Current and Future Use of Internet Technologies at Sky Plc - Case Study Example

CURRENT AND FUTURE USE OF INTERNET TECHNOLOGIES AT SKY PLC By Location Contents Introduction and e-Business background 3 2.E-Marketing Analysis: Sky Company 3 3.Web Design Analysis 5 4.Business to Business Analysis 6 a)Ratio Analysis 7 b)Profitability Ratio 8 c)Liquidity Ratio 8 5.Innovation and Change Management 9 6.Conclusion and Recommendation 10 7.References 12 Current and Future use of Internet Technologies at Sky PLC 1. Introduction and e-Business background Sky PLC is a British company that focuses on satellite broadcasting, telephone and broadband services. However, in the recent past the company also included internet streaming in their list of services. Apart from the UK, the company also has operations in Italy, Austria, Ireland, and Germany. Sky PLC has widely made use of e-business in making their operations much easier. For instance, due to the adaptation of a centralised database, the company has been able to make sure that they can easily access and update pricing, products and customer information. Online operation has also enabled the Sky PLC to effectively communicate the features and other factors relating to their services to their customers and potential customers. On their website customers can create their own accounts making it easier for customers to access any information that they want regarding the company’s services. Development of a tailored user interface and activities enables Sky to support and enrich its sustainable business practices. 2. E-Marketing Analysis: Sky Company The entertainment industry is a difficult industry to penetrate and as much difficult for a company to maintain its hold on the market. Sky faces a lot of competition from equally able companies such as Virgin Atlantic. To keep its hold on the market and more so to maintain its hold of its present customers, it becomes exigent to diversify its marketing techniques and such way is through the use of electronic media, especially the internet (Miletsky 2009 p. 217). The advent of satellite made it possible for Sky to boost its market position. The marketing objectives for Sky have always been to create fresh interest and demand for Sky and to make sure potential customers understand the benefits that come along with using Sky’s products. However, as much as this is necessary or seems necessary in keeping a business going, an extra component of awareness is added to complement this. The campaign and communications have also become an integral part of Sky Digital’s marketing mix embracing public relations (PR), sponsorship and consumer promotions, in-store marketing, branding and direct marketing activities (Whalen 2009 p. 172). Focus on e-marketing has proved to be important in most industries, with the target market carving the direction the company takes. For Sky, the major part of its business is aimed at providing digital content. Their target market is divided depending on the content. For example, films would suit film lovers and couples, home banking would suit busy, career minded people and documentaries would suit retired people or nature loving people in most cases. Therefore the marketing strategies employed by Sky, specifically, the e-marketing techniques used are customized depending on the target group. Sky Group uses the internet as its principal e-marketing technique, and this suits its cause precisely because of its accessibility to all the various groups its customers are divided into (Eley& Tilley 2009, p. 166). Information about its product and any relevant alteration to one of its services or products can easily be conveyed via the internet. Another benefit derived from the use of the internet as the primary e-marketing tool is that non-subscribers to Sky’s products can access information via this platform. A satellite or digital provider, such as Sky, should be competent in distributing or relaying information. This seems to be the primary reason Sky is anchored towards the internet as its platform for electronic marketing. Sky has a great history of generating sales through its aggressive marketing procedures and this is not going to stop soon according to estimates. 3. Web Design Analysis A look at Sky’s website gives a feeling of simplicity and convenience, akin to Google’s webpage. This is not a mere accident as figures from research indicate people are more comfortable visiting websites that are less cluttered with advertisements and other pieces of unnecessary information (Plunkett Research Ltd 2004, p. 123). Sky’s website is spacious and clearly discernible. The page is complimented with images and a button permitting one to sign up for an account upon which one’s status is elevated to a member of the site. Also included on their website is a general but clear depiction of the products they have to offer (Adler 2010, p. 156). A search button on the top of the website provides an easy means for navigation through the site in case one is in search of a service or product in mind. Also, for existing customers, Sky offers a convenient way for them to settle bills and payments via the website. In addition, one can subscribe to new bundles or new services via the same platform with the only requisite being possession of your unique identifier. Fig. 1: A look at Sky Group Home Page As with most websites, Sky provides a link to their help desk. Here is a chance to speak to the customer service at Sky. Finally, for the interested prospective customer, a concise list of the products and services provided by Sky is on the site, giving one the chance to sample Sky’s products. 4. Business to Business Analysis More than 10 million households in the UK get entertained by Sky Company, getting extraordinary experience of movies, new and other extraordinary content. In addition, Sky provides telephony and broadband services. In the year 2014, Sky Broadcasting Group performance was excellent under a tough environment. The demand for digital content is rising and the diversification of Sky’s businesses into various fields. This has enabled the company to maintain its competitive edge. Furthermore, by acquisition of competitors, such as Sky’s takeover of a Virgin Media Group business in the early part of the millennium gives Sky a strong foothold in the industry. Due to operational efficiency, revenue increased for the company by some 10%. Operational efficiency here implies a market condition that exists when participants can execute transactions and receive services at a price that equates fairly to the actual costs required to provide them (Plunkett 2006, p. 112). This means that customers subscribing to Sky services received Sky services and products at costs far compared to customers subscribing to other companies for that year. This has been Sky’s principal strategy ever since its inchoate days. To a large extent, this policy has enabled Sky to hold on to its customer base while reducing costs for subscription but without sacrificing revenue. Sky Group’s major competitor is Virgin Media, which provides the same satellite services in the UK. As of July 2009, Virgin media already had a 50% foothold in the UK. This was attributed to its diversification in the HD segment. a) Ratio Analysis Ratio Analysis refers to the quantitative analysis of the financial information of a company’s financial statement (Kim &Mauborgne 2015 p. 201). It is calculated from the company’s current year’s financial numbers then compared to the other year’s current ratio to assess performance. The comparison can be done by comparing current years to the previous year, other companies in the same industry, industry average etc. Ratio analysis can also be used as a part of strategic analysis of an organization. By doing it one can identify any critical financial or other issues a company currently faces or might face. There are different types of ratios that can be used to assess a company’s financial performance (Mayar& Ramsey 2011, p. 109). b) Profitability Ratio This ratio enables one to assess the capability of a company to earn profit. Sky broadcasting company sales actually increased every year and they have done really well in it despite this tough economic conditions compared to the other companies. The sales in the year 2006 were £4148m and in the year 2010 was £5912m, which is an increase of 42.52%. The reason behind the increase in sales could be their expansion of business into different content like Sky started its high definition television service; they buy of broadcast rights for foremost sporting events (Ryan & Jones 2012 p. 192). c) Liquidity Ratio Liquidity ratio checks a company’s ability to meet its short term debts. It helps in the identification of the company’s ability to manage its working capital (Pringle & Field 2008, p. 167). Sky Broadcasting’s liquidity position has improved from the year 2008 to 2009 as their current asset has increased (current asset in year 2008 was £1698m and in year 2009 was£3395m) over the year and also current liability has increased very little amount (current liability in the year 2008 was £1893m and in year 2009 was £2029). The current ratio has increased from year 2008(. 90) to year 2009 (1.67) as their Derivative Financial Instrument had an increase from £5m in the year 2008 to £37m in the year 2009. And also there was a big increase in trade payables two of those years. In the year 2010 current asset increased £37m but current liability increased £311m. As a result, current ratio decreased 0.20 in the year 2010. 5. Innovation and Change Management In the field of digital media, only innovation can save a company from collapse. Sky is structured to promote innovation by making interaction among employees flexible in a way that one can freely interact with employees from different departments so as to get share ideas and improve upon existing ones (Dahlén& Lange 2008, p. 187). Furthermore, projects and launch of products, enhancing in groups which the bond between employees thereby enabling free undisputed communication. To further its scope of innovation, Sky Group has taken the necessary steps to diversify its employee backgrounds as possible. It is not uncommon to have foreigners given equal opportunities as citizens in the country hosting the company’s offices. This has enabled Sky Group furnish the needs of different markets. Handling change is also a major factor influencing the success of any company. Sky Group manages this by effecting structures that are modularly organized. This modularization makes the company flexibility to change. For example, while shifting to High Definition technology, this required a technological know-how among its employees and swift shift in equipment to implement the new technology (Ginty, Vaccarello&Leake 2012, p. 211). The shift was quick because of the structure of the implementation of the company. The modular structure among employees allows an organized transfer of technical knowledge and the modular implementation allows quick implementation without interruption of existing technology. 6. Conclusion and Recommendation Overall, the performance of Sky Group is seen to be improving with time. The company is doing very well to achieve its corporate objectives and that’s what is giving them more sales in each year and hence becoming more profitable. A look at the ratio analysis in the above section, one can easily see that the companies most of the ratios are improving and they are getting even stronger than before in terms of revenue. More importantly in the last two years their other business sectors have grown rapidly making their diversification project successful. Their online broadband service system has shown vast growth, the newly established HD channel, low-cost service and had a great contribution to the company’s revenue in the last three consecutive years. The existing business environment has proved to be profitable and worth maintaining for sky Broadcasting Group growing its operation. The future for Sky cooperation looks suspicious, if by the figures were to be used. Furthermore, with their dedication to sports and the lucrative nature of the internet, it seems that Sky will be among the companies that may survive with future technological advancements as it has already shown its ability to cope in the current market. This is a simple implication that the company has a very high possibility of doing even better in the future if they will continue adapting to new trends and technology. 7. References Adler, M 2010, A study of Marketing and Online Marketing Tools which improve online success, GRIN Verlag GmbH, München. http://nbn-resolving.de/urn:nbn:de:101:1-201009174915. Dahlén, M & Lange, F 2008, Marketing communications, Wiley, Hoboken, N.J. Eley, B & Tilley, S 2009, Online marketing inside out, SitePoint, Collingwood, Vic. Ginty, M, Vaccarello, L &Leake, W 2012, Complete B2B online marketing, J. Wiley & Sons, Hoboken, N.J. http://www.123library.org/book_details/?id=53548. Kim, WC &Mauborgne, R 2015, Blue ocean strategy: how to create uncontested market space and make the competition irrelevant. Mayar, V & Ramsey, G 2011, Digital impact the two secrets to online marketing success, John Wiley & Sons, Hoboken, N.J. http://www.books24x7.com/marc.asp?bookid=43188. Miletsky, JI 2009, Principles of Internet marketing: new tools and methods for Web developers, Cengage Course Technology, Boston, Mass. Plunkett Research, Ltd 2004, Plunketts advertising & branding industry almanac, Plunkett Research, Houston, Tex. Plunkett, JW 2006, Plunketts entertainment & media almanac 2006: the only comprehensive guide to the entertainment & media industry, Plunkett Research, Houston, TX. Pringle, H & Field, P 2008, Brand immortality how brands can live long and prosper, Kogan Page, London. http://www.books24x7.com/marc.asp?bookid=31016. Ryan, D & Jones, C 2012, Understanding digital marketing: marketing strategies for engaging the digital generation, Kogan Page, Philadelphia, PA. Whalen, A 2009, Online marketing revealed: a couple of chicks guide to optimizing your presence on the web, Trafford On Demand Pub, [S.l.]. Read More