As you are aware, Google has been entering select markets with its Google Fiber service that competes directly with our high-speed data and video services. Even though its market penetration has been moderate, Google has deep pockets and excellent brand awareness. As a result, we are paying close attention to markets that it is entering.Within the last year, we completed our own fiber upgrade in the area at a cost of a little over $550 million. We are able to provide our high-speed data and video, and have a large number of bundled customers for our products. Unfortunately, many of them have been with us for a while and are no longer under any contract to remain with us. With Google’s entry, (along with existing competition) we may need to reduce our prices. The Austin service area for our services includes 340,000 households. Currently, in neighborhoods where Google competes, we provide bundled services that average $120 per household per month.In addition to monthly costs associated with the $550 million (which is being amortized over 15 years at 6.0 percent), agreements with program providers stipulate that we pay them $41.50 per subscriber per month. In addition, we have maintenance, service, and billing costs of $9.20 per subscriber.I am concerned that increased competition will lead to a price war, and that prices may get to unprofitable levels. If things turn really bad, we may need an exit strategy from this market. How low should we be willing to go with our prices before it makes sense to exit the Austin market?"
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
As you are aware, Google has been entering select markets with its Google Fiber service that competes directly with our high-speed data and video services. Even though its market penetration has been moderate, Google has deep pockets and excellent brand awareness. As a result, we are paying close attention to markets that it is entering.Within the last year, we completed our own fiber upgrade in the area at a cost of a little over $550 million. We are able to provide our high-speed data and video, and have a large number of bundled customers for our products. Unfortunately, many of them have been with us for a while and are no longer under any contract to remain with us. With Google’s entry, (along with existing competition) we may need to reduce our prices. The Austin service area for our services includes 340,000 households. Currently, in neighborhoods where Google competes, we provide bundled services that average $120 per household per month.In addition to monthly costs associated with the $550 million (which is being amortized over 15 years at 6.0 percent), agreements with program providers stipulate that we pay them $41.50 per subscriber per month. In addition, we have maintenance, service, and billing costs of $9.20 per subscriber.I am concerned that increased competition will lead to a price war, and that prices may get to unprofitable levels. If things turn really bad, we may need an exit strategy from this market. How low should we be willing to go with our prices before it makes sense to exit the Austin market?"
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