Aol Time Warner Inc. – a Bad Idea from the Start?

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A. Societal Environment
•Strong competition among internet providers – not able to increase prices(O/T) •Growing markets, Stage II development for Internet service with Broadband, Cable and DSL(O) •Business growth, product and service usage (cable, internet, media)(O) •September 11th disaster(O/T)

•The ‘burst' of the Internet bubble(T)
•Corporations' accounting issues(T)
•Slowdown of the economy(O/T)

•Changes in technology – Implementing change of services provided from dialup to broadband can be expensive and require extensive capital resources.(O/T)

•FCC changes and rulings in broadband regulation(O/T)
•Lobbying against broadband service providers(O)
•Cable industry – Regulation vs. Deregulation(O/T)

•"Environmentally friendly products – intangible services(O) •Demographic changes from specific niche markets to diversified target areas(O) •Low end services, low consideration for purchase decision making(T) •Necessity of service for home considered high (internet access, cable) (O)

B. Task Environment
1.Threat of new entrants: Medium
•Internet – a small investment is all that is required for a start up company to operate its own ISP and provide E-commerce solutions.

2.Bargaining power of buyers: High
•Ability to choose substitutes
•Subscriber preferences

3.Threat of substitute products: High
•Same product, different brand, close quality, and lower cost. •Cable modems – similar high speed service, strong, reliable reputation already being established for service

4.Bargaining power of suppliers: Medium
•Widespread availability of technology (hardware/software) •Access to materials such as copper networks provided by Bell, AT&T •Traditional and New distribution channels

5.Rivalry among competing firms: High
•Cable Systems – AT&T Broadband, Cablevision Systems, Direct TV, Cox Enterprise, Comcast. •Internet...
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