Industrial Organizational Strategy Option for SiriusXM Radio

Industrial Organizational Strategy Option: Expand into International Markets


Satellite radio companies outside the US are practically nonexistent. As an example, WorldSpace India, which at one time operated a satellite radio service across India, on December 31, 2009 ceased operations due to what it calls “an outgrowth of…financial difficulties” (WorldSpace Inc, 2009). High operating costs and a general lack of interest in satellite radio abroad has plagued companies looking to establish the industry in other countries with little hope of succeeding. Similar problems face SiriusXM right now; however, this I/O strategy seeks to diversify the company’s income streams in the hopes of enhancing profitability.

To expand SiriusXM service to countries overseas would require the launching of new satellites into geosynchronous orbit over their respective continents. As one might expect, this process is time consuming and extremely expensive. On the contrary, SiriusXM could consider any foreign market to be an untapped segment of citizens. Additionally, the marginal cost of arranging the content to be offered on the new networks seems at first to be inexpensive. Taking account of SiriusXM’s current proficiencies in operating a satellite radio service, economies of scale would lend themselves to SiriusXM’s potential for success. A few of the strategies which SiriusXM executes best right now is partnering with auto companies and providing very specific content on-air to appeal to a variety of listener tastes.

A potential pitfall of international expansion could be that SiriusXM’s strengths become its weaknesses. It would take a lot of time and social capital to develop partnerships with car companies in foreign countries to the same extent as in the US. Further, SiriusXM would likely have very little idea where to even begin sourcing programming from in its target countries. For example, if SiriusXM were to enter the market in India, it is unlikely that Indians would be particularly fond of Howard Stern’s program. In this sense, cultural differences would need to be overcome for this strategy to have a chance at working properly in its intended markets abroad. More realistically though, the capital requirements of foreign expansion make this I/O strategy difficult to implement with SiriusXM’s current debt problems. The company’s business level strategy in expanding abroad would remain focused differentiation, as the fundamentals of SiriusXM’s operations would not change, rather the service’s offering in international markets would expand.


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WorldSpace Inc. (2009, December 31). Worldspace inc announcement. Retrieved from http://www.worldspace.com/index_wsmsg.html