The Impact of Macroeconomic Variables on the...

Running head: ENVIORONMENTAL ANALYSIS The Impact of Macroeconomic Variables on the Telecommunication Industry University of Phoenix MBA 501 Forces Influencing Business in the 21st Century January 22, 2007 Introduction The intent of this paper is to perform an analysis of the cable industrys external environment. The first sections of the document will discuss environmental scanning and define the telecommunication niche that is currently occupied by cable operators such as Comcast. The next section will identify the macroeconomic variables that currently impact cable operators and will compare two variables to two corresponding industry variables. The final section of the paper will identify some of the challenges and opportunities†¦show more content†¦These changes in disposable income impacts the cable industrys subscriber numbers through subscriber churn (subscriber leaving) and premium services churn (dropping and adding premium services), these changes are reflected in revenue stream which in turn affects the market value of the cable operators. Inflation the general increase in the level of prices McConnell, Brue (2004) pg 82 is one of the macroeconomic variables that directly impacts the revenue stream of cable operators. Like most industries that maintain fleets of vehicle the escalating cost of fuel has an immediate impact on the bottom line. As a service providers and the owner of the infrastructure one of our largest costs is related to the installation of our services and hardware. In most cases after a new customer orders service the company rolls a truck. A truck roll requires that a technician is scheduled to drive to the customers home, connect their home to our plant, install the ordered product into the customers home, activate the product and do onsite training of the customer. The escalating cost of fuel directly increases the cost of truck rolls which depending on installer status (employee or contractor) is on average a $150.00. In most cases the company does not charge an install fee for this truck roll s o the cost is added to the ROI (Return on Investment) that is calculated for each customer. Interest rates also have a profound impact on the cable industry, there are hugeShow MoreRelatedThe Impact Of Macroeconomic Variables On The Telecommunication Industry1635 Words   |  7 Pageswill discuss environmental scanning and define the telecommunication niche that is currently occupied by cable operators such as Comcast. 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By understanding the environment,†¦show more content†¦The USs premier operator in the broadcasting cable TV market is Comcast. Its 2005 revenues of $22.3 billion places it firmly at the top of the sector; while the company attributes revenue growth of 9.6% to the business innovations which Comcas t is deploying in the search for new revenues. University of Phoenix (2007) While Comcast provides many different types of services and products this paper will concentrate on one of its primary services which is cable operations, as defined by the North American Industry Classification System (NAICS); code 517500 Cable and other program Distribution. This industry comprises establishments primarily engaged as third-party distribution systems for broadcast programming. The establishments of this industry deliver visual, aural, or textual programming received from cable networks, local television stations, or radio networks to consumers via cable or direct-to-home satellite systems on a subscription or fee basis. These establishments do not generally originate programming material. NAICS (2007) Macroeconomic variables that affect the cable industry Some of the macroeconomic variables that impact the cable industry are gross domestic product (GDP), inflation, trade, interestShow MoreRelatedThe Impact of Macroeconomic Variables on the Telecommunication Industry1704 Words   |  7 PagesRunning head: ENVIORONMENTAL ANALYSIS The Impact of Macroeconomic Variables on the Telecommunication Industry University of Phoenix MBA 501 Forces Influencing Business in the 21st Century January 22, 2007 Introduction The intent of this paper is to perform an analysis of the cable industrys external environment. 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This change enables businesses toRead MorePrice Makers and Price Takers952 Words   |  4 Pagesend of their life-cycle – more elastic demand, lower prices o Impact of marketing and advertising on consumer loyalty / brand loyalty The Regulatory System In markets where firms have price-setting power, government appointed regulatory agencies may intervene directly or indirectly in the price-setting process o The regulatory agencies covering privatised utilities such as gas, electricity, telecommunications and the rail industry – most of these regulators have at times enforced price-cappingRead MorePersonal Health Behaviors And Religious Prohibition Of Alcohol936 Words   |  4 Pagesrole in determining the prevalence of diseases of major socio-economic impact throughout the world, including cardiovascular diseases, cancers and accidents. (2) Personal health behaviours are determined by a wide variety of factors, including socio-cultural influences (e.g. dietary traditions and religious prohibition of alcohol), legislation (e.g. laws restricting the purchase of tobacco and the use of seat-belts), macroeconomics (e.g. disposable income and taxation on cigarettes), health care provisionRead MoreWhat Are The Determinants Of FDI Flows1789 Words   |  8 Pagesfactors influencing the destination of the investment: Host-country determinants, rather than industry specific factors. The major determinants of FDI are as follows--- (01)Size of the Market- Econometric studies comparing a cross section of countries indicate a well- established correlation between FDI and the size of the market. Some studies found GDP growth rate to be a significant explanatory variables, while GDP was not, probably indicating that where the current size of national income isRead MoreForeign Direct Investment Of India1718 Words   |  7 Pagesnumber of Economic and Social variables can be determinants of Economic Growth. The variables divided into five groups. 1. Conditional Convergence The Conditional Convergence or Transitional Convergence maintains that the poor countries should grow faster than rich ones because of decreasing returns to scale in production. The countries control for initial position of the economy by including the initial level of Gross Domestic Product in the set of explanatory variables. The neoclassical growth modelRead MoreForeign Direct Investment ( Fdi ) And Economic Growth2405 Words   |  10 PagesInfrastructure (Ports, Roads, Power and Telecommunication) 3. Efficiency-Seeking a. Cost of resources and assets b. Other input costs (e.g. transport, communication and other intermediate products costs c. Membership of a regional integration agreement conducive to the establishment of regional corporate networks 4. Business Facilitation a. Provision of Tax Incentives (Local, Regional, National) b. Investment Subsidies 5. Policy Framework a. Stability of Political and Macroeconomic Framework (low inflation)Read MoreCoporate Finance Case Study5492 Words   |  22 Pageson Value per Share 5 The Benefits of Leveraging for the Shareholders 6 The Macroeconomic Benefit of Debts 7 Koppers Company, Inc. 7 Case 30 – MCI Communications, Corp.: Capital Structure Theory 9 Introduction 9 Cost of Capital 9 Costs of Equity 9 Cost of Debt 10 WACC 10 Scenario Analysis 11 Leverage and Risk – Coverage Ratio 11 Leverage and Earnings – Earnings per Share 12 The Creditor’s Reaction 14 Impact on Financial Flexibility 15 Summary and Concluding Remarks 16 Literature 17 Read MoreHow Stock Market Operates3258 Words   |  14 Pagestogether eventually lead to generate a gain in productivity and innovations that increases the stock price and strengthen the economy. The relationship between economic growth, research and development, technological change have been instituted at the industry, and national level. It simply means that corporate research and development is the connected with following gains in company’s stock prices, earnings, and productivity. Most of the companies do not usually disclose their