MANAGEMENT

” Management”

 

     Launched in August 1957, SMG or the Scottish Media Group is a national and regional broadcasting network providing information and entertainment services across the United Kingdom (UK).  They operate in commercial television, radio, outdoor and cinema advertising.  SMG Television incorporates Scottish TV, Grampian TV, SMG TV Productions, Ginger Television and SMG Broadcast and Event Solutions. Now, it is the 6th largest program producer in the UK.  They also include Virgin Radio for radio, Pearl and Dean for cinemas, and Primesight for out door advertising. ()

     Scottish TV, in Central Scotland currently serves 3.5m viewers. This Independent Television (ITV) license holder is the most popular channel in Scotland in peaktime and is the leading commercial broadcaster in the UK. And its award-winning output reflects Scotland’s different political, legal, educational, cultural and sporting and religious agendas, and most importantly the interest and aspirations of its viewers and advertisers. Quality, creativity, innovation and the provision of new opportunities for the next generation of program and film-makers is its core values.

     While Grampian TV in Northern Scotland and has the largest transmission area in the ITV network serving 1.1m viewers. Grampian TV provides viewers with high quality program that are distinctive and innovative.  Their production have a high level of ambition, socially purposive, has educational value and reflect the varied and exciting cultural, artistic, sporting and spiritual life of the region.

 

      SMG TV Productions a major player in UK and in international television production industry, constantly endeavoring to nurture and develop the talent essential for the health of the TV industry outside the south east. SMG TV Productions, together with its sister company, Ginger Television Productions, has produced a wide range of programs for a variety of networks including top quality ITV1 drama like Taggart and Goodbye Mr. Chips and high profile factual programming for ITV1 and ITV2 including Club Reps, Don’t Drop The Coffin and Medics of the Glen. SMG TV Productions also produces peaktime programming for BBC1, Channel 4, Sky1, and Five. Its track record in children’s programming includes How2, Squeak! and the CITV dramas, Butterfingers and Harry and the Wrinklies. And other well known programs in the international market, over its 100 territories.

     SMG Broadcast and Event Solutions, the production resources division of SMG, is the home of some of the UK broadcasting industry’s best talent and leading edge facilities. 

     It contains three business areas: SMG Broadcast Solutions; SMG Commercial Solutions; and SMG Event solutions.

     SMG Broadcast and Event Solutions provides a diverse range of expert staff and state of the art facilities to support program making and transmission requirements for clients like Setanta Sports, Lion TV Scotland, Channel 4, BskyB, Scottish TV, Grampian TV and SMG TV Productions.  They shoot on a range variety of formats and equipment, including 35mm film or High Definition.

     They provide “one stop shop” needs for OB (Outside Broadcast) events to corporate videos.  From producing, developing, and delivery.  They cater Sports, LE, Dramas, Topical, Factual programming, Music Awards, product launches and presentations for both Corporate and TV clients. ()

     Pearl & Dean has been screening advertisements since 1953.   Pearl & Dean provides on and off-screen media opportunities across some of the biggest and best cinemas in the UK. These now include: Vue; UGC; and Apollo circuits as well as many successful independents.   Pearl & Dean now represent over 1200 screens across the UK and Eire.

     Primesight provides advertising solutions for both audience targeting and coverage requirements.  Primesight markets an expansive outdoor media product across the UK.  Products include small and large format displays on major roads; displays at locations such as leading cinemas and health clubs; retail outlets and the Glasgow underground network

     SMG Radio has three divisions: Virgin Radio; Virgin Radio Classic Rock; and Virgin Radio Groove.  Virgin Radio started in 1993, and is the nation’s only commercial pop and rock music station.

     Virgin Radio Broadcasts on 105.8FM in London, 1215AM nationwide, on Sky Digital and the cable networks, on any DAB (Digital Audio Broadcasting) Digital Radio and via internet through www.virginradio.co.uk.  Virgin Radio Classic Rock and Virgin Radio Groove also broadcasts on DAB radio and on the internet across London. ()    

 

 

 

 

 

 

 

PESTLE Analysis

     PESTLE analysis is very important in an organization since one should consider its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. 

  PESTLE (Political, Economic, Socio-cultural, Technological, Ecological or Environmental, and Legal) is an analytical tool used to assess the company or business organization’s environment.  The marketing environment is made up of: The internal environment (e.g. staff, office technology, wages and finance, and so on.); the micro-environment (e.g. customers, agents and distributors, suppliers, our competitors, and so on); and the macro-environment (e.g. Political, Economic, Socio-cultural, Technological, Ecological or Environmental, and Legal)

     Let us delimit the scope of our PESTLE analysis.  Let’s concentrate on the organization’s external macro-environment. Namely, the political, the economic, the socio-cultural, the technological, the legal, and the ecological or environmental forces that affects the organization. 

     The political forces are the political and fiscal stability of the government, tax legislation, social legislation such as marketing ethics, legislation against pollution, religion and beliefs, and so on, and the government’s relationship with the industries, such as trading agreement, deregulation, and so on.

    

     The economic forces pertains to the income, employment and other related factors of the market (in order for the market to support the product, there should be the ability and willingness to buy), and also including the current economic status of the country and its past crises.

    Meanwhile, the socio-cultural forces differ from place to place. It refers to lifestyles, values and beliefs of the inhabitants. consumer behavior (e.g. consumers attitudes to foreign products and services), and social issues (e.g. changing gender roles: increasing number of two-income households, a growing number of “house husbands”, women’s attitudes towards careers, shopping and products continue to evolve)

      Technology is vital for competitive advantage, and is a major driver of globalization.   It has a tremendous impact on people’s lifestyles, consumption patterns, and economic well being.  It enables Individuals to access information shop and communicate globally increasing access to different goods, giving wider choice of products and services and thus Increasing Competition.

     Technology has the power to create new and destroy existing industry. Like computer hardware and software, and robotics replacing typewriters and some manual labors.

     The legal forces are mostly related with the political environment.  These are local, national, or global legislations that may have an effect on the organization.

     The environmental or ecological forces are usually environmental issues may it be local or global.  And it is mostly backed up by legislation.  So, in a way it too, is related to the political environment.  The most common issues related to this is wastes management and energy conservation.

PESTEL ANALYSIS ON SMG

     Political/Legal Factors:

     SMG is an Independent Television.  It was originally part of the commercial British television broadcasters, set up on a regional basis in 1955 to provide competition to the BBC. Since the only television service in Britain in the early 1950’s was operated as a monopoly by the British Broadcasting Corporation (BBC), and financed by the annual television license fee payable by each household which contained one or more television sets. 

      Almost all of these companies have now merged into a single business. Its flagship analogue channel is ITV1. ()

     In the European Union, member states have enforcing authorities to ensure that the basic legal requirements relating to occupational safety and health are met. In many EU countries, there is strong cooperation between employer and worker organizations (e.g. Unions) to ensure good Occupational Safety and Health (OSH) performance as it is recognized this has benefits for both worker (maintenance of health) and enterprise (improved productivity and quality).

     An example of these is The Health and Safety Executive (HSE), which reports to the Health and Safety Commission, is a British government body responsible for the regulation of risks to health and safety in the UK. It was created as a result of the Health and Safety at Work Act 1974.

     As compliance to this SMG made occupational health service available to all their employees provided by British United Provident Association (BUPA). BUPA is international health and care company, its base in the UK gives health insurance both for individuals and corporations that want to look after the health of their employees. ()

     Economic Factors:

     The United Kingdom, is a leading trading power and financial centre, it has an essentially capitalist economy, the fourth largest in the world in terms of market exchange rates and the sixth largest by Purchasing Power Parity (PPP) exchange rates. Over the past decades, the government has greatly reduced public ownership by means of privatization programs, and has contained the growth s three states.

     Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with only 1% of the labor force. The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial state.

     In terms of services, particularly in banking, insurance and business services, the UK account for by far the largest proportion of GDP. Though the industry continues to decline in importance, but still, the UK is Europe’s largest manufacturer of armaments, petroleum products, personal computers, televisions, and mobile telephones. In terms of tourism, the UK has over 24 million tourists a year, ranking as the sixth major tourist destination in the world.

     Socio-cultural

     Historically most people in the United Kingdom lived either in conjugal extended families or nuclear families. This reflected an economic landscape where the general populace tended to have less spending power, meaning that it was more practical to stick together rather than go their individual ways. This pattern also reflected gender roles. Men were expected to go out to work and women were expected to stay at home and look after the families.

     But in the 20th century, the greater freedoms enjoyed by both men and women in the years greatly influenced easier divorce.  This changed gender roles and living arrangements significantly. The general trend is for single people to live alone, reducing in prominence on the traditional nuclear family.

  

 

 

      But some research indicates that in the 21st century young people are tending to continue to live in the parental home for much longer than their predecessors. The high cost of living, combined with rising cost of accommodation, further education and higher education means that many young people cannot afford to live independent lives from their families.

     Environmental/Ecological:

     The Montreal Protocol on Substances That Deplete the Ozone Layer is an international treaty designed to protect the ozone layer by phasing out the production of a number of substances believed to be responsible for ozone depletion.

     In compliance to this, SMG made policies that conduct responsible ways in minimizing the adverse effects of the business on the environment.  This includes policies on energy efficiency and waste management.  Examples of these are: Using renewable energy sources to power sites in Glasgow, Waterhouse Square (London) and Aberdeen; controlling and minimizing the use of energy, such as gas, electricity, and water; the use of Greenline products of cleaning contractors; and introduction of recycling in all sites.

 

 

 

 

 

SWOT Analysis

     SWOT (Strengths, Weaknesses, Opportunities, and Threats) is also an analytical tool which focuses on the organization’s environment.  They are divided into two groups, the external (Strengths, and Weaknesses), and internal (Opportunities, and Threats).

     SWOT analysis provides the organization vital information in matching its resources and capabilities to the competitive environment it lives in. (cited in http://www.quickmba.com)

     Strengths are resources and capabilities of the organization that can be used as basis for competitive advantage.  Resources are tangible visible assets, such as skills, financial, physical and technological, in order to meet organisational needs.  On the other hand, capabilities are Intangible & invisible assets such as knowledge and relationships

     Examples of organizational strengths are: Marketing expertise; a new, innovative product or service; the location of business; and quality processes and procedures.

     Meanwhile, weakness is the absence of strengths: Lack of marketing expertise; bad location; poor quality goods or services; and bad reputation.

     Like strengths and weaknesses, opportunities and threats are also like the different sides of a same coin.  Changes in technology and markets on both a global, national and local scale, changes in government policy related to the organization’s field, changes in social patterns, population profiles, lifestyle changes, and local events can viewed both as opportunities and threats, depending on the organization’s strengths and weaknesses.

SWOT ANALYSIS ON SMG

STRENGHTS:

-Strong market position.

-Introduction of live daytime programming.

-New business initiatives.  (Broadcast & event solutions expansion, new digital radio stations, new outdoor panels and cinema contracts)

WEAKNESSES:

-Low RAJAR (Radio Joint Audience Research Limited) sampling.

-Loss of the UGC (Union Générale Cinématographique) contract.

OPPORTUNITIES:

-Changing broadcasting environment due to new technologies and multi-channel television.

-Lower license fees and reduced public service broadcasting commitment.

-Release of high profile movies. (Harry Potter, Narnia, and War of the Worlds).

 

THREATS:

-Changing broadcasting environment due to new technologies and multi-channel television.

-Short term and erratic advertising markets.

-Low consumer spending.

     Since the advertising market is not stable due to seasonal changes, SMG should ought to make their products and services more flexible to ride the sudden shifts of the market.

CHANGE MANAGEMENT

     Change management is the process of developing a planned approach to change in an organization. Typically, the objective is to maximize the collective efforts of all people involved in the change and minimize the risk of failure of implementing the change.  ()

     Change management can be either ‘reactive’, in which case management is responding to changes in the macroenvironment, which makes the source of the change external, or proactive, in which case management is initiating the change in order to achieve a desired goal, which makes the source of the change internal.  

 

     Change management can be conducted on a continuous basis, on a regular schedule such as an annual review, or when deemed necessary on a program-by-program basis.

     Change management can be approached from a number of angles and applied to numerous organizational processes. Its most common uses are in information technology management, strategic management, and process management.

     To be effective, change management should be multi-disciplinary, touching all aspects of the organization. However, at its core, implementing new procedures, technologies, and overcoming resistance to change are fundamentally human resource management issues.  ()

      and  formulated a formula for change, which is sometimes called Gleicher’s Formula. This formula provides a model to assess the relative strengths affecting the likely success or otherwise of organisational change programs.  ()

D x V x F > R

      The three factors that must be present for meaningful organisational change to take place are: D = Dissatisfaction with how things are now; V = Vision of what is possible; F = Initial, concrete steps that can be taken towards the vision.

If the product of these three factors is greater than R = Resistance, then change is possible.

     Because of the multiplication of D, V and F, if any one is absent or low, then the product will be low and therefore not capable of overcoming the resistance.

     To ensure a successful change it is necessary to use influence and strategic thinking in order to create vision and identify those crucial, early steps towards it. In addition to this, the organisation must recognise and accept the dissatisfaction that exists by communicating industry trends, leadership ideas, best practice and competitive analysis to identify the necessity for change.  ()

     Management’s first responsibility is to detect trends in the macroenvironment so as to be able to identify changes and initiate programs. It is also important to estimate what impact a change will likely have on employee behaviour patterns, work processes, technological requirements, and motivation.

      Management must also assess what employees reactions will be and craft a change program that will provide support as workers go through the process of accepting change. The program must then be implemented, disseminated throughout the organization, monitored for effectiveness, and adjusted where necessary.

 

 

     In general, a change program should:

     1) Describe the change process to all people involved and explain the reasons why the changes are occurring. The information should be complete, unbiased, reliable, transparent, and timely.

     2) Be designed to effectively implement the change while being aligned with organizational objectives, macroenvironmental trends, and employee perceptions and feelings.

     3)Provide support to employees as they deal with the change, and wherever possible involve the employees directly in the change process itself.

 

CHANGE MANAGEMENT IN SMG

Dissatisfaction

     In this scenario, dissatiafaction comes from the managers.  It is beacause of the intense competition from its rivals.  And since the advertising market was short lived and erratic, the Group would need new ideas to keep up with competition and the constanly changing market.

 

 Vission   

     Even though the advertising market was unpredictable, the Group insisted to strengthen this part of their field.  They continued investments in outdoor panel build and cinema minimum rental guarantees.  They believe that this erratic behavior of the advertising market will soon come to pass.

 

Initial steps towards vision

     To strengthen advertising, The Group increased advertising sales in important sectors, such as health clubs, garage forecourts and convenience store.  The SMG also expanded their Backlight business and made agreements with Cal Brown. 

     The SMG also decided to establish digital brands, such as Virgin Radio Classic Rock and Virgin Radio Group.

 

Resistance

     In this scenario, there is not much resistance from the employees of the SMG.  Maybe except for those who will be layed-out due to the restructuring  of the company which was not mentioned in their annual reports.

 

BALANCED SCORECARD

     The balanced scorecard is a management system and not just a measurement system, which enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise. ()

     The balanced scorecard suggests viewing the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:

 The Learning and Growth Perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organization, people are the only repository of knowledge and are the main source. In the current climate of rapid technological change, it is becoming necessary for workers to be in a continuous learning mode. This can also be an indicator of ‘brain drain’. Metrics can be put into place to guide managers in focusing training funds where they can help the most. In any case, learning and growth constitute the essential foundation for success of any knowledge-worker organization.

     The Business Process Perspective refers to internal business processes. It tells managers how well the business is running, and whether its products and services conform to customer requirements. These metrics have to be carefully designed by those who know these processes most intimately; not something that can be developed by outside consultants.

     There are two kinds of business processes can be identified: a) mission-oriented processes, and b) support processes. Mission-oriented processes are the special functions of government offices, and many unique problems are encountered in these processes. The support processes are more repetitive in nature and hence easier to measure and benchmark using generic metrics.

 The Customer Perspective concentrates in developing metrics for customer satisfaction.  Customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.     The Financial Perspective refers to timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. BALANCE SCORECARD ON SMG The Learning and Growth:

     SMG Television are encouraged to identify development objectives that are personal to their continuing professional development.  SMG has recently incorporated competencies into the performance management system, which focuses upon the behaviors and skills that people employ to do their job.

 

     Last March 2003, SMG launched a Training Forum.  Members of staff are able to improve their knowledge, skills and performance. The Training Forum provides a full complement of training which is open to all members. The training course includes: Widescreen TV; Digital camera technology; Media legislation; Small Camera Technology; Compliance; Copyright & Intellectual Property; Airtime Trading; Insight into TV Studio; Desk top editing; TV audience Profiles; Scots Law in Journalism; The developments surrounding the Communications Bill; Data Protection; A variety of PC skills courses; Shareholder value; Understanding Business Finance; and Disciplinary and Absence Management.

The Business Process:

     The first half of 2005 has been a period of profitable growth for SMG, aided by a strong first quarter for advertising and excellent regulatory settlements which resulted in lower licence fees and reduced public service broadcasting commitments. Turnover was up 7% to £94.9m (2004: £88.5m) resulting in a 68% increase in underlying pre-tax profits to £6.7m (2004: £4.0m).

     The operating margin of 17% on television was three percentage points up on the corresponding period in 2004. Although the advertising revenues were on a par with the first half of 2004, still SMG Television Division outperformed ITV1 as a whole, growing their NAR share to 6.7% (2004: 6.4%). This was achieved despite regional advertising revenues being 10% lower, primarily due to a significant cut in Scottish Executive spending.

     Virgin Radio has gained considerable momentum in 2005 through its national positioning, strength of brand, singular focus and the rapidly evolving marketplace for digital radio services.

     Meanwhile, the Out of Home Division grew sales by 9% aided outdoor panel growth and cinema contract.  Primesight grew revenues by 15%, outperforming the overall outdoor market, and SMG Out of Home Division now hold market-leading positions for the 6 sheet format in a number of important sectors, including: health clubs; garage forecourts and convenience stores. And the expansion of their Backlight business continued with an additional 12 panels being constructed across the UK.  Making them the leading Backlight contractor in London to date.

     Pearl & Dean grew cinema advertising sales by 5% over the period, again outperforming the market. ()

The Customer:      SMG Television is number one in peak time.  Gathering 33% of audience share as of June 30 2005.  ITV1 ranked in second with 29% audience share, BBC1 in third with 23%, C4 in fourth with 10%, BBC2 and FIVE both in fifth, with 8%.  While other cable and satellite channels have 22%. ()         The Financial:      The SMG’s financial highlights are as follows: 2005 2004 Turnover

£94.9m

Turnover £88.5m Operating Profit £13.7m Operating Profit £11.3m Profit Before Tax (Underlying) £6.7m Profit Before Tax (Underlying) £4.0m Profit Before Tax (Statutory) £6.7m Profit Before Tax (Underlying) £8.6m Basic Earning per Share (Underlying) 1.7p Profit Before Tax (Underlying) 1.1p Basic Earning per Share (Statutory) 1.7p Basic Earning per Share (Statutory) 2.8p Interim Dividend 1.2p Interim Dividend 1.0p           

Credit:ivythesis.typepad.com