Information and Communication Management of the Radio Industry

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Information and Communication Management of Radio Industry











EXECUTIVE SUMMARY

TABLE OF CONTENTS

Executive Summary

i

  1. Introduction

1.1 Beginning of Radio Broadcasting in New Zealand

4

2.0 Analysis

2.1 Porters 5 Forces Analysis

8

2.2 Turning negative ICTs to Positive

11

2.3 Value Chain of Radio Industry

2.4 ICTs to Connect Linkages

23

3.0 Conclusion and Recommendations

24

4.0 References

25

1.0 INTRODUCTION

1.1 Beginning of Radio Broadcasting in New Zealand

Radio broadcasting first came about in New Zealand in 1921. The occurrence happened in Wellington with an unlicensed transmission of recordings. Soon after, the first licensed radio broadcast occurred with the transmissions of concerts of a Professor from Otago University (Radio Spectrum Management, 2014). Therefore, it can be said that the first radio broadcastings in New Zealand were all transmitted by random individuals. It was not until 1922, when private radio stations were established with the accompaniment of the government. From then till 1930s, the private radio broadcasting industry flourished in the country.

1.1 Industry description

2.0 ANALYSIS

2.1 Porters 5 Forces

In order to determine and achieve the competitive advantage, Michael E. Porter developed five competitive forces in a business environment that has a direct or indirect impact on the organization (Hill & Jones, 2007). The five forces Model of Porter divided entities into five groups as

  1. Threat of new entrant
  2. Competitive rivalry
  3. Bargaining power of buyers
  4. Bargaining of suppliers
  5. Threat of substitutes

According to Porter, the higher the impact of the force, the more dangerous it is for the organization. The organization needs to find the negative forces and convert them to positive using strategies and ICT tools. All these forces can be changed, depends on the condition of industry (Hill & Jones, 2007).

Description: http://managementhelp.org/blogs/strategic-planning/files/porter-five-forces-model-of-strategy-480wide.jpg

Source Hill & Jones, 2007

Porter’s defines an industry as a group of firms producing and marketing products which are close substitutes for each other. In order to achieve an effective strategy, it is imperative to assess the industry. This is done using 10 steps.

  1. Identify competitors
  2. Identify buyers
  3. Identify suppliers
  4. Identify substitutes
  5. Identify new entrants
  6. Understand the relationship between competitors and buyers
  7. Understand the relationship between companies and suppliers
  8. Rivalry
  9. Threat of substitutes
  10. Threat of new entrants

Using the ten steps mentioned above, we can analyze the radio industry in New Zealand as below:

2.2 Turning Negative ICTs to Positive

ICT (Information and Communications Technology) takes a big part in the firm to develop in order to succeed in business. More than half of total expense is invested in ICT strategic planning.

Sometimes it is hard to differentiate ICT and IT, but ICT has broader range than IT, it defines all the communication technology in life. All sorts of communication method such as broadcasting, social network, telecommunication and so on, are include in ICT. (Tech term, 2010)

To have positive effect, the ICT should lift up profitability of industry. When it is well planned it also brings reducing of company expenses.

ICT has an important job to analyze current business and to ensure the goal of the business reaching not only in short term but in long term.

While ICT planning, Porter’s five forces model defines market situation well, also is a good tool to evaluate competitive position in industry. Among the 5 forces of Porter’s, 4 forces are marked as negative forces and hereinafter suggested how ICT will turns it into positive effect.

Rivalry

There are many selections on Radio station for customer to choose. One good thing is that it has classified into various genres such as pop music, classic music, children’s, entertainment, news, comedy and so on. Hence the range of rivalry is narrower than all in same genre, yet there are still few selections to select. It needs differentiation to be able to have more attraction from the Radio’s audience. A strategy that can be adapted in entertainment genre is that famous pop star or movie star’s invitation. Their voice through Radio would attract the audience a lot also highly competitive compare to other channels that is on air at the same time.

Radio channel can make an application which can easily operate in smart phone. The application is not only including the signal of itself, but also chat option for listener to comment. This application will lead more customer loyalty, as the smart phone is essential part in our lives it will make it all easy to connect to channel.

More participants of audience will also make customer to stay together with same radio channel. For example, phone connecting between audience and Radio disc jockey. More participants of general people can attract more audience and it is eventually competitiveness.

Bargaining power of buyers

In Radio industry as well as most of industries, bargaining power of buyers will effect as negative. The buyers are who want to advertise in Radio channels. Top high ranking advertisers always have to find a spot for their advertisement in one of the radio channels.

As mentioned in above sector, if the radio channel made an application it can make a positive effect and competitive. Advertiser also can make advertisement on the application so that people who connect to Radio through smart-phone can pass through it.

Participation of general audience in the broadcasting, the brand can have more opportunity to advertise. For the gift that audience to receive would be the brand and it will announce it by Disc jockey. More of people’s participation event would make more positive effect on this bargaining power of buyer.

Bargaining power of suppliers

In the Radio station, it requires numbers of expensive equipment to broadcast in New Zealand land-wide. The Supply power is negative to be powerful.

To make this into positive, aiming not only for bargaining power of supplier, radio can broadcast simultaneously with video. Watch through video and listen to radio at the same time. Viewing of the whole radio station booth can expose the equipment and system.

Threat of Substitutes

Negative effect is made with threat of substitutes. The biggest substitutes would be the broadcasting on Television. By visual effect, the audiences are far more attracted in Television than audio effect of Radio. Almost every benefit that Radio offers is also on television. However the Radio has its advantage for people who drives on the road while tripping or elders who stays at home and turn on the Radio habitually. Especially people who travel a lot and spend time a lot in the car, tend to turn on the radio and listen to their favourite channel. It is certain that even if the television is far more loved by people, it can make a difference depending on occasion. And this is why advertiser still has to look into Radio advertising.

Simultaneous combined broadcasting by video and audio is helpful to make this sector positive as well. Radio is normally not exposed to listener but this occasion people can view the radio booth that they have listened. With this, it has more powerful competitiveness compare to television and any other substitute.

2.3 Value Chain of Radio Industry

2.3.1

2.3 ICTs to Connect Linkages

The Value Chain analysis would be ineffective if its departments will not have a system to increase its value. In addition, a company or industry that can identify information communication technologies (ICTs) to link and improve each section could further smooth out internal and external operations and thus, increase profits. In the fast-paced changing business environment, we have identified below some ICTs to improve the linkages of the sections.

ICT 1: Connecting directly to Mobile devices companies and application developers

Connect Marketing/ Sales to After-sales support

As industry borders are fast blurring e.g. the camera and mobile phone industries are merging, cars are being developed to fly, etc., the broadcasting industry should be prepared to merge with other technological advancements as well. As such, the New Zealand Radio Broadcast industry, particularly the companies operating in it, should also improve and develop ways to reach their target customers.

The radio broadcast industry could possibly make tie ups with leading technology companies like Apple and Samsung to create built-in applications for transmitting radiowave frequencies directly to smart phones. Radio companies could also create exclusive tie-ups with Smartphone application developers like Clear Channel Communications. This company developed an application called iHeartRadio that streamed live radio broadcasts from different radio stations to mobile devices (Pearlson et al., 2013). By doing this, the industry could extend their reach of target customers who prefer to use their mobile devices. Thereby, companies would be also convinced to advertise through live radio streaming in mobile devices.

ICT 2: Connecting directly to Telecommunications companies (Telcos)

Connect Marketing/ Sales to After-sales support

In addition to the previous ICT, radio companies could also employ technologies that could free-up its dependency on radiowave signals. In short, radio broadcast industry should also look at mobile phone signals if it would be able to transmit live radio through it. Signing up exclusive contracts or partnering with Telecommunications companies like Vodafone, Telecom, etc. could improve its market reach and as such, advertising/ sales could pick up as well.

ICT 3: Intranet database for employees and an Online Recruitment process

Connect Human Resource activities to all Primary and other support activities

An intranet-based data system with employee details could improve the value chain of the industry. By having this system, HR department could fully see the organizational structure of the company. It gives the HR a “whole and complete picture” of the company employees from top to bottom. In addition, vacant positions could also be offered internally first to interested active employees before posting it online. The online recruitment system could essentially speed up the recruitment process. By using an online recruitment system, HR could easily filter applicants who could fit the vacant position. The company could also advertise in online recruitment websites to spread the word about the vacant position. Thus, it would save the company a lot of time and money to recruit the right people for the job.

ICT 4: Online system for Radio program schedule

Connect Outbound logistics to Marketing/ sales

Marketing/ sales would not be able to function well if they would not know the radio program schedule that will be aired. As such, the radio program schedule should be always accessible for marketing/ sales personnel and to do this the outbound logistics has to update the schedules all the time. In so doing, creating an online system to coordinate the radio program schedule between the two departments can increase productivity. As such, marketing/ sales personnel who are out on field work could easily go to clients and use the online radio program schedule on their client meetings. Better yet, companies could also directly use the online radio program schedule to “buy” airtime in radio broadcasting to advertise their products.

Inbound logistics -> operations -> Outbound logistics -> mktg/sales -> After-sales support stage

ICT 5: System to capture audience information

Connect Inbound logistics to After-sales support

Knowing your target audience is an important part in the radio broadcasting industry. As such, supporting the linkage between Inbound logistics and After-sales support should be cyclical and must be supported with an ICT. Creating a technology that could capture the audience information much like market surveys do will be critical in order for the company to develop the information that the radio company will use for its programming. For example, an online or computer system could be developed to get the listener information such that future programming schedules of radio companies could depend on those information to capture more of the listener’s wants/ demands.

3.0 CONCLUSION AND RECOMMENDATIONS

Industry borders are blurring in this new millennium and companies should exercise full caution and outlook in the future. We have seen that the effects of technology in business today and as such, it is critical for the companies to adapt and change accordingly. By adapting different ICT strategies, the New Zealand Radio Broadcast industry and particularly the radio companies in it, could remain in business well into the future. Utilizing the appropriate ICT and implementing it in a well-developed plan can defend against the other forces in the Porter’s Five forces analysis.

As such, management should firstly analyze the whole radio broadcast industry to identify the forces that is challenging it. Afterwards, implementing concrete and logical actions i.e. ICTs strategies should negate and change the negative forces into positives that may result in favor of the company. In addition, the ICTs that the company/ industry should implement should be in accordance with the overall business strategy. An ICT plan would be ineffective if it will not be supported by top management specially if it requires a long period of time to implement and needs huge budgeting. The ICT should be planned extensively and should really produce the desired outcomes that are needed to improve the company. In addition, the ICT should not just link the factors in the value chain but improve and create a sustainable growth in it. Otherwise, inappropriate ICT could just result to negative effects i.e. wasted money/investment and time.

Managers should be also mindful that these ICTs are “changes” that can impact both internal and external stakeholders. The ICTs should implement organizational change strategies like Lewin’s Calm Water Metaphor (Unfreeze, Change & Refreeze) to implement the ICTs and make the stakeholders more receptive to the change. With this, radio companies and the whole New Zealand Radio broadcast industry itself could further exist successfully into the future.

4.0 REFERENCES

Hill,C.W., & Jones,G.R. (2008).Strategic management: An integrated approach. Boston, 8: Houghton Mifflin.

Pearlson, K.E. & Saunders, C.S. (2013). Managing & using information systems: a strategic approach (5th ed.). New York, NY: John Wiley & Sons.

Radio Spectrum Management. (2014, December 8). New Zealand Radiocommunications History | Radio Spectrum Management. Retrieved from http://www.rsm.govt.nz/about-rsm/who-is-radio-spectrum-management/new-zealand-radiocommunications-history

TechTerms. (2010, January 4). ICT (Information and Communication Technologies) Definition. Retrieved from http://techterms.com/definition/ict

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