Chapter 4

The Translational Media Corporation and the Economic of Global Competition
The translational media corporation

There are two major concepts concerning the translational media corporation. The first one is that such companies operate in most of all markets of the world. Few companies operate in all markets of the world. The second myth is related to the fact that most companies are monolithic in their approach of business.
The purpose of a global media strategy
As a company’s exports steadily increases, it establishes a foreign office to handle the sales and services of its products. Later on as the pressure arises, there is recognition of a more comprehensive global strategy. Most importantly, major corporations become foreign direct investors through a process of gradual evolution rather than by deliberate choice.
The globalization of marketers
The globalization of marketers involves the full integration of transnational business, nation states, and technologies operating at a higher speed.
The role of free market: free market capitalism is the only economic system operating in the world. Free market trade attempts to promote as much domestic competition as needed and to presuppose a willingness to open up one’s domestic market to foreign investment

1. Foreign direct investment: it refers to the ownership of a company in a foreign country. There are five reasons why companies engage in foreign direct investment
   · Proprietary and physical assets: some NTC’s invest abroad for the purpose of obtaining specific proprietary assets and natural resources
   · Foreign market penetration: they invest abroad for the purpose of entering a foreign market and serving it from that location.
   · Production and distribution efficiencies: the coast of labor is important factors in the selection of foreign locations. Some countries offer significant benefits such a slower coast, tax relief, and technological infrastructure.
   · Overcoming regulatory barriers to entry: they invest for the purpose if entering into a market that is heavily tariffed.
   · Empire building: the CEO is shaping the beliefs and the motivations of the organization as a whole
   · The risk associated with FDI: there are serious risks of investing in a country such as political instability, wars, revolutions, and coups.
   Translational media ownership
   Mergers, acquisitions, and strategic alliances are the different ways that companies can join to achieve increased market share to diversify product line and create efficiency.
   · Mergers: it happens when two companies are combined into one company.
   · Acquisition: it involves the purchase of one company to another one for the purpose of adding the firm’s productive capacity.
   · Strategic alliances: two or more companies work to achieve a collective advantage.
   There are four reasons why mergers and acquisitions fail
   lack of a compelling strategic rational
   failure to perform due diligence
   post manager planning and integration failures
   financing and the problems of excessive debt
   Media and global finance
   The business of media and telecommunication is an industry characterized by high startup coasts high risk. In order to obtain the necessary financing, today‘s media and telecommunication companies will either use their own money or seek the assistance of financial institution.
   The role of global capital markets
   It brings together those companies and individuals who want to invest money and those who want to borrow it.
   Capital market loans
   Capital market loans are either equity loans or debt loans. An equity loan is made when a corporation sells stock to investors. A stock offering enables individual investors to purchase shares
2. The principle of Core Competency is crucial to understand at this point. The term suggests that a highly successful company is one that possesses a specialized production process, brand recognition, or ownership of talent that enables it to achieve higher revenues and market dominance relative to its competitors.
   Vertical integration: it is when a company will control most or all its operational phases.
   Broadening communication: the ability to distribute multichannel information and entertainment services to the home.
   Transnational media and the marketplace ideas
   A market is said to be highly concentrated if it is dominated by a limited number of firms.
   The deregulation paradox: is supposed to foster competition and open to new services provided
3. The market place of ideas: a small set of dominant media corporation exercises a disorientate effect over the marketplace ideas.