In order to understand the external environment of the company PESTLE analysis has been done. The PESTLE analysis can be defined as a strategic tool that is used for analysing the macro environment of the organization.
The political environment of USA s stable which in turn impose positive impact on the business industries established in this nation. The political relationship of the nation is positive with its neighbouring nations. Davis and Boudreaux (2019) have highlighted that the frequent changes in the taxation can be considered as one of the major risks associated with the changes in taxation. Not only can this repeal of net neutrality be considered to another major factor that needs to be considered.
USA being a developed nation, the per capita income of the consumers are high. This signifies higher number of consumers of the telecommunication industry. According to Charters et al (2021), the cable industry of USA has an oligopoly market structure This means cable companies are few and they are more or less similar or little differentiated services to the individuals. Another major factor to be highlighted includes higher data demand and economies of the scale.
The class distribution amongst the USA population can be considered to be of paramount importance. The elite class of USA is composed of 3 percent of the population and is indifferent to the service that they use. The middle class is approximately 40 percent off the total population of USA. The lower class is comprised of 27 percent. The key consumers off Charters Communication includes the middle class population. According to Murray (2019), in this era of 5G, there exists massive investments as well as changes that is require to be made for satisfying the high demand off the data to the consumers. Similar plans are offered to the consumers by al the top brands in the telecommunication industry.
USA is a highly develop nation with technological advancements. This is turn is highly beneficial for the telecommunication industry. The transition of the spectrum to digital along with high technology diffusion rate can be considered to be two major beneficial aspects. Additionally the 5g era along with M payment boost new opportunities for ISP industry
One major factor to be highlighted includes the ant trust law in the CATV system industry as well as overall in the nation. The copy right, patent and intellectual property law also need to be adhered by.
The ability of Charter Communications to handle the delivery of both the supplies and the completed products may be substantially impacted by erratic weather conditions. In the event of, instance, an unanticipated monsoon, this would have an impact on the delivery dates of the finished product. The digitalized links may also experience poor service as a result of an unexpected monsoon. Recent disasters like the storm Harvey, which severely damaged large portions of Houston and Texas, Spectrum's primary converging regions, caused Charter Communications to lose infrastructure. Additionally, natural disasters like the disruption caused by a volcanic eruption resulted in the loss of cable and network lines, necessitating a significant capital investment to repair the damage.
Industry Structure and economic feature
With high-speed data demand reaching new heights and subscription growth of 6% annually, broadband has been a major area of cable expansion. In 2018, there were 68.2 million subscribers to Cable HSD, and by 2022, that number is predicted to increase to 70.7 million. Additionally, the growing use of wireless communication services has resulted in a major revenue reduction for residential call services. Industry participants have also been forced to change their business models due to the increased consumer preference for digital and subscription services over linear pay-tv and rentals or outright purchases. However, the number of U.S. broadband only subscribers rose from 17.4 million in 2017 to 22.2 million in 2018, and this number is anticipated to expand further.
Additionally, even if the promised speeds of 5G will increase cellular subscriptions, given that standards have not been finalised and a number of technical challenges still need to be resolved, it is possible that fixed wire-line subscribers won't be displaced in the near future. Charter Communications works in a highly competitive industry, which has an impact on their capacity to draw in and keep new clients. However, their effective merger with Spectrum and Bright House has allowed them to increase their market share. Additionally, programming expenses are increasing much more quickly than salaries or inflation, and they might not be able to control these growth rates or pass them on to their clients.
Charter Communications Companies Strategic
Charter Communications' goals are based on providing high-quality service to satisfy customers. The first goal is mentioned below: To provide clients high-speed digital connections for the Internet.
2. To emerge as the top manufacturer in the telecom sector.
3. To offer clients quality goods and services at fair prices.
4. To retain its excellence and use digital technology to change the world
Among the tactics is commitment to its clients: The business offers its customers customer service. The company is dedicated to making its goods and services better. Their customer care crew is effective and ready to assist clients at any time. Its external success elements can be strengthened by the internal success factor.
• • Customers will be helped to choose from a range of services and products by an updated information unit.
• • Effective Staff: The Company uses its corporate strategy to establish the enterprise as a premier service provider. Her numerous clientele receive exceptional service from their effective and productive personnel.
• • To fulfil client demand, the firm coordinates its business operations and market synergies.
Competitive Analysis and Advantage in the industry
Threats from new competitors
• Significant financial and material resources must be invested to enter the sector. If product differentiation is great and clients place a high value on the new experience, this force also loses power.
• If the current legislative framework places certain obstacles in the way of new enterprises looking to enter the market, Charter Communications Inc. will not be as threatened by new competitors. In this scenario, entry-level firms may be deterred from joining the market by the need to satisfy stringent, time-consuming regulatory standards (Szefler et al. 2020).
Threat of Substitute Products or services
• The switching cost of utilising the alternative product is considerable, the threat is significantly low for Charter Communications Inc. (due to high psychological costs or higher economic costs)
• Consumers can access the same utility from replacement products as they do from Charter Communications Inc.'s products (in terms of quality and performance).
Rivalry among existing firms
Charter Communications Inc. will see little competition from other companies if:
• There are few competitors in the market
• The business is expanding quickly.
• The items are very differentiating, and each market competitor focuses on a particular sub-segment. There is a clear market leader.
• Consumer switching costs are high on both an economic and psychological level, and enterprises may simply quit the sector without suffering significant losses because to the low exit barriers.
Bargaining Power of Suppliers
If: Suppliers have consolidated in a certain area and their concentration is larger than that of their consumers;
This force is especially powerful when the cost for purchasers to migrate from one supplier to another is high; (for example, due to contractual relationships).
Suppliers' position against Charter Communications Inc. is strengthened when there are few suppliers and considerable need for the goods they supply.
Bargaining Power of Buyers
There are some factors that increase the bargaining power of buyers:
• The capacity of corporate clients to do backward integration strengthens those clients' market position. Backward integration demonstrates that consumers are capable of producing goods independently as opposed to acquiring them from Charter Communications Inc.
• The high level of market awareness, value consciousness, as well as volume purchases of standardised goods by customers all contribute to the buyers' increased bargaining power.
Charter Communications has several advantages, including
1. An Internet service pioneer. Charter is the tenth-largest supplier of landline telephone service, with around 2 million residential telephone users (Sargeant and Gillett-Swan 2019).
2. Outstanding client care provided by more than 16000 staff
3. Strong Brand Equity
4. Operational efficiency and market standing
1. There are issues with slow growth, debt, valuations, and declining margins.
2. Inefficient bandwidth use reduces operational effectiveness
1. Modification of operating strategy and national go-to-market tactics to gain competitive advantage
2. Improving goods and services to boost earnings per client, cut transaction costs, and deepen relationships with customers
3. Alluring goods, costs, and packaging stimulate the use of fully functional services in the house.
1. Competition from satellite and overbuilders for many years,
2. Charter is quite accustomed to competing with ILECs
9. Target Market Analysis of Charter Communications
1. Cardholders of credit cards
Long-term contracts are more beneficial to Charter than short-term ones with a high turnover rate. As a result, this section will take factors like long-term value and consistency of service given into consideration.
2. Age of 20 to 30
a. Younger people are significantly more likely to sense the "need" for internet access. By the time they are 20, most people are able to apply for a credit card or check card, are living independently, and probably have no incentive to be loyal to any single supplier. This category is a fantastic chance to acquire devoted clients.
Schools, college campuses, corporate complexes, and other commercial sites are examples of large structures or land areas that require internet access. This market has very particular requirements and needs a tonne more information.
a. As time goes on, education and computers go hand in hand. Several courses are based on the internet, and social media has emerged as a significant communication tool.
5. Developers of infrastructure
a. In order to deliver high quality and quick speeds, new infrastructure is needed to provide broadband to new markets. When entering these market opportunities, physical wires and monitoring boxes by the side of the road need to be erected.