Time Warner Internal Memo: Chairman Dick Parsons Offers Strategic Overview

Time Warner Chairman and CEO Dick Parsons’ annual strategic overview for TW colleagues went out by company-wide email Friday. We’re posting the full text in extended view but here are some highlights:
– TW may have dropped synergy from its vocabulary but the concept is still a driving force. Whether it’s “taking advantage of natural adjacencies” or “collaborating,” Parson’s emphasizes the ability of the various parts of the company to feed one another or work together. For example, HBO-on-Demand and the new AOL Music channel are the two leading on-demand services on Time Warner Cable.
– The reduction of debt from $26 billion to $15 billion “has significantly increased our financial capacity, not only to invest in our existing businesses and to make strategic acquisitions, but also to return value more directly to our shareholders.”
– On AOL’s upcoming web launch and its high-speed efforts: “I have every confidence that, with effective execution, AOL’s strategy can succeed and it can become an even more robust part of our company.”

To: Time Warner Colleagues
From: Dick Parsons
Date: June 3, 2005
Re: Overview of Time Warner Strategy

We recently held our annual strategic planning session with our Board of Directors and our annual meeting with the stockholders. So, as I’ve done in the past at this time of year, I thought that this would be a good opportunity to share with you an overview of our strategy for the company as we move forward.

Our goal remains the same: to be the world’s best media and communications company, not only producing and distributing compelling journalism and entertainment, but also helping to connect consumers in new and innovative ways. Our strategy to achieve that goal has four basic components.

Shaping Our Portfolio of Businesses First, our strategy begins with the businesses we’re in. While some companies (such as Ford) offer a single type of product or service, and other companies (such as General Electric) invest in a wide array of unrelated businesses, our approach at Time Warner is to own and manage a focused portfolio of related media businesses involved in creating, aggregating, and distributing entertainment and journalism. As we move forward, our strategy is continue to shape our portfolio of businesses in order to improve our competitive position and to enhance the advantages we get from having closely aligned businesses. Our recent agreement with Comcast to buy Adelphia’s cable systems, which will increase our cable subscribers from 10.9 million to 14.4 million, is a major example of how we are investing in our businesses in a disciplined manner to become more competitive.

Managing to Achieve Best-in-Class Performance. The second part of our strategy is to manage our businesses to achieve best-in-class performance, whether measured by financial metrics, quality, or industry leadership. This is really at the heart of our strategy. It requires continuing to invest in our businesses and seek new growth opportunities, whether in the U.S. or abroad. It also requires attracting and retaining talented and diverse employees; investing in their development; and rewarding their performance. This year, for example, we’re significantly expanding our leadership training programs across the company.

Collaborating to Create Value. The third part of our strategy is to collaborate across our businesses to take advantage of the natural รข

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