THE NEWS CORPORATION

“The News Corporation"



“The News Corporation"

This report pretends to answer the third question of this case study “ The News Corporation”. It will outline and evaluate the strategies pursued by Rupert Murdock during the period of the case study. It will also recommend a future strategy for The News Corporation.

This report will focus on analysing three different issues:

A) It will analyse the extend and type of diversity undertaking by the company. Whether, the strategies, undertaken by the company, are the same throughout the period of the company in this case study.

B) It will also evaluate the logic of the mix of business in the company portfolio, which may explain how important is for the company to have the diversity of businesses in order to achieve a balance.

C) It will enhance how the corporate centre, Rupert Murdock, add value to the company.

This report will end with a conclusion and recommendations.

The extend and type of diversity undertaken by the Company.

The News Corporation focuses on different strategies throughout the period of this case study. To make clearer this analysis, it will be helpful to divide the period in two stages:

STAGE 1- 1980's. This stage is print based. TNC diversifies in order to get into more attractive business and balance its portfolio. The portfolio logic assumes a role of the centre. These, the portfolio logic and the role of the centre, make assumptions about the diversity of businesses within a corporate portfolio. This diversity of business has a certain degree of relatedness in some way, and this diversity of business should inform of the role of the centre. Therefore, the strategy that TNC follows is a Related

Diversification, which is strategy development beyond current products and markets, but within the value system or industry in which the company operates. TNC uses a vertical backward integration by the acquisition of the printing warehouses, books publishing transport, which are concerned with the inputs into the company's current business.

On the same way, it uses horizontal integration by the acquisition of other newspaper and magazine, in order words, activities that are competitive with, or complementary to, a company's present activities.

STAGE 2- 1990's. This stage is time based. Once TNC has diversified into the different businesses, has to find new advantages in order to improve and expand its existing businesses. By improving its businesses, TNC gains competitive advantages. Gets stronger towards its competitors. The strategy that TNC follows in this second stage is globalisation with a place in all parts of the industry from newspaper to TV, from magazine to film. TNC's markets are homogenised and consumer's needs and preferences are more similar. Therefore, TNC has to diversify in order to gain competitive advantages.

The corporate portfolio

TNC company portfolio consists of:

- Newspapers

- Magazines

- Twentieth Century Fox

- Sky TV

The diversity of this portfolio is obvious, however there is an explanation about this mix of business. By using the Boston Consultancy Matrix, the logic of this mix of business can be ...