An Analysis on The News Corporation
News Corporation is one of the world’s largest media companies with total assets, as of December 31, 2003 of approximately US$52bn and total annual revenues of approximately US$19bn. According to its website: ‘News Corporation is the world’s leading publisher of English-language newspapers, with operations in the UK, Australia, New Zealand, Fiji, Papua New Guinea and the US. The Company publishes more than 175 different newspapers, employing approximately 15,000 people worldwide and printing more than 40 million papers a week'(Anon. (2007). “CorporationWatch”. www. corporatewatch. org. uk/? lid=357.
Accessed 13th August 2007. ). The development of News Corporation is somehow the growth of its CEO and founder, Rupert Murdoch. News Corporation, as one of largest media corporations, however, is the property and outcome of Rupert Murdoch himself. It is Murdoch’s life, and he runs it with a passionate interest. He visits all of his major operations on a regular basis and continues to find synergies between them. Any of his businesses may play a part in supporting his own or News Corporation’s political or commercial influence. Murdoch systematically trades his newspapers and TV news channels.
By carefully cultivating relationships with national governments, he has bought ever more influence throughout the English-speaking world and beyond. By doing so he has been able to break down or sidestep media legislation intended to prevent the emergence of media barons such as him. Ultimately in spite of his evident right wing leanings, he is a political pragmatist who” moves effortlessly between Republicans and Democrats, Tories and Laborites, capitalists and communists, depending on what deals are cooking” (Russ Baker in the Colombia Journalism Review).
Murdoch obtained his first newspaper, ‘The Adelaide News’, by inheritance on the death of his father in 1952. He was then still an undergraduate at Worcester College, University of Oxford. In 1953 he returned to Australia and assumed control of the paper, rapidly improving its fortunes. By the end of the decade he had acquired a News South Wales-based newspaper chain, Cumberland Newspapers, the Sydney ‘Daily Mirror’ and Melbourne and Brisbane’s ‘Truth’. 1964 saw him buy a stake in Wellington Publishing, New Zealand’s largest media company.
He arrived in the UK in the late ’60s, beating archrival Robert Maxwell to the ‘News of the World’ (1968) and ‘The Sun’ (1969). Then in 1973, he entered the US market place, taking the ‘San Antonio Express News’, following up three years later with the ‘New York Post’, the ‘Village Voice’ and ‘New York Magazine’. A string of further titles were acquired or bought during the 70s in the US and Australia and in 1980 he established News Corporation as a global holding company. In 1981 News Corp bought ‘The Times’ and ‘The Sunday Times’ from the Thomson Group.
A sympathetic Thatcher government allowed him to exploit a monopolies law loophole to buy the papers. The 1980s brought more landmarks: Murdoch taking American citizenship, and acquiring 20th Century Fox (1985); buying the ‘South China Morning Post’ and Harper ; Row publishers (1987); the launch of Sky (1989). By 1990, News Corp was in deep financial trouble with vast debts. Insolvency was narrowly avoided by a matter of hours, but still the media empire went on with its continual expansion buying: i??
300m broadcasting rights to the Premier League (1992); Asian satellite broadcaster, Star Television (1993); LA Dodgers baseball team (1997); 10 further US TV stations (2000). More recently News Corp has gained a foothold in mainland Europe: in settling the law suit filed against subsidiary NDS, News Corp bought a share in Italian network Telepiu (2002) which was then renamed Sky Italia (2003) Firstly, this report will analyze The News Corporation’s bases of growth since the 1980s, which contains organizational capabilities, environmental factors, and directions and methods of corporate strategy development.
Secondly, it will Evaluate the strategies they adopted within this period from the aspects of consistency, suitability, validity, acceptability and feasibility. Thirdly, some Recommend strategies they could use for the future accordingly will be given. The bases of company growth generally include organizational capabilities, environmental factors, and directions and methods of corporate strategy development and so on. Organizational capabilities enhance the competitive ability of a firm and balance the cost and quality of products and service in a satisfied pattern.
It transform from the individual unit to the commitment and competence of the employees to achieve the competitive advantage, at the same time, it focus on the direct skills and efforts to create the unique competencies. Murdoch has some special managing approaches. For example, his management style was supported by an efficient reporting system, which is a weekly document, and it can make him know clearly the situation the company is in. Control can also be achieved by detailed telephone briefings and unannounced ‘parachuting-in’ trips to check in person on the details of a business’s activities and management.
The organizational capability manage a working group to meet the customer needs more efficiently and conveniently, also deliver a exceeding expectations to develop enduring relationship between customers and the employees. Organizational capability has another characteristic. Since it is not easy to imitate, it could keep and enhance the uniqueness. The complex social cooperation including culture, teamwork and leadership is not easily imitated or understood. Imitation needs familiar with the thoughts, action and interaction to the aim person.
Therefore, the shared thoughts between customers and the employees, between the procedures and the goals create the satisfaction and the consistency of the customer. Reduce the time to come out new products. Environmental factor is another aspect of the base of the growth. Every company has an environmental condition. It actually affects the development of the company . According to it, the organizer make the strategies and turn them into action. Environmental factors include Macro environment, Scenarios, Sources of competition, Understanding competition, strategic gaps.
Macro environment contains political, economical, socio-cultural, technological, environmental and legal factors. Scenarios are detailed and plausible views of future development of environment, based on groupings of key environmental influences and drivers of change about which there is a high level of uncertainty The sources of competition rely on five forces,competitive rivalry, potential entrance, buyers, suppliers and substitutes. Strategic gaps have both opportunities and threats. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
It is the method, which lends itself to customization by a firm depending on its size, strategy, time, and culture. Analyzing the advantage and shortage of the environmental factors, handling the concrete PESTEL framework, Key drivers of change, Porter’s diamond and building the scenarios are basic process to the great success. In complex industries and sectors, it requires the coherence five forces framework to promote the dynamics of competition and identify what the customers’ value to manage the effective strategies according to the market to achieve the satisfaction of the customers and seize the opportunities.
Directions for strategy development are built on current position and should cooperate with the product development, market development and anytime diversification. Methods of strategy development split into internal development, mergers and acquisitions, strategic alliances. All these factors work well could lead to the suitability, acceptability and feasibility. Directions and methods of corporate strategy development lay at the heart of successful strategies and ensure the company as a whole unit to adjust internal standards, conform to new requirements and it will benefit the firm in the long run.
The strategies are keystones of its future success. A critical component of this is an evaluation of how it fits into the external business environment. Short- and long-range planning must take into account the anticipated market conditions, and these plans must be communicated effectively throughout the firm. The SWOT analysis is one tool that is available to managers that allows for a systematic but flexible method of observing the market and planning in the future. The 1980s saw New Corp accelerate its development” (The News Corporation, Aidan McQusde, p3).
Since then the News Corporation begins a global expansion strategy and a multi-industry strategy. the company successfully adopted a series of strategies, and they realized a rapid development. The News Corp entered the UK, US, Asia, Latin America market step by step. In 1981, the News Corp bought ‘The Times’ and ‘The Sunday Times’ from the Thomson Group. The political friendship with the Thatcher government helped him to exploit a monopolies law loophole to buy the papers.
In 1980s Murdoch took American citizenship, and acquired 20th Century Fox (1985) and bought the ‘South China Mo By 1988, the broadcast four channels had received by more than 12 million viewers in 15 European countries. As early as 1993, News Corp has moved into Asia with the acquisition of the Hong Kong-based satellite television company STAR TV, which broadcasted over China, India, and other 51 countries which occupies two-thirds of the world’s population.
In November 1995, News Corp created a satellite service covering Latin America. By 2000, Sky Latin America had over one million subscribers. After the purchase of Direct TV in 2003, with more than two million new subscribers and hence great potential, Murdoch reached its goal of expansion with unparalleled power and ability (Post’ and Harper & Row publishers (1987); The 1980s brought more landmarks: the launch of Sky”. By 1988, the broadcast four channels had received by more than 12 million viewers in 15 European countries.
As early as 1993, News Corp has moved into Asia with the acquisition of the Hong Kong-based satellite television company STAR TV, which broadcasted over China, India, and other 51 countries which occupies two-thirds of the world’s population. In November 1995, News Corp created a satellite service covering Latin America. By 2000, Sky Latin America had over one million subscribers. After the purchase of Direct TV in 2003, with more than two million new subscribers and hence great potential, Murdoch reached its goal of expansion with unparalleled power and ability.