Business Policy & Strategy

During the course of this report I intend to address the following points concerning The News Corporation (NewsCorp) and their leader since inception, Mr. Rupert Murdoch.

Ш I will identify and summarize the key stages of NewsCorp development detailing the strategies and policies adopted to attain their corporate objectives and the logic behind them.

Ш I will discuss the environmental changes which created opportunities for NewsCorp and how these environmental changes had an impact on the time-based media industry.

Ш I will write about the financial situation in which NewsCorp found themselves in 1990, the strategies they adopted to reverse their fortunes, and whether these strategies were effective.

Ш I will then switch the discussion of the report to Mr. Rupert Murdoch and the role he has played in the strategic development of NewsCorp.

Ш Finally, I will point out the unsolved issues for NewsCorp and recommend a suitable strategic approach for them.

'I'll keep it short and sweet; Family, Religion, and Friendship. These are the three demons you must slay if you wish to succeed in business'.

(Mr. Montgomery Burns advice to Lisa,

The Simpsons, The Fox Network's big success story)

Molded under the watchful eye of Rupert Murdoch, NewsCorp has evolved throughout the years and now serves as a model for the modern day vertically integrated time-based media conglomerate.

The origins of NewsCorp, however, begin with the establishment of a local Australian daily newspaper in 1923 called the Adelaide News and Adelaide Sunday Mail, both set up by Rupert Murdoch's father Sir Keith. Murdoch himself inherited his father's company in 1952. Throughout the 1960's Murdoch's Australian newspaper holdings increased with the acquisition of Cumberland Newspapers and Mirror Newspapers Ltd, publishers of Sydney's Daily and Sunday Mirror, in 1960. In 1964, Murdoch launched The Australian as the first national newspaper.

In 1968, provided by the financial backing of this Australian base (worth $50 million), Murdoch embarked on the multinational scene with the purchase of the UK-based News of the World Organization Sunday newspaper. Murdoch, having spent time at Oxford University in his earlier years, harbored resentment of the English upper class as he felt they had made him feel like an outsider as if the Australians were regarded as inferior. With the purchase of the News of the World and the subsequent purchase of the Sun newspaper, which he turned from a broadsheet to a tabloid by personally climbing on top of the broadsheet printing machine and changing a bar which would convert the machine to a printer of tabloids, Murdoch's objective was to appeal to the English lower-class readers. On November 17, 1970, the first photograph of a half-naked woman was published. These ladies would become known as the Page3 Girls. The circulation of the Sun, which had been making a considerable loss at the time of purchase, rose and began making profits. Murdoch achieved what he had set out to do which was to 'tweak' at the upper classes with his 'sex and mayhem formula'.

In 1972, Murdoch strengthened his power in the Australian newspaper industry with the purchase of the Sydney Daily and Sunday Telegraph. This was then followed, in 1973, by his first operation into the United States with the purchase of the Express publishing company of San Antonio, Texas which printed and distributed the San Antonio Express; News and Sunday supplement. As early as this, Murdoch stated his intentions of breaking into the American market. At a later date Chenoweth comments that 'the only way to create a worldwide brand was to succeed first in the huge U.S. market'. Murdoch revamped the San Antonio News with his 'sex and mayhem formula' and it would become an instant success, again appealing to the American lower-class readers. He would launch The National Star in 1974 (later to become know as the Star) which would rival the existing National Enquirer in the area of sensational, strange and scarcely creditable stories.

To date Murdoch had adopted the objective, and succeeded, of appealing to the lower-class readers in both the UK and United States with his stories of infidelity, crime and imprudence. He was quoted as saying -

'I think a newspaper should be provocative, stir 'em up'

However in 1976 with the acquisition of The New York Post, which Murdoch personally edited for a time, people could now read about his changing political sentiments. The New York Post, and Murdoch, began verbally attacking liberal politicians who opposed his development into the United States and his far right objectives. He continued his New York spending spree in 1977 and following the hostile takeover of the New York Magazine Company he acquired the New York; Village Voice, a left wing journal and New West. Such acquisitions were a sign that Murdoch now wanted to appeal to the upper class people who he earlier harbored resentment towards. He did so, however, by lowering them down to his level and they were now susceptible to his views and opinions. Such was his strong intentions to succeed at this that the strategic visions he had in the late 1970's would structure his future business endeavors. Ted Turner, one of Murdoch's main rivals, was later quoted as saying that when he just wanted to make money Murdoch 'wanted to rule the world'. This assertion was captured in his 1979 acquisition of the Ansett Transport Industries which owned Channel 10 in Australia. In order to execute this purchase the Australian Government first had to modify the media laws, which had stated that the owner of a T.V. station had to be a resident, to citizen ownership. This was directly amended to accommodate Murdoch, who now spent most of his time in the United States. These amendments would become know as 'The Murdoch Amendments'. His political friendships would also assist him in his corporate development abroad also.

NewsCorp was officially formed in 1980 as its development accelerated throughout the decade. Murdoch turned his interests back to the UK with the acquisition of Times Newspapers Ltd, in 1981. His newspaper base in London was making large profits which allowed him to purchase the Times. However commentators also state that because of his support for the then Thatcher Government this acquisition was not referred to the Monopolies and Mergers Commission. This created a stir amongst the upper classes because of his