AOL Time Warner Term Paper

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AOL Time Warner

Strategic Alternatives

Revised strategies for the company include ways in which to mitigate the problems experienced by the connection between Time Warner and AOL. One of the strategies used to do this is the change in the company's title form AOL Time Warner to Time Warner. The mixed reaction to this change indicates that more significant work is probably necessary in order to restore public confidence in the company. One should note that the case study ends on a positive note, with the financial situation of the company appearing to indicate a profitable strategic plan. As such, it may be possible for the company to turn its situation around towards a more favorable future. A concern may be the speed with which this is occurring. Time Warner Inc. may profit from refining current strategies, but should also consider new strategies and possible alliances in order to maximize its position in the market. Indeed, alternative strategies should be considered in addition to what is currently being done. These should be specifically targeted towards the company's current problems such as debt levels and investigations.

2a. Time Warner is currently not stable on any level. The company is being investigated, its economic situation is far from what it could optimally be, and internal leadership struggles and conflicts detract from its organizational unity. Its growth is showing signs of being reestablished as a result of retrenching managers and workers who have not contributed positively to the company.Get full Download Microsoft Word File access
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Term Paper on AOL Time Warner Assignment

The disadvantage of retrenchment as a strategy is that it contributes to internal instability and conflict as employee stress levels rise. In the wake of existing retrenchments and resignations, further strategies of this kind can only contribute to further instability. While retrenchment can serve the purpose of eliminating non-profitable employees, and thus increase overall profitability for the company, it should be weighed against the effect on remaining employees. When considering its current situation, I therefore do not believe that further retrenchment is a favorable strategy for Time Warner. Instead, I believe it should now focus on its current employee base, and consider how this, along with other strengths, can be used to help the company prosper in the future.

2b. Cost leadership refers to offering low-cost services in order to compete in an existing market. Again, in the light of its current situation and lessons from historical events, I do not believe that this is a good strategy for Time Warner. Instead differentiation may be a better alternative as long as it is targeted towards current market demands and existing competition. The company can for example use the creativity of its current employee base in order to differentiate its current products and services.

2c. In terms of strategic alternatives, Time Warner Inc. may profit more from concentrating on the positive aspects of the company rather than the negative. SO strategies, where the company uses its strengths in order to make use of opportunities is for example the most favorable strategic alternative that might be used. Time Warner Inc. can cite as its main strength its size and its public prominence. It is a very well-known company, and can use this in order to diversify its products. There are many opportunities that this company can make use of by relying upon this strength. Particularly the opportunity to diversify may prove profitable.

Opportunities can also be used to overcome potential weaknesses within the company via WO strategies. When this option is considered, the company should list its weaknesses and how these can be mitigated by making use of concomitant opportunities. Weaknesses such as the company's debt can for example be mitigated by reentering markets for the company's existing products, as well as for newly developed products. Further market research can reveal opportunities that have not been considered so far.

Considerable threats are also currently experienced by the company, and can be mitigated by using strengths in terms of ST strategies. The company can for example use strengths that have proved profitable in the past to mitigate threats such as existing competitors. The traditional approach mentioned in the case document may be of help in this regard.

B. Recommended Strategy

1. For the corporate level of Time Warner, Inc., I would recommend the SO strategy. The company has historically performed very well, and can use the strength of its reputation and its public prominence to make use of currently existing opportunities. For the business level of the corporation, I would recommend a WO strategy. It is clear that the company's economic situation is somewhat weak, and this should be acknowledged by the alternative strategy chosen. By means of targeted opportunities in concomitance with the corporate level, this situation can be mitigated. At the functional level, I would also recommend an SO strategy. The employees that are left within the company should be viewed as an asset and should also be treated as such. Employees should therefore be trusted to be creative and innovative. This will however take cooperation between the different units of the corporation, and all signs of internal weakness should be eliminated before the potential strengths of employees can be utilized.

To streamline the overall strategies, I would recommend that the different unites within the corporation be addressed individually via different alternative strategies until equilibrium is reached among all aspects of the corporation. The ideal is to profit from SO strategies. For the Time Warner unit of the corporation, I would recommend ST strategies. The company has historically thrived upon traditional technologies that are currently outmoded by more modern computer technologies. Threats include these new technologies and the FCC ruling mentioned in the document. The Time Warner unit can use its strengths in order to create innovative products and services to compete in the current technological world.

For the AOL Unit, I would recommend an initial focus on a WT strategy. The reason for this is that this unit has many internal conflict issues, as well as conflicts with the Time Warner unit. Such interpersonal conflicts weakens the overall structure of the company and should be mitigated before opportunities can be utilized for the profit of the corporation as a whole. These conflict issues should therefore be addressed in order to minimize both weaknesses and threats to the corporation as a whole. Once these strategies have been implemented, Time Warner can strive towards its final goal of SO strategies for the whole corporation.

2. Short-term problems include interpersonal conflicts and public perception. By beginning with the WT strategy, the AOL unit of the corporation can focus on specific problem areas and address these in order to form a sound basis for future strategies. Before opportunities can be utilized, a company should ensure the proper functioning of its internal components. The public perception of both Time Warner and its AOL component is not very favorable, and should be mitigated in order to properly make use of the opportunities open to the corporation.

Long-term problems include the organization's economic situation in terms of profit, loss, and debt. While there appears to be a favorable turn for the company, the company should make long-term commitments to effective business strategies for its renewed economic growth. This will restore not only public trust, but also the corporation's reputation within the business world itself. This can be done by initial WO strategies that can evolve towards SO strategies as the corporation's financial growth increases once again.

3. The most pressing problem is the internal conflict between the Time Warner and AOL units of the corporation. If the internal basis of a company is weak, no externally focused strategies will be profitable in the long-term. Rather than continuing the strategy of retrenchment, I believe that a policy of interpersonal communication should be implemented in order to help employees work on their internal… [END OF PREVIEW] . . . READ MORE

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