Question

Sustainable competitive advantage means a firm outperforms its peers over a sustained period of time. Such superior performance is noticed by the peer group that attempts to identify the source of the performance and copy it. This concept is called “benchmarking.” Which of the following demonstrates a benchmarking process?

1) Is SiriusXM’s business model working? Explain your answer.

Go to investor.siriusxm.com and check whether SiriusXM’s recent financial reports indicate that its business model is working. Are its subscription fees increasing or declining? Is its revenue stream from advertising and equipment sales growing or declining? Does its cost structure allow for acceptable profit margins?

2) Are its subscription fees increasing or declining? Explain your answer.

Answer 1

Go to investor.siriusxm.com and check whether SiriusXM’s recent financial reports indicate that its business model is working. Are its subscription fees increasing or declining? Is its revenue stream from advertising and equipment sales growing or declining? Does its cost structure allow for acceptable profit margins?

2) Are its subscription fees increasing or declining? Explain your answer.

Answer...

1. The subscription revenue of the Siriusxm has increased from $1010m in 2016 to $1078m in 2017.

2. The revenue from the advertising has increased from $32m in 2016 to $36m in 2017. The Equipment revenue has also have the increasing trend from $27m in 2016 to $30m in 2017.

3. Yes, the cost structure has improved from 71% in 2016 to 69.55% in 2017 of the revenue. So, the profit margin has been in the acceptance level and increasing.