The Translational Media Corporation and the Economic of Global Competition
Introduction:
The translational corporation as a system of organization represents a natural evolution beyond the multinational corporation of the 1960’s and 70’s. What distinguishes the transnational media corporation from other types of TNC’s is that the principle commodity being sold is information and entertainment.
1. The translational media corporation
There are two major myths about the translational media corporation. The first one is that such companies operate in most of all markets of the world. Few companies operate in all markets of the world. The second myths is related to the fact that most companies are monolithic in their approach of business.
2. The purpose of a global media strategy
As a company’s exports steadily increases, it establishes a foreign office to handle the sales and services of its products. Later on as the pressure arises, there is recognition of a more comprehensive global strategy. Most importantly, major corporations become foreign direct investors through a process of gradual evolution rather than by deliberate choice.
3. The globalization of marketers
The globalization of marketers involves the full integration of transnational business, nation states, and technologies operating at a higher speed.
§ The role of free market: free market capitalism is the only economic system operating in the world. Free market trade attempts to promote as much domestic competition as needed and to presuppose a willingness to open up one’s domestic market to foreign investment.
§ Foreign direct investment: it refers to the ownership of a company in a foreign country. There are five reasons why companies engage in foreign direct investment
a. Proprietary and physical assets: some NTC’s invest abroad for the purpose of obtaining specific proprietary assets and natural resources
b. Foreign market penetration: they invest abroad for the purpose of entering a foreign market and serving it from that location.
c. Production and distribution efficiencies: the coast of labor is important factors in the selection of foreign locations. Some countries offer significant benefits such a slower coast, tax relief, and technological infrastructure.
d. Overcoming regulatory barriers to entry: they invest for the purpose if entering into a market that is heavily tariffed.
e. Empire building: the CEO is shaping the beliefs and the motivations of the organization as a whole.
§ The risk associated with FDI: there are serious risks of investing in a country such as political instability, wars, revolutions, and coups.
4. Translational media ownership
Mergers, acquisitions, and strategic alliances are the different ways that companies can join to achieve increased market share to diversify product line and create efficiency.
§ Mergers: it happens when two companies are combined into one company.
§ Acquisition: it involves the purchase of one company to another one for the purpose of adding the firm’s productive capacity.
§ Strategic alliances: two or more companies work to achieve a collective advantage.
There are four reasons why mergers and acquisitions fail
a. lack of a compelling strategic rational
b. failure to perform due diligence
c. post manager planning and integration failures
d. financing and the problems of excessive debt
5. Media and global finance
The business of media and telecommunication is an industry characterized by high startup coasts high risk. In order to obtain the necessary financing, today‘s media and telecommunication companies will either use their own money or seek the assistance of financial institution.
The role of global capital markets
It brings together those companies and individuals who want to invest money and those who want to borrow it.
Capital market loans
Capital market loans are either equity loans or debt loans. An equity loan is made when a corporation sells stock to investors. A stock offering enables individual investors to purchase shares
Business and planning strategies
The challenges of standing global competitiveness become more difficult. Strategic plan is the set of marginal decisions and actions that determine the long-term performance of a company or organization.
§ The principle of Core Competency is crucial to understand at this point. The term suggests that a highly successful company is one that possesses a specialized production process, brand recognition, or ownership of talent that enables it to achieve higher revenues and market dominance relative to its competitors.
§ Vertical integration: it is when a company will control most or all its operational phases.
§ Broadening communication: the ability to distribute multichannel information and entertainment services to the home.
9. Transnational media and the marketplace ideas
There has been a clear movement toward economic concentration. It is used to describe the number of sellers within a given market. A market is said to be highly concentrated if it is dominated by a limited number of firms.
§ The deregulation paradox: is supposed to foster competition and open to new services provided
§ The market place of ideas: a small set of dominant media corporation exercises a disorientate effect over the marketplace ideas.
§ Global competition and the diffusion of authority.
Friday, September 21, 2007
Outline of chapter 3
Global Economy and International Telecommunications Networks
Introduction
Global economy affects our personal lives in many ways. The price of gas is determined by global oil markets, the ups and downs of interest rates are prompted by global money flows, and the availability of jobs is greatly affected by activities of global corporations.
1. Pre- modern World
The world in the past was different from the one of today. For instance, what we used to wear in the past was made by local people living with you in the same town. The only foreign products used were for kings and rich people, the close were made of materials naming gems, silk, and other products that were easy to transport but yet were expensive.
2. Division of labor:
One of the things that distinguished the modern world from the pre-modern one was the extent to which division of labor was used in the production process. As the division of labor increased, the production increased as well. As a result, specialization accompanied the division of labor, and thus results in increasing efficiency. In many ways, division of labor is a devil’s bargain. It increases productivity via specialization, which in turn creates problems of coordination and control. The managers were taking these problems seriously and were trying to solve them by controlling (face to face level).
However, when business owners started realizing that some components could be made more cheaply in other parts of the world, they moved away from centralized production. The lower cost was due to the easy access to raw materials, and cheap labor worker. Thus, the global division of labor is intricately tied to modern communication technologies, while the telecommunications technologies allow for global coordination and control.
3. Imperialism:
The world in the 13 century was multipoler, for instance, Indian and Italy traded with each other via Egypt and Iraq. This situation changed with the emergence of the Portuguese, Spanish, Dutch, French, and British Empire in the 14 century. The Western power transformed the multipolar world into a monopolar one. Thanks to the development on technologies and advances in weaponry, Western powers could control. These countries were interested on cotton, rubber, and other raw materials. To obtain that imperial powers used divide and conquer strategy to weaken potential opposition. Today, we have moved from the era of imperialism to electronic imperialism.
Global media flows:
After independence of many countries, the center of the world also moved across the Atlantic to the United States. The main power if the US was its economic power rather than its military one. Today the US is in the center; it dominated the world through culture as well. For instance, it dominated the cinema and TV (Hollywood). As a result, the US tends to look at its media through business prospective.
Developing nations consider the import of US films to be a new kind of invasion, a cultural one. Electronic imperialism is from the center the US to the periphery the rest of the world which is a one way flow.
5. Transborder Data Flow:
With the improvement in transportation technologies, international trade progressively moved beyond lightweight, high –value items to heavier and bulkier commodities. One of the main reasons that services changed was that they required an intense amount of interaction between the service provider and the consumer. For instance, computer software needs to be done by a trained human being.
6. Toward a new world system:
With the shift of power from one part of the world to another one can think of the following questions: Once the US power declines, will the center merely pass from the US to another country? Or will there be an emergence of a multipolar world like the one of the 13 century.
Introduction
Global economy affects our personal lives in many ways. The price of gas is determined by global oil markets, the ups and downs of interest rates are prompted by global money flows, and the availability of jobs is greatly affected by activities of global corporations.
1. Pre- modern World
The world in the past was different from the one of today. For instance, what we used to wear in the past was made by local people living with you in the same town. The only foreign products used were for kings and rich people, the close were made of materials naming gems, silk, and other products that were easy to transport but yet were expensive.
2. Division of labor:
One of the things that distinguished the modern world from the pre-modern one was the extent to which division of labor was used in the production process. As the division of labor increased, the production increased as well. As a result, specialization accompanied the division of labor, and thus results in increasing efficiency. In many ways, division of labor is a devil’s bargain. It increases productivity via specialization, which in turn creates problems of coordination and control. The managers were taking these problems seriously and were trying to solve them by controlling (face to face level).
However, when business owners started realizing that some components could be made more cheaply in other parts of the world, they moved away from centralized production. The lower cost was due to the easy access to raw materials, and cheap labor worker. Thus, the global division of labor is intricately tied to modern communication technologies, while the telecommunications technologies allow for global coordination and control.
3. Imperialism:
The world in the 13 century was multipoler, for instance, Indian and Italy traded with each other via Egypt and Iraq. This situation changed with the emergence of the Portuguese, Spanish, Dutch, French, and British Empire in the 14 century. The Western power transformed the multipolar world into a monopolar one. Thanks to the development on technologies and advances in weaponry, Western powers could control. These countries were interested on cotton, rubber, and other raw materials. To obtain that imperial powers used divide and conquer strategy to weaken potential opposition. Today, we have moved from the era of imperialism to electronic imperialism.
Global media flows:
After independence of many countries, the center of the world also moved across the Atlantic to the United States. The main power if the US was its economic power rather than its military one. Today the US is in the center; it dominated the world through culture as well. For instance, it dominated the cinema and TV (Hollywood). As a result, the US tends to look at its media through business prospective.
Developing nations consider the import of US films to be a new kind of invasion, a cultural one. Electronic imperialism is from the center the US to the periphery the rest of the world which is a one way flow.
5. Transborder Data Flow:
With the improvement in transportation technologies, international trade progressively moved beyond lightweight, high –value items to heavier and bulkier commodities. One of the main reasons that services changed was that they required an intense amount of interaction between the service provider and the consumer. For instance, computer software needs to be done by a trained human being.
6. Toward a new world system:
With the shift of power from one part of the world to another one can think of the following questions: Once the US power declines, will the center merely pass from the US to another country? Or will there be an emergence of a multipolar world like the one of the 13 century.
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