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Com sci- UNIT 3- TRANSNATIONAL MEDIA CORPORATIONS & GLOBALISATION…

- - - - Private sector is the primary engine growth
      - It requires that the nation-state can maintain a low rate of inflation & keep prices stable
      - Attempts to keep the size of government small & to achieve a balanced budget, if not a surplus
- - - - Natural resources, talent or specialised expertise can be considered a type of proprietary asset.
        E.g: Sony purchase of CBS record in 1988 and Columbia Pictures in 1989 enabled the company to become a formidable player in the field of music & entertainment for exclusive film library, contacts with some of the world's leading musicians.
        2004 Sony acquired Metro Goldwyn Mayer (MGM) for 5.8 Billion dollars.
    - - TNC invest abroad for the purpose of entering a foreign market & serving it from that location.
        The ability to buy an existing media property is the easiest & most direct method for market entry.
        E.g: Bertelsmann AG entered the US in 1986. Bertelsmann Music Group is headquartered in New York City.
    - - Entering into a market that is heavily tariffed or has quotas.
        Not uncommon for nations to engage in various protectionist policies designed to protect local industry
        1989 EC Directive 89/552 was intended to promote European television and film production. Plan called for imposing restrictions on the import of US television programming and films.
        1 way to offset the potential effects of program quotas
        
        to form international partnerships and/or engage in coproduction ventures.
    - - Lower labour costs, tax relief and technology infrastructure.
        Shooting on location (Canada and Ireland) where production costs are less expensive when compared to Hollywood and New York.
        Ireland important comm centre for many high-tech companies. Dell Computer centralises all of its billing, inventory management and distribution for its European operations by having the various functions flow through a single call center in Ireland.
        -therefore achieving significant cost saving
    - - CEOs like Rupert Murdoch (News Corp), Sumner Redstone (Viacom) and John Malone (Liberty Media)
        -have a certain amount of personal competitiveness & business gamesmanship that goes along with managing a major company.
        Success is measured in ways that go beyond straight profitability. Able to spend billions of dollars in order to advance the cause of a new project venture.
- - - - 1. The lack of compelling strategic rationale:
        
        Unrealistic expectations of complementary strength and presumed synergies.
      - 2. Failure to Perform due diligence:
        
        Prior to merger agreement.
        
        Often the lack of due diligence results in the acquiring company paying too much for the acquisition.
      - 3. Post-Merger planning & integration failures:
        
        No effective plan for combining divisions with similar products- the duplication can be a source of friction.
        
        Turf wars erupt.
        
        Problem is further complicated when there are significant differences in corporate culture.
      - 4. Financing & the problem of excessive debt:
        
        Some companies will assume major amounts of debt through short-term loans.
        
        May be forced to sell off entire divisions.
        
        May default on their payment altogether.