CHAPTER 4

EXTERNAL ANALYSIS

I. General Environment

A. Political and Governmental Forces

A1. Fair Election Act

One of the sources of income of television broadcasting companies come

from the advertisements. In addition, the national election is one of the biggest

events in the country. During this time, hopeful candidates can easily

communicate their platforms with the help of the media. However, since this is a

nationwide advertisements, these can be very costly. With the fair election act,

regulations are provided to monitor the expenses of the candidates since they

are only allowed a specific budget for their campaign. While broadcasting

networks can use this opportunity to earn more, this act may also be a limitation

because there are specific materials that cannot be aired during the election

period like movies or biographies portraying the candidate.

A2. Movie and Television Review and Classification Board (MTRCB)

The Movie and Television Review and Classification Board (MTRCB) is a

Philippine government agency responsible for the regulation and classification

of motion pictures, television programs, and publicity materials. It is the agency

responsible for the suspension of television programs which do not promote a

value-based media and entertainment culture. This can affect the viewership of
 the television broadcasting station. This can be a threat or a limitation to the

viewership of the broadcasting station because they cannot easily air TV shows

which can be of a high sensitivity to the public. These shows shall first be

reviewed by the MTRCB.

A3. National Telecommunications Commission (NTC)

The National Telecommunications Commission (NTC) is an attached

agency of the Department of Information and Communications Technology

responsible for the supervision, adjudication and control over all

telecommunications services throughout the country. One of the functions of

NTC with respect to the television broadcasting industry is to regulate and

supervise radio and television broadcast stations, cable television (CATV) and

pay television. While MTRCB regulates the contents of the shows to be aired,

the NTC regulates the technological aspects of broadcasting. Limitations can be

associated with that of the radio frequencies sent by the broadcasting stations.

A4. Broadcast Code of the Philippines 2007

The Kapisanan ng mga Brodkaster ng Pilipinas is a broadcast media

organization in the Philippines which sets the norms and limitation of

broadcasters who belongs to the members of KBP. The organization is

composed of Regular and Associate members. Regular members are owners

and operators of radio and television stations while the associate members are

the radio and television stations themselves. It was during a series of plenary
sessions in 2006 and 2007 that the provisions of this code were adopted by the

general membership of the KBP.

A5. 1987 Constitution Art. XVI, Sec. 11

Section 11
1. The ownership and management of mass media shall be limited to citizens of

the Philippines, or to corporation, cooperatives or associations, wholly-owned

and managed by such citizens.

The Congress shall regulate or prohibit monopolies in commercial mass media

when the public interest so requires. No combinations in restraint of trade or

unfair competition therein shall be allowed.

2. The advertising industry is impressed with public interest, and shall be

regulated by law for the protection of consumers and the promotion of the

general welfare.
Only the Filipino citizens or corporations or association at least seventy per

centum of the capital of which is owned by such citizens shall be allowed to

engage in the advertising industry.

The participation of foreign investors in the governing body of entities in such

industry shall be limited to their proportionate share in the capital thereof, and

all the executive and managing officers of such entities must be citizens of the

Philippines.
This law regulates the entry of foreigners in the broadcasting industry in

the Philippines. It provides an opportunity for Filipino citizens to venture into

advertising and earn money in their homeland. In addition, this law also aims to

protect the consumers and the general public by prohibiting monopolies in the

industry.
A6. EXECUTIVE ORDER NO. 546 July 23, 1979 - CREATING A MINISTRY

OF PUBLIC WORKS AND A MINISTRY OF TRANSPORTATION AND

COMMUNICATIONS
As a result of enacting these laws, radio stations can no longer install and

operate radio telephone services on the basis of a legislative (congressional)

franchise alone. It is now required for the broadcast stations to get certificate of

public convenience and necessity from the NTC.

A7. Environmental Laws

Some of the environmental laws that GMA Network complies with are the

following:

1. R.A 8749 (Philippine Clean Air Act of 1999)

In connection with this law, the company received a DENR permit on July

4, 2012 in order to operate the generator sets installed in the GMA Network

Center for five years. As a requirement in the permit, annual emission tests are

conducted by DENRs accredited third party group to all the generator sets of

the company. A total cost of P127,360.00 was incurred for the emission test of

the 5 generator sets in 2016.

2. R.A 6969 (Toxic Substance and Hazardous Wastes) under DENR

This law requires that all generated hazardous wastes such as tapes,

used engine oils, busted fluorescent lamp (BFL), empty paint cans,

contaminated rags and others be treated, recycled and appropriately disposed

of with the DENRs accredited third party. In 2016, the budget for the disposal

of hazardous waste was P50,000.00

 3. R.A. 9275 (Philippine Clean Water Act) under the Laguna Lake Development

Authority
GMA Network has a Discharge Permit from the Laguna Lake

Development Authority (LLDA). This permit allows the company to operate its

Sewage Treatment Facility (STP) in the GMA Network Center. This permit

costs around P30,000.

4. R.A. 9003 (Ecological Solid Waste Management Act)
GMA Network applied for an Environmental Permit to Operate

(Environmental Clearance) to the Quezon City Environmental Protection and

Waste Management Department. The budget for the annual permit for 2016 is

P2,500.00

B. Natural Environment Forces

B1. E-waste management
True, broadcasting industry plays a vital role to societies of both

developed and developing countries because it fulfills two key roles worldwide,

economic and public function. Because of this, technology is growing more

rapidly and in return people depend more to it. The problem associated with this

is the media technologies' effects on the environment. One is e-waste. E-waste

or electronic waste are electronic products already disposed of or are to be

disposed of. The consequences included when proper disposal of these

technologies are not followed are detrimental to both environment and people.

When throwing out computers they end up in landfills causing the possibility of

toxic metal leaching into the groundwater. Toxic metals in e-waste leach into our

supply of resources, threatening their integrity. When e-waste is warmed up,

toxic chemicals are released in to the air, damaging the atmosphere.

 B2. Production of media technologies
Media Technologies are made of metals such as tin, cobalt, palladium,

silver, gold, copper, aluminum, etc. Like for example, the development of print,

its production created and emitted dangerous substances, creating multi-

generational risks for ecosystems and workers. In addition, the use of plastics to

create media and communication technologies can cause different types of

health issues and while discarded it will release carcinogenic dioxin and

hydrochloric acid in to environment. Lastly, the habitats of the birds are also

endangered because of telecommunication towers constructed.

C. Social, Cultural and Demographic Forces

C1. Viewership in the Philippines
The social factor concerning the preference of Filipinos for television has

always been great, with 92 percent of urban homes and 70 percent of rural
homes owning at least one television set, and thus even with the changes in

technology and the improving use of social media, its been proven that Filipinos

are still avid watchers and supporters of the broadcasting industry. According to

a survey released by Asean DNA, Philippines ranks second in the list of

countries spending a lot of time in front of the television. Philippines puts in an

average of whopping 21 hours watching the screen.

C2. Traditional Television vs Social Media

Another fact to be considered is the study conducted by Nielsen, a global

performance management company. It simply stated that Filipinos still favors

the traditional television amid the growth of social media as an entertainment

and news source. Results showed that 59 percent of online Filipino consumers

are subscribed to a cable provider, of which 16 percent are subscribed to an

online service provider at the same time.

 C3. Viewers Preference in Urban Areas
With these facts it is evident that there is a large number of customers

available in the Philippines, amazingly, GMA inc. maintains its position as one of

the most watched and anticipated television broadcaster in the country. It has

remained as the undisputed ratings leader in viewer-rich Urban Luzon, which

accounts for 77 percent of all viewers in urban TV homes in the entire country,

with 43.4 percent, ahead of its competitor, ABS-CBNs 32.3 percent. With the

data shown, GMA Inc. is an apparent among the mass.

D. Technological Forces
D1. Microelectronics Revolution
Remarkable progress in technology has had, and will continue to have, an

enormous impact on media and broadcasting industry. Satellites, among other

technologies, contribute significantly to the globalization of broadcasting

services. Broadcast stations use a powerful antenna to transmit radio waves to

the surrounding area. Viewers can pick up the signal with a much smaller

antenna. Clearly, major systems in modern broadcasting have been deeply

dependent on innovations of electronic devices and materials. Because of the

rapid progress of microelectronics, members of broadcasting industry must face

the issue of capital-intensive investment and quick obsolescence.

D2. Internet
The advancement of high-speed Internet has a strong effect to the

television market especially with the rise of services like Netflix and Youtube.

Today, viewers can watch sports, drama, news, sometimes simultaneously with

their tablet and smartphones. Additionally, advertisement, which has traditionally

been the source of funds for most television content, is also struggling. The
 internet has proven to be the most innovative development, threatening the

profit stream of broadcasting industry.

D3. Software Crisis

As technology advances, becoming more digital and computer-oriented,

one major problem is the rising cost of software and production. Although

device technology in broadcasting industry is lowering hardware costs, software

costs are increasing. The increase is due to the constant demand for more

sophisticated and diversified types of software, as well as to the high labor costs

associated with software development and production.

E. Economic Forces
E1. Inflation Rates
Inflation rates affect the cost of capital as well as the interest rates. It thus

forces businesses to adjust their budgets to account for increased prices and

usually leads them to pass on the costs to consumers by increasing the price of

their products or services. According to Trading Economics, inflation rate in the

Philippines is expected to be 2.70% by the end of the first quarter of 2017 and

also estimated that it will go around 3.80% in 2020.

E2. Tax Rates

Another uncontrollable and possibly unpredictable economic factor that

might affect the broadcasting industry in the Philippines is taxation. Currently, the

broadcasting companies in the Philippines are subject to 7% franchise tax.

However, they have the option to be registered as a value-added taxpayer and

pay the tax due thereon provided that once the option is exercised, it shall not be

revoked.
 Furthermore, the government may offer tax incentive programs in

broadcasting companies so they will be encouraged to develop and provide

better products and services. In this case, there would be better market

opportunities and attract more consumers in the industry.

E3. Stock Market Trends

News have been revealed that the Philippine Stock Exchange Index

(PSEi) broke the 8100 mark for the first time in 2016. Manny Lisbona, head of

PNB Securities, said that many investors are placing their bets in anticipation of

earnings reports and optimism to Pres. Dutertes first SONA. Strong economic

growth in the first half of the year, partly driven by election spending, is seen to

benefit corporate earnings.

However, it is seen in the graph below that PSEi ended weak as 2016 closes.

This is due to US policy risk arising from Donald Trumps election as the new

president. From the election campaign, one can infer that Pres. Trump is not

trade-friendly and would like to renegotiate certain security agreements.

Increased tariffs towards goods made in emerging markets would have an impact
on liquidity and profits which will result to negative outcome. Until the market has

greater clarity as to the strong economy of the Philippines, the risk premium for

risk assets will remain high.

E4. GDP Growth

GDP measures a countrys total economic production and performance. It

reflects the total market value of all the goods and services produced by the

economy at a certain period. A higher growth rate means a healthier economy. In

effect, more investments and more jobs will be offered. For full 2016, the

Philippine economy grew by 6.8% faster than a 5.9% expansion in 2015. On a

quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.7% in the last

quarter of 2016 while market estimated a 1.6% growth. For 2017, it is expected

to advance between 6.5-7.5%.

 E5. Electricity Price Hike
Meralco has announced that consumers will see an increase of 10

centavos per kilowatt-hour due to higher generation charge promoted by the

peso depreciation. Weakness of the peso in relation to the US dollar is putting

much pressure on generation cost. Electricity price hikes would cause probable

increase in operating expenses of broadcasting companies because the

industrys major equipment are being run by electricity. Also during mid-2016,

Meralco has warned possibility of power interruption and price hike due to

insufficient power supply from power plants. Very likely, this could disrupt the

normal operations of the company.

II. Industry and Competitor Analysis

A. Five Porters Forces

FIVE FORCES OF MODEL LEVEL

Rivalry Among Competing Firms High
Potential Entry of New Competitors Low
Potential Development of Substitute High

Products
Bargaining Power of Suppliers Moderate
Bargaining Power of Consumers Moderate

A1. Rivalry among competing firms: HIGH

As reported by the National Telecommunications Commission (NTC), there

are 435 television stations operating in the country as of June 2014. In the

television broadcast industry, a television company can have more than one

station in its operations. Of the 435 TV stations in the Philippines, People's

Television Network, Inc. (Channel 4) and Radio Philippines Network, Inc.

(Channel 9) are some of the TV stations owned by the government. As to the

television companies widely known by majority of Filipinos, the Alto Broadcasting

System-Chronicle Broadcasting Network (ABS-CBN), Global Media Arts Network,

Inc. (GMA 7), and Associated Broadcasting Company (ABC Development

Corporation/ABC 5) were named as the Big Three television networks in the

country. To have a closer glimpse, below are the descriptions of the Big Three

television networks in the country:

1. Alto Broadcasting System-Chronicle Broadcasting Network (ABS-CBN)

ABS-CBN Corporation is the countrys first and largest integrated media and

entertainment company. It is also known as the Kapamilya Network. It was

formed by merging two TV networks beforethe Alto Broadcasting System and

the Chronicle Broadcasting Network. The company was founded on July 11, 1946

as Bolinao Electronics Corporation (BEC). Then on February 1, 1967, it was

incorporated as ABS-CBN Broadcasting Corporation, and by 2010, the company

was called ABS-CBN Corporation. The company has 42 subsidiaries and 12

divisions.

2. Global Media Arts Network, Inc. (GMA 7)

GMA, Inc. is the leading free-to-air media broadcasting company in the

country and is also known as the Kapuso Network. The company started in

1950 as an AM radio station with the name Republic Broadcasting System

(RBS). On October 29, 1961, it ventured into television and began broadcasting

on Channel 7 in the Greater Manila Area from which the companys acronym

initially came from. As the companys coverage area widened, the meaning of its

acronym was changed into Global Media Arts.

3. Associated Broadcasting Company (ABC Development Corporation/ABC

5)
The company started its operations in 1960 when Joaquin "Chino" Roces,

owner of the Manila Times was granted of a radio-TV franchise from Congress

under Republic Act 2945 on June 19, 1960. The network was rebranded as TV5

in 2008. It is also known as the Kapatid Network.

The competition between TV stations is very stiff since they try to appeal to

the same set of audience which is the Filipino people. It can be depicted that TV

programs with the same genre are being shown in the same timeslot. As an

example, ABS-CBNs Its Showtime and its rival TV program, GMAs Eat Bulaga.

Both programs are considered as noon-time variety show. However, they are still

different in terms of games and segments they provide their viewers. They try to

surpass one another in order to get more viewers.

In order to determine the viewers of these TV stations, surveys are

conducted in the Philippines by Kantar Media Research and AGB Nielsen Media

Research. AGB Nielsen gathered most of its survey data from urban places while

Kantar Media conducted its survey mostly from rural ones. From the surveys
conducted by AGB Nielsen, the results show that GMA network is the leading TV

station in the company. On the other hand, the data gathered by Kantar Media

revealed that ABS-CBN is the leading TV station in the Philippines. From these, it

can be inferred that GMA Network is more popular in urban areas.

A2. Potential entry of new competitors: LOW

Entry to the television broadcast industry is not easy and is subject to the

policies imposed by the government. First, in order to start a television network, a

company must obtain a franchise from the congress which shall give the former a

slot in the radio frequency spectrum that will allow it to transfer information at a

specific frequency. Second, all the requirements must be submitted, such as

articles of incorporation, technical feasibility study, and economic viability study,

in order to petition for a certificate of public convenience (CPC) with the NTC.

Third, public hearings shall be conducted and only after shall the commission

render its decision on the petition. Also, a minimum of Php6 Million must be the

starting capital of the network since equipment like television relay stations and

transmitters cost high prices.

Moreover, the biggest companies are the ones most likely to survive the

competition by gaining fans through their talents. Starting companies being on

par with the television network giants in terms of their talents seem impossible

due to the fact that creating celebrities will require spending extortionate amounts

of resources just for marketing that would eventually lead to higher costs than

income. This is the reason why some small television networks show movie

replays and or few programs instead of creating more of their own. This may also

be supported by the natural nature of the market to tune in only to those

television networks familiar to them. In short, the stiff competition existing within

television broadcast industries makes entry to the industry to be burdensome

since there seems to be no room left for starting businesses in an industry

predominated by giant companies.

A3. Potential development of substitute products: HIGH

The threat of substitution is affected by the ability of the consumers to

switch to another product or services. Typically, this is brought about by the

likelihood of the existing products in the market which forces the consumers to

find an alternative in response to price hike.

Television companies earn profit through advertisement and viewership. In

addition, these companies also produce television shows that are also

considered as their products. The propensity of consumers to substitute is high.

One of the threats that broadcasting industry is facing is the innovation in

technology. In advertisement, television is traditionally the most expensive

medium when it comes to cost. Advertising costs depend on timeslot, frequency,

length of ad, dates to be shown and the network. The higher the programs rating

is, the higher the cost. Advertisers can spend P500,000 to P1,000,000 for every

30-second spot on primetime per frequency. However, on other day-parts like

afternoon spot, 30-second advertisement is much cheaper than primetime cost

estimated at P30,000 to P200,000.

But nowadays, people can advertise through social media like Facebook,

Twitter, Instagram and Youtube because it is very much affordable, even for

micro and small businesses, than television advertising. Most people in the
Philippines are Facebook users, whether at their desktop or at their mobile

phones and tablets. That is why if you are doing business in the Philippines, your

target market might just be lurking on the crowded social network. Advertisers

can buy Facebook ad for as low as P200. Furthermore, people also has the

option to advertise through billboards or magazines. Billboards advertising costs

range from P400,000 to P680,000 per month depends on the location while

magazine advertising rates vary according to the size and place of the ad in the

magazine which costs from P12,000-P100,000.

A4. Bargaining power of suppliers: MODERATE

In the broadcasting industry, the bargaining power of suppliers is moderate

caused by the decent amount of suppliers of broadcasting equipment throughout

the country. Also, an alternative source of equipment is available outside the

country particularly from countries who are technologically advanced (e.g. China

and South Korea). Another factor to be considered is the number of customers

for the said suppliers given the market type is an oligopoly which means the

number of buyers is limited hence, the suppliers bargaining power is slightly

decreased. However in the broadcasting industry, the uniqueness of the product

and service is essential to ones survivability, this provides the suppliers a small

advantage over the industry. Given these facts, it is acceptable to conclude that

there is a balance in the bargaining power of the industry and its suppliers.

A5. Bargaining power of consumers: MODERATE

In the broadcasting industry, the bargaining power of customers is

moderate. Increased globalization increases the bargaining power of the

 customers but the choices of the customers are otherwise. This is because of the

availability of substitutes making the bargaining power of consumers, being the

ultimate purchaser of services, high. Consumers now have broad selection on

where their products can be shown such as youtube, facebook, instagram etc.,

which is a low cost alternative for them especially small and medium enterprises.

However, large companies still choose to advertise their products to broadcasting

companies even though it is costly, making the bargaining power of consumers

low, thus moderate.

B. Competitive Profile Matrix

COMPANIES

Critical Success Weight Rating Score Rating Score Rating Score

Factors
Product Quality 0.13 4 0.52 3 0.39 1 0.13

Brand Name 0.04 3 0.12 4 0.16 2 0.08

Pricing 0.05 3 0.15 4 0.20 2 0.10

Management 0.13 3 0.39 4 0.52 2 0.26

Financial 0.09 4 0.36 3 0.27 2 0.18

Position
Market Share/ 0.18 3 0.54 4 0.72 2 0.36

Customer

Loyalty
Technological 0.15 3 0.45 4 0.60 2 0.30

Advancement
Promotion 0.05 3 0.15 4 0.20 2 0.10

Strategies
Talent 0.18 2 0.36 4 0.72 1 0.18

Management
TOTAL 1.00 3.04 3.78 1.69

In the company profile matrix, the product quality of GMA network Inc. was given

the score of 4 which is the highest in comparison to its competitors. This was decided

on the basis that GMA has better reception or has clearer channels than all of its

competitors and it also has numerous well-funded programs that are viewed by the

masses as quality shows such as i-witness and Kapuso mo Jessica Soho. While

ABS-CBN is given a 3 because it is also investing heavily on equipment and talents.

For the brand name, GMA network Inc. is behind by one point to its main

competitor, ABS-CBN who scored 4. The reason for this score is that ABS-CBN has a

wider range in its customers as it covers not just urban but also rural areas where it

ranks number one. GMA is given a 3 for establishing a name in both urban and rural

areas but not being able to be the main preference of the Filipinos in the rural areas.

In terms or pricing, GMA is again given a 3 as it is more expensive to acquire the

GMA channel and watch its programs than the ABS-CBN channel which offers the very

cheap black box for one to able to watch the channel.

GMA is given scores of 3 and 2 to management and talent management

respectively while its main competitor, ABS-CBN earned 4 on both categories. GMA

management earned that score as it only ranks 2 nd overall in the country and ABS-CBN

is ranked 1st. For talent management, it is evident that ABS-CBN has more well-known
talent in the country and it uses this to set-up more trends which favour its company.

Whilst GMA is quite lacking in well-known talent and some of those talent are

transferring to other networks.

GMA earned a 4 in terms of financial position because it is in a more favourable

position by having higher equity than debt in contrast to its competitor ABS-CBN who

has a larger asset pool but a large amount came from debt, this could result to a

takeover if equity is lower than debt.

For market share, technological advancement, and promotion strategies, GMA

network Inc. obtained 3s in all three categories when ABS-CBN earned 4, also in all

three categories. For market share, it seemingly shown in public news that GMA

network Inc. is leading in the urban areas but ABS-CBN dominated the overall rankings

in the countries by being a close second in the urban areas and having a large lead in

the rural areas. As for technological advancement, GMA network and ABS-CBN are

similar but ABS-CBN took the lead by providing the ABS-CBN box which is a

technological advancement that directly increases the number of audiences. On the

other hand, GMA also upgraded their studios and equipment but this only a relatively

indirect approach to obtain customers in the industry compared to the strategic move of

ABS-CBN. With regards to promotion strategies, GMA network is slightly behind ABS-

CBN who has an aggressive approach by reaching out to far rural areas. And although

GMA network Inc. reaches out other areas it is not that aggressive compared to ABS-

CBN as it prefers to maintain its lead in the urban areas. Another factor to be

considered is that ABS-CBNs talent like actors and actresses is more well-known and

has more impact to the masses in comparison to GMA network Inc.

 III. Summary and Conclusion

A. External Factor and Evaluation Matrix

Key External Factors Weight Rating Weighted

Score
Opportunities
1. Proposed tax reform 0.05 2 0.10
2. Watching television is part of the Filipino culture 0.09 3 0.27
3. Strong bargaining power against suppliers 0.09 3 0.27
4. Easier dissemination of information due to rapid 0.10 4 0.40

growth of technology
5. Strict regulation for entry in broadcasting 0.10 4 0.40

industry

Key External Factors Weight Rating Weighted

Score
Threats
1. Rise of internet 0.16 4 0.64
2. People preferences are changing 0.13 3 0.39
3. Strict regulation for television shows 0.07 2 0.14
4. Content protection and piracy 0.14 4 0.56
5. Increasing inflation rate 0.04 2 0.08
6. E-waste 0.03 1 0.03
Total 1.00 3.28

OPPORTUNITIES:

1 Proposed tax reform

The Department of Finance submitted to Congress last September 2015

the first package of tax reforms designed to lower personal income tax rates over

time to 25% from 32%. The package also includes the expansion of value-added

tax base, the adjustment of excise taxes imposed on petroleum products and the
 restructuring of the excise tax on automobiles. Thus, this is an opportunity for the

company to boost its consumption and investment.

2 Watching television is part of Filipino culture
As evidenced by the number of Filipino households owning a television

set, it is undeniable that watching television has been a part of Filipino culture.

Many families treat it as a means of their bonding. Thus, considering this as a

lifestyle of many Filipinos would be a great opportunity for broadcasting stations

for a wider market.

3 Strong bargaining power of suppliers
The increase in number of available suppliers both locally and

internationally with limited number of buyers is an opportunity for the company

because it lessens the probability of having supply shortage.

4 Easier dissemination of information due to rapid growth of technology

The new technologies available in the market would help the company to

earn more revenue since it can improve and offer more services to keep its

customers loyal. Moreover, the company can easily disseminate information by

posting news on the internet.

5 Strict regulation for entry in broadcasting industry

In order to start a television network, a company must obtain a franchise

from the congress which shall give the former a slot in the radio frequency

spectrum that will allow it to transfer information at a specific frequency. This

serves as a barrier to entry for new competitors; thus, an opportunity for the

company.

THREATS:

1 Rise of internet
 With the rapid technological advancements, people are getting more

inclined to using social media. In connection with this, many companies are using

social media to promote their products wherein some advertisements went viral.

Thus, this can be a threat for television broadcasting since companies may opt to

advertise their products thru the internet.

2 People preferences are changing
The aspects and preferences that are constantly changing are threats for

the company. Today, television channels are slowly shifting to rely on viewer

preferences, streaming and personal information. These changes began with

viewers ability to watch shows at their leisure and peaked with the rise of the

internet.
3 Strict regulation for television shows
MTRCB regulates and classifies TV programs to be aired publicly. It can

suspend television programs which do not promote a value-based media and

entertainment culture. This can be a threat or a limitation to the viewership of the

broadcasting station because they cannot easily air TV shows which can be of a

high sensitivity to the public.

4 Content protection and piracy
Piracy is still a big threat for broadcasting industry since it can affect the

companys revenues because people can now stream content online or buy

counterfeit DVDs which are less costly on the part of the consumers.
5 Increasing inflation rate
Inflation rates affect the pricing of services determined by regulators. The

higher the inflation rate, the higher the probability the company is forced to adjust

its budget and pass on the costs to consumers by increasing the price of its

products and services.

6 E-waste
 Laws and regulations in accordance with e-waste must be followed by the

company. However, getting permits together with the requirements that comes

with them such as annual test emissions can be costly.

ANALYSIS OF EFE MATRIX

The External Factor Evaluation Matrix resulted to a total weighted score of 3.28

which means the companys external performance passed the 2.5 midpoint average.

The factor that greatly contributed to such is the technology. Although the greatest

opportunity for GMA Network is the rapid growth of technology which has a weighted

score of 0.40, it could also be a greatest threat for them garnering a weighted score of

0.64 because rise of internet can affect the revenue streams of the company in terms of

advertising. Overall, GMA Network is above average in its effort to pursue strategies

that capitalize on opportunities and avoid threats.