The Weather Company Case Study - Activities and Relationships Level of Analysis - Management Assignment Help

Assignment 

The Weather Company  
Everybody talks about it. David Kenny was wondering what to do about it. As Chairman and  CEO of The Weather Company, he had heard nearly every metaphor and pun about the weather and used many himself. Since forecasting was the company’s core competence, in early January 2014,  almost two years after coming on board, he was taking stock of his own forecasts about the climate in the company and grappling with some tough decisions.  
Kenny had led the privately-held company through massive strategic change, from a primary identity as a cable television channel with ancillary services to a multi-channel, cross-platform digital company with an emphasis on weather forecasts as the product, science at the center, and cross-platform communications to reach consumers and industrial customers. He saw that location information—where someone wanted weather information—was the new digital prize, and weather data could target people for alerts and promotions without triggering individual privacy concerns.  

Since Kenny’s arrival, about one-third of active employees were new to the company, but there were also nearly half who had been with the company more than 5 years including one-quarter who were long-standing veterans of over 10 years with their own ways of doing things. And for a  company with only 1200 employees, there was great diversity in backgrounds and professional cultures—scientists, TV producers, advertising salespeople, software developers, to name just a few.  
The company was getting in a position for growth opportunities ahead. The industry took note— Digiday named Kenny Person of the Year in June 2013 for leading digital transformation linking ads to weather conditions. Joint business plans with Twitter, Google, Facebook, and Apple were presented to the Board at a retreat in San Francisco. Now the challenge was execution—the right people and culture to tap the opportunities with innovation and speed, especially as rivals known and unknown were seeing the Big Data potential, and partners could easily flip into competitors.  How could The Weather Company be fast and agile enough?  In early August 2013, Kenny and his team had a busy week. On a Monday, he used The Weather  Channel’s main TV studio on the lower floor of the Atlanta building to rehearse his portions of  Lightning Round, an internal closed-circuit broadcast he would deliver live from the New York studio on Thursday at “30 Rock,” NBC’s famous home base. In the afternoon, he led a 4-hour session for the top 12 executives in a nondescript 4th-floor conference room, with a delivery of Skittles and  M&Ms substituting for a break, followed by a slightly larger group for a high-end restaurant drink and dinner.

The executive session was also a rehearsal of sorts, to discuss unresolved elements of a  three-year strategic plan to meet growth aspirations (see Exhibit 1). On Tuesday and Wednesday,  Kenny kicked off a management conference previewing the plan for the top 130 managers at  Atlanta’s W Hotel, the first time this whole group had been together. Then on to New York City for the live broadcast featuring the headlines from the plan, done as professionally as any of The  Weather Channel broadcasts, complete with human interest segments on the Make a Wish  Foundation child that had just visited and the company’s National Volunteer Day activities,  including participation with New York Media Cares on a Hurricane Sandy cleanup.

On Thursday and Friday was a day-and-a-half Board meeting, at which Kenny and top officers discussed the strategy and three-year plan in full detail.  
The Board endorsed the direction but questioned the amount of investment required, putting a  brake on some plans. In October 2013, the board met again and endorsed a one-year budget. But the financial investment was only part of the challenge. How to become cross-platform was a major shift of mindset and organization. Where to invest to stop traditional businesses from eroding while competing effectively in new ones. And how to move from primarily the U.S. to truly global while acting on the company’s societal purpose—to ensure safety for people everywhere affected by severe weather events.  The Weather Company claimed the world’s best and most accurate weather forecasts. Kenny wondered what else he should do to ensure that his business forecasts would produce results.

Company History  
The Weather Company’s origins were in cable television. In 1982, under the leadership of Frank  Batten, who was CEO for nearly 50 years, Landmark Communications, a privately-held Norfolk,  Virginia-cased newspaper company that had assembled assets as a cable operator, launched The  Weather Channel, an all-weather 24/7 cable television channel, using a newly-acquired cable transponder. Landmark’s first idea, an all-news broadcaster, was taken—Ted Turner, a sailing friend,  had launched CNN in 1977. Batten was receptive when John Coleman, a respected meteorologist from ABC’s Good Morning America, offered the idea.  

The idea of all-weather programming was met with extreme skepticism, Batten reported later.1 The National Weather Service (NWS) gathered weather data but left the distribution to the private sector companies given free access to NWS reports. NWS, which liked the proposed channel’s capability to beam NWS’s severe-weather alerts almost instantaneously to affected locales, agreed to standardize its forecasts nationwide and adopt protocols that would make the data usable. Local information— generally a text crawl across the bottom of the screen—could be augmented by local ads, national advertising could be sought, and, if successful, the channel could get subscription fees from cable operators. All of these revenue sources were soon tapped.  

Long-time employees of The Weather Channel, based in Atlanta, and subsidiary companies,  recalled a benign organization that looked after employees but was also financially conservative.  Landmark was also early to the Web with the launch of Weather.com in 1996. After converting a  money-losing operation into a solidly profitable business, in 2008 Landmark Communications sold  The Weather Channel for $3.5 billion to a consortium of NBCUniversal, Bain Capital, and the  Blackstone Group, which also included subsidiaries Weather.com and Weather Services International  (WSI), a provider of weather information services to businesses.  

Competition  
For the first decades, competition involved traditional broadcast television channels which also featured weather information on their news programs. National broadcasters and local stations competed with cable channels for viewers and advertisers. In addition, cable channels had to find their place in the bundles that cable operators offered to consumers; they were dependent on viewership numbers for their bargaining power. The Internet grew in fits and starts through the mid 
The 2000s, following the dot-com boom and dot-com crash, but then became a preferred source of information and even entertainment. Then, with smartphones added to the Internet as sources of weather information, the rise of social media, and lines blurring between industry players, there were numerous existing and possible competitors in new media channels and applications.  According to spring 2013 data for the U.S., The Weather Company had about 2/3 of the 81 million unique visitors to the Web and about 40% of the 98 million unique visitors to mobile apps.  Accuweather, WeatherBug, Yahoo!, Google, and major media companies’ sites were competition (see  Exhibit 4 Leader in Weather Information).

But competitors posed a particular challenge on mobile as well as the Web, where AccuWeather, for example, focused on preload deals with smartphone manufacturers, integration with broadcasters, and a 30-day forecast, Dark Sky offered real-time weather updates with alerts, innovative data visualization, and user participation, and WeatherMob raised funding to build a user-generated weather engine. Outside the U.S., the competition included  MeteoGroup, a pan-European private business focused on weather, expanding also into China.  The competition was rising from app developers and weather-based startups. When Weather Co-developed its first mobile weather app, there were only a few, but by 2013 there were many thousand. A new firm with two people could provide a forecasting product that wasn’t envisioned today.  

Competition in the digital space was also growing from giant corporations with deep pockets.  Google was a classic “frenemy”—the best partner and also a potential ferocious competitor because  Google had the science; an R&D agreement with National Oceanic and Atmospheric Administration  (NOAA); and fast processing speed. “Weather Underground took about two years to download all historical archives, while Google can do it in 8 seconds,” a Weather Co executive said. Twitter, Apple,  Facebook, GogoInflight, Flipboard, and Yahoo! were also considered strategic partners. Was Weather  Co’s source of advantage proprietary, volume, or velocity/agility? Its new turbulence product for  airlines, which moved data from an airplane into a weather product and back to the plane in real-time, was an example of a proprietary product that integrated data. IBM was also a competitor moving toward Weather Co space, as it applied Big Data to an increasing number of related areas.  Unexpected players could emerge too. In October 2013, Monsanto bought Climate Corporation,  which focused on data science for the agricultural sector, for which weather was vitally important for planning and operations. Monsanto called this the next big breakthrough.2 

Review the following:
“The Weather Company” and keep detailed notes. You can, and should, scan it multiple times.
Write a polished analysis that responds to the prompt below.
If you were on the board of directors at The Weather Company in 2013, would you approve the proposed strategy? Why, or why not?
Be specific, and be sure to support your response with evidence from the case. Use appropriate concepts from the course and MBA program to make the strongest case you can. Your response should be approximately 500 words.
You may want to consider the questions and analysis elements below to help you craft your response. Note: Do not, however, respond to these questions in a “checklist” format as your original response. Your response should be a single, persuasive narrative argument that is polished and could serve as the basis for a speech you might make to the board of directors—to either support or question the proposed strategy.
Hint: The following are strategy evaluation elements that you should formally consider:
Strategy Evaluation: Clarity of the Strategy
Do the strategy and associated initiatives have a “name” that evokes the strategy?
Is it easy to communicate what the strategy is and why it can work?
Is it likely that people inside the organization will understand and commit to the strategy?
 

Strategy Evaluation: Consistency of Purpose (Context Level of Analysis)
Based on your reading of the case, is The Weather Company’s proposed 2013 strategy consistent with its soulful purpose and its mission, vision, and values? How?
 

Strategy Evaluation: Feasibility and Alignment (Activities and Relationships Level of Analysis)

• What are the primary key success factors that The Weather Company needs to excel at in the future?
• Do they have the internal skills, competencies, and capabilities to execute their strategy? (If not, does the plan do a good job of saying how they will acquire these?)
• Are the basic elements of the proposed strategy feasible from a:
• Teamwork and healthy organization standpoint?
• Financial standpoint?
• Measurement/metrics standpoint?
• Does the strategy appear to be internally aligned?
• Do the specification plan steps support each other? How and why?
• Strategy Evaluation: External Consonance and Potential Competitive Advantage
• Is the proposed strategy consonant with the current and future needs of the external ecosystem and stakeholder needs? How and why?
• Does the strategy indicate any long-term strategic intent?
• Does the proposed strategy position the company to perform activities differently than rivals do? How and why?
• Does the proposed strategy lead to incremental change within the industry or more fundamental change within the industry, or does it establish new positions outside the industry or in blue ocean spaces? How and why is the scope of the strategy appropriate?
• Do you think the proposed strategy can create or preserve any advantages it may confer on the company? Which advantages, and how and why?

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