Corporation Analysis

BUS 302 Group Report

THE NEWS CORPORATION

CASE STUDY

By

Bernardetta Tusacciu

Yun Kyong Choi

Noubda Bojoudi

Naresh De Silva

Xi Xi Cheng

Table of Contents

Executive Summary pg.3

Findings pg.4

Appendices pg.11

External Analysis

PESTEL

PORTER'S FIVE FORCES

SCENARIOS

Internal Analysis

SWOT

TOWS MATRIX

VALUE CHAIN

ACTIVITY MAP

RESOURCE AND COMPETENCES MATRIX

STAKEHOLDERS MAPPING

Portfolio Analysis

BCG'S MATRIX

ASHRIDGE'S MODEL

Strategic Analysis and Choice

ANSOFF'S MATRIX

POSSIBLE ALTERNATIVES

Executive Summary

This report analyses the sustainability of The News Corporation within the future context.

In this respect, the report first undertakes a thorough analyses of the issues surrounding NewCorps, and then goes on to find solutions to these specific issues. These are used to generate options which are an amalgamation of the different solutions, with the purpose of deriving viable strategies to counter the issues with a holistic approach.

Finally and perhaps most importantly, the report appraises the viability of each of these compositions of strategies, evaluating them under the strict criteria of suitability, acceptability, and feasibility. This proved to be an appropriate measure of the soundness of each solution.

The report however stops short of recommending specifically the strategy option that NewsCorp should take, since all of three are equally viable for a number of reasons. It is therefore the responsibility and discretion of management and shareholders to determine the adoption of one of these options.

The appendices follow which provides essential information to the comprehension of the report, since all of the models used for evaluation are outlined here. The use of theory was pervasive throughout our analysis and subsequent reporting, as it is only with sufficient theoretical proof that solutions become viable and appropriate.

Findings

THE ISSUES

* The crisis in the late 80's that led to a massive debt restructuring scheme in 1990, and the significant losses incurred in 2001 and 2002 came on the heels of periods of large scale acquisition, and could be a symptom of an inefficient post merger integration system. It is probable that the many acquisitions and investments have been value destroying at the strategic business unit level.

o There exists a need for consolidation and integration (or divestiture) of business units within the organization, with specific emphasis on profit generation capabilities at the SBU level, in order to realign the profitability and financial stability of NewsCorp as a whole.

* Ownership of its various media channels entails an ethos and responsibility toward unbiased, impartial content, yet the Murdoch stable of newspapers and magazines around the globe have garnered a reputation for being short on quality . Its other units have also suffered from a lack of credibility, such as Fox News Channel at Fox Broadcasting Company which has purposely been positioned with a right wing bias, and NewsCorp's British papers, who have been stalwart opponents of the European Union, most likely due to self interested motives (the stringent regulatory environment within the E.U. would restrain NewsCorp). Murdoch's conducive ties with political figures throughout the globe have further contributed to this skepticism.

o There is a need for revaluation of the mission and purpose of the organization so as to restore credibility to the corporate parent and within each SBU in the field of news coverage. Examination of corporate social responsibility objectives is also therefore necessary.

* With a large and potentially negative implication for the future, the intrinsic attachment between NewCorp and its founder has raised yet another serious concern. The drive of the organization can always be traced back to Rupert Murdoch, and an issue therefore arises regarding management and development of NewsCorp in the event of death or retiring of Murdoch.

o Contingency plans need to be prepared in the event of departure of Mr. Murdoch which would entail a restructuring of management structure and culture, and henceforth developing strategic position.

* A plausible threat lies within the realm of regulation within the media distribution framework. Regulatory barriers have been prominent throughout NewsCorp's growth and existence, and have at times acted as impediment. In most cases however, NewsCorp, with the use of informed strategy and Murdoch's political allies, has continually been able to circumvent these barriers. Yet the future has the potential to bring with it pervasive legislation that could effectively restrict further expansion, or in the worst case, oblige the divesture of parts of its multi subsidiary structure in the interest of competition.

* a need to avoid complacency regarding legislature governing control of the media within all of its international markets, and to be ready with appropriate tactics at corporate and business level.

An