Shomi - Case Analysis Case Study Sample
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Shomi is a video-on-demand service which is based in Canada. The service is available for subscribers of cable and satellite television. However, it is also available through Shomi website and other apps via the over-the-top service model. The service is owned by Shaw Communications and Rodgers Communication as a joint venture. The service is very new in the market as it was founded in August of 2014 and launched in November of 2014. This paper looks at the ability of Shomi to compete favorably with established competitors in the industry such as Netflix. In order to achieve this, the case study will perform an internal analysis and situational analysis of Shomi.
2.0. Internal Analysis of Shomi
2.1. Marketing objectives
The marketing objectives upon which Shomi was created was to build a strong brand delivers in the user experience needs of the consumers in order to stem the influence of competitors on the domestic scene. Owing to the scarcity of specific and numeric information on the marketing objectives, this paper will make some assumptions. Another marketing objective employed by the company is the provision of content differentiation, content curation and content exclusivity. In this regard, Shomi will ensure that 30% of its content is locally produced in order to differentiate itself from the competition. As identified above, Shomi is a new entrant in the market and as such faces stiff competition from competitors such as Netflix, Crave TV and Club Illico. In this regard, Shomi seeks to gain a market share of 15% by the first year of operation. The marketing objective of the company adequately addresses the problem identified. It is important for the company to create a strong brand image in order to attract customers to its service. The differentiated services and products set the company apart from its competitors and give the customers a reason to subscribe with Shomi.
2.2. Functional Areas
This paper considers several functional areas in the internal analysis of Shomi. These functional areas include marketing, manufacturing, finance, research and development, human resources and information systems. In performing the internal analysis, the functional areas are grouped into two distinct groups based on how they apply to Shomi.
The marketing efforts of the company are strength for the new company. As highlighted earlier, the marketing strategy of the company is geared towards creating a strong brand that can rival other existing competitors in the industry. In this regard, the company has embraced a differentiated approach through offering products that are not offered by the competitors, and through means that rival those of established competitors.
Manufacturing as a functional area is a strength for the new company. The service process used by Shomi emphasizes on a user interface and a curation of content that is similar to a video-store clerk.
2.2.3. Human resources
The human resource at Shomi is strength for the new organization. As support for the marketing strategy of the organization, the two founders have contracted qualified personnel to oversee the operations of the organization.
Finance is also strength for the company. The two founders of Shomi have other business interest in media, and as such have the financial capability to fund the operations of the company. Additionally, the confluence of the two founders, who are competitors brings for the a financial pool to oversee the operations of Shomi.
2.2.5. Research and development
The research and development functional area is a weakness for the new company. Given hat the company was launched in November 2014, and founded four months before the launch date, the concept of research and development at Shomi is dwarfed by that in other competitors who have been in operation for longer. While this is a general overview, it is noteworthy to consider that in determining the business model, the founders engaged in market research in order to determine the needs and gaps in the market. With time, research and development might change into strength for the company.
2.2.6. Information systems/Technology
Technology is strength for the company. Shomi is a vertically integrate entity that uses many technological platforms. For instance, the company uses the online streaming services using specific distribution channels. The company website is one of the technological platforms used by the company. In the same respect, the company has apps that allow the customers to use different devices such as android-enabled mobile phones, tablets and IPads. However, the company also realizes that the internet usage caps of the company will be influenced by data usage. In this regard, the company has also tailored its products to be used through set-top boxes, thereby eliminating data usage.
3.0. Situational Analysis of Shomi
Shomi experiences a confluence of both opportunities and threats, and an environment that can either influence its success or its failure. In order to adequately conceptualize this, it is necessary to consider the situational analysis under the context that Shomi is a new entrant into the market. As explained in the Appendix in details, the competition from the three main players in the industry is a factor that Shomi has to overcome. The appendix attached also highlights threats that might derail the success of the company. The threat from the exclusivity agreements can derail the availability of content for the company to stream. However, there are many opportunities that the company can exploit to augment its industry status. One of the opportunities that Shomi can exploit is the opportunity to expand in the international market. The number of broadband subscriptions has been on the increase. This presents an opportunity for Shomi to venture into these markets. Shomi can also venture into online games and live sports in order to diversify its portfolio further.
Shomi was created by two competitors in the entertainment industry in order to stem the influence of Netflix in the Canadian entertainment market. Shomi has a real opportunity to usurp the market leader status from Netflix. However, there are weaknesses and threats that the company has to overcome. These weaknesses and threats are compounded by the fact that the company is a new entrant in the entertainment industry. However, the situational analysis details strengths and opportunities that the company can exploit in order to achieve its objective.
Appendix 1: Situational Analysis
Bogart, Nicole. “What is ‘Shomi’ and how does it work?” Global News. Last modified August 26, 2014. http://globalnews.ca/news/1527665/what-is-shomi-and-how-does-it-work/
Careless, James. “Rogers, Shaw Launch ‘shomi’ to Counter Netflix Onslaught,” Multi Channel News. Last modified November 6. 2014. http://www.multichannel.com/news/tv- apps/rogers-shaw-launch-shomi-counter-netflix-onslaught/384463
Public Interest Advocacy Center. “Shomi tied selling,” Public Interest Advocacy Center. Last modified February 6, 2015. http://www.piac.ca/wp-content/uploads/2015/02/PIAC-CAC- PART-I-SHOMI-Application.pdf
Rogers. “Shomi what I'm missing: New streaming service to deliver superior user experience and most popular content to Canadians, this fall” Rogers. Last modified August 26. 2014. http://about.rogers.com/About/Media_Relations/News/14-08- 26/shomi_what_I_39_m_missing_New_streaming_service_to_deliver_superior_user_exp erience_and_most_popular_content_to_Canadians_this_fall.aspx
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