Xm Satellite

SECTION 1: BUSINESS OVERVIEW

1.1 XM COMPANY’S OVERVIEW

XM satellite radio was founded in 1992 as a subsidiary of American Mobile Satellite. In1997, XM Satellite Radio obtains the license from Federal Communications Commissionwhich gives XM the first mover advantage to become the pioneer in Satellite radio industry.

1.2 ANALYSIS OF MARKETING ENVIRONMENT

1.2.1 External Analysis

1.2.1.1 Radio Revolution

Radio, as a source of information form and a leisure tool, experience a very long evolution

from 1920s when the first licensed commercial radio services began on AM. FM came out in 1946, with better quality of sounds and trendy programming. The newcomer, satellite radio, allows listeners to follow a single channel of music no matter where they are because the signal is sent from transmitters orbiting thousands of miles above the

Earth.

1.2.1.2 Market Environment

Satellite radio can be widely used in media and entertainment market, for example, into

auto mobiles, through a home stereo, portable boom box and online through a

computer. In seeking market acceptance, XM will encounter competition for

distribution, listeners and revenues from many source, including Sirius satellite

radio, traditional radio (AM/FM radio), internet radio, direct broadcast and cable

radio .

1.2.2 Internal Analysis

As a new company, XM’s resources are limited . However, not all the resources

lead to a competitive advantage. Compared with other competitors, XM have got strength

the technology and the potential alliance. XM have already set up a partnership with

WorldSpace which can provide with needed technical support on design and development

of the service.

One the other hand, since XM do R&D in chipset, they are able to license the technology to receiver manufactures that they would alliance with. What’s more, GM which has an equity investment in XM can make alliance to them let the radio installed in their cars . The weakness of XM lies in