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  • June 2004 (Revised June 2006)
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Scientific-Atlanta, Inc.

By: Thomas R. Eisenmann
  • Format:Print
  • | Pages:21
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Abstract

Scientific-Atlantia (S-A), a leading manufacturer of cable TV equipment, is confronting strategic challenges in mid-2004. For decades, cable operators have faced high switching costs that have locked them into exclusive supply relationships with either S-A or its somewhat larger rival, Motorola. S-A has developed technology that substantially reduces switching costs, and it is positioned to capture market share because it has an 18-month lead over Motorola in developing cable set-top boxes that incorporate digital video recorders (DVRs). Cable operators are eager to offer DVRs to stem subscriber losses to satellite TV. The case asks whether S-A should aggressively pursue opportunities to overlay its set-tops in cable systems that previously employed only Motorola gear. If so, to what extent should S-A subsidize cable operators' remaining switching costs? Are there risks in introducing more competition into what had previously been a stable duopoly? Also explores S-A's strategic options for dealing with a transition to all-digital television technology and consumers' growing demand for solutions for managing their digital media files (photos, music, etc.). Asks whether S-A should continue to offer an integrated, proprietary, end-to-end transmission solution or, instead, embrace a more open "ecosystem," relying to a greater extent on third-party software and hardware providers and offering solution elements on an unbundled basis. A rewritten version of an earlier case.

Keywords

Technological Innovation; Competition; Industry Structures; Television Entertainment; Duopoly and Oligopoly; Manufacturing Industry; Media and Broadcasting Industry

Citation

Eisenmann, Thomas R. "Scientific-Atlanta, Inc." Harvard Business School Case 804-191, June 2004. (Revised June 2006.)
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About The Author

Thomas R. Eisenmann

Entrepreneurial Management
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