Corporate Strategy of News Corporation

Corporate Strategy of News Corporation

1. Evaluation of the News Corporation Strategy

The conventional approach in developing a corporate strategy for News Corporation are complicated by the fact that the company is global in the field which is not necessarily adaptable to globalization. A company producing a refrigerator can sell the product to almost any household in any country, where only insignificant modifications on the product are necessary for the culture and conditions in each country. In contrast, the services offered by News Corporation are country- and culture-specific for the most part and are also subject to political and legal regulations which can be quite different from country to country. For example, as mentioned in the case study, Murdoch was forced to become an American citizen in order to own TV stations in the US, which in turn was one of the reasons why the negotiations with the German TV companies controlled by the Cairch Gruppe in 2002 (see case study) in the end failed. As another example, the films acquired by purchase of the 20th Century Fox in the US as well as the content of programs produced for US television may well be proper entertainment in that culture, whereas it is less acceptable for example in Asia.

For this reason, News Corporation has entered into a number of joint ventures and alliances as shown in Fig. 13.10 of the case study in various countries. It is however not immediately clear what synergetic effects could arise from a TV cable channel in Poland with a joint venture in Spanish language for Latin America.

Consequently the development of an "international" strategy which would follow some basic pattern common to the product and services "worldwide" is quite difficult in the case of News Corporation. The company is not similar to the classical situation, for example BMW automobiles, for which international expansion or globalization would mean merely adapting basically the same car, but to local technical and governmental regulations. There may be a few exceptions to the above, as indicated in the case study, namely that the services of providing news and coverage of sports events appears to be universal. The worldwide news channel of CNN demonstrates this possibility in the news sector, while it is well known that a football match involving Manchester United or the Olympics in 2008 are sports events of interest on almost all continents.

Are the prescriptive or emergent approaches to developing strategy options applicable to News Corporation?

The actual strategy of News Corporation appears more to be based on a general vision of a multi-media and global corporation with strategies that can or will be fulfilled only when opportunities arise in the market.

The