Sunday, November 11, 2007

The Transational Media Corporation and the Economics of Global Competition

. The Transnational Media Corporation


- TNC: a system of organization, focusing on the primary commodity being sold is information and entertainment.

II. The Purpose of a Global Media Strategy
- TNMC tends to operate in preferred markets with a an obvious preference toward its home market.
- TNMC's are NOT monolithic in their approach to business.
-Bertelsmann, for example, reflects the business philosophy and media interests of its founder: interests such as strategic planning and decentralization.

III.The Globalization of Markets
- driven by world wide deregulation and privatization trends, advancements in new technologies, and market integration (such as NAFTA, European Community)

a. The Rules of Free Market Trade
- only system operation in the world today is FREE MARKET CAPITALISM
- attempts to promote as much domestic competition as possible

b. Foreign Direct Investment
- refers to the ownership of a company in a foreign country

i. Propriety and Physical Assets
- ownership of talent or specialized expertise can be considered a type of propriety asset
- SONY, purchase of CBS

ii. Foreign Market Penetration
- purpose of entering a foreign market and serving it from that location
-Bertelsmann AG when purchased Doubleday Publishing

iv. Production and Distribution Efficiencies
- countries which offer significant advantages such as lower labor costs, tax relief, and technology infrastructure
-shooting movies in Canada/Ireland, rather than New York/LA

v. Empire Building
-high premium placed upon successful deal making and new project ventures

c. The Risks Associated with FDI
-problems associated with political instability: wars, revolutions, coups
-country risk assessment

IV. Transnational Media Ownership

a. Mergers, Acquisitions, and Strategic Alliances
-represent different ways that companies can join to achieve increased market share, to diversify product line, and/or create greater efficiency of operation

VI. Media and Global Finance
-today, companies will either use their own money or seek assistance of financial lending institution
-enables companies to issue securities and obtain loans

VII. Role of Global Capital Markets
-brings together those companies and individuals who want to invest money and those who want to borrow it.

a. Capital Market Loans
-either equity loans or debt loans
-equity: made when corporation sells stock to investors

VIII. Business and Planning Strategies
-Core Competency suggests that a successful company is one that possesses a specialized production process, brand recognition, or ownership of talent.
- Time Warner-
-Broadband Communication

IX. Global Competition and the Diffusion of Authority
-What distinguishes TNMC from TNC?
PRINCIPAL COMMODITY BEING SOLD IS INFORMATION AND ENTERTAINMENT.
-TNMC actively pursues the use of advanced media and information technology
-TNMC and host nation have shared responsibility to create system that is desirable and sustainable.

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