CNN’s Service Offerings and Differentiation Strategy

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Table of Contents

Introduction
Thesis Statement
Components of CNN’s Service Offerings
Target Markets
Competitive Strategy
Tools and Processes Supporting Differentiation Strategy
Recommendations for Service Improvement
Conclusion
References

Introduction

Services providing firms, just like the goods manufacturing companies, need to establish sound strategies and operations in order to develop their overall businesses. Such strategies may involve determining new services, identifying a perfect competitive strategy, and defining target markets to serve the market effectively.

This paper seeks to discuss in detail the aspect of service management with special focus on one of the world’s leading news broadcaster, Channel Television Network (CNN). The paper designs a proposal for a new services offering for the company, as well as gives recommendations on the alternative ways through which CNN can improve its services offerings.

Thesis Statement

CNN’s differentiation strategy can provide the company with more competitive advantage globally if it is integrated with a focus strategy.

Components of CNN’s Service Offerings

CNN is a TV channel that mainly broadcasts news for 24 hours. The TV channel is based in the United States of America, but it has a global outreach across all the continents. The services are mainly categorized into two, that is, CNN America and CNN international. CNN America is customized for the local US market, while CNN international includes content for the global market.

News by the channel is structured into several categories to appeal to varying audiences. The categories include politics, justice, entertainment, and technical news. Other categories are health, living, travel, money, and sports. CNN international runs dedicated channels that focus on specific countries or regions.

These specialized channels include CNN Chile, CNN Airport, CNN enEspanol, CNN TURK, CNN IBN, which is dedicated for the Indian subcontinent, and CNNj for Japan. The n-tv channel is a dedicated CNN affiliate that is focused on the German news market.

CNN also provides its news services through the online platform via the web address cnn.com. Users can read news articles on the website or watch video clips directly. A highly interesting and interactive feature of the online news services, iReport, allows users who are amateur journalists to upload videos and photos. The firm has launched a recent service, CNN Films, which distributes and produces TV, as well as feature documentaries.

Target Markets

Different CNN service components target varying market categories. The TV platform particularly targets viewers with a minimum of 45 years. Most people falling within this age bracket often consider TV as a traditional news channel. The younger generation of CNN’s viewers, mainly falling in the 15-40 age brackets, considers the online platform as more accommodative than the traditional TV platform.

Additional features of the online platform, such as iReport, allow users to increase their interaction by allowing them to send videos and photos that are later on uploaded on the company’s website. CNN International (CNNI) is a 24-hour global channel that specifically focuses on news (CNN, 2013). Up to 212 countries throughout the world can watch the channel through 23 satellites (Ireland, Hoskisson & Hitt, 2006).

CNNI has further been regionalized in order to narrow down its content to specifically suit specific regional markets. The regions include CNN International Europe/Middle East/Africa, for the general European, Middle East, and African markets.

Other regional markets include CNN International Latin America, for mainly the Southern American market, CNN International Asia Pacific, for countries in the Asia Pacific region, as well as CNN International South Asia for the Southern Asia market. Finally, CNN International USA also exists, with its special focus being to provide international news to the local US viewers (Ireland, Hoskisson & Hitt, 2006).

CNNmoney, on its part, delivers comprehensive news about business for 24 hours for every weekday. Viewers enjoy broad range news on business, consumer, and financial news, which specifically targets both small investors, as well as business professionals (Ireland, Hoskisson & Hitt, 2006). The details are credibly analyzed for purposes of helping viewers to enjoy high quality content that is not offered in other rival channels (CNN, 2013).

CNN’s HLN service, which was previously referred to as CNN Headline News combines all top stories on health matters, technology, entertainment, breaking news, travel, as well as sports, and weather information (Ireland, Hoskisson, & Hitt, 2006). This service targets an audience in need of relevant comprehensive news for purposes of their urgency and schedules.

The news is delivered by a team representing four anchors, who interactively engage to ensure a lively delivery of the news content (Ireland, Hoskisson & Hitt, 2006). The specialized CNN channels have been particularly designed to focus on the national audience markets of the specific countries involved. CNN Chile, for instance, is customized for the Chilean market, as is the same case for CNN TURK, which specifically targets Turkey as a market (CNN, 2013).

Competitive Strategy

CNN employs a differentiation strategy in order to achieve competitive advantage in the industry and market (Gershon, 2009). CNN has sought to create a unique operation and service delivery that makes it stand out exceptionally compared to other cable networks. CNN has succeeded to establish itself as a global leader in terms of delivering news that covers the entire world.

The news coverage by the channel is more global, creating the feel, as well as look similar to a news magazine. This tends to vary with the positioning attained by its main rival Fox News, for instance, which is looked at as being mainly conservative and earning the “proAmerican news organization” tag. This is more evidenced by the presence of a US flag in its studio background (Gershon, 2009).

Tools and Processes Supporting Differentiation Strategy

Specialized channels

CNN has introduced specialized channels that seek to customize its services for specific national markets in order to enhance its strategy of differentiation. Although CNN is an American firm, its focus and attention has been to cover international news comprehensively, in the same breadth that it covers local news, in order to effectively differentiate itself as an international news channel.

Currently, there are up to eight specialized channels that are run by the broadcaster. CNN Chile, CNN TURK, CNN-IBN, CNNj, and n-tv, all represent efforts by the company to support its competitive strategy (CNN, 2013). While CNN may still be regarded as foreign to the national markets represented by these channels, which include Chile, Turkey, India, Japan, and Germany, the company has sought to drop the tag by introducing special channels.

These channels broadcast in the local languages, as opposed to English which is CNN’s main language of broadcasting, and give priority to events and features that occur within the countries.

The specialized channels have been structured in a similar format to CNN/US, which mainly focuses on local US news. While distribution of international news remains the main purpose of CNN, the company realizes the importance of customizing each national market in order to effectively serve the specific needs.

Bureaus

CNN operates several bureaus, both within the US and on the international scene, to enable the firm to differentiate its service delivery to the diverse market that it serves. In the US, the bureaus are set up in ten states, including Atlanta, which also doubles up as the company’s headquarters, Boston, Chicago, Miami, New York City, San Francisco, and Washington DC (CNN, 2013).

While the US is a single national market, CNN seeks to achieve more competition in the delivery of its news by giving all the country’s regions special attention. This ensures that the audiences residing in all the US regions are able to find services that have been specially designed to suit their interests. With the US being CNN’s home country, the company has given it special attention mainly because of the intense competition that exists within the country.

Other well established cable channels, such as Fox News, have given the market more attention, which makes it critical for CNN to equally give it special attention. On the worldwide scene, CNN runs several bureaus that are mainly established in the specific country’s capitals. In Africa, CNN has run bureaus in Cairo, Lagos, Nairobi, and Johannesburg in a bid to effectively cover regional news within the African continent.

The Indian sub-continent, with a massive population exceeding one billion, is served by the New Delhi bureau. Other bureaus established within the region include Islamabad in Pakistan, Jakarta in Indonesia, as well as in Istanbul Turkey (CNN, 2013). Northern America, other than the USA market, is also served by an established bureau in Mexico City, while the European regional market relies on bureaus in Italy, Paris, Moscow, Madrid, London, and Berlin.

Another significant market in the Asian continent, China, is served by an existing bureau in Beijing. Several other bureaus also exist in the Middle East region, South America, as well as in the Pacific region that includes Australia. In other regional areas where no established bureaus exist, CNN relies on affiliate station reports as strategic sources for filing their stories.

CNN Films

CNN’s latest launched operations target the film industry, which highlights the company’s competitive strategy more elaborately (CNN, 2013). Although films may appear to be a departure from the company’s main business objective of distributing news, CNN targets to increase its competitive capability by venturing into the operations.

The company intends to distribute news through this new feature, where it will report on social, political, and economic aspects using documentaries. This represents a new business idea that has not been employed traditionally by news companies.

Recommendations for Service Improvement

CNN should consider employing a strategic scope to integrate it with its differentiation strategy in order to improve on its service delivery. In other words, CNN should consider narrowing down its target market such that it only focuses on a niche market. Currently, the firm focuses on a wide market that eventually affects its ability to tailor the marketing mix to the specialized market.

With its global target market, and a wide service component, CNN cannot efficiently achieve its objective of emerging as the market leader in a more effective manner. The company should begin by identifying distinct groups amongst its wide audience base and determine their special needs before coming up with ideal services for the groups.

Using a focused strategy, CNN should narrow down its market segmentation to consider audience groups that are less susceptible to substitutes (Xiang et al., n.d.). The news broadcasting industry is highly competitive, and it is difficult for firms to be highly competitive in their delivery of service unless players adopt a focus strategy.

BBC news, which is one of CNN’s main competitors, has aggressively employed the focus strategy by launching various specialized channels across the world in order to serve its wide audience effectively. To succeed in this new focus strategy, CNN must create high efficiency and skill where completion of value chain activities, both primary and secondary, is involved (Xiang et al. n.d.).

CNN must also narrow the target market by increasing the number of its specialized channels throughout the regions that it serves. Only Chile, India, Germany, Turkey, the USA, and Japan enjoy a more focused service delivery from CNN at the moment. CNN has established local channels that are more dedicated for these markets, which also use the local language in their services.

However, other significant global markets receive less focused service delivery, which gives too much room for competitors to create more competitive advantage over the firm. In China, for instance, CNN has not considered focusing its differentiation strategy to specifically suit its needs, yet there is a market potential of more than 1.2 billion people.

A specialized news channel for China should adopt the local Chinese dialect and focus more on the events happening in the country. The idea should be to minimize the attention on CNN International service component, and instead seek to establish more specialized channels that focus on national markets. Priority should be given to market sizes since it is not capable to establish specialized channels in all the countries of the world.

Regional specialized channels, on the other hand, should focus on several national markets with common unifying factors. These may include language, especially where the countries use a similar language for communication. The ‘international news channel’ differentiation position that CNN currently enjoys will be enhanced further through specialized channels that focus on specific national markets.

Collecting news within smaller national market areas will be more elaborate in a focus strategy, while this news can be shared throughout the other existing specialized channels to make the news content international. With CNN’s elaborate service component, a focused differentiation strategy will cement the company’s position as the world’s leading international news channel.

Conclusion

CNN has successfully established itself as a global leader in the distribution of international news. The company employs a differentiation strategy with the main focus of attaining a leadership position in international news. This is sustained through the establishment of its several specialized channels that exist in Germany, Chile, India, Japan, and Turkey.

It also runs several bureaus across selected capital cities in the world, including in Europe, Asia, Africa, and North and South America regions. However, CNN should consider integrating its main strategy of differentiation with focus strategy. This will allow the company to improve its service delivery by introducing additional specialized channels for specific national and regional markets in order to achieve market customization.

Equally, a focused strategy will enhance the company’s position as an international news-broadcasting channel by ensuring more elaborate news content for its audience. Special emphasis should be given to significant markets, such as China, that have huge populations.

References

CNN. (2012). CNN. Web.

Gershon, R. A. (2009). Telecommunications and business strategy. New York, NY: Routledge.

Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2006). Understanding business strategy: concepts and cases. Mason, OH: Thomson-South Western.

Xiang, Z., et al. (n.d.). Multi-focused strategy in value co-creation with customers: Examining cumulative development pattern with new capabilities. International Journal of Production Economics, 132, 122-130.

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