CATV or Cable TV was originally devised to help transmit TV signals to the homes with difficulty in viewing. Today's CATV is providing not only a number of specialized program channels but various two-way services as well.
The variety of programs through dozens of channels, two-way communication capability, and local services are the major characteristics of CATV. It provides non-broadcasting services such as home shopping, home banking, and telemetering as well as broadcasting services. CATV helps to enhance the quality and standard of life and reduce the information gap among regions by providing these services.
Until now, the main streams of strategy studies have been the industry analysis framework and the resource based view. The former is based on Porter's theories and postulates that the structure of an industry decides the industry attractiveness and it affects the profitability of firms in that industry. According to the resource based view, on the other hand, the internal capabilities of firms play an important part in competition and the resources and competitive capabilities peculiar to a firm.
In this study, Porter's five-competitive-force model was employed to analyze the competitive situation of system operators in Korea and it was found out that threat of substitutes(TV, VCR, DBS, etc.) and bargaining power of buyers (viewers) are the strongest competitive forces. It follows that differentiation strategy and marketing strategy are the most important for system operators to gain above-average profit. Aside from it, the opportunities and threats related to CATV industry were highlighted to emphasize the importance of strategy.
According to the result of industry analysis, detailed strategic actions for system operators were suggested with emphasis on differentiation strategy and marketing strategy. A number of policy suggestions were added, for some of the current government regulations and policies about CATV were found to hinder the development of CATV industry.
