News Corp Case Study

1. Which external environment dimensions were most relevant in this case? Why?

The most important external environment dimension is the technological. News Corps is a

media company which has to evolve and adapt with all technological evolutions. The second

is the sociocultural factor, nowadays media are essential, technologies are progressing really

quickly. People have higher expectations about communication and entertainment so

companies have to satisfy the customers and respond to his needs. There is also the

demographic factor, many people in the world are interested by entertainment media and

consumers are more and more numerous, for instance people living in rural areas. About the

economic factor, people in the world spend more and more money in media and

communication which is favorable for News Corp. These four factors are most relevant in

that case.

2. In which industry does DirecTV compete? Is this an attractive industry (Porter)?

DirecTV competes in broadcast television's media. It is a satellite provider of consumer

television entertainment content.

 Threat of the new entrants: the threat of new entrants is low because brand names as

DirecTV or his competitors are well-known. It is difficult for a firm to settle there because

companies had a lot of power; these firms have to possess a technological advance or need

significant upfront capital investments to start their business.

 Rivalry among competing firms: Rivalries between competing firms exist but it's not really

high. The rivalry is between satellite (DirecTV) and cable. The major competitors in U.S are

Comcast (cable) and Time Warner.

 Threat of substitute goods: there is not high threat of substitute goods but we can mention

the streaming internet content which can replace cable and satellite content.

 Bargaining power of buyers is low. Prices are fixed and can't be negotiable by consumers.

 Bargaining power of suppliers is also low because DirecTV try to minimize this power by

owning their own satellite and broadcasting its own content.

3. What factors are the firm's primary competitors in the US? According to the case, how

are they competing?

The two major competitors of DirecTV in the U.S are Comcast and Time Warner Cable. They

also try to "expand their own distribution cable". Comcast is "the number 1 cable system " in

U.S and try to diversified and improve its services (telephone, two-way internet interactivity)

with the acquisition of AT&T Broadband or TechTV (video gamers) and develop his

partnerships, for example with Viacom or Radio One. They are also competing with

introducing similar shows and services.

4. What are News Corp.'s tangible and intangible resources?

TANGIBLE RESOURCES:

- Financial: News Corp. has a large capital, the company "generated $30 billion a year" in 2004. As

a proof we can see that they are doing a lot of acquisition (Sky television, DirecTV...) and

investment. On the charts we can see that it had 12,2M cumulate customers in 2003.

- Organizational: News Corp. has a global market (Europe, Asia, Africa, and America). It company

wants a "piece of the world".

- Physical: News Corp has different location for their equipment, their "satellite platforms span

four continents". It is one of the most geographically spread company, "we're spread

geographically in a way no other media company in the world can match".

- Technological: News Corp is specialized in satellite, with DirecTV it wants to "eliminate

dependence on cable distribution