Problem Identification
-Should News Corporation diversify their existing business in the United States and pursue major distribution operations?
-Will this market entry create the synergies need to make it profitable?
-Will this market entry detract from our core competency and increase our overall costs of doing business?
Hypothesis:
No, News Corp should not enter the distribution market in the United States currently. Instead, News Corp should focus on its Cable Networking Programming segment "package". This will maximize our core competitive advantages.
Analysis of Hypothesis
What are News Corp's competitive advantages?
1. Synergies: News Corp's conglomerate nature allows for synergies to exist among its companies and affiliates. Especially all FX companies.
2. Branding: the Fox name has been branded throughout the News Corp family. It creates a familiarity for the end customer and an expectation for excellence. In addition, News Corp has been able to tap niche markets through their lineup of specialized channels.
English: Rupert Murdoch at the Vanity Fair party c...
News Corp. CEO Rupert Murdoch attends the Oxfam/My...
Wendi Deng Murdoch, wife of News Corporation Chair...One of the most recent additions: speed vision a channel devoted solely to racing.
3. Global presence: News Corp is one of the smaller players in the industry; however, it holds one of the strongest international presences in the market. This cross border diversification offers News Corp greater opportunity for expansion.
4. Leveraging Sports: News Corp has contracted with multiple sports to boots its ratings: 1999 News Corp acquired the broadcast rights to NASCAR's 20 annual races (the 2nd most popular sport in the US); in 1993 they won the bid for the 4 year National Football Conference (NFC) package, forcing cable operators to put Fox on the air. It all started with the exclusive rights to broadcast Premier League Soccer, this contract put BSkyB into almost every home in the UK.
Does News Corp have a synergy advantage in distribution operations?
News Corp has extensive experience...