Strategic Management Essay Example | Topics and Well Written Essays - 1750 words

Strategic Management - Essay Example 8 References 9 Appendix 10 Introduction NewsCorp can be characterized as a dynamic multinational organization, having been expanded rapidly in countries worldwide; the current performance of the firm is significant – see graph 1 (Appendix). In 2010, the firm continued its growth by developing a series of critical agreements, such as the increase of its ownership in Sky Deutschland to 45%, the development of a joint venture with CME Group inc. and so on (Annual Report, p.17). In 2010, the profits of the firm were estimated to 32,778 millions, increased by 8% compared to 2009 (Annual Report, p.18). Apart from its geographic expansion, the firm’s major characteristic has its ability to enter new industrial sectors. However, it would be stated that its growth has been mostly based on its profits from newspapers. The above view is based on the following fact: in accordance with the case study, the profits from the Australian newspaper, The News – established by the fa ther of Murdoch in 1923 – allowed the expansion of NewsCorp in the global market (p.713 case study); In the above context, the level at which the involvement of NewsCorp in the newspapers sector has offered the firm a competitive advantage in the global market has to be further examined. ... In the context of the Five Forces model of industry competition (Figure 1, Appendix) a firm that aims to compete its rivals is likely to face five different forces, including: the threat of similar (substitute) products/ services, the threat of new firms entering the particular industry, the power of customers to ask for lower prices, the power of suppliers to ask for higher payment of the material/ services provided and the competition from existing rivals (Porter 1998). In the case under examination, the increase of TNC’s competitiveness towards its rivals and the further growth of the firm in the global market were achieved, mostly, through the following strategies: the expansion of the firm in the areas of national and local newspapers – in this way the competition within each market was minimized; for instance, in Australia, the firm established the country’s ‘first national newspaper, the Australian, along with 20 provincial newspapers’ (p.713 case study), a fact that offered to the firm the hegemony in the Australian market; in this way also, the firm achieved to secure an important source of funds for supporting its expansion in the international market; another, important, competitive strategy of the firm has been the acquisition of key competitors in the international market; an indicative example of this type is the acquisition of the News of the World – a British publishing company which was already well developed in the local market. The competitive strategy of NewsCorp should be criticized using the Five Forces model of Porter – to see how the strategic initiatives of Murdoch have been, actually, aligned with the existing academic theories on competitiveness in the context of