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Drivers for a Global Media Market

Changing role of the US Media market

International and Diversification Strategies

Changes in the political Control of mass media

Lifestyle parallelism

Technological development

Multilateral competition: Increasingly blurry Industry boundaries

Increased Market Size, Return on Investment, Economies of Scale and Learning, Location Advantage

Diversification in the Global Media Marketplace


Related Product Diversification Content repurposing Marketing know-how Sharing of production

Entry Modes for a Global Media Market New Entry (Greenfield venture) Exporting/Licensing Cooperative Partnerships
Cross-border Mergers and Acquisitions International Joint Ventures (IJV)

Multi-channel Media Content Distribution Systems


Complementary Resource Alignment

Broadcast Media Content Product Relatedness Related Geographical Markets

Symbiotic Relationship between media content and distribution drive complementary resource alignment

Cultural sensitivity and understanding of the regulatory environment encourage related geographic diversification to take advantage of the acquired Local knowledge and relationships

Rationales for Mergers and Acquisitions


9 Empire building (managerialism) 9 Risk reduction (managerialism) 9 Increase market power 9 Overcome entry barriers 9 Reduce cost for new product development 9 Increase speed to market 9 Lower risk compared to developing new products 9 Increase diversification 9 Avoid excessive competition

Why International Strategic Partnerships in Media Industries?


9 To develop complementary resources
Content + distribution

9 To gain access
Speedy access in more regulated markets Access to multiple media outlets

9 To reduce risks/costs
Economies of scale is especially important for content product

9 To reduce competition 9 To respond to competition 9 To reduce market uncertainty

The Strategic Management Process

The How-Tos Strategic Management and Strategic Competitiveness

Involves the full set of:

Commitments

Decisions

Actions

which are required for firms to achieve:

Strategic Competitiveness Sustained Competitive Advantage

21st Century Competitive Landscape

21st Century Competitive Landscape


The global economy is changing
People, goods, services and ideas move freely across geographic boundaries New opportunities emerge in multiple global markets Markets and industries become more internationalized

Fundamental nature of competition is changing


Rapid technological changes Rapid technology diffusions Dramatic changes in information and communication technologies Increasing importance of knowledge

The pace of change is relentless.... and increasing Traditional industry boundaries are blurring, such as...
Computers Telecommunications

Traditional sources of competitive advantage no longer guarantee success New keys to success include:
Flexibility Innovation Speed Integration

Creating Competitive Advantages


Industrial Organization Model
The External Environment An Attractive Industry Strategy Formulation Assets and Skills Strategy Implementation Superior Returns

ResourceResource-Based Model
Resources Capability Competitive Advantage An Attractive Industry Strategy Implementation Superior Returns

External Environment
What the Firm Might Do

Sustainable Competitive Advantage


Internal Environment
What the Firm Can Do

Components of the General Environment


Economic Demographic Industry Environment Competitive Environment Political/ Legal Technological

Components of the General Environment


Demographic Segment Population size Age structure Geographic distribution Inflation rates Interest rates Trade deficits or surpluses Budget deficits or surpluses Political/Legal Segment Antitrust laws Taxation laws Deregulation philosophies Women in the workforce Workforce diversity Attitudes about work life quality Labor training laws Educational philosophies and policies Concerns about the environment Shifts in work and career preferences Shifts in preferences regarding product and service characteristics Focus of private and government-supported R&D expenditures New communication technologies Global Segment Important political events Critical global markets Newly industrialized countries Different cultural and institutional attributes Ethnic mix Income distribution Personal savings rate Business savings rates Gross domestic product Economic Segment

Sociocultural

Sociocultural Segment

Technological Segment

Global

Product innovations Applications of knowledge

External Environmental Analysis


The external environmental analysis process should be conducted on a continuous basis. This process includes four activities: Scanning
Identifying early signals of environmental changes and trends of environmental changes and trends

Industry Analysis: Porters Five Forces Model of Competition


Threat of Threat of New New Entrants Entrants

Monitoring Detecting meaning through ongoing observations Forecasting Developing projections of anticipated outcomes
based on monitored changes and trends

Bargaining Power of Suppliers

Rivalry Among Competing Firms in Industry

Bargaining Power of Buyers

Assessing

Determining the timing and importance of environmental changes and trends for firms' strategies and their management

Threat of Substitute Products

Competitor Analysis
The followfollow-up to Industry Analysis is effective analysis of a firm firms Competitors

Competitor Analysis
Assumptions What assumptions do our competitors hold about the future of industry and themselves? Current Strategy Does our current strategy support changes in the competitive environment? Future Objectives How do our goals compare to our competitors goals? Capabilities How do our capabilities compare to our competitors?

Response
What will our competitors do in the future? Where do we have a competitive advantage? How will this change our relationship with our competition?

Industry Environment Competitive Environment

Resources
What a firm Has...

Internal Analysis: Discovering Core Competencies


Identify Resources Identify Capabilities

Tangible Resources
* * * * Financial Physical Human Resources Organizational

What a firm has to work with: its assets, including its people and the value of its brand name Resources represent inputs into a firms production process... such as capital equipment, skills of employees, brand names, finances and talented managers

Intangible Resources
* Technological * Innovation * Reputation

Capabilities

What a firm Does...

Core Competencies
Capabilities represent: the firms capacity or ability to integrate individual firm resources to achieve a desired objective.

What a firm Does... that is Strategically Valuable

McKinsey & Co. recommends identifying three to four competencies to use in framing strategic actions.

Resources and capabilities lead to Competitive Advantage when they are:


Valuable Rare
allow the firm to exploit opportunities or neutralize threats in its external environment possessed by few, if any, current and potential competitors

Costly to Imitate when other firms either cannot obtain them


or must obtain them at a much higher cost

Nonsubstitutable the firm must be organized appropriately to


obtain the full benefits of the resources in order to realize a competitive advantage