Time Warner Cable Inc. is a United States based organization that deals in provision of high-data speeds, videos and customer voice services. This company has almost 15 million customers spread in the 29 states of U.S. This company additionally owns a good number of local sports and news channels. Their specialty is in providing its customers with video services, voice services and the high-data speeds to any sizes of business entities. Additionally, this company provides its customers with cell tower backhaul to carriers that are wireless as well as the class enterprise. Another function of this company is the services and application management. The company’s media provides for solutions in advertising for the local and regional innovative organizations(Center, n.d.).
The Time Warner Cable case examines the profiles of customers, benefits, basic Time Warner Cable information and solutions. This case further indicates some challenges such as the desire to make an attractive and humorous website. This will ensure the company earns more income from the new users. The new business that enters the entertainment industry bring about innovations diversification and new approaches of handling things development hence threatening the growth of this company. The new entrants into this market come with strategies for lower pricing, cost reduction and providing new propositional values to the customers(Fitzgerald, 2016).
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These problems are mainly within the executive suite and the operations. As a result, this makes the company to suffer huge losses of up to $100 million annually. For this company to attain the break even point, an operator who was distinctive had to cut its rate. The systems that initially seemed to be losers were now benefiting by rising their number of subscribers(Center, n.d.).
Memo 2 solution
My recommendation is that, Time Warner Inc. becomes involved in wars for prices and become profitable till the price bundle is at $50.95. The decision on the organization exiting the Austin market should also be considered in a situation whereby the company finds itself not able to meet the average variable cost of $40.1. the company will be in competition for customers with Everest in the area of Kansa City. The main objective of this organization is to keep its market share at 65%(Fitzgerald, 2011). Everest and Time Warner are all in the oligopoly market structure whereby only the power of the market is only shared by a few firms that deal in similar products and thus they are the setters of the prices. Time Warner is in preparations to involve its competitors in price competition. The Bertrand’s model has it that, from a perspective of a game theory, it can be examined as concurrent game with the competitors in which the prices are a strategic decision. Therefore, it can be concluded that Time Warner will maintain its profitability in Kansa City if only the company’s total revenues exceed the total costs, that is P>ATC (Crandall, 2005) .
Memo 4 solution
The organization should calculate its profits at each level so as to arrive at a price that will ensure profit maximization. Profit is calculated as total costs being deducted from the total revenues. The total revenues can be equated to the price per subscriber number. Profits can also be maintained at maximum by increasing the revenues per unit while reducing the cost per unit. Other approaches for profit-maximization price include; innovation strategy that will incorporate the new exploited ideas, mass customization especially in a competitive business environment, collaboration with the customers is another strategy and last but not least is value engineering which will deal with improving the production by increasing value. This translates to higher profit margins for this company and it will remain competitive in the market(Dey, 2007).
References
Center, O. T. W. (n.d.). TIME WARNER INC.
Crandall, R. W. (2005). Competition and chaos: US telecommunications since the 1996 Telecom Act . Brookings Institution Press.
Dey, A. K. (2007). Profit maximization. Business Perspective , 9 , 41–49.
Fitzgerald, S. (2016). Time warner. In Global media giants (pp. 51–71).
Fitzgerald, S. W. (2011). Corporations and cultural industries: Time warner, bertelsmann, and news corporation . Lexington Books.
