1) Identify the corporate strategy of News Corporation in terms of whether it has been a related linked, related constrained or unrelated diversification or a combination of these. Give examples from case.
* Newscorp adopted a combination of Related Constrained and Related Linked Diversification
* Reasons justifying Related Constrained Diversification
- Vertical integration by acquiring Twentieth Century Fox and also 6 TV stations of Metromedia Broadcasting Group and used the same distribution platform for the content. Newscorp has constructed animation studios to acquire original content for their channels.
- Cross promotion across various businesses. Ex. Newscorp newspapers frequently promote other activities/programmes of other Newscorp companies
* Reasons justifying Related Linked Diversification
* Newscorp frequently shared expertise, resources and personnel across platforms and across the globe. * For ex, Newscorp’s satellite tv venture Sky brought in some senior management personnel from Sunday Times and Fox to spearhead its launch. * Newscorp’s proprietary encryption technology through its subsidiary NDS was a key factor propelling the success of the company’s satellite tv venture. It enabled the company to promote its own channels, acquire revenue by distributing programme channels of other companies, and even acquire stakes in competing channels such as Nickleodeon.
2) How has the acquisition route to diversification helped?
* Increase Newscorp’s global footprint with rapid expansion into other markets across the world
* Helped Newscorp get into other media segments like television, DTH, internet etc.
* Ensured faster economies of scale
* Access to new technology which were changing the industry
* Cross media ownership
* Vertical integration – (ex:NDS, programming content as well as distribution through FOX …)
* Rapidly acquire new subscriber...