Name of the Company: Comcast Corporation
Business Sector: Telecom and Mass Media
Operating Geography: North America, United States
About the Company: Comcast Corporation is a global technology and mass media company comprising of Comcast Cable and NBCUniversal, the latter being acquired from General Electric. The company is involved in development, managing and operations of cable networks since 1963. The company’s business is divided into Cable communications as part of Comcast Cable and into Broadcast Television, Cable networks, Filmed entertainment and Theme Parks as part of NBCUniversal. The company is headquartered in Philadelphia, Pennsylvania with Brian L. Roberts as Chairman and CEO. The company is still a family-owned business despite being publicly traded.
Revenue: US $74.51 Billion – FY ending March 2016
SWOT & PESTLE Analysis
|1. Strong core business and positioning|
2. Technology adoption and innovation
3. Attracting and retaining top talent
4. Strong film slate for NBC Universal
|1. Decline in grocery segment
2. Dependence on distributors and retailers
|1. Potential in emerging markets|
2. Growing demand for premium and specialized high-end products in skin care segment
|1. Global and regional competitors
2. Private label brands from retailers
3. Divergent global market environment
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1. Strong core business and positioning: Comcast corporation is uniquely positioned at the intersection of technology and media with a strong service portfolio. The company’s financial performance in 2015 saw revenue increase by 8.3% and $2.4 billion in dividend to shareholders for NBCUniversal business. Comcast Cable business saw an increase in revenue by 20%. Threatrical and home entertainment segments for the NBCUniversal business showed impressive revenue growth in 2015.
2. Technology adoption and innovation: The company has increased its focus on innovation through its cloud-based X1 video platform. The product constitutes 30% of the video customers of Comcast. The internet business saw continued growth with the addition of 1.4 million high speed data customers. Introduction of new technologies like the Xfinity TV app and DOCSIS technology for gigabyte speeds as well as improvement in network coverage through 13 million Wi-Fi hotspots supports enterprise business across the country.
3. Attracting and retaining top talent: In 2016, the company received the CandE award for the second year running based on candidate surveys, and featured in the top 50 companies with the highest promotor ratings. The company received positive feedback from most of the hired and interviewed candidates.
4. Strong film slate for NBCUniversal: The broadcast and film industry has seen significant upside of 20% in share prices over 2016. Comcast will continue to reap benefits from a strong film slate for 2017 and 2018. With NBC due to broadcast the 2018 olympics, the projected retransmission revenue is close to $500million.
1. Dependency on Technology:.The competitive advantage in the telecommunications and broadcasting arena is dependent on use of technology and equipment. The advent of wireless networks and advanced fibre cables have resulted in increased adoption among competitors in order to reduce additional costs. Recently, Comcast has adopted new technologies like DOCSIS, Cloud DVR, wireless gateways and X1 set top boxes. The adoption and integration of these technologies will determine revenue growth and competitive advantage for Comcast in the future.
2. Heavily regulated industry: The video and voice services industry is a heavily regulated one with federal, state and local governing bodies legislating and regulating obligations and rights of various cable operators. The mass media business is subject to NBCUniversal Order and NBCUniversal consent decree which governs rules regarding competition. Failure in compliance to these regulations can result in administrative action, fines, loss of revenue and liabilities.
3. Revenue stream dependent on consumer acceptance of content: The industry is subject to availability of alternatives in terms of products and services for sale, viewing and distribution of high quality content. Change in consumer behaviour in controlling and consuming content has led to fragmented audience and reduced subscription revenue for video services for NBCUniversal.
1. Inorganic Growth through acquisitions: Over the years, Comcast has invested in a large number of partnerships and acquisitions in the field of broadcast television, cable networks, mobile and wireless communication. The company’s recent acquisitions include Dreamworks Animation, Plaxo and thePlatform, for IP-based media publishing. The company is expected to grow through acquisitions in related businesses in the future.
2. Potential for the venture capital division: Comcast Ventures is the combined venture capital arm of Comcast and NBCUniversal. The venture capital affiliate has invested in nigerial startup Paystack, VR headset firm Skylight and several others. This holds potential for high profitability in the future.
1. Heavy Competition: There are several companies providing a wide range of communication services with high quality content. The competitors for the company are Direct-broadcast satellite providers and mobile companies with fibre cable networks. Since the company is also a provider of high-speed internet services, it faces threats from wireless and internet-based phone service providers. AT&T is the biggest competitor with its acquisition of DirecTV, the largest DBS provider in the US. The company also sees Google as a competitor to its high speed internet and video-based service.
2. Changes in advertising markets: A substantial portion of the revenues for Comcast are derived from sale of advertisements. A drop in expenditure by the advertisers could have a negative impact on the operations and the bottom line of the company. The broadcast company’s popularity among the advertisers depends on several criteria like audience ratings, economic prospects, and new technologies to measure audience viewership levels.
3. Changes in Statutes and regulations: Comcast operates in an industry regulated by the Federal Communications Commission(FCC). Any changes prescribed and executed by the regulators and legislators will affect Comcast’s businesses.
4. Disruptions in information systems and networks: Comcast’s operations are heavily dependent on information systems and networks, which are vulnerable to third party attacks. This could include denial of service attacks, computer viruses, hacking, data theft, malicious software, and cyber attacks. These attacks prevent the company in their operations of service delivery, customer service operations and network management. Also, there is a threat from natural disasters, power outages, and terrorist activities causing disruption and damage to data and equipment.
The unpublished sections of the entire SWOT analysis is available in the 'Complete Report' on purchase.Comcast Corporation SWOT analysis has been conducted by V Sanjeev Raman and reviewed by senior analysts from Barakaat Consulting.
1. Comcast Corporation Year in Review: http://files.shareholder.com/downloads/CMCSA/3589779426x0x873660/79DC8EFA-B73B-46B6-A2DC-0481BAC5E653/2015-Comcast-Year-in-Review.pdf
3. Comcast Corporation Annual Report: http://files.shareholder.com/downloads/CMCSA/3589779426x0x873674/3DD12C3C-44D3-4AFD-AFA0-AB114FFF130A/2015_Comcast_Form_10-K_Final.pdf
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Bunge SWOT and PESTLE analysis has been conducted by V Sanjeev Raman and reviewed by senior analysts from Barakaat Consulting.