Please provide alternative solutions for the problems identified in the following given case: -

The sun was setting after another sweltering day in the city of Buenos Aires in January 2012. Alejandro Harrison, Pramer's CEO, looked out the window of his Palermo Hollywood office while he reflected on his company's upcoming challenges. On the one hand, he was very pleased and proud with its business performance: Pramer's cable TV channels had proven successful in Latin America, a rapidly changing market increasingly dominated by large-sized international production companies. On the other hand, Harrison wondered, how could his company leverage the worldwide momentum of gastronomy to its advantage? As the global interest in food and all cultural issues associated with it was rising to unprecedented peaks, Pramer, with its successful Elgourmet.com (EG.C) channel, was ideally poised to seize any emerging opportunities. EG.C was the only cable channel solely dedicated to Latin America's regional cooking. Clearly, the company stood at a crossroads, with two potential paths to growth opening before it. Pramer could boost EG. C's penetration in Latin America, where it had already consolidated its success but still had some room for growth, or it could launch the channel in the United States' Hispanic market, where its competition was already active. Harrison knew timing was crucial for a TV channel's entry and establishment in a new market. As the entire world witnessed an unparalleled gastronomic boom, Harrison had two weeks to prepare a plan for company growth to submit to Pramer's Board, whose expectations were running high. PRAMER AND ELGOURMET.COM Pramer was founded in 1993 to broker cable TV content and channel sales. In 1997, the firm was acquired by Liberty, an international media conglomerate. In 2005, after merging with UnitedTHE CHALLENGE AHEAD Alejandro Harrison knew that his company's business was changing rapidly, with a small number of large content producers (Turner, Fox, Discovery, etc.) gradually concentrating greater power, leaving smaller players at risk of demise or acquisition. Pramer was a small player among the large ones and too large to qualify as small. Thus, growing proved a necessity. Pramer faced multiple expansion options and resource constraints. As a result, the company's future actually hung in the strategic choices concerning where to grow and how to allocate its resources. Harrison realized EG.C would spearhead the company's sustained growth leveraging the worldwide gastronomic boom. He wondered if it made the most sense to invest in E6. C's Latin American continued expansion, as his marketing team already had a strong grasp of the regional market. However, recruiting new subscribers would prove increasingly costly and hard, and it would require approaching reluctant cable operators. Instead, the company could choose to launch EG.C in the U.S. Hispanic market, a fastgrowing community that started to weigh heavily in the American landscape. EG. C's foremost competitors Utilisima, Fox LIFE, TLC, and Cazalet had already ventured into the U.S. market, and time would play against any newcomers, making it harder for them to conquer a significant market share. Even though both options should be pursued in the long run, which decision would be more adequate in the short run? And if the decision to enter into the U.S. Hispanic market was made, a number of questions plagued Harrison: Would PRAMER be able to use the knowledge acquired in Latin America? What knowledge would be useful and which new capabilities should be developed? Who should EG.C target in the U.S. market? What should be its positioning vis avis its competitors? Harrison had to review both alternatives with his team, analyzing their individual pros and cons, in orderto make a sound recommendation to the Board. Time was running out, as Harrison would make his case before Pramer's Board in two weeks. Global Communication, another media giant, Liberty changed its name to Liberty Global (see Exhibit 1 for a list of Pramer's milestones).1 In January of that same year, Alejandro Harrison, a 42-YEAR-OLD executive with extensive experience in Argentine media who had joined Pramer less than a year before as VP of Operations, was appointed Pramer's CEO. Alejandro was a driven, innovative professional, who took over a nearly bankrupted company in a highly competitive market with concentrated media and content industry players. With courage and a carefully assembled team, he managed to pull the company through to firmer ground. His clear, sharp mind had enabled Alejandro to elaborate a new strategy for his company, based on the development of a proprietary content portfolio with a unique "regional" approach that would provide marketable offerings for Latin America at large. By 2012, Pramer2 had turned into a major producer, distributor and marketer of contents for multiple pay television platforms, boasting the capacity needed to deliver hundreds of original broadcasting hours to all Latin American viewer segments. The company fed its signals to more than 20 million viewing households in over 24 countries. Its channels included: Elgourmet.com, Cosmopolitan Television, Film & Arts, Europa-Europa, Canal (a), Reality TV, and America Sports. The firm also represented El Garage TV. Elgourmet.com (EG.C) had become PRAMER's most successful and widespread channel. ELGOURMET.COM - CREATION, CONCEPT AND FEATURES In July 2000, EG.C started broadcasting straightforward cooking contents intended for Latin America at large. By the late 1990s, gourmet cooking had turned into a well-established trend, rallying increasing interest among consumer audiences. Gourmet cooking was construed as refining popular gastronomy, and EG.C focused on that notion. EG. C's refined cooking contents did not involve complicated dishes that went beyond viewers' possibilities. Rather, channel shows offered accessible recipes artfully prepared by renowned chefs. In a nutshell, EG.C set out to cater to viewers' aspirations with attainable offerings. Well-known Latin American chefs who offered the rich diversity of flavors, customs and tastes that characterized local cultures hosted EG. C's shows. Production costs were relatively low and the station could afford to bring chefs from other countries to Buenos Aires. Soon, EG.C turned into a concept that far exceeded any typical cooking channel. It offered an exquisite combination of dishes, beverages, local customs, travelling experiences, and colorful stories that reflected its slogan, "a love of fine living." From its inception, EG.C aimed to stand out among current broadcasts, working on a number of unique features listed in Table 1 below.Attribute Specialty Regionalizat ion Identify Prestige Aesthetics Language Multi- format Interactivity Table 1. EG. C's features n The only Latin American channel 100% devoted to cooking Latin American scope the soul of E6. C's proposition Regional foods and chefs were to be adequately featured As a result of featuring renowned chefs who represented their countries. "Design\" imagery, modern (sparse, minimal furnishings) decor, and carefully managed audiovisual language to create a professional, unique ambience. Formal language: harmonious, subtle, balanced, relaxed, and intended for a general audience. Content: no accurate ingredient amounts were provided; the idea was just to show how a dish was made unlike traditional instudio cooking shows. Traditional "studio cooking\" shows were complemented with other shows on traveling contests, reality TV, general information (etiquette, cooking tips, etc.), and beverages. EG. C's most innovate feature: the channel emerged amidst the internet boom, and its own name evoked the Web's Source: Case authors, based on interviews with PRAMER executives. Over the years, EG.C added other business ventures that enabled the channel to expand its offerings and to interact with its viewers in and outside their TV sets. Its additional ventures included a website, www.elgourmet.com, expogourmet.com exhibitions, a Club de! Buen Beber (a sort of wine club), and elgourmet.com magazine. Overall, EG.C drew 70% of its revenues from agreements with affiliated cable TV companies, while another 15% came from advertising, and the remaining 15% was brought in by syndication sales and associated ventures, among other business operations (see Exhibit 2 for a summarized account of E6. C's revenue sources). MAJOR CABLE AND SATELLITE TV INDUSTRY PLAYERS Cable TV industry players included signal providers, satellite operators, cable companies, and subscribers or paying viewers. Pay-TV channel providers owned what was usually known as a "cable channel" (e.g., EG.C, Utilisima, HBO, etc.) with its contents i.e., the shows it broadcast. Signal providers might develop their own contents, purchase them from other companies, or acquire a license to market and distribute syndicated contents in a specific region. Contents were \"stored\" in a video library, and a programming lineup was set up, typically spanning 24 hours a day. For signals to reach viewers, providers had to seize a slot in cable television offerings. Finally, the signal was encrypted and sent to satellite operators. Satellite providers took encrypted signals and sent them to paytv operators. The signal was \"broadcast\" to individual geographical areas. A specific band width that could accommodate more than one signal was purchased from satellites by paytv channel providers. For instance, EG.C had two feeds: a southern feed for Argentina, Paraguay and Uruguay, and a northern fee for the other Latin American countries, except Brazil. Thus, EG.C was able to adjust its schedule to local time zones and \"fine-tune\" its programming with suitable contents for large markets, like Mexico and Colombia. PayTv operators marketed and distributed channels to subscribers via cable or satellite, with broader reach, effectively delivering paytv services. Latin America boasted over 1,200 cable operators. As a result of mergers and acquisitions, some groups concentrated several cable operators the largest holding owned 250, while its closest follower grouped 100. Instead, the United States featured 92 cable operators, with 10 of them holding 80% of the market. The number of channels offered by cable operators depended on their respective band width typically, the number of signals exceeded band width, forcing a selection process. Subscribers were the people or organizations that had a cable or satellite TV service installed and paid for. Usually, subscribers were divided into households, household groups (buildings, condominiums, etc.), and institutions (hotels, public sites, etc.). Subscribers normally accessed the service by purchasing a basic package that contained a set number ofsignals. There were also premium packages available, with attractive programming offerings for specific audiences for example, packages offering movies, sports, etc. In the United States, Hispanic or Latin packages were offered with contents in Spanish (see Exhibit 3 for a diagram of interactions among industry players). CHAN NELS' VALUE PROPOSITIONS The notion of \"competition\" had a number of special features in the cable TV business. First, no signal was a "clearsubstitute\" for another one, as, typically, several cable channels were watched every day viewers even watched competing signals on any given day. Additionally, viewers were believed to spend 90% of their viewing time watching no more than 15 signals. At the same time, cable channels carried \"broad" offerings that could encompass a rich diversity of themes, often blurring their own "identity.\" A signal's value proposition translated into its programming schedule, which, unlike other products, allowed for easy alterations within some boundaries by simply changing the shows broadcast. EG. C's competitors appealed to viewers' overall wellness a broad notion associated with good living, lifestyle and living conditions. All signals, including EG.C, focused on "life improvements\" by two means: information and entertainment. Information was construed as the knowledge conveyed to drive viewers to take actions that would lead to change. For example, a traditional instudio cooking show demonstrated to viewers how to make a recipe, and that information, if used, contributed to improve viewers' lives. On the other hand, entertainment contents were intended to produce numerous stimuli to immediately gratify viewers, with no intent to elicit future actions. A show chronicling travels illustrated this content type. Table 2 below describes the four major programming content segments. p.4 Table 2. Segments and contents WELLNESS good living/lifestyle/quality of life Information + entertainment TTTT Foods & Beverages Personal Care, Family & Health Primary focusing on food Revolving around personal care and/or drinks (indoor and (beauty, make-up, fashion, etc.), outdoor cooking, reality shows, including family and health care. contest, etc.). Travels & General Interest Home Improvement & Handicrafts Travelling is the basic appear, Shows dealing with home Segments & Contents including or not foods and beverages. This segment may improvement (painting, interior include other contents no design, maintenance), as well as featured by the other crafts and art projects. categories. Source: Case authors, based on interviews with PRAMER executives. THE COMPETITION EG. C's key competitors in Latin America (excluding Brazil) included the following channels: Casa Club TV3 was owned by MGM Networks Latin America LLC, an alliance forged by MGM Networks, a Metro-Goldwyn-Mayer Studios Inc. division, and Liberty Global Inc. -meaning that EG.C and Casa Club TV were somewhat "related" despite their complete management independence. In 2012, MGM Networks Latin America operated four television channels -MGM, MGM HD, Casa Club TV, and Ella (the American version of CCTV)- broadcast in Spanish and Portuguese to 23 Latin American countries, Portugal, and the United States. With contents spanning all four segments, Casa Club TV built a balanced positioning, devoting one working day a week to highlighting a specific topic -family, looks, home, palate and dreams. The signal combined subtitled English-spoken content produced in the United States with wholly owned shows in Spanish, hosted by Latin celebrities. In early 2012, Casa Club TV's slogan was, "Enhance your life."Created in Argentina and broadcast by cable TV since 1996, Utilisima4 was acquired by FOX in 2006 to join the powerful Fox Latin American Channels (FOXLAC) network. This signal was broadcast across most Latin American countries (Paraguay, Chile, Ecuador, Uruguay, Costa Rica, Peru, Bolivia, Venezuela), and, starting in 2004, it also reached Colombian, Canadian, Spanish and Australian viewers. In late 2008, Utillsima was broadcast by satellite and cable in Mexico, and, by 2010, it was also airing in the United States. Its contents focused primarily on home-making topics (crafts, cooking, interior design, do-it-yourself projects), and all of its shows were wholly owned and produced in Spanish, with Latin hosts. Its catchphrase in early 2012 WAS "Simplify your life." FOX Life was also owned by FOXLAC, a true conglomerate based on sound offerings and strong, worldwide distribution. This channel focused on travelling, with a fresh, young, entertaining and relaxing flair. It targeted middle-aged audiences of any gender.5 For the most part, it relied on superior-quality, syndicated shows with Spanish subtitles. Its slogan in early 2012 WAs "You've made it back home." Finally, TLC (Travel & Living Channel), owned by Discovery Communications, Inc, described its shows as "visually appealing, inspiring contents that focus on lifestyles and tell compelling human stories." With a primary focus on lifestyles and no in-studio cooking shows, all of TLC's offerings were in English, with subtitles and offering entertainment. Its slogan in early 2012 WAs "Life brings surprises," although it was not featured on screen. Except for FOX Life, which only broadcast shows in English in the United States, all EG.C competitors featured Spanish or Spanish-subtitled content both in Latin America and the United States (see Exhibit 4 for a description of EG.C competitors' content in their respective segments). ELGOURMET.COM AND THE LATIN AMERICAN MARKET The Latin American region consists of nearly 20 countries over 21 million square kilometers, and a population of 572 million as of late 2011. Its regional GDP added up to around USD 5.16 trillion by mid-2011.7 Overall, the region boasted 71.9 million households, with 31.3 million or 42% of them subscribed to some cable or satellite TV service.8 EG.C operated in nearly all regional countries, except Brazil, a market with a language and dynamics that set it apart from all other Latin American countries. Cable TV penetration varied across the region (see Exhibit 5). Pramer estimated that, for a number of reasons known as "deflectors" (see Table 3 below), some households were cost-effectively unreachable, and, as such, they should be discounted from Latin America's "potential market." Harrison believed EG. C could tap further into this potential market by negotiating with approximately 20 cable operators over a three-year period, incorporating 30% of households in thefirst year, 40% in the second, and 30% in the third year. Revenues per subscribed household were estimated at USD 0.0555 a month. Typically, regional cable operators were rather unsophisticated in terms of market information, and their programming and purchasing decisions were frequently made by a single individual with a very intuitive approach. For the most part, these companies were owned and managed by intuitive entrepreneurs with typical Latin idiosyncrasy. Table 3. Latin American market deflectors _ Technical Cable operators' technical limitations affected an estimated 430,000 households Financial An estimated 235,000 households did not fit the channel's socio-economic target. Strategic An estimated 6.1 million households were affected by cable operators' programming choices, "band with\" availability, competition, etc. Source: Case authors, based on interviews with PRAMER executives. EG. C's further expansion across the Latin market required a hefty investment, as secondtier households proved much harder to lure. Indeed, Harrison's threeyear plan called for a USD 5.84million investment that would mostly go to advertising and promotion, wi1 a 62.5% allocation for the first year, 31.3% to be spent in the second, and the remaining 6.3 left over for the third year. Finally, incremental overhead expenses were expected to add up to USD 382,000 in the first year, growing at a 10% annual rate thereinafter. ELGOURMET.COM AND THE U.S. HISPANIC MARKET In March 2011, the U.S. Hispanic population totaled an estimated 50.5 million, accounting for the nation's largest minority: one out of every six Americans was Hispanic.9 For U.S. census purposes, the term "Hispanic\" did not refer to a racial distinction but merely described an origin (Mexican, Puerto Rican, Argentine, etc.) that is, it was viewed as an ethnic category rather than a racial grouping. As a result, people claiming to be of Hispanic origin came in all races (AfricanAmerican, Asian, Caucasian, etc.), and their cultural background varied according to their homeland, with the Spanish language often ranking as a common feature. Three out of every five Hispanics living in the United States had been born on American soil, while most foreign born Hispanics came from Mexico. As a result, a large number of Hispanics shared a similar background. Over half of the overall U.S. population growth in 20002010 was driven by the 43% increase in its Hispanic population.10 By 2010, Hispanics' purchasing power had surpassed the USD 1 billion mark and was growing at a faster rate than that of other ethnic groups. Despite their lower-thanaverage income in 2010, Hispanic households, as a whole, spent more than the average U.S. household on telephone services, men's and children's apparel, and footwear. They also used a large share oftheir income on food (groceries and restaurants), housing, utilities and transportation.11 The ten American states with the largest Hispanic markets were (in Hispanic population decreasing size order): California, Texas, Florida, New York, Illinois, New Jersey, Arizona, Colorado, New Mexico, and Georgia. In nationwide censuses, 59% of Hispanics in the United States reported speaking Spanish at all times, while an additional third claimed to speak Spanish at least half the time. Only 4% of the U.S. Hispanic population said they never spoke in Spanish.12 On average, Hispanics watched television in Spanish for 17.3 hours a week. They spent 12 hours a week listening to Spanishspeaking radio shows, 1.6 hours a week reading magazines in Spanish, and 1.2 hours a week reading newspapers in Spanish. In turn, they watched television in English for 11.6 hours, listened to Englishspeaking radio stations for 7 hours, and read English magazines and newspapers for 1.7 and 2 hours, respectively. Combined, they also made 9.8 million visits to restaurants every year.13 In 2011, the total of U.S. Hispanic households was estimated at 12.9 million, with 9.7 million of them subscribing to a cable TV service, and 4.0 million opting for a special \"Latin\" package offered by cable operators.14 Pramer estimated that 25% of these households would not sign up to receive EG.C for a number of reasons (cable operator strategy, purchasing power, interest, etc.). The channel could reach the remaining market over a threeyear period, working with ten cable operators to reach 45% of prospect households in year one, 30% in year two, and the remaining 25% in year three. Revenues per subscribed household were estimated at USD 0.102 a month. U.S. cable operators were professional companies, with more complex organizations than their Latin American counterparts. Typically, sales processes proved long, starting with an approach to executives in charge of Multicultural Programming, who assessed prospect channels and submitted their recommendations to the Programming Head. Next, the Programming Head asked the company's Marketing Department to analyze how a prospective signal fitted in with its programming strategy. Once this process was successfully completed, the Programming Head moved on to negotiate prices and terms. Launching EG.C in the UWispanicmarket required an investment of USD 770,000 over a three year period. This investment would largely go to cable operators, with 71.4% used during the first year, 21.4% in the second year, and 7.2% in the third year. Finally, incremental overhead expenses would amount to USD 707,000 in year one, with an expected annual growing rate of 10%. For more detailed information on the U.S. Hispanic population (see Exhibit 6)