XM-Sirius Merger

Paper Summary:

This paper discusses the merger of XM and Sirius and examines the the pricing, product and marketing challenges that the new company will face as a result of the merger. The paper specifically discusses the pricing considerations and asserts that the merged company must concentrate on increasing the value pricing strategies. The paper then looks at the merger from a product strategy perspective and shows why the future must include value-based strategies that allow for digital video and, in turn, greater levels of differentiation. The paper concludes that the combined companies need to step away from price competition and focus on developing the market, battling Apple and improving the video content. Several tables of financial data are included with the paper.

Outline:
Introduction
Pricing Considerations
Product and Service Strategies
Combining Marketing Messages

From the Paper:

"In November, 2007, Sirius and XM announced their intention to merge and on March 24, 2008 the Department of Justice (DOJ) approved the merger, citing the companies as competing in the audio entertainment industry instead of the more specifically defined satellite radio industry. Detractors argued that the value positions of each company, Sirius and XM, underscored their intentions to dominate the satellite radio industry, yet the DOJ stated in approving the merger that both companies face significant competition in the broader audio entertainment industry. Both XM and Sirius has heavily invested in each of their product and service divisions, with Net Income (Tables 1 and 3) being elusive for each company. It is predicted by financial and industry analysts that the combined companies will deliver $4B in operating expenses over the next six years (Holahan, Hesseldahl, 2008)."

Sample of Sources Used:

• Andrew Edwards, Mike Barris. (2008, May 13). Earnings Digest -- Media: Losses Dog Sirius, XM. Wall Street Journal (Eastern Edition), p. B.7. Retrieved June 1, 2008, from ABI/INFORM Global database. (Document ID: 1477481521).
• Apple Investor Relations. Investor Relations website for 2008 - 2008 filings with the Securities and Exchange Commission.,. Retrieved June 1, 2008, from Apple Investor Relations and Filings with the SEC Web site: http://www.apple.com/investor/
• Goh Shu Fen (2008, January). Is there really true value in value-based pricing? Media, 21. Retrieved June 3, 2008, from ABI/INFORM Global database. (Document ID: 1468593981).
• Catherine Holahan, Arik Hesseldahl. (2008, March). Sirius and XM Get the Justice Go-Ahead. Business Week (Online) Retrieved May 21, 2008, from ABI/INFORM Trade & Industry database. (Document ID: 1450933951).
• In-Stat: Digital Radio Market to Experience Global Market Growth - Unit Sales to Increase Three-Fold. (2007, November). Wireless News,1. Retrieved June 1, 2008, from ABI/INFORM Trade & Industry database. (Document ID: 1379147371).

More papers on XM-Sirius Merger:

• Analytical Essay # 150318 : "The Sirius XM Merger"
• Analytical Essay # 110428 : "Sirius Satellite Radio"
• Analytical Essay # 126041 : "Sirius and XM Radio Case"

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