Challenges of digital broadcasting and competitive strategies adopted by television stations in Kenya
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Date
2016-11Author
Mwithui, Catherine K
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The media industry has undergone major changes after analogue to digital migration.
Digital broadcasting has reduced the entry barrier which has for years been a source
of competitive advantage. It has fragmented the audiences and this has posed a great
danger to television stations which make revenue solely via advertisements. As a
result, competition is cut throat and the television stations had to adopt relevant
competitive strategies. The aim of the study was to look at the challenges of digital
broadcasting especially its effect on competition and competitive strategies adopted
by television stations in Kenya. The study adopted descriptive cross sectional survey
design. The target population of study comprised of 8 local television stations owned
by the large media organizations in Kenya. Data analysis was done with the help of
Statistical Package for Social Sciences (SPSS version 21) and the findings were
presented in form of table and figures for easy understanding. The study determined
that digital broadcasting brought the challenge of increased competition. Using
Porter’s Five forces model, it was determined that it was easy for competitors to enter
the television industry and compete effectively, there was a big threat of substitute
product, competitive rivalry had increased and it was very easy for buyers and in this
case advertisers to drive prices down as well as switch to a competitor. The study
established that the local television stations in Kenya used their resources to achieve a
competitive advantage. The key resources used are the human resource and financial
capability. It was also established that appropriate pricing strategy as well as strategic
positioning enabled the television stations to attain a competitive advantage. The
recommendations of this study are that disruptive technologies will continue to
transform the television industry. Therefore, the televisions have to be proactive in
scanning the external environment so as to identify such technologies and take the
necessary strategic steps to cushion the firm from adverse effects. Another
recommendation is that the television stations will have to expand their revenue
stream from pure advertising to set top boxes subscription as well as by moving into
the outdoor advertising. Further, profitability can be increased by signing long term
contracts with the advertisers accompanied by rewards to enhance customer loyalty.
This can increase the switching costs. Television stations should strive for the top
positions in terms of the most competitive human resource, cost management and
differentiation an aspect perceived to bring forth best performance of the television
stations. The key conclusion of this study is that, despite the high competition
resulting from digital broadcasting, television stations can still achieve a sustained
competitive advantage. The study has two main implications: Firstly, there is need
for television stations to do Research and Development and establish how they can
take advantage of the disruptive technology and use it as an opportunity rather than a
threat. Secondly, it is important to determine other different ways that the television
stations can remain competitive apart from use of resources, cost leadership and
strategic positioning.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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