Vivendi SA SWOT and PESTLE Analysis

Strengths

1) Homogeneous economic organization and integrated business segments: Vivendi has well defined integrated business segments across mass media segments. The Universal Music Group has a Strong position as a world leader in music industry having the largest catalogue with prestigious labels like Polydor and Blue Note etc. It offers music platform as a Universal Music Publishing Group. Canal+ group is the leading audio-visual media group with presence in France, Poland, Vietnam and Africa and Dailymotion is one of the world’s largest video host, aggregator and provider of broadcasting services through global platform. Vivendi Village is a supplementary services and offerings through Vivendi ticketing in UK, USA, and France, MyBestPro giving expert advices, Watchever providing subscription streaming service and Radionomy producing digital audios. Gameloft is global leader in mobile video games, with 2 million games downloaded per day.

2) Production of original content and quality services: Vivendi relies on its in-house production capabilities to develop and produce original content without being dependent on any third party producer. The content ranges across the rich diversity of cultures, ideas and artistic expressions. It has a global pool of employees, artists, authors, creators, journalists, technicians, developers and designers who talent and skills are leveraged. Vinvendi has invested in various content production companies like Banijay Group, Mars Films, Guilty Party, Studio+, Bambu Producciones and IRoko.

3) Sustainable and strong financial position: Strategic investment policy, transparent financial communication policy, centralized insurance coverage makes Vivendi’s finances very strong and sustainable. Vivendi’s 2016 revenues amounted to €10,819 million and profit stood at €1,256 million (or €0.99 per share). It has a strong and consistent track record of profitability and dividend pay-out over the last six years. The company forecasts it 2017 revenues to increase by 5% and EBITA by 25% due to the various restricting and investment initiatives undertaken.

Weaknesses

Opportunities

Threats

1) Intense competition from existing players and new entrants: Vivendi’s businesses face intense competition from existing companies, or new entrants in the relevant markets which will lead to a loss in market share. This competition is exerting substantial pressure on Vivendi to supply quality services and innovative offers at reasonable prices. Arrival of new national and international competitors has been created severe threat for Canal+ channels in France in past few years. This demands for major transformational plans to sustain company’s long term position. In France, Vivendi is embroiled in price wars with rivals such as Bouygues Telecom and France Telecom and also faces the onslaught from the entry of new mobile player, Iliad.

2) Piracy practices and illegal downloading and streaming: Vivendi faces challenges in protecting copyrights and artists against unauthorized digital or physical distribution. Piracy and counterfeiting practices are a threat to the company’s business development model by encouraging un-paid consumption of music and movies. Illegal downloading and streaming from the Internet also disrupts sales revenue growth of a company.

3) Security service platforms, Information system and other operational infrastructure: Vivendi businesses are highly vulnerable to safety and security problems of transmitted content and personal data over digital platforms. It has to ensure safeguard of transmitted personal data, the leakage of which can cause substantial financial and reputational damage to the company.

References

1) Vivendi 2016 Annual Report: https://www.vivendi.com/wp-content/uploads/2017/03/20170331_VIV_DDR_2016_EN.pdf

2) Vivendi Investor Presentation 2016: https://www.vivendi.com/wp-content/uploads/2016/07/201606_BofAML_presentation.pdf

3) Vivendi First Quarter 2017 Results: https://www.vivendi.com/wp-content/uploads/2016/07/201606_BofAML_presentation.pdf

4) Call of Duty helps Vivendi advance despite weakness in French sector: https://www.independent.co.uk/news/business/news/call-of-duty-helps-vivendi-advance-despite-weakness-in-french-sector-2347155.html

Political

1. Brexit and future integration of the European Union: Brexit’s fallout is expected to affect business not only in UK but across the European Union. The future integration of European Union is also under doubt with political uncertainty in many of the member countries. Any disintegration will severely affect a company like Vivendi which has alliance partners and investments spread across EU.