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Aol Time Warner Inc. – A Bad Idea From The Start?

Submitted by heve_papillon on November 8, 2006

Category: Business
Words: 591 | Pages: 3
Views: 349
Popularity Rank: 26,411
Average Member Grade: N/A (Add a Comment / Grade this Paper)

EXTERNAL ENVIRONMENT

A. Societal Environment
1. Economic
• 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)

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

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

4. Sociocultural
• “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...

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