Read the case study:

You are a new MBA working for Discovery Network. Top management is alternately happy and worried. They need to keep profits up, but are having difficulty find a winning strategy. They are afraid that they may be doing too little or maybe too much to make money. The CEO says they need a better strategy. She says the company is out of focus.

The overall situation in what is loosely called “cable television” reveals several approaches that work. Sports and 24-hour news seem to work pretty well. Channels tend to specialize in one of a wide range of programs including re-broadcasts of old television programs; movies; game shows; cooking; new dramas [very expensive]; home repair; travel; educational offerings; religious programs and others.

Keep in mind that Discovery is not in a position to go head-to-head with Fox, TNT and ESPN, not even the faltering CNN. Other successes are cartoons and children’s programming. Movies are generally popular but the rights to movies are very expensive. There is a general fear that someone has already grabbed the good opportunities.

There is some good news. It seems that Discovery have found a kind of middle ground. It is doing fairly well in crime programs, nature programs, home repair and some other types of programming with smallish audiences.

Recently, Discovery Network decided to acquire Food Network and HGTV for $11.9B. They already own Animal Planet and TLC. They have also made a deal with Oprah Winfrey for an increased share of the OWN Network. Discovery paid $70 million for an additional 24.5% of OWN.

Top management is still not happy with their situation. All acquisitions are expensive. They feel OWN runs too many women-only programs and that they have hit a wall on animals, home repair and home purchasing. They even tried yacht purchasing, a show with a very small audience.

Your job is to set a reasonable strategy. In developing a strategy for Discovery, keep these ideas in mind:

• Give management a reasonable plan: Define when, cost, probable results.

•Demonstrate that it will work. Is anyone having success now?

•You need to read about the situation. What does the Wall Street Journal say?

•Stay professional. Do not write, “I think.” Give a better rationale.

•Do not describe what happened over the last five years. The last MBA who did that was fired.

•Do not suggest an unrealistic strategy: NBA championship games, for example. They are not available, too expensive and may be in a shrinking market. And no, they cannot acquire Netflix or Google.

• Do not pick a personal favorite that will led to low ratings and shrinking advertising revenue, such as weird cooking shows.

Answer rating: 100% (QA)

Introduction The objective of this paper is to help formulate management a clear and focused strategy for the Discovery Network operating mainly in the industry of Cable Television channels The channe... View the full answer