Hello, everyone. Today our presentation is about the Distance, the distance for a company to go into another country to build its business. Dose distance matter?
And our presentation will be divided into 4 parts. In the 1st part, we will use a example - the US media giant STAR TV to analysis why its delivery activity was failed and what’s the really core concentration for a company if it want to expand its business to other country. In the 2nd part, we will talk about a method, which are used to analysis how a company choses a foreign target. And in the third part, we will use a specific example – Mexico – to analysis whether it's a good choice for TRI (Tricon Restaurant International).
Now, I will start the 1st part.
The US media giant Star TV was launched in 1991, and just liked a surefire winner. In order to expand its business outside the US, it chose Asia as its target to deliver television programming to Asia audience. It would target the only 5% of Asia socioeconomic pyramid, a newly rich elite who could not only afford the service but who also represented an attractive advertising market. Since English was the second language for most of the target consumers, Star would be able to use readily available and fairly cheap English-language programming rather than having to invest heavily in creating new local programs. And by using satellites to beam programs into people’s homes, it would sidestep the constraints of geographic distance that had hitherto kept traditional broadcasters out of Asia. Media mogul Rupert Murdoch was so taken with this plan that his company, News Corporation, bought out Star’s founders for $825 million between 1993 and 1995. The results have not been quite what Murdoch expected. In its fiscal year ending June 30, 1999, Star reportedly lost $141 million, pretax, on revenues of $111 million. Losses in fiscal years 1996 through 1999 came to about $500 million all told, not including losses on joint ventures such as Phoenix TV...
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