Vivendi-Blizzard Case Study: a Situation Analysis Paper Outline

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  • Topic: Vivendi, Universal Music Group, Music industry
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SCHOOL OF BUSINESS ADMINISTRATION STRATEGIC MANAGEMENT

VIVENDI-BLIZZARD CASE STUDY: A SITUATION ANALYSIS PAPER OUTLINE

Instructor: Professor Clarisse Molad, PhD

Student: Ilija Kuzmanovski

Skopje, December 2012

CONTENTS
1. 2. 3. 4. ABSTRACT ............................................................................................................................ 2 INTRODUCTION ................................................................................................................... 3 COMPANY OVERVIEW .......................................................................................................4 EXTERNAL ENVIRONMENT VIVENDI/ACTIVISION BLIZZARD: MACROECONOMIC CONDITIONS AND PORTER’S 5 FORCES ...................................5 5. INTERNAL ENVIRONMENT VIVEDNI/ACTIVISION BLIZZARD: RESOURCES AND CAPABILITIES AND VRIO ANALYSIS .............................................................................8 7. 8. 9. SWOT ANALYSIS VIVENDI/ACTIVISION BLIZZARD ................................................. 10 CONCLUSION: WHAT DOES THE FUTURE HOLDS .................................................... 17 REFERENCES ...................................................................................................................... 19

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1. ABSTRACT
The paper analyse French international company Vivendi and its subsidiary Activision Blizzard. This company has $15 billion US debt which decreases bond credit ranking and it is an obstacle for rising of the stock share price. Vivendi is on the crossroad to change the strategy in order to find solution for these problems. There is a suggestion to sell Activision Blizzard and reduce the debt. In this paper I have made external and internal analysis of Vivendi (SWOT, PASTLE, Porters Five forces and VRIO). The results are opposite of the suggestion of selling Activision Blizzard. Actually the industry will grow in next 3 years with 15,3 % and the interactive entertainment industry revenues reached $68.4 billion in 2012. Moreover, results are contributing to the fact that all other subsidiaries have to be kept because of their high profitability and expectation of growing the markets in next 3-5 years. SFR is the company that has been bond with large fixed assets and expenses, and their EBITDA margin is very low. Analyses are showing that in next 3-5 years SFR will face with decreasing of the customer base and revenues, and increasing the costs. Therefore, new strategy for Vivendi will be to sell SFR, reduce the debt and buy the rest of the Blizzard stocks. Furthermore, Vivendi should start expanding on African telecommunication market because of expectation to grow in next 3-5 years and low labour wages. Because of expectation that music entertainment market will grow in next 3-5 years, UMG should be kept and invest in it.

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2. INTRODUCTION
According to Barney and Hesterly, (2008), strategy is a theory about how to gain competitive advantage. Strategic management process is a set of decisions and actions that result in the formulation and implementation of an organization’s mission and objectives. Therefore, among first tasks that organization has to do is to formulate its mission, which comprises of a broad statement of intent, vision and goals. This is subsequently translated into more predefined objectives. In order to assure success in its mission and objectives, an organization must subsequently conduct an internal and external analysis. Analyses are performed by using SWOT analysis to find out Strength, Weaknesses, Opportunities and Threats, VRIO Analysis in order to evaluate its own resources and capabilities along with the internal conditions in which it operates, Porters 5 forces analysis in which it will list the business’s opportunities or threats in the environment in which it operates. Based on this analysis the company will choose its strategy. In order to achieve its mission and objectives, an organization must strive to...
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