via strategic alliances. The company wants to expand globally in all
its business.

Internal Analysis / Strategic Capabilities:

Functional Resources Competencies Strategic Type of

Areas Capability Capability
Human Employees Company has employees with the Right Distinctive
Resources expertise and skills required. Eg, expertise
(Intangible) Rohinton Screwvala and skills
Financial Balance sheet ROE of 6.85% Strong Threshold
Resources Cash flow balance
(Tangible) sheet
Operational Employees Resources used in the operation of Appropriate Threshold
Resources Physical locations the company; media equipment resources
(Tangible) Productions used for production, headquarters
etc, animation and films made

Testing Strategic VRIO:

Valuable? Rare? Inimitable? Supported by Competitive

Organisation? Implications

Human Yes Yes Yes Yes Sustained

Resources: competitive
Leadership advantage
External Environment Analysis (PESTEL):
Factors Global/Corporate Issues and
Supporting Facts
Political Global & Corporate:
Efforts to encourage the film industry
by the Indian government very
minimal.
Economic Global:
Incomes of youths had increased
substantially and they had higher
disposable incomes. There were willing
to pay for content.
Corporate:
Higher disposable incomes, willing to
pay for content = willing to spend more
on entertainment.
Overall cost advantage in terms of
salaries and costs of production if UTV
expands to India.
Competition for the market share in
Indian M&E industry as it attracted
many international players.
Social Global & Corporate:
Changes in consumer tastes.
Role of TV.
Several channels launched in kids’
space were growing and there was a
strong demography to back it up.
Animation products to cater to
illiterates.
Technological Global & Corporate:
Impact of internet – allowed films to
be pirated and available for download
after just a few days of release.
Similarly, UTV also faces the problem
of having their films pirated.
Sub-Conclusion and Reason:
Opportunity / Neutral / Threat?
Threat.
- It will pose as a threat to UTV if it
were to further expand its base
in the Indian market – given that
the support from government
will be minimal and UTV may
lack the necessary expertise.
Opportunity.
- Customers who have higher
disposable income are more
willing to pay for content. Hence,
it may positively affect the
economic outlook of UTV.
Neutral.
- UTV will face changing
consumers’ tastes.
- However, with its kids’ channel,
UTV will still stand a chance to
lock-in loyalty from consumers.
- Animation products can be tools
for education, awareness and
entertainment in rural areas.
Threat.
- All in all, a threat – since films
can be readily available for
download, filmmakers like UTV
will see this factor as a threat.
 Ecological Global: Opportunity.
Public will scrutinise the
‘environmental-friendliness’ during
production.

Corporate:
Similarly, UTV will also be scrutinised
by the public on its ‘environmentally-
friendly’ measures.
Legal Global: Threat.
International businesses will have to - Since media productions have an
be aware of the legislations within the impact on the society, they are
operating country. controlled by the law.
In India, infringement of IP rights is - IP rights can be easily infringed
common. and no actions will be taken
against the individual(s).
Corporate:
Like all businesses, UTV has to face
laws and regulations when
internationalizing its business.

UTV will be concerned with the fact

that India does not take stern actions
against those who infringes on IP
rights.

UTV faces a challenging external environment since it faces more threats than opportunities
expanding alone.
Industry Analysis (Porter’s 5 forces):
The threat of entrants: Low
Factor
Scale and experience
Access to supply or
distribution channels
Expected retaliation
Legislation or
government action
Differentiation
Supporting Facts Is Threat high/low to
the company?
Will cost entrants a lot of High Low
money to create
productions.
It also brings about the
advantage that an
‘experienced’ company
has compared to a new
entrant.
There are a number of Low Low
suppliers (TV channels) to
choose from.
However, distribution
economies or ownership
of scarce resources eg,
people, broadcasting
licenses.
Poor access to these
channels = high barrier to
entry.
Entrants will face High Low
competitors’ aggressive
expansion to maintain
market share.
Some countries may set
up legal barriers to
protect their home-
grown media companies.
Entrants will have to High Low
consider legislations of
different countries to
operate in.
Not much of a Low Low
differentiation when it
comes to media
production.
The threat of substitutes: High

Factor Supporting Facts Is Threat high/low to

the company?
Price/Performance ratio Substitutes for films – High (because the films High
radio, television, may ultimately be
internet etc. played on TV or
internet)
Extra-industry effects Consumer behaviour High Low
may affect this element.
Some customers prefer
to wait for the movies to
be shown on TV instead
of spending the money
to watch the films in the
theatres.

The power of buyers: High

Factor Supporting Facts Is Threat high/low to the

company?
Concentrated buyers Buyers can switch to High High
another supplier since
there is an abundance of
suppliers in the market.
Low switching costs Buyers can switch to Low High
another supplier as and
when they wish without
incurring any penalty or
additional cost.
Buyer competition threat Chances of backward Low Low
integration from the
buyer’s point-of-view are
not as likely.
The power of suppliers: Low

Factor Supporting Facts Is Threat high/low to the

company?
Concentrated suppliers Readily available Low Low
suppliers to choose from.
High switching costs It does not require high High High
switching costs due to
the expensive nature of
the industry.
Supplier competition Chances of suppliers Low Low
threat forward-integrating not
as likely.

Competitive rivalry: High

Factor Supporting Facts Is Threat high/low to

the company?
Competitor balance Similar-sized competitors High High
like Zee Telefilms, Sun
Network etc have their
‘own cult brand images’.
Industry growth rate Indian M&E industry High High
attracted many
international players.
High Fixed costs Entry to the retail High High
industry does entail
massive working capital.
High Exit barriers A business size equivalent High High
to UTV will face high
redundancy and will
make massive losses
since the industry
requires a big amount of
entry working capital in
the first place.
Low Differentiation Not much of a Low Low
differentiation in the
M&E industry.

Overall, the M&E industry will be unattractive for UTV if it decides to expand globally alone.
SWOT Analysis:

Strengths: Opportunities:

- Strong brand presence. - Increase the type of content eg, news

- Expansion of UTV group across 3
verticals allows for synergy across in
terms of content development,
communication and development of
leadership – allows employees to
broaden experience and enrich careers.
- Targets moviegoers and television
viewers at the same time.
and educational channels.
- Introduce channels worthy for
customers to pay. After paying, they
lock-in customers’ loyalty and if
customers switch, they may face
switching costs.

Weaknesses: Threats:

- High investments in the production - IP rights infringement – increasing

equipments. piracy.
- Businesses in the M&E industry face high - Competitive pressure
risks. - Alternative sources of entertainment

Critical Success Factors of media industry:

They are:

- Having an alluring brand name to attract customers.

- Customer inertia; to lock-in customers and exists when a customer who changes from one supplier
to another has to face switching costs.

- Distribution economies or ownership of scarce resources eg, people, broadcasting licenses.

- Knowing its target audience.

Done during class:

Strategic position:

- UTV good position to venture overseas to seize the opportunity of having higher viewership as it has
strong LOCAL brand presence. To add on, exhibit 10 shows that Hungama TV has the highest GRPs
(higher viewership) over 42 weeks as compared to other competitors such as Zee, Star etc.

- But bad position to defend against threats as it is financially weak.

Strategic choice:

- Can they:

o JV? Using disney’s $$ from selling hungama tv as backup?

International drivers:

Market: 25 million Indian customers globally (from case), 3 million from US (from google). Hence there are
similar customer needs. Global customers who are non-indians also watch bollywood/hindi shows, thus,
there is a market to venture into overseas.

http://prezi.com/zpzohzwolcgb/copy-of-utv-and-disney-a-strategic-alliance/

http://businesstoday.intoday.in/story/ronnie-screwvala-disney-utv/1/197084.html

http://www.slideshare.net/abhishekchatterjee51/a-market-analysis-of-utv-motion-pictures

PESTEL:

http://www.scribd.com/doc/28337429/PESTLE-analysis-of-Film-and-Animation-Industry

http://www.ukessays.com/essays/media/indian-film-and-entertainment-industry-media-essay.php

http://prezi.com/rpoaopfhzkbr/pestle-analysis/

CSF:
http://www.intellimediasolutions.com/careers/HR_Folder/Articles_Folder/The%20media%20industry%20A
Generaloverview.pdf

5 forces:

http://prezi.com/9ysfxpotumgu/disney/
http://www.equitymaster.com/detail.asp?date=10/12/2007&story=3&title=Zee-Entertainment-Porter-
analysis

swot:

http://www.mbaskool.com/brandguide/media-and-entertainment/5941-utv-software-communications-
ltd.html

http://www.evankropp.com/wp-content/uploads/2013/10/SWOT_Analysis_Disney.pdf

http://www.slideshare.net/ravishasethi/walt-disney-17949844