The National Broadcasting Company (NBC), a wholly owned subsidiary of the General Electric Company (GE) is the number one rated network company in the nation. NBC has maintained a strong presence in the national broadcasting industry, its top six prime-time shows, and number one daytime show Days of Our Lives has made them the company to beat. Programming has been the important aspect of NBC's success. The excellent programming has captivated viewers, which increased rating that in turn got advertisers. Upfront sales in 1997 were $2.1 billion and NBC's market share was at 34%. NBC just acquired its 12^th own-and-operated station that will give them a reach of 27% of U.S. households.

NBC has also made its presence felt in the cable market with MSNBC and CNBC, both of which have become instant competitors in their respective markets.

Along with the rest of the General Electric Company subsidiaries, NBC has adopted Six Sigma quality initiatives, which will help to motivate and discipline the employees to work harder and live happier.

Finally, to maintain and improve our position in this industry we will discuss who and what matters. Further, the strategy that has been suggest is a market penetration strategy to improve our competitive position utilizing the existing products and services of our company.

Founded in 1926, NBC is a wholly owned subsidiary of General Electric Company (GE). NBC was the world's first broadcaster and today is America's number-one-rated network. Among many landmark events, NBC conducted the world's first telecast, and the world's first color broadcast, and originated one of today's distinctive emblems, the NBC peacock.

The National Broadcasting Company (NBC) registered its fifth consecutive year of double-digit gains in ongoing earning in 1997 and led the prime-time ratings for a second straight year. They also had impressive growth in its primary cable properties, CNBC, and MSNBC. In addition, the year 1997 marked the launch of NBC's Six-Sigma quality initiative. They finished the 1996-97 season as the nation's most-watched network, winning the prime ratings battle by more than 25% in the prized adult age 18-49 demographic with regular programming. Led by "must-see" series such as ER, the Peacock network has the top six prime-time shows, was number one across the board in late night programs, and with Days in Our Lives has the number one daytime drama in advertisers' target female demographic (GE Annual Report, 1997, p.14).

NBC News enjoyed its fifth straight year of record profits. NBC Nightly News with Tom Brokaw surged ahead in the evening news ratings race to become the top-rated broadcast, Today beat the competition by an average margin of 67% and celebrated more than 100 weeks in first place, and the award-winning Dateline NBC added a fourth night

to its multi-night franchise. Meet the press, the longest-running program on network television, marked a television milestone in 1997 with the celebration on its 50^th anniversary (GE Annual Report, 1997, p.14).

NBC Sports has secured long-term relationships with organizations such as the International Olympic Committee, the NBA, and the USGA. NBC Sports will be the exclusive over-the-air broadcaster of the NBA through the 2002 season, and the network will present the USGA's major golf championships through the year 2003. Moreover, after the 1998 Winter Games, every Olympics through 2008. NBC will be broadcast leader well into the next century (GE Annual Report, 1997, p.34).

NBC Stations had record revenues and profits in 1997. In December, WVIT in Hartford became NBC's 12^th owned-and-operated station, and NBC will soon take

majority ownership position in KXAS in Dallas, the nation's eight-largest market. This deal is expected to be finalized in the first half of 1998, this innovative partnership with Hicks, Muse, Tate & Furst will bring the reach of our owned stations to 27% of U.S. households (GE Annual Report, 1997, p14).

CNBC enhanced its position as the world leader in business television journalism in 1997, delivering a record year by every measurement. Ongoing earnings were up more than 40% and its business news audience was up 76% in the fourth quarter compared with the same period a year ago. In a move that will expand the global value of CNBC, they entered a strategic alliance with Down Jones to merge our European and Asian business new services under the CNBC banner and to utilize the Dow Jones editorial resources for CNBC in the United States (GE Annual Report, 1997, p.14).

After its full year of operation, MSNBC, the 24-hour cable and Internet news service, now reaches 36 million households, and it has commitments in place to reach 56 million by the year 2001. Since coverage of the death of Princess Diana on August 31, MSBC has narrowed the ratings gap with CNN in several major television markets. Ad sales and subscriber fees more than tripled in 1997. Finally, one of NBC's most significant accomplishments in 1997 was the rollout of Six Sigma, which will play a crucial role in helping them maintain their leadership position in the broadcast industry. In 1998, they expect to have quality projects under way in every area of our business (GE Annual Report, 1997, p.34).

The mission statement of an organization outlines the relationships, offerings, location, methods of competence maintenance, economic and ethical policies, and the unique qualities of that organization. It serves to guide the employees of the firm toward achieving their corporate goals and acts as concise information about the organization to those in the external environment.

The mission of the National Broadcasting Company (NBC) is to provide the U.S. with network television services through more than 200 affiliated stations and12 VHF and UHF television broadcasting stations. NBC will continue the production of television programs, as well as the operation of four cable/satellite networks around the world. NBC will maintain its investment in programming activities in multimedia and cable television. NBC dedicates itself to helping advertisers reach their desired mass audiences at competitive prices. The network will continue to create programming that will attract viewers in order to provide audiences for advertiser messages.

Nielsen Media Research provides a quantitative method for determining the success of NBC and other networks in attracting viewers, allowing the networks to have concrete statistics to provide to advertisers in determining competitive rates. NBC aims to work cooperatively with the Federal Communications Commission (FCC) to contribute constructively to society by taking a socially responsible stance on issues of current concern to the viewing public. NBC maintains strong relationships with predominant producers and actors in order to improve the entertaining quality of the programming they provide. Finally, NBC's objective is to provide a solid return to shareholders/owners while operating in accordance with these guidelines.

• Organizations that advertise provide the main source of revenue for national broadcast networks. 90% of the networks' total revenue (Standard & poor's, 1997:13) of $13 billion annually (TVB, 1997:a) derives from this source. In order to maintain strong relationships with these advertisers, NBC seeks to attract large viewing audiences through their programming choices.
• Viewers act as suppliers for NBC. The advertisers mentioned look to the national broadcast networks to provide access to large audiences for their messages. Consequently, networks are constantly concern with how attractive their programming is to viewers. Unless viewers are enticed into watching a given network's programming, the audience the advertisers require will not materialize. Viewer numbers, or audience size, is measure by the ratings produce by the Nielsen Media research firm (Nielsen Media research, 1997:b).
• The FCC regulates the broadcast networking industry. NBC seek to maintain good relationships with this government agency in order to renew their bandwidth licenses and obtain favorable revisions in the relatively restrictive regulations concerning network broadcasting (Standard & Poor's, 1997:13).
• Television manufactures supply the hardware to the 98 million households that represent 98% of the United States population that own a television set (Nielsen Media Research, 197:b). Without the manufacture of this equipment, NBC would not be able to reach the viewing public.
• Producers and actors are responsible for the creating the programs that NBC air's to attract viewers. Depending upon the situation, specific producers or actors can exert great influence upon a network's programming; therefore, strong relationships are maintained with this group. For example, Warner Bros., the producer of the hit television show "ER", recently charged NBC $13 million an episode for the rights to broadcast that particular program. With 22 episodes in a standard television season, NBC will pay $286 million a year for this one show (Carmody, 1998:B01).
• Antenna manufacturers and satellite technology firms provide NBC with the resources by which they can broadcast their signals to the television in their target household.

• The chief revenue-generating offering of NBC is to provide premium airtime during programming that advertisers can use to send messages to as large an audience as possible in as little time as possible.

• Customers for NBC can be found anywhere there is a firm that can afford and has the desire to purchase airtime in the United States, Asia, or Europe. Such firms could be located domestically or in foreign countries. NBC's perspective customers must have their product or service available to American, Asian, and European viewers.

• In order to maintain competence, NBC must take an active role in the development of new regulations that affect the larger telecommunications field as a whole in order to advance the technology and innovations needed to constantly move forward. In addition, networks strive to adapt to the constantly changing cultural trends of their viewers, in order to provide desirable programming that will generate large audiences for advertisers.

• NBC has the desire to maximize owner wealth by generating a profit from advertising revenue.

• NBC abide by FCC regulations and attempt to be socially aware of their programming content. There are occasions, however, when networks engage in less-than-ethical behavior in an attempt to generate advertising audiences.

• NBC has the ability to reach a large number of people in the smallest amount of time of any currently available medium.

NBC Asia is a unit of the National Broadcasting Company (NBC), the USA, and a subsidiary of (GE), one of the largest industrial companies in the world. Headquartered in Hong Kong with approximately 90 staff members, NBC Asia broadcasts the NBC entertainment and information channel via satellite and cable television to major markets across the Asia Pacific region. Launched in April 1996, NBC's mission is to provide fresh, intelligent, and sophisticated programming which stimulates and entertains Asia's discerning viewers. NBC delivers news, views, entertainment, and world-class sports for a sophisticated, internationally minded audience, 24 hours a day, 7 days a week (nbcasia.com, 1998, p.1).

NBC offers Asian viewers and advertisers a broadcast service that comprises the highest quality programming. Not only is the product current and relevant, much of its beamed live via satellite from the US. NBC's Asia Pacific viewers are no different from counterparts in North America and Europe. Discerning, with an international view, they need to be "plugged-in" to the latest trends, news, views, and issues.

Only on NBC can Asian viewers tune into some of the world's hottest entertainers and newsmakers the same day they broadcast in the USA. NBC's commitment to Asia is part of a long legacy of growth and innovation. Supporting Asia growths is NBC's commitment to localization in key areas, customizing by time zone, language and programming via four separate feeds into the Regional, India, Taiwan, and Japan markets (nbcasia.com, 1998, p.2).

NBC Europe is an exciting, Pan-European English language television channel. Specifically design for its target audience of upmarket, internationally minded, European

Professionals. NBC Europe is available in 56 million homes (full-time distribution) in 44 countries across Europe and the Middle East. The programming of NBC Europe brings together the best of US and original European production, ranging from morning business news to international magazines, award-winning documentaries, and current affairs during the day (nbceurope.com, 1998, p.1).

The evening is "Must-See TV", an explosive line-up of entertainment, comedy, and drama. NBC Europe also brings the best of international sports, with coverage of such quality events as the Baseball World Series, Golf PGA Tour, and the Tennis Davis Cup to name but a few. In addition, to the cost advantages of pan-regional advertising, NBC Europe offers the benefit of tailor-made multimedia marketing solutions, providing maximum flexibility and creativity in order to meet advertisers' individual needs.

An integral part of the global NBC network, NBC Europe gives you access to worldwide advertising opportunities in Asia and the US (nbceurope.com, 1998, p.1).

In Europe, CNBC and the existing Dow Jones service, European Business News (EBN), joined to form a single new channel called CNBC - A service of NBC and Dow Jones. This new channel is based in state of the art production facilities at Fleet Place, in the heart of London's financial district. In Europe, CNBC brings together the best of what was CNBC and EBN to combine unparalleled coverage of the financial markets and breaking news throughout the day with quality features and documentaries in prime time and on the weekends. Another component of the joint venture sees the expansion of the NBC-Microsoft alliance to include Dow Jones (nbceurope.com, 1998. P.2).

The alliance between CNBC and Down Jones combines the resources of two of the most capable business news gathering organizations in the world. The joint venture enables NBC to provide advertisers with exceptional cross media advertising opportunities and access to an essential highly desirable audience (nbceurope.com, 1998, p.3).

As a news source, MSNBC is the first of its kind: a 24-hour service that delivers news continuously through the Internet, cable, and broadcast television. By taking advantage of the strength of each of these media, MSNBC offers a useful and engaging news experience for the viewer that has never been achieve before. This interactive approach has allowed. MSNBC to expand the very concept of news coverage beyond the boundaries of traditional TV or print journalism (msnbc.com, 1998, p.1).

In February 1998, Media Metrix ranking put MSNBC's reach among Internet users ahead of sites operated by CNN, USA Today, The Wall Street Journal, and The New York Times. Just over a year old, MSNBC is solidly established as the leading online news source (msnbc.com, 1998, p.1).

NBC for news, Microsoft for technology. MSNBC co-produces and cross-promotes original packages with these NBC News programs: "Dateline NBC," "NBC Nightly News with Tom Brokaw," the Today Show" and with MSNBC cable television. MSNBC advertisers benefit from extensive cross-promotion on NBC, MSNBC Cable, the Microsoft Network and Microsoft's many Web sites (msnbc.com, 1998, p.2).

MSNBC's team of online journalist creates a multimedia news product that goes far beyond the re-purposed wire, copy, and scripts found on most news sites. MSNBC delivers complete, concise coverage of today's news as it happens. MSNBC journalists are the most respected journalists, including Tom Brokaw, Jane Parley, Andrea Mitchell, and Brian Williams. This means your brand is associated with a first-class editorial product when you advertise on MSNBC (msnbc.com, 1998, p.3).

MSNBC uses Microsoft's technical expertise to enable viewers to adapt the product to fit their needs through a variety of delivery options. Viewers can personalize MSNBC by selecting news topics, sports scores, stock quotes, and weather forecast that matter to them. Each time they visit the site these topics are displayed on their personalized MSNBC front page. Viewers can also have their news delivered via MSNBC News Alert and e-mail. With all of the technology involved and the attractiveness of this partnership MSNBC is looks forward to meeting its goal to reach 56 million homes by the year 2001 (msnbc.com, 1998, p.3).

Nielsen TV rating are a service of Nielsen Media Research. Arthur C. Nielsen, Sr., founded the company in 1936, as one of the first research companies to measure the audience for rapidly developing radio broadcasting and advertising industry. Moreover, Nielsen Media Research was there again in 1950, at the birth of the TV broadcasting and advertising business, and has remained the official national measurement service of the television industry for over forty years (nielsenmedia.com, 1998, p.4).

Some people have described the Nielsen TV ratings as being similar to voting. The role of Nielsen Media research in estimating the viewers is somewhat like the role of the board of elections in counting the votes. Nevertheless, the role of the viewers in Nielsen Media's panels is quite different from voters. They are not supposed to vote for or against programs by viewing them or not viewing them; our panel members represent the viewing of the actual audience simply by watching what they normally watch.

So when the Nielsen TV ratings report that a show is "top ranked" for the week, they are saying that this is a show which was watched by more people than anything else on any channel at any time during the week. It is literally the most popular show because its audience has more of the population in it (nielsenmedia.com, 1998, p.4).

The way that Nielsen media finds out about who is watching they measure what a sample of what television viewers are watching. For their national ratings estimates they use a sample of more than 5000 households, containing over 13,000 people who have agreed to participate. Since there are over 98million households with TVs in the U.S., it might seem that a sample of 5000 is just not big enough to represent the nation. However, over the years it has been proven very effective. This is an important aspect to know because it gives some background on how NBC has been positioned at the number one spot in the industry (nielsenmedia.com, 1998, p.5).

"Six Sigma" is a discipline methodology, led and taught by highly trained GE/NBC employees called "Master Black Belts" and "Black Belts", that focuses on moving every process that touches their customers - every product and service - toward near-perfect quality. Six Sigma project work consists of five basic activities: Defining, Measuring, Analyzing, Improving, and then Controlling processes. These projects usually focus on improving our customers' productivity and reducing their capital outlays, while increasing the quality, speed, and efficiency of their operations (GE Annual Report, 1997, p.3).

GE/NBC didn't invent Six Sigma - they learned it. Motorola pioneered it and AlliedSignal successfully embraced it. The experience of these two companies, which they share with GE/NBC, made the launch of their initiative much simpler and faster.

GE/NBC had another huge advantage that accelerated their quality effort: they had a Company that was open to change, hungry to earn, and anxious to move quickly on a good idea (GE Annual Report, 1997, p.3).

This learning environment came from a decade long soul-transforming cultural initiative called "Work-Out". Work-Out is a continuing effort to achieve what they call "boundaryless behavior"-- business behavior that tramples or demolishes all barriers of rank, function, geography and bureaucracy in an endless pursuit of the best ideas -- in the cause of engaging and involving every mind in the Company (GE Annual Report, 1997, p.3).

After a decade of Work-Out, most of the old bureaucracy and the boundaries among employees have been demolished. (They are, however, aware that bureaucracy is the Dracula of institutional behavior, and will rise again and again, requiring every one in the organization to reflexively pound stakes through its reappearance's.). However, at GE/NBC today-- and they are obviously proud of this -- finding the better way, the best idea, from whomever will share it with them, has become their central focus. Nowhere has this learning environment, this search for the better idea, been more powerfully demonstrated than their drive for Six Sigma qualities (GE Annual Report, 1997, p.4).

The Value Net is a framework that supports analysis of those firms that assist or deter an organization from dealing with customers and suppliers. Those individuals or organizations that assist the firm in getting customers or suppliers are complementors. Those that deter the firm from getting customers or suppliers are competitors.

Customer Complementors: Affiliates, advertising firms, newspapers, entertainment publications with television focus, and special events.

• Affiliates aid NBC in securing advertising because they increase the potential audience for the network’s programming. Since the FCC forbids networks from owning stations that reach more than 35% of the nation’s households, the more than 200 affiliates that NBC has allows the network the opportunity to broaden their audience to the 96% of households they actually reach with their programming (Standard & Poor’s, 1997: 17).
• Advertising agencies usually design the commercial spots for large organizations as well as make arrangements for their broadcast. Clients generally pay advertising firms 13-15% of the total ad price change by NBC as commission for this service. A majority of television advertising is placed through these agencies (Standard & Poor’s, 1997: 18). Agencies provide business to NBC that might otherwise not be received, since they can suggest the use of network advertising to firms that might not be cognizant of its availability.
• The growth of cable television over the past 15 years has helped NBC by providing clearer reception for viewers in remote areas (Standard & Poor’s, 1997: 12). Clearer reception means a larger potential viewing audience, which results in higher advertising fees.
• Newspapers in different locations throughout the country provide television listings either weekly or daily, allowing viewers to select the programs that they wish to see on NBC and their affiliates (USA Today, 1998: 14D).
• Entertainment publications with a television focus generate interest in various television programs and influence cultural trends that affect viewing choices (Entertainment Weekly, 1998: 95). By generating interest in NBC's programming, audiences increase, and so does advertising fees.
• Special events help NBC attract advertising because they ensure large audiences for commercial spots. In 1996, advertising figures drastically increased by 12% due to spending on the Summer Olympics of $740.7 million for NBC. (Standard & Poor’s, 1997: 1).

Customer Competitors: Cable television, newspapers, magazines, radio, and telemarketing/direct mail.

• Cable television has hurt NBC by fostering the creation of dozens of new cable channels that battle for the same advertising dollars that the NBC has historically received (Standard & Poor’s, 1997: 12).
• Newspapers with a national circulation compete with NBC by taking away possible advertising opportunities. Nationally circulated newspapers annually generate $4.4 billion dollars in advertising revenue, a full 33% of the total generated by network television (TVB, 1997: a).
• Magazines compete with NBC much the same reason as newspapers, draining advertising dollars to other firms. Magazines annually generate $9 billion in advertising revenue, nearly matching the take of networks (TVB, 1997: a).
• Radio also drains advertising dollars, form NBC. National spot advertising and radio networks annually generate $2.6 billion in revenue, which is 22% of the network television tally (TVB, 1997: a).
• Telemarketing/direct mail accounts for $34 billion in advertising expenditures each year in the United States, siphoning off advertising possibilities for the NBC (TVB, 1997: a).

Supplier Complementors: Cable television, affiliates, newspapers, entertainment publications, special events, government, and the telecommunications industry.

Due to the nature of the industry, several of the customer complementors listed above serve as supplier complementors. That is, they provide the means for generating a larger viewing audience, which, in turn, causes higher advertising rates. These complementors include cable television, affiliates, newspapers, entertainment publications, and special events.

• Government is a supplier complementor, but not a customer complementor. The government, through the FCC, prevents competitive entry into the marketplace by limiting proprietary access to the networks already established (Standard & Poor’s, 1997: 9). With only a few bandwidths available for VHF broadcasting, the FCC regulation stands as a formidable barrier to entry and thus aids the NBC in obtaining supplies (viewers, etc.).
• The telecommunications industry as a whole acts as a supplier complementor by defraying the cost of launching and maintaining the satellites in geosynchronous orbit that are required for broadcasting network signals.

Supplier Competitors: Cable television, government, local networks, motion picture production companies, video sales, and rental outlets.

• Cable television acts as a supplier competitor because cable-based networks compete for viewers (Standard & Poor’s, 1997: 7).
• The federal government (FCC) serves, as a supplier competitor by enforcing restrictive regulations that prevent networks from expanding their audience through wholly owned stations.
• The other supplier competitors (local networks, motion picture production companies, and video sales and rental outlets) all provide alternative forms of entertainment that drain the viewer base for NBC.

The co-opetitive environmental analysis considers the economic, technological, political/legal, and sociocultural factors that the organizations within an industry must contend with in order to develop and continually evaluate their critical success factors.

Economic:

Overall, economic conditions appear to have little total effect upon the network broadcasting industry. Since 1960, industry revenues have steadily increased practically every year, showing declines only in 1971 and 1991 (TVB, 1997: a). This constant growth pattern illustrates the industry’s relative imperviousness to economic factors. Even so, the amount of growth does vary from year to year, often due to the surplus of available ad time in many TV markets (Standard & Poor’s, 1997: 21). NBC has more than a comfortable position in the industry since its creative in 1926.

High-definition television marks the foremost up-and-coming technological innovation within the broadcast industry. These revolutionary new devices would allow for crisper sound and far better pictures than previous machines, but HDTV would also require NBC to invest millions of dollars in new equipment in order to have the ability to broadcast the appropriate signal for the medium (Pegoraro, 1998: F01). In addition, as of the end of 1995, two direct broadcast satellite systems were providing service with sharper and clearer pictures than cable. These systems do not offer over-the-air broadcast signals, thus taking viewers away from network advertising (Standard & Poor’s, 1997: 12).

The Telecommunications Act of 1996 included sweeping changes in regulations regarding broadcast television. The effects of these changes include (Standard & Poor’s, 1997: 9):

• An end to limits on TV station ownership. Networks can now own asmany television stations as they want, up to a cap of 35% of thenation’s TV homes, the number was 25%.
• An expansion on waivers of the one-to-a-market rule. Networks can now own more than one station or have more than one affiliate in the top 50 media markets with FCC approval.
• An easing of the rule against ownership of two broadcast networks. Networks can now start new networks but cannot acquire existing ones.
• A single entity can now own both networks and cable systems.
• The removal of barriers to ownership of TV stations and cable systems serving the same market.

These regulations have helped NBC to obtain its position.

Because anything that affects viewer patterns has a potential effect upon advertising rates and, thus, NBC's revenue, NBC must pay particular attention to ongoing trends within society. The growth rate and size of key age groups, such as senior citizens, and other categories, such as married couples, grandparents, and working mothers, often determine how much advertising money a segment will attract and what broadcast medium will be best suited to reach it (Standard & Poor’s, 1997: 20).

In addition, major sociocultural events, such as wars, have impacts upon advertising.

The Integration-Responsiveness (IR) Grid measures the pressures upon an organization for engaging in global integration or local responsiveness. Global integration refers to the centralized management of geographically dispersed activities on

an ongoing basis. Local responsiveness refers to resource commitment decisions taken autonomously by a subsidiary in response to primarily local competitive or customer demands.

Multinational customers are important to NBC as long as they have the resources and the desire to purchase television spot advertising in the United States, Asia, or Europe. As the industry begins expansion overseas , the importance of multinationals will increase as networks look for customer advertisers that want to send their messages to multinational audiences.

The chief multinational competitors to NBC would be the Internet, certain popular magazines, and cable broadcast stations. All of these mediums provide advertising access to multinational audiences in the same form all at the same time, as network television would.

NBC a reasonably low investment intensity because little additional investment is required to expand operations overseas. Maintenance of a satellite system and permission from foreign governments to broadcast are essentially the only tools needed for international broadcasting. We have gotten from Asia and Europe.

Technology intensity - NBC has relatively little technology intensity, since because the networks themselves develop few technological innovations.

In terms of cost reduction as a pressure for global integration, there is not much pressure upon NBC since location and economies of scale are irrelevant to the revenue drivers for that industry.

The need for advertising time requires little adaptation across national markets, thus facilitating global integration.

Access to raw materials and energy:

NBC does not have to contend with this issue.

Because of the nature of the NBC's product, which is advertising time, there is virtually no difference in customer needs from one country to another.

Some pressure for responsiveness in this area might derive from foreign government regulation of how the distribution channels must be established. NBC has not had a problem to date the good relationships that we share in Asia and Europe only strengthens our overall ability, as well as the program adaptation gives NBC more of an advantage.

NBC's product will require adaptation to be locally competitive. Since NBC attempts to attract large viewer audiences in the market areas they are present in, their programming will need to be modified to the differing tastes of the various cultures in those markets. For example, NBC Asia significantly differs from NBC; consequently, NBC on a multinational basis will need to adjust their programming choices for this NBC Asia's market, resulting in a high pressure for local responsiveness.

Local competitors tend to control a majority of the market in foreign locations. However, because the nature of a multinational network’s such as NBC, offering would be radically distinct from local competitor offerings, the market structure does not apply pressure for local responsiveness (i.e. the NBC offers a completely different level of advertising than a local foreign station.)

Foreign governments probably have strict sets of regulations regarding television broadcasting. As a result, networks might have a certain measure of local responsiveness enforced upon them by rules governing such issues as majority local ownership, programming schedules, number of stations, etc. However, in Asia and Europe we have established great relationship with the governments where we provide broadcasting.

This model serves to indicate the phase a business is in with respect to internationalization. The three phases detailed in the model are the initial market entry phase, the local market expansion phase, and the global rationalization phase. Each of these phases have its own triggers, or causes, and their own respective problems, or challenges. When a company experiences the triggers established for a given phase, it is said to be ready to move into that phase stage. If not enough of the triggers are present, the company can still experience growth within its current phase.

• Movement overseas of domestic customers:

• Sourcing opportunities in overseas markets:

• Entry of foreign competition in home market:

• Desire to keep abreast of technological changes:

• Government incentives to export:

• Advances in communications technology:

With 4 existing triggers, 2 absent triggers, and 2 questionable or irrelevant triggers, NBC either should be or are in the initial market entry phase. Looking at the local market triggers follows.

• Meeting local competition:

• Local management initiative and motivation:

• Desire to utilize local assets more effectively:

• Natural market boundaries:

With 5 out of 5 triggers present, the model indicates that the NBC should move into local market expansion.

• Learning via transfer of ideas & experience:

• Emergence of global competition:

• Development of global marketing infrastructure:

With 3 triggers out of 5 present, NBC has already made its decision to be a global network with this rationalization they should continue on that path.

The IFE matrix was created to shows the strengths and weaknesses of NBC. The explanation of the weights and ratings for the strengths and weaknesses are as follows:

1. Market Share: This strength was assigned a weight of .15 because with 34% of the market NBC is the leading company in the network industry. NBC was given a rate of 4 because with such a large market share they have been able to attract many advertising dollars with up front sales of $2.1 billion in 1997 (Katz, 1997,p.4).
2. Strong Programming: This strength was assigned a weight of .10 because advertising dollars come from viewers who watch good programming and until recently, we had all of the # 1 shows. NBC was given a rate of 3 because eventhough we still have wonderful programming, we just lost two of our big money makers in Seinfeld and Professional Football.
3. Six Sigma: This strength was assigned a weight of .15 due to the major influence that the company is giving to this system to motivate its employees. NBC was given a rate of 3 because I believe you can never put all of your marbles in one bag and in reading information about six sigma it seems that they are.
4. Strong Financial Position and access to capital; This strength was assigned a weight of .15 because with a number one standing in the industry, billions of dollars in revenue, and the backing of General Electric (GE) its parent company. NBC was given a rate of 4 because of all of the preceding reasons.
5. Right to Special Events: This strength was assigned a weight of .10 because NBC Sports will be the exclusive over-the-air broadcaster of the NBA through the 2002 seasons, USGA's major golf championship through the year 2003. And every Olympics through 2008 (GE Annual Report, 1997, p.14). NBC was given a rate of 4 because of the advertising dollars that will be locked in because of the preceding sports programming.
6. Increase in MS NBC rating: This strength was assigned a weight of .10 because of its swift rise in the cable news market. Competing heavily with CNN. NBC was given a rate of 3 for MS NBC because there are still some areas that can be worked on with the 24-hour cable station.

1. The lack of a Cable Sports Channel: This weakness was assigned a weight of .10 because eventhough NBC Sports has some great sporting events locked in they don't have a channel that can compete with ESPN. NBC was given a rate of 4 because this is an area that needs to be address in the future to increase viewers and advertising dollars.
2. The loss of the NFL and Seinfeld: This weakness was assigned a weight of .10 because these were two big money makers for NBC. NBC was given a rate of 4 because with the loss of these two programs also goes the advertisers and some viewers that may feel betrayed. For the network loosing these programs.

3. Two diversified in smaller cable markets: This weakness was assigned a weight of .05 because of its size compared to NBC's other ventures. NBC was given a rate of 2 because it is a situation were NBC needs to advance the stations and really work them or leave them as they are with marginal returns. Because the effect on the company is small.

The EFE matrix was created to show the opportunities and threats for NBC the explanation of the weights and ratings for the opportunities and threats are as follows:

1. The increase in the popularity of entertainment publications: The opportunity was assigned a weigh of .20 because magazines such as Entertainment Weekly have many readers due to the continuing fascination with the private lives of television and motion picture Stars. This acts as an opportunity for NBC to enhance its viewership. NBC was given a rate of 3 because eventhough it is a good strategy it is not flawless.
2. The eligibility to enter foreign markets: This opportunity was assigned a weight of .15 because NBC has been very successful with its venture in Asia and Europe, so they feel good about the possibility to go to more countries in the near future. NBC was given a rate of 3 because you may have good relations in one country but that does not put that same kind of relationship in stone for the next country.
3. Changes in government regulations: This opportunity was assigned a weight of .20 because with regulations that are open to NBC, it gives us more flexibility to maintain our number one position. NBC was given a rate of 4 because with its acquisition of its 12^th owned-and-operated station it will now reach 27% of U.S. households. The regulation by the FCC was only up to 25% of U.S. households but the change went up to 35%, which worked perfectly for NBC's latest acquisition.

1. Cable television: This threat was assigned a weight of .20 because it provides the greatest danger of taking viewers away from NBC. Cable was given a rate of 3 because with NBC's continuing presence in the cable market viewers will become more aware of our involvement, and our programming.
2. High definition television (HDTV): This threat was assigned a weight of .05 because there is not a large market for HDTV at this time. But it will be in the future. HDTV was given a rate of 2 because the threat is minimal at this time, but it does not have the potential to do more damage in the future.
3. Digital Broadcast Satellite (DBS): This threat was assigned a weight of .05 because the market for DBS is small but growing, so just like HDTV the market is growing and they will become greater threats. DBS was given a rate of 2 because damage now is minimal, but in the future, it will have a greater impact as it increases in popularity.
4. The Internet: This threat was assigned as weight of .15 because it provides a danger of taking viewers away just like cable does. And all of the information you can get is intense. The Internet was given a rate of 3 because NBC is on the net as well as MS NBC, so we are making our presence felt. However, there is still a huge threat there of taking potential viewers.

• With NBC's strength in programming and its rights to special events, they must utilize the increase in popularity of entertainment publications to advertise their programming to reach those individuals that they otherwise may not get.
• With the changes in government regulations such as the FCC increasing the amount of US households, that broadcast networks can reach which went from 25% to 35 %. NBC took advantage of this by purchasing its 12^th owned-and-operated station and increased its reach to 27% of US households.
• With the access to capital and NBC's strong financial position, the ability to expand into foreign markets increased as well as their global presence.

WO-Strategies

• Even in the loss of premium television, NBC can utilize the increase popularity of entertainment publications to introduce new shows and put more emphasis on existing shows.

ST-Strategies

• With its continued increases in the cable and Internet markets, MS NBC's increase in rating decreases some of the treats of cable television, as well as the Internet. NBC is moving toward being a force in both of these markets and penetrating the danger that these markets present.

WT-Strategies

• The threat of cable TV is already enormous, but if they can't challenge programming such as the ESPN channel, they have to do something to compete in this area.

The axis of the SPACE matrix represents two internal dimensions (financial strength [FS] and competitive advantage [CA]) and two external dimensions (environmental stability [ES] and industry strength [IS]). These four factors are the most important determinants of an organization overall strategic position (David, 1997, p.184).

The Y-axis has a coordinate of 3.3 and the X-axis has a coordinate of 3. This put NBC in an aggressive strategy. NBC is a financial strong firm that has achieved major competition advantages in a growing and stable industry.

The BCG Matrix graphically portrays differences among discussion in terms of relative market share position and industry growth rate (David, 1997,p.187).

NBC is the industry leader, which gives them a 1 on the x-axis, and the industry growth rate is 5.3%. This puts NBC in with the Star-Quadrant II. Quadrant II businesses represent the organization's best long-run opportunities for growth and profitability. It also suggests a market penetration strategy for NBC.

The IE matrix is based on two key dimensions: The IFE total weighted scores on

the X-axis and the EFE total weighted scores on the Y-axis (David, 1997,p.190).

The IFE total weighted score is 3.55 and the EFE total weighted score was 3.1. These coordinates put NBC into cell I which can be described to grow and build. It is

strongly suggested going with a market penetration strategy.

NBC being the industry leader has a strong competitive position and with a growth rate of 5.3%. NBC falls into Quadrant I. Firms located in Quadrant I of the Grand Matrix are in an excellent strategic position. For these firms continued concentration on current markets, market penetration, and market development are appropriate strategies (David, 1997, p. 192).

The QSPM determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized upon or improved (David, 1997, p. 194).

Market penetration and market development was used for this matrix and market penetration got a weight of 6.55 and market development a weight of 6.4. I would suggest staying with market penetration because NBC just got into foreign market a couple of years ago and they need to develop those markets as they have dominated domestically. However, in a few your market development will become an issue to deal with to improve NBC's global presence even further.

The four components of a strategy are the scope, resource developments, competitive advantages, and synergy (Class Handout, 1998).

Scope refers to the extent of interaction with the firm's environmental (handout), 1998). NBC has gotten involved with Asia and Europe and it is starting to make it presence felt in the markets where they are broadcasting.

Resources deployments concern the level and patterns of past and present resource and skill deployments, or its distinctive competencies (handouts, 1998). When talking about NBC's resource deployments this is it programming. The network had the six prime-time shows in the number 1 spot in 1997. In relations to the programs, you must include the actors, directors, and producers.

Competitive advantages pertain to the unique position development vis-à-vis competitors through a pattern of resource deployments or scope decision. In this case, NBC has a clear advantage being a subsidiary of a conglomerate like General Electric (GE). This gives NBC financial resources that other networks just don’t have. Again, the programming has to be a competitive advantage otherwise, we wouldn't be rated number one.

Finally, synergy refers to the joint effects sought from resource deployment and or scope decisions (Handout, 1998). The long arm of NBC Asia and NBC Europe as well as CNBC and MSNBC will prove to be brilliant moves by the National Broadcasting Company.

• In the network broadcasting industry, the measure of R& D is what kind of shows will the people in your target market want. Therefore, NBC must work in the type of entertainment to produce for a different demographic in the markets that they are in.

• Dealing with HR, you need to know who can pick the good shows on your executive staff. Knowing who to choose to direct a show and actors, you have to have people with these winning eyes and intuition and, the vision for the show to attract viewers to get the high ratings.

• The brand identity of NBC is very important. The energy of the sitcoms must be specials, such as Seinfeld has done. Made for TV movies must be memorable like Merlin. The advertisement outlets that NBC uses must have the correct targets in mind.

• In operations and productions, NBC has to deal with language differences and time zone differences when dealing with Asia and Europe. Operations of the programs broadcast in each time zone have to be worked out without a hitch.

• Cost of the signals and trying to put a program on at the same time in the different time/zones of the US, Asia, and Europe is a financial issue. Whether to borrow money or use its own money is an issue as well, the great thing about NBC is its relationship to GE.

• The management Communication systems are very important. Whether they have a videoconference, phone conference or use electronic mail are all-important issues to the information systems of NBC. And it relationship with Microsoft guarantees wonderful information systems technology

NBC has four critical success factors that will keep them in their number one spot. They are programming, viewers, rating, and advertisers. The programming is most to important because without good programming they won't get any viewers that determines its rating, which gets them the advertising dollars. Following these factors will help to maintain the competitive advantage for NBC.

NBC should use a market penetration strategy in the US, Asia and Europe. The use of the EFE, IFE, SPACE, BCG, IE, GRAND, and QSPM have all suggested a market penetration. The IR Grid and the Douglas and Craig Models seem to be pushing NBC to a global position, but the fact of the matter is that we are already a global company being in Asia and Europe.

In the future, as market development strategy will be suggested, however at this point to a market penetration strategy in the US, Asia, and Europe is strongly suggested. To work on improving the markets, that we are in is worth exploring, as well as giving the cable and Internet markets a more aggressive look at the Peacock network.

Key Internal

Factors Weight Rating Score

1. Market Share (34%) . 15 4 . 6

2. Strong

Programming . 10 3 . 3

3. Six Sigma System . 15 3 . 45

4. Strong Financial Position . 15 4 . 6

and access to capital

5. Rights to Special Events . 10 4 . 4

6. Increase in MS NBC rating . 10 3 . 3

1. The lack of a cable . 10 4 . 4

Sports Channel

2. The loss of the . 10 4 . 4

NFL and Seinfeld

3. Two diversified in smaller . 05 2 . 10

Cable markets

Key External

Factors Weight Rating Score

1. The increase in popularity of .20 3 .6

Entertainment publication

2. The eligibility to enter foreign .15 3 .45

markets

3. Changes in government .20 4 .81

regulations

1. Cable television .20 3 .60

2. High Definition .05 2 .10

television

3. Digital Broadcast .05 2 .10

Satellite

4. The Internet .15 3 .45

1. Opening Profit increased +5

22% in 1997

2. Sales were $2.1 billion +5

a 5% increase from 1996

3. NBC does not have an +6

ease of exit from the market due to

its number 1 standing

Total FS +16

1. NBC has the largest share of the -1

market at 34%

2. Programming is extremely -1

high in quality and this has the reason

for NBC # 1, position

3. Had more than 25% in the prized adult age -1

of 18 -49 demographic with regular

programming.

Total CA -3

1. Technology is very important to NBC +1

with all of the changes from day to day they

do a good job keeping up.

2. Demand for NBC programming is high, -4

3. Advertising price competition -2

with ABC, CBC and FOX is tight.

1. The growth for this industry is +3

slow to marginal.

2. The profit potential is intense but the need +5

for excellence, programming is important.

3. Technology is always changing and it will +5

only get better (black & white to color)

FS Average is +16/3 = 5.3

CA Average is -3/3 = -1

ES Average is -7/3 = 2.3

IS Average is +13/3 = 4.3

NBC is a financially strong firm that has achieved major competitive advantages in a growing and stable industry.

2. The loss of NFL and .10 4 . 40 4 . 40

3. Too diversified in .05 - -- - -- the cable market.

Strategies IE SPACE GRAND COUNT

Fns integ.

Back integ

Hor Integ

Mkt. Penet X X X X

Mkt. Dev

Prod. Dev

Conc. Div.

Congl Div.

Hor. Div

J.V.

Retrench

Divest

Liquidate

Carmody, John. "NBC Puts Its Money on ER 3 year, $850 Million Deal Sets a Series Record." The Washington Post, 15 January 1998, Sec. Style p. B01.

Class Handout, April 1998.

Class Handout: Douglas, Susan P.; Craig, C. Gamuel. "Evolution of Global Marketing Strategy: Scale, Scope & Synergy." BADM 197. 11 February 1998.

Class Handout: "Mapping the Characteristics of a Business." Analysis for Strategy Development. BADM 197. 11 February 1998.

David, Fred. Strategic Management-sixth edition. New Jersey:

Prentice-Hall, Inc., 1997.

General Electric Annual Report, 1997.

Lazich, Robert S. ed., Market Share Reporter. Detroit, MI : Gale Research Inc., 1997.

NBC Asia. 1998. Online. NBC. Internet. 20 March 1998. Available http://www.nbcasia.com/dbNBCa/html/who.htm

NBC Europe. 1998. Online. NBC. Internet.20 March 1998. Available http://www.nbceurope.com/Advertising/advertising.htm

MSNBC. 1998. Online. NBC. Internet. 19 April 1998. Available http://www.msnbc.com

Nugent, Thomas M. ed., Standard & Poors. New York: McGraw Hill, 1997.

"On TV Tonight." USA Today, 20 February 1998, Sec. Life p.14D.

Pegoraro, Robert, "A Clear Advantage with a Hazy Outlook HDTV Sharp Picture Blurred by High Costs." The Washington Post, 10 January 1998. Sec. Financial p F01.

Television Section. Entertainment Weekly. 20 February 1998. p. 95.

TVB. 1998. Online. TVB. Internet. 15 February 1998. Available http:\\www.TVB.org.

a) http://www.tvb.org/researchreports/trends_advolume/1995_1996.html

b) http://www.nielsenmedia.com/wtrrm.shtml

c) http://adage.com/ns-search/news_an...2/aaaa000P0e72f63&NS-doc-offset=7&