1. a) Threat of new entrants – The threat of new entrants is relatively less than compared to most entertainment and programming industry. New entrants have to spend millions of dollars for launching satellites in order to get broadcasting signals, installing other terrestrial networking equipment, and for developing programming, such as conduct market research and advertise product. These are all the arrangements that both these companies did for initial feasibility study. Hence it will not be easy for new entrants to make a space in already highly dominated area of satellite radio. b) Threat of substitutes/alternatives – The threat of substitutes is high. There are various alternatives, such as terrestrial AM/FM radio, free and paid Internet streaming services, the music channels offered by cable TV providers, and the music app that could be download directly on smartphones. These substitutes are freely available or available at cheap pricing. c) Bargaining power of suppliers – Suppliers for Sirius XM are the content providers of music and various other programming. Before these two companies operated as a single entity, these providers had an advantage to push up the negotiations for content in demand and during 2002-2007, executives from both sides understood they were paying through the nose to achieve the right and desired content. However, …show more content…
Department of Justice and care was taken so that no satellite radio monopoly was not created. The buyers’ complaint of high costs along with complaints of various AM/FM enterprises, various consumer interest groups and other interested parties which expressed opposition to the merger was largely on grounds that it would be anti-competitive and injurious to satellite radio subscribers. Also, the car manufacturers’ negotiate a good fees per subscriber to pre-install their satellite system in their