STAR TV case study
GENERIC GRAND STRATEGY AND ITS SUBCATEGORIES WHEN INITIALLY PURSUING AND THE PORTER 5 FORCES INVOLVED
STAR TV which is an acronym Satellite Television Asian Region, which is interesting company to focus on within satellite broadcasting. Star was founded in 1991 by Li Ka-Shing and his Hong Kong-based Hutchison Whampoa Group as an English-language, free-to-air broadcaster of mainly western fare. Star TV was launched at an initial cost of $300 million. On that time, only one channel being offered and soon added four more channels to its menu. STAR TV was using asiasat-1 satellite to beam their channel to Asian country.
The grand strategy that has been using during this time was growth. The fact is most of the 2.7 billion people living in the 38 countries extending from Egypt through India to Japan and from the Russian Far east to Indonesia do not have television sets and satellite dishes. Yet STAR TV has debuted 24-hour all sports television program, beaming the U.S Open Tennis tournament via satellite to these potential audiences in Asia. The five channels being offered were Sports, News, Music TV, Entertainment and special channel to learn mandarin.
The subcategories of the grand strategy during this time that had been using by STAR TV were intensive/concentration. As we know, the intensive strategy is divided into three things which are Market penetration, Market Development and Product Development. As for market penetration, previously STAR TV was initially targeted to a select 5 percent of the population in major markets in Hong Kong, Taiwan, South Korea, Indonesia and India. These are the countries that they chose to being penetrated and to increase the market share. This segment of the potential audience is made up of English-speaking, well-educated, well-travelled and wealthy Asian. All channels were in English without subtitle/translation that made most of the targeted countries’ residences were not interested to subscribe it. Plus the Television was very difficult to get due to the price was considered expensive. Japan was not in targeted country due to Japan already had its own well-developed satellite TV network. On the other hand, Japanese were not interested in English because they didn’t speak/understand English at that moment.
With the $300 million initial capital, some observers predicted that STAR TV would lose massive amount of money in getting the audiences. As for the market development of the subcategories, STAR TV introduced the satellite dishes which were new to audience. Customers were scared to buy because that was new to them. They didn’t really understand of its functions. STAR TV had come out with many campaigns and advertisements to audiences to make they know the functions well. However, when STAR TV sports channel offered world cup cricket championship in 1992, sales of satellite dishes were skyrocketed, particularly in areas that had once been British colonies. Everybody was interested in watching those channels in Asia. The subscribers were increased from time to time and they enjoyed not only sports but they also were getting music television (MTV), News channel, Entertainment (movies, drama, etc) and Mandarin learning channel.
Initially STAR TV was making its money solely from advertising. They found that the profit unable to bear all the cost in order to maintain the good service level and product enhancement. They were start thinking and they found an idea on how to increase the income. They implemented pay channel concept as for the product development. They courageous to implement this concept were because their audiences were reaching a total number of 3.75 million households in eight countries just after a year it began operating.
The porter five forces involved during this previous time were suppliers, customers, and substitute product. The suppliers were not so many which had given less...
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