Al Jazeera Broadcasting Company: PESTEL Analysis

Al Jazeera broadcast medium Company PESTEL AnalysisExecutive SummaryThe objective of this report is to analyse the key orthogonal issues affecting Al Jazeera Broadcasting Network using the PESTEL Co. mnemonic. This analysis will consider the opportunities and threats facing Al Jazeera and its competitors in the publicise industry.Al Jazeera is generally regarded as a controversial TV network and has faced various forms of censorship in different countries. These censorships represent a significant threat to their desire to increase market sh are.Increasingly, viewers are demanding a more rounded coverage of news rather than a perceived one side to the humbug served up by existing networks want BBC and CNN. Al Jazeera are seen as one of the main networks to provide this rounded coverage.Al Jazeera faces competition from new Arab network stations who are copying the motives format. Since the launch of their slope run, the Qatar found network is now in direct competition with the likes of BBC and CNN which brings challenges prevalent when competing against well established brands.Al Jazeeras orthogonal Environment PESTEL AnalysisAlthough external forces are beyond its control, Al Jazeera can use proactivity to improve its position based on its understanding of this environment (Scholes, 2004).It enables Al Jazeera to be in a position to determine its position in the industry and subsequently identify and implement strategies and activities that will exploit the opportunities in the external environment and minimise the threats faced (Grant, 2004).The mnemonic, PESTEL Co., will be used to carry out an appraisal of the external factors affecting Al Jazeera. The mnemonic stands for the following governmentalEconomicSocialTechnologicalEthicalLegalCompetition(P)oliticalAl Jazeera is seen as a controversial TV network station. Consequently, it has had run-ins with many countries. A make out of these have resulted in censorship of some sort.The US and UK ha ve been reported registering strong protests against the TV networks perceived anti-US and anti-UK stance in describe the 2003 invasion of Iraq. In Spain, in 2003, a reporter was arrested for allegedly providing support to Al Qaeda members (www.wikipedia.com).These controversies impacted negatively on Al Jazeera in scathe of increasing its customer base. The more censorship and negative publicity that they attract, the less they are able to make inroads into the market share of their major competitors like CNN and BBC. This represents a significant threat.In 2004, allegations, though unsubstantiated, were made against the US, of a plot to deliberately target Al Jazeera headquarters in Doha (www.wikipedia.com). On the plus side, Al Jazeera is known for covering post-war issues.(E)conomicAl Jazeera survives on the funding provided by the Emir of Qatar and finished advertising revenue. Al Jazeeras main strategy is based on increasing market share instead of profits. The Economist re iterated as such in its November 2006 edition, influence more than profits are Al Jazeeras driveway force. Due to increased globalisation and a general economic upturn in the world economy, i.e. low interest rates, higher levels of spending and investment, Al Jazeera are exposed to increased opportunities in terms of attracting more viewers. Viewers worldwide are better able to afford satellite TV stations in their households, therefore Al Jazeera is perfectly poised to exploit the opportunities presented. Through its web-based subscription-free service, the TV network withal has an increased reach across the globe.(S)ocialThis represents a significant fortune to Al Jazeera. In Abram Sauers article Al Jazeera Tough Enough (www.brandchannels.com), the writer intimated that the channel is seen as providing alternative views from the normal propaganda allegedly served up by mainstream stations. Recently, residents of countries like US and UK are registering their concerns and disple asure on what they perceive as misinformation and increased propaganda of the news presented by well-established global TV networks like CNN and BBC. The concern is based on the beliefs that these stations are sympathetic to their respective governments. Increasingly, Al Jazeera is seen as the alternative providing a more realistic and credible news and more primary(prenominal) providing views from the separate side (i.e. views of Palestinians, Al Qaeda etc). This is translating itself into increased viewing figures for the Qatar based channel. In just over 10 years, Al Jazeera recently estimated its worldwide audience at approximately 45 million with over 150000 US households included in that figure (www.aljazeera.com).(T)echnologicalWeb based services in Arabic and English present the TV network with good opportunities to reach a wider audience.(E)thicalIn the western world, for example, the powers that be accuse Al Jazeera of promoting or supporting terrorist activities which worldwide is regarded as unethical. In the Middle East, the opposite view is held. Al Jazeera has cleverly constructed an image of itself as the station for the underdog.(L)egalIn a nutshell, the obligation to provide fair and indifferent news places a great duty of care on organisations such as Al Jazeera to be responsible in disseminating news. The threat here is unsuccessful person to adhere to legal obligations can end in closure for the station.CompetitionTwo Arab networks are eating into Al Jazeeras share of the Arab market specially in the Middle East, these are Al Arabiya and Al Hurra. Since launching their English based service, the TV network is now in direct competition with international broadcasting giants like BBC World and CNN International.Porters Five AnalysisPorters Five Forces model will be used to analyse the competitive forces in the industry Al Jazeera operates in.Each will be looked at in turn and an assessment made on whether each of these forces present opportunities or threats to Al Jazeera.Bargaining power of suppliersThe suppliers of Al Jazeera consist of providers of products and services to help Al Jazeera conduct its operations. These include suppliers of vehicles, equipment and hotel accommodation. There are also consultants and presenters who are lured to the station for galactic money, for example Sir David Frost. The bargaining power of suppliers can be considered low and therefore present opportunities to the TV network to attract the best.Bargaining power of buyersIncreasingly, audiences are looking at at alternative news coverage as their concern on alleged propaganda offered by mainstream TV news channels grows. This provides a fantastic luck for Al Jazeera, who are considered as the prime channel for more balanced views. In the TV news network industry, the power of the audience is very high. What is also high is the level of audience loyalty to established brands like CNN and BBC. The threat from such stations is clear as more of these diversify into programmes for ethnic minorities and other programmes presented by Al Jazeera.Barriers to immersionThis is high due to high capital and stringent legal requirements to be met. New entrants find it hard to compete with the TV broadcasting giants. This enables Al Jazeera to focus more on existing competition and worry less about new entrants. The main opportunity here is the strategies invest in place to maintain or improve their competitiveness can be more effective than if a threat from new entrants was significant.Availability of substitutes numerous people follow the news on the radio and online. However, TV is the preferred medium. Al Jazeera has increased its distribution channel by having their web based service. Therefore, the accessibility of substitutes is regarded as low and therefore the threat is not significant enough to worry Al Jazeera. However, complementary substitutes like other TV news channels, especially the Arabic ones wi ll provide a significant threat once they become more established, in terms of eating into Al Jazeeras pump customer base.Extent of competitive rivalryBuyer power is high in the industry. The audience are demanding and getting greater choice of channels, thereby ensuring that broadcasting organisations place greater emphasis on the quality of their programme offerings. This poses a threat.The threat of new entrants is low as is the bargaining power of those who supply goods and services to TV network stations. Therefore, the threat from these two forces are low.The availability of substitutes provides a significant threat to Al Jazeera but the threat is well mitigated through the TV news networks creation of a niche market for itself, i.e. one which provides a more balanced alternative view to the norm. lastSignificant threats and opportunities exist in the world of TV news. The threats for Al Jazeera mainly come from political, ethical and competitive forces while the opportunitie s are provided by social, high entry barriers and technological forces.Al Jazeera are able to mitigate threats through cleverly carving themselves a niche in the industry. They are able to exploit the opportunities as more people are demanding a more rounded view of whats actually happening in the political news world, rather than universe fed, what is widely being considered as propaganda news.REFERENCES AND BIBLIOGRAPHYBooksBegg, D et al 1997, Economics 5th edition, McGraw-Hill, MaidenheadBuckle, M Thompson, J 1999, The UK Financial System, 2nd edition, Manchester University stir, ManchesterGrant, R 2004, coetaneous Strategic Analysis 5th edition, Blackwell Publishing, LondonHowells, P Bain, K 1998, The Economics of Money, Banking and Finance Addison Wesley Longman, EssexPorter, M E 2004, Competitive Strategy Techniques for Analysing Industries and Competitors New Edition, Free PressScholes, K 2004, Exploring Corporate Strategy, Text and Cases, FT Prentice Hall, LondonInterne t/Practitioner SourcesAJ Publishing, 1996, About Aljazeera.com, viewed 20 March 2007, www.aljazeera.com/about.aspAnswers.com, 2004, Al Jazeera, viewed 20th March 2007, www.answers.comBritish Broadcasting Corporation, 2005, David Frost joins AlJazeera, viewed 20 March 2007, http//news.bbc.co.uk/2/hi/entertainment/4318284.stmCNN, 2002, Al-Jazeera Bin Laden Tape Praises Hijackers, viewed 20 March 2007, http//archives.cnn.com/2002/WORLD/meast/09/09/binladen.tape/index.htmlEl-Nawawy, M Iskandar, A, 2002, The Minotaur of contextual Objectivity War Coverage and the Pursuit of accuracy with Appeal, viewed 23 March 2007, www.tbsjournal.com/Archives/Fall02/Iskandar.htmGuardian Newspaper, November 2005, Gagging for the Truth viewed 23 March 2007, www.guardian.co.uk/leaders/story/0,3604,1649144,00.htmlLynch, M, 2005, Voices of the New Arab Public Iraq, al-Jazeera and Middle East Politics Today, Columbia University Press, viewed 23 March 2007, www.columbia.edu/cu/cup/catalog/data/023113/0231134 487.HTM 13kNisbet, E C, 2006, Public diploma, telly news and Muslim opinion, viewed 20 March 2007, Harvard International Journal of Press/Politics 9(2), 11-37, http//islamperceptions.org/Arab%20Perception%20of%20the%20West.pdfSauer, A 2003, Aljazeera Tough Enough, viewed 20 March 2007, www.brandchannel.com/features_profiles.asp?WIPO arbitrament and Media Centre, 2006, Aljazeera Space Channel TV Station v AJ Publishing aka Aljazeera Publishing, Case NO. D2005-0309, viewed 23 March, www.wipo.int/amc/en/dmains/decisionsZednik, R, 2002, Perspectives on War Inside Al Jazeera Columbian Journalism Review, viewed 23 March 2007, www.cjr/org/year/02/2/zednik.asp