Introduction
The purpose of this report is to determine and identify the “attractiveness” of the U.S. television (TV) manufacturing industry, i.e. to analyze the opportunities and threats that a company and its industry face due to the external environment. This external environment project will therefore after defining some key terms, analyze the dominant economic characteristics, the driving forces, and the competitive environment of the U.S. television manufacturing industry. To simplify matters the analysis will be performed from the point of view of an audio and video equipment producer, who is planning on entering the television manufacturing industry.
Key Terms
For a better understanding of the report this section will provides definitions of some important key terms used in the TV industry.
− CRT: cathode ray tube, the primarily technology used for TVs
− LCD: liquid crystal display, newer technology used for flat panel TVs, called LCD TVs
− PDP: plasma display panel, relatively new technology used for flat panel TVs, called plasma TVs
− DLP: digital light processing, relatively new technology used for rear-projection TVs
− LED: light-emitting diode
− OLED: organic light-emitting diode, technology, which is commonly used in mobile phones and digital cameras but is also applicable for TVs and computer screens
− FPD: flat panel display, including amongst others LCD, PDP, DLP, and OLED
− Analog TV: encodes TV picture and sound information as an analog signal
− DTV: digital television, “is a telecommunication system for broadcasting and receiving moving pictures and sound by means of digital signals [1]”
− HDTV: high definition television, “is a television broadcasting system with a significantly higher resolution than traditional formats [2]”
At a glance
- Applies Porter’s five forces to television industry competition
- Examines Internet television services Joost and BT Vision as potential substitutes
- 43 sources in the bibliography
- 3 figures and 1 table
Contents
1. Introduction
2. Key Terms
3. Dominant Economic Characteristics
3.1 CRT TVs
3.2 LCD TVs
3.3 Plasma TVs
3.4 DLP TVs
4. Driving Forces
4.1 Social/Demographic
4.2 Technological
4.3 Economic
4.4 Political/Regulatory
5. Competitive Analysis
5.1 Intensity of Rivalry
5.2 Threat of Entry
5.3 Threat of Substitutes
5.4 Bargaining Power of Suppliers
5.5 Bargaining Power of Buyers
5.6 Present Level of Competition
6. Conclusion and Recommendation
Objective and Themes
This report assesses the attractiveness of the U.S. television manufacturing industry from the perspective of an audio and video equipment producer considering entry. It asks how external opportunities, threats and competitive forces affect the prospects of a prospective manufacturer.
- Market size, shipments and television technologies
- Demographic, technological, economic and regulatory forces
- Rivalry, entry barriers and substitute products
- Supplier and buyer bargaining power
- Emerging display technologies and market entry strategy
Excerpt from the Book
Technological
Several different ongoing and expected technological trends and challenges are and will influence and affect the TV manufacturing industry. Some of these trends are TV size, smart TVs, TV energy consumption, and OLED TVs.
A major technological ongoing trend in the TV manufacturer industry is the development of large giant TVs, in particular LCD TVs. For examples “the International Consumer Electronics Show [of 2007 in Las Vegas], Sharp, … [introduced] the world’s largest LCD TV, a behemoth 108-inch liquid-crystal display [17].”According to Sharp chief executive Toshihiko Fujimoto, the “LCD TVs have become larger and are now competing aggressively in screen size segments that were formerly the exclusive domain of plasma and rear-projection televisions [17].” From his point of view, LCD TV is growing and will become the dominant flat-panel technology. Furthermore, major TV manufacturers report “technological improvements to how LCDs render high-speed movement, cutting down on the staccato image trails that have so far made LCDs less smooth than plasma models [17].” Regarding the future of flat-panel TV sizes, DisplaySearch estimates that by 2010 about 50% of all LCD or plasma TVs sold in the U.S. will have screen sizes bigger than 37 inches, compared to 16.5% in 2006. All large LCD leaders such as Samsung, Sharp and Sony are therefore investing billions of dollars in next-generation factories [18].
Another expected but yet not mature trend is the development of smart TVs. The idea behind smart TVs is to bring Internet content such as movies, videos, digital music and other programs directly to the TV, eliminating the so called PC middleman. Major companies such as Sony, Hewlett-Packard, Microsoft, and Apple with its Apple TV announced the new ways to realize these new visions of smart Internet TV, where the users get more control over the content they want to view. However, the market for these new developments is still not large, but will grow substantially by the year 2010 [19]. “The race is very much on [19].”
The power consumption for U.S. TVs is another technological feature, which influences the TV manufacturing industry. For 2005 the annual national power consumption for U.S. TVs was estimated to be 69 TWh per year, with 57 TWh for CRT TVs, 1 TWh for DLP TVs, 5 TWh for LCD TVs, and 6 TWh for plasma TVs. The forecast for 2010 estimates the total TV TWh per year to be 121, with 42 TWh for CRT TVs, 5 TWh for DLP TVs, 13 TWh for LCD TVs, and 61 TWh for plasma TVs. However, the plasma TV with 679 kWh per year is the TV with the highest average consumption per unit per year. DLP TVs consume 444 kWh per year; CRT TVs and LCD TVs consume only 244 and 256 kWh per year, respectively. This indicates that especially the plasma TVs have a relatively high energy consumption; on average it consumes even more energy than a new refrigerator does use on energy, which is about 500 kWh per year [3].
Chapter Summaries
Introduction: The report establishes its assessment of industry attractiveness and the perspective of a potential entrant.
Key Terms: Definitions introduce display technologies and television broadcasting terminology used in the analysis.
Dominant Economic Characteristics: Market shipments, technology categories, prices and projected changes provide an overview of the industry’s economic characteristics.
Driving Forces: The report considers demographic, technological, economic and political or regulatory developments that may affect television manufacturers.
Competitive Analysis: Porter’s five forces structure an examination of rivalry, entry, substitutes and bargaining power, followed by an assessment of competition.
Conclusion and Recommendation: The final section brings the external and competitive analyses together and discusses a possible entry strategy.
Keywords
U.S. television manufacturing, industry attractiveness, external environment, Porter’s five forces, market entry, competitive rivalry, market concentration, LCD, plasma television, OLED, smart television, buyer power, supplier power, industry trends
Frequently Asked Questions
What is the report about?
It examines the external environment and competitive conditions of the U.S. television manufacturing industry from a prospective entrant’s perspective.
What are its central themes?
The report addresses market characteristics, display technologies, external driving forces and the competitive pressures facing manufacturers.
What is the main objective?
The objective is to assess industry attractiveness by identifying opportunities and threats for a company considering entry.
What method does the author use?
The author draws on published market and industry information, examines external driving forces and applies Porter’s five forces to competitive conditions.
What does the main analysis cover?
It considers television shipments and technologies, demographic and economic developments, regulation, rivalry, entry barriers, substitutes and bargaining power.
Which keywords characterize the report?
Key terms include industry attractiveness, Porter’s five forces, market entry, LCD, plasma, OLED and competitive rivalry.
How are market concentration measures used?
The report uses four-firm concentration ratios and Herfindahl index calculations to discuss rivalry among television manufacturers.
Which alternatives to conventional television sets are considered?
The analysis discusses Internet television services, downloadable online television and products from PC monitor manufacturers as potential substitutes.
Why does the report discuss OLED technology?
OLED is examined as an emerging display technology relevant to the author’s discussion of future industry entry.
- Citar trabajo
- Christian Rodiek (Autor), 2007, External Environmental Analysis - The U.S. Television Manufacturing Industry, Múnich, GRIN Verlag, https://www.grin.com/document/69655
