Globalisation is the “trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies” (Wild, Wild, Han, 2010, p34). That process has increase the fall of trade barriers and therefore has shaped the world's markets and businesses, increasing the opportunities for companies to extend internationally.
Numerous are the reasons for going international and the most obvious ones are by far: economies of scales, bigger foreign market, escape from the domestic saturated market...
When companies have their reasons for extending their business overseas, they have to determine the right strategy to enter the new foreign market, which is the hardiest work.
In this report we will explain and show through the example of the famous company MTV, how important and crucial is the strategy choice to succeed in international business. The report will make the reader understand that domestic strategy won’t automatically work in foreign countries. Even if today, globalisation is spreading a standardized way of living, doing business, consumption… and people tastes around the world are getting closer, the need to accommodate the product to specific expectations can be an obligation for companies and the key to succeed.
According to the well known slogan “think global, act local” the report will discuss about multi domestic’s stakes, creating therefore a key issue problem: how to make the right balance between standardization and adaptation of the offer in the international scene?
The report will be mainly divided in two parts: the failure of MTV first step in extending its business abroad, and then we will present and explain its current strategy which has allowed it to become the one of the most powerful international TV program.
To summarise, the report is about to show different important points, in international business strategy, and mostly it will underline the difference and the importance of undertaking a multi- domestic or a global strategy according to the market and the product the company is into.
It will put the stress on MTV historical past and present experiences, to illustrate the importance of having the knowledge, perfect command and experiences of international business.
1. PRESENTATION OF THE COMPANY: MTV
* Company background
Music television (MTV) is an acronym of Music Television. It is an American cable network based in New York City and launched on August 1, 1981 (Steve Peake, 2010). Initially, MTV specialize its activity in original music videos. In addition, MTV also play many different types of programs to attract young people. Those programs were sponsored by the Warner Communications and American Express from 1981 to 1985. After 1985, MTV is owned by Viacom and became a subsidiary of Viacom.
Viacom is currently the world's largest media and entertainment group, and one of the world's top 500 enterprises. The companies owned by the group belong to the film, TV, publishing and other retail and entertainment-related business. Therefore, Viacom is leader in the media and entertainment market.
MTV began to expend internationally in 1987. MTV international (MTVI) was launched in Europe in 1987. MTV International (MTVI) was the first major international television network to broadcast its channels in regional languages around the world (MTV Networks international: Localizing Globally, 2006) and later Viacom focused on playing local programs, not just American programs. Step by step, MTV international continue its market extension launching its channels in Latin America, Asia, Australia, Africa and recently the Middle East. Thus, MTV became the world's largest music television network, covering almost every part of the world.
* Industry analysis
The first competitor of MTV is radio, which was very popular back then. People used to listen to music through radio but since music video came out, it...