As I was reading about market position mapping in a strategy class, I started to think about the space occupied by TV broadcasters, cable channels and on-demand streaming sites that all compete for American eyeballs. I created the attached diagram that illustrates "the closeness" of each of the players along 2 dimensions - the use of distribution channels and the product line breadth. Why did I chose these dimensions? I wanted to make sure the two variables were not too closely related and were also relevant to each firms strategy. I could have picked dozens of other variables as axes but I think these paint a nice pictures of the industry.
So what can we glean from this map?
- The big 4 networks (NBC, CBS, Fox and ABC) should be more concerned with the strategies of each other and less about those of Netflix or an independent cable channel
- Although they produce and distribute filmed entertainment content, Netflix and Amazon are not direct competitors to the big 4 networks
- A cabler like DIY Network is a niche player and, with regards to competitive forces, should really be concerned with other niche players
- There are 3 clusters on this map called strategic groups
- The big 4 may be less agile to respond to changes in consumer demand given their large capital expenditures in distribution channels like tradition TV.
- Being higher on either of the axes does not mean more profitability or sustainability; the map only serves to measure "the closeness" of competitors along these two telling dimensions
