Newspaper Industry Essay Research Paper StrategyAssignment Two

Newspaper Industry Essay, Research Paper

Strategy

Assignment Two: News Corporation.

Discuss the growth strategies pursued by Rupert Murdoch for News Corporation between 1960 and the early 1990s.

.In the world of Rupert Murdoch, ruthlessness is expected; weakness leads to corporate Siberia.. (www.bn.com)

Rupert Murdoch is the inventor of the modern global information empire. With cable and satellite channels on five continents, Murdoch reaches nearly seventy five percent of the world. Initially building News Corporation (News Corp.) upon a series of smaller acquisitions and brand-new ventures (La Franco, 1998), Murdoch has acquired a taste for .corporate cross-pollination. (Baker, 1998). By diversifying and vertically integrating News Corp., in addition to forming strategic alliances and pursuing joint ventures, Murdoch.s corporate strategy allows him to endlessly pursue growth opportunities.

The evolution of News Corp.

In 1954 Rupert Murdoch inherited two Adelaide newspapers, Sunday Mail and The News. He converted The News into a paper dominated by sex and scandal (www.britannica.com), a strategy that he later successfully applied to other national papers, and subsequently his international publications. Despite local success, Australia was considered .too slow and provincial. for Rupert who devised a strategy to broaden his media network (Kiernan, p85). In 1969 he acquired his first British newspaper, and in 1973 he entered the American market by purchasing two daily papers.

News Corp. includes major holdings in radio and television stations, newspapers and magazines, video and record companies, publishing houses, sports teams, satellite and cable networks, the development of digital broadcasting, the production and distribution of motion pictures and television programming, amongst other investments. The company has a frightfully complex structure, listing roughly 800 subsidiaries.

Strategic issues.

The strategy issues News Corp. must appraise are consistently changing to address a dynamic environment and a changing portfolio of companies. The pertinent areas Murdoch has always considered include the threat of intensifying competition and globalisation, the evolution of new technologies, the power of information, and the potential for new alliances. Superseding these concerns is the critical question for strategy; evaluating what resources and capabilities provide the most promising basis for exploitation or development. Markides (2000) dictates that the company.s initial resource endowments and core competencies should constitute the focus for strategy, and therefore guide the search for new combinations of activities.

Resources.

In order to sustain a competitive advantage, valuable firm resources and capabilities are those which cannot be imitated by others in a competitive market, or substituted by some other asset that can be purchased competitively. The firm specific assets of News Corp. include it.s brand name, reputation, and identity, which have been described as .distinctive. compelling . unique.a risk taker. (Gunther, 1998). The following resources are also essential to the creation of a competitive advantage that supports News Corp..s growth strategy. Knowledge of how to operate a multinational company; of overseas markets; and of competitors; decisive leadership; and News Corp..s unique culture. These resources are invaluable to Murdoch and help position his company as a market leader.

Capabilities.

It can be contended that Murdoch himself is a capability for News Corp. When evaluating what truly differentiates News Corp. from it. rivals, consensus amongst observers and competitors is that the risk taking nature of Murdoch is a valuable asset that other companies cannot emulate. His relentless determination and daring, his quest to defy convention and break the rules of the establishment, give his company opportunities that others would readily overlook or disregard. Furthermore, Murdoch.s .great business skill and guile. (Kiernan, 1986, p321), guide News Corp. and help to establish and enact its aggressive growth strategy.

The overall growth strategy of News Corp.

Robert (1998) states that the vision of the CEO is the starting point for strategic thinking; his/her task being to shape and clarify the organizations future strategic profile. News Corp. has no strategic planners (Gunther, 1998). Decision-making tasks reside with Murdoch and two other executives. Murdoch bets on his instincts which underlie the company.s strategy; News Corp. takes chances when others don.t. Hussey (1999) explains that strategy is the means by which an organization moves to attain its long-term aims. Although a gambler, Murdoch employs a long-term focus for strategic growth, and when speaking about his strategy of grabbing a chance as it presents itself, he discloses that .Sometimes you have to pay a high price for opportunity. It.s a case of sacrificing immediate earnings for a longer-term build up of asset values.. (La Franco, 1998)

Beginning in Australia, Murdoch applied a rigid formula of .scandal, sports, cheesecake and crime. (Kirkland and Kinkead, 1984) to most of his papers. He bought pallid papers cheaply and successfully transformed them into profitable enterprises. This led to enormous growth opportunities. He transported th

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