Strategic Administration Analysis System of Bloomberg - Case Study Example

Strategic Management Analysis System affiliation Strategic Management Analysis System Introduction Bloomberg L.P, formed by Michael Bloomberg in the year 1982, is a business company based in U.S. located in Midtown Manhattan, New York; the company runs multimedia services ranging from news agency, radio station and a TV channel. Besides posting contents on its website, it also prints them on its magazine, Business week. To its subscribers, viewers and other associated financial corporations, it extends asset management, financial services and regularly updates them on exchange markets. Being a private corporation, it does not publicly reveal its financial statements of accounts (Aguilar, 2007). Due to its fast, timely and authentic messaging services, it has grown greatly and has secured a strong market position in Wall Street. In order to maintain its brand name, it keeps adding services to its portfolio thus enabling it not only attract more customers and but also extend its services. This paper is going to conduct SWOT, PESTEL, Porter’s Five Model and Value Chain on its internal and external environment in order to understand why it has managed to possess a huge market share in spite of existence of other companies. Through SWOT analysis is a framework that looks at how effective an organization is utilizing its resources by giving an overall market analysis and highlighting the company’s current position and all the strategies it has adopted. This framework enables an organization work optimally by enabling the organization utilize available scarce resources. This framework will look at: strengths, weakness, opportunities and treats to Bloomberg. Strengths Bloomberg has been providing its services for the last 30. According to Baden-Fuller and Stopfold (2004), it owns a larger market share controlling approximately $6.25 billion out of a $16 billion global market. Its in-house environment attracts professionals from other companies. It has a strong communication channel that enable it cover most parts of the world reaching to almost 0.3 million subscribers in the world. Weakness The idea of selling SmallBiz magazine and buying Businessweek was not a good idea. Reliable sources claim that it is running the magazine on loses (Cadle, Paul, & Tuner, 2010). Opportunity With the launching of and iPad app, the company is expected to reach consumers who use tablets, smartphones and eBooks (Chandler, 2004). It has a plan of reaching nations that are struggling to rise financially like China and India. Threat Economic slump has extremely affected its rise. Constant market fluctuations extremely affect investor’s in turn affecting revenue generation of the company (Donald, & Pamela, 1998). With rise in other companies that are providing the same services, Bloomberg is compelled to revise down the rates at which it is offering its services and this affects its ability to offer the same. As to conclusion, the SWOT model has aided Bloomberg assess interrelationship between strengths, weaknesses, opportunities and threats, in relation to its competitors. It has been realized that the company has been in existence for long and has a mobile application that is meant to edge it in the market. However, with the selling of SmallBiz magazine, it gives its rival opportunities. Through this framework Bloomberg will develop a TOWS matrix for generating strategic options on how they will succeed more. Another framework is the value chain. This framework helps and organization evaluates all the activities that affect the quality of goods or services before they are dispatched for the market. Organization must add value to their goods in order to make them more competitive. The framework will look at: inbound and outbound logistics, operations, marketing and selling and services in relation to Bloomberg. Inbound logistics Its inbound logistic system is well connected to ensure that erroneous facts and figures, in all departments across the world, are not duplicated. It has approximately 2,300 employees working in 72 different countries that collect, compile, formulate and analyze financial market information (Fitzroy, & Hulbert, 2005). Operations Bloomberg management ensures that correct responsibility is delegated to the right person at the right time. This well hierarchy of management aid in smooth running of all operations of the organization. Outbound logistics It ensures timely and quality publication of information before other competitors thus ensuring that its consumers are not misinformed and uninformed (Ghemawat, 2004). In addition to that, by informing investors of financial markets in advance, investor can make the best decision. Marketing and sales Publication of news on its website coupled with the magazine, are good channels for marketing for Bloomberg. In addition to that, the company has sales and marketing departments that are solely focused to marketing the company. Finally, with launching of the mobile app, the company will be in a position to market itself more and more (Haspeslagh, 2002). Service The company’s motto is to offer subscribers with information despite any external factor like natural disaster or political instability that may crop up (Hax, & Majluf, 1996). Through this framework, it can be seen that Bloomberg is taking advantage of opportunities and neutralizing threats. Delegation of duties by management is quite well to ensure of services provided. In addition, Bloomberg adds quality to its service by providing their services in different forms to consumers. By doing so, they are adding value to their service have despite external challenges. Another model is the Porter’s five forces framework. This model enable an organization understand its degree of attractiveness it has in relation to the industry. It also helps in identifying weaknesses that a company has in the market. In doing so, the company can work in its weaknesses while reaping benefits from the strengths it already has. In this framework, level of competition, treats of substitute, threats of new entrant, supplier and buyer power will be analyzed. Level of competition Main competitors of Bloomberg are Dow Jones FX, Google and Yahoo finance, magazines like The Financial and Times Wall Street Journal and Reuters. Its radio and TV program also faces stiff competition from CNBC (Jarvenpaa, & Tiller, 1999). Threats of substitute For investors to invest, the have to rely on information relayed to them by media. As a result, there are specific information that Bloomberg may fail to provide some aspects of information to customers and which may readily be available in other sources like the Reuters, Dow Jones and FactSet Research System thus becoming strong substitutes and competitors of Bloomberg. Threat of new entrants Due to the large scale economies, becomes hard for new competitors to enter the market and overtake Bloomberg (Johnson, & Scholes, 2002). Therefore, Bloomberg stands in a good position even if other companies find their way into the existing market of delivering news to people. Supplier power Reliable sources indicate that Bloomberg has a wide network of around 500 journalists who are involved in coming up with around 3,000 different financial stories each day (Jimmy, Whittington, & Scholes, 2009). Buyer’s power According to Luffman (1996), Bloomberg has more approximately 314,000 installations around the globe. To create awareness to consumers, they have named the installations Bloomberg or terminals. As a result of this, they have increases customers power to almost $1,500 a month. By using the Porter’s model, it has been seen that Bloomberg has other competitors. However, due to its economies of scale, it has been able to hinder new entrants into the market. Final framework is the PESTEL framework. This is a tool that helps in measuring and assessing an organization and its growth. It helps in understanding the opportunities and risks that comes to a business while it is expanding and as a result, risk related to foreign environment can be mitigated. This model looks at the risk and opportunities that an organization is exposed to while in the expansion process. It also enable an organization identify present fundamental factors that will have future implication to the organization. The framework will look into the political, economic, social, technological, environmental and legal environments that influence Bloomberg. Political environment Bloomberg has moved beyond its boundaries of providing financial information to providing political information through its comprehensive web-based services (McNamee, 1996). As a result of this new venture, the company has been able to provide fundamental information about the government and its maneuver. In addition to that, people who operate business can obtain political information formulated against or for businesses. Economical The financial crisis that hit U.S. in 2008 brought financial losses to the company. In spite of this, the company picked up well and continued to run normally (McDonald, & Wilson, 2011). In another incident in 2011, Bloomberg lost around 600 subscriptions in its terminal. This came as a result of one of the companies, MF Global, running bankrupt. This company, according to Minzberg and Quinn (1992) was one of the biggest brokerage firms to Bloomberg. In the same year, Bloomberg recorded a 12% decrees in sale by each employee. Despite off all these, the company managed to remain profitable with a 30% operating margin above revenue enabling it lead companies like Apple, Dow Jones and Thompson Financial Unit which recorded a 20% operating margin. Social Bloomberg understand the social needs to its subscribers and how it can communicate with them socially (Porter, 2004). As a result, it introduced a social policy in the year 2011. According to this policy, editors, journalists and reporters were required to communicate with consumers via a social network which was chosen to be twitter. Technological The new technology, BLPAPI, introduced by the company, enables approximately 100,000 professional and other consumer’s access fundamental financial information in the global market on a day to day basis (Rowe, 1994). In addition to that, the technology also serves, other non-Bloomberg customers and vendors in aiding them accessing market information. Environmental The company is well aware of the impacts on pollution on the environment. The company has donated over $2.4 million in to aid in construction of public cars and discourage usage of private cars with and attempt to reduce fuel consumption (Saddler, 2002). The CEO, being the chairman of the C40 Cities Climate Leadership Group, is focused to bringing climate mitigation plans that aim at reducing the level of gas emission thus destroying the green environment. Furthermore, the company has started a campaign that will enable U.S. cut down on coal consumption by the end of 2020. Legal This company is bound to abide to all rules and regulations in the country that it has ventured into. Given that the company is an international one, it has had to spend a lot so as to ensure that its data is protected. In all the countries it is operating from, it has had to register its copyright and patent to ensure smooth working environment. Finally, for the company to penetrate the markets of Asia, it needs to establish a strong legal ground with the nation (Agboola, 2003). Conclusion Bloomberg L.P began its business operations in 1982 and within a short period span it managed to establish a solid foundation in the financial market. The company, with its massive collection of products and services, has become one of the most exceedingly dependable and efficient investment and financial information companies. With its eminent strengths and prospects, it has many amazing accomplishments. Natural disasters and economic slumps may affect the working of the company; as a result, the company is required to lessen any potential threats and address its flaws appropriately. The company is dedicated to increasing its network with customers and other business bodies and that has enriched its value addition process and profit growth. References Aguilar, F. J. (2007), Scanning the business environment, Macmillan. Baden-Fuller, C., & Stopfold, J. (2004). Rejuvenating into the mature business the comparative advantage. London: Routleigh. Cadle, J., Paul, D. & Tuner, P (2010). Business analysis techniques, 72 Essential tools for success, BSC The Chattered Institute of IT. Chandler, A., D. (2004). Strategy and stracture: chapters in the history of industrial enterprise. MIT Press, Cambridge. Donald, C., & Pamela, S. (1998). Business research methods, sixth edition, McGraw-Hill, New York Fitzroy, P.T., & Hulbert, J.M. (2005). Strategic management, creating value in a turbulent world. Chichester: Willey& sons. Ghemawat,, P.(2004). Strategy and business landscape: text and cases. NewYork: White. Haspeslagh, P.C.(2002). Portfolio planning approaches and the strategic management process in diversified industrial companies. UMI, Ann Abor: Sharplin. Hax, A., C., & Majluf, N. (1996). Strategy concepts and process, a pragmatic approach. New Jersey: Prentice Hall. Jarvenpaa S.L. & Tiller E.H (1999), Integrating market, technology and policy opportunities in business strategy, Journal of Strategic Information Systems 8;pp 235-249 Johnson, G. & Scholes, K. (2002). Exploring corporate strategy, sixth edition, Prentice hall, London. Jimmy, K., Whittington, R.& Scholes, K. (2009), Exploring Corporate Strategies with MyStrategyLab, Financial Times/ Prentice Hall. Luffman, G.(1996). Strategic management, an analytical introduction. Blackwell Business: Oxford University Press. McNamee, P., B. (1996). Tools and techniques for strategic management. New York: Pergamon Press. McDonald, M,. & Wilson, H. (2011). Marketing Plans: How to Prepare them, how to Use Them, 7th Edition, John Willey Minzberg H. & J. B. Quinn (1992). The strategy process: Concepts and contexts, Prentice – Hall International Journal Editions, Englewood Cliffs; pp 47. Porter, M., E.(2004). Competitive strategy. London: Free Press. Rowe, A.J.(1994). Strategic Management, a methodological approach. London: Addison Wesley. Saddler, P.(2002). Leadership. London, UK: Kogan Page. T. O., Agboola A. (2003). The impact of the external environment on the growth of the IT industry Oyebisi. New Haven: Willey& sons. Read More