ABSTRACT
In pursuing competitive advantages, a media firm goes through the stages of strategy analysis, formulation, and implementation (Dess, Lumpkin, & Taylor, 2004). These strategic actions involve different levels of complexity as well as resource commitments, ranging from microlevel, functional strategies like an advertising campaign; to business-level strategies that are mainly concerned with developing core competencies in a specific product market (e.g., a differentiation or cost leadership strategy); to corporate strategies that deal with how a media corporation diversifies its business units, allocates resources, and manages its portfolio. Although each business unit of a diversified firm has to analyze and align the external and internal environment of its product market with the unit’s business mission and intent to exploit competitive advantages in a particular market (e.g., ABC in the network TV market), a diversified corporation such as Disney, the corporate parent of ABC, also has the challenging tasks of finding the best combination of resources and business environments in which the overall company can be competitive in multiple markets. Hitt, Ireland, and Hoskisson (2001) suggested that a company may adopt among five generic business-level strategies: cost leadership, differentiation, focused cost leadership, focused differentiation, and integrated cost leadership/differentiation. Compared to these single-market business-level strategies, corporate strategies tackle more multidimensional issues such as mergers and acquisitions as well as product and geographical diversification that are heavily dependent on the conditions of a firm’s external environment and have substantial implications for the development and appropria-
tion of its resources. Along the same line, considering the popularity of strategic alliances in the media industries and the emergence of numerous global media conglomerates, a media firm’s cooperative strategies that exploit pooled competitive advantages and international strategies that aim at capitalizing on the technological, political, societal, and economic changes in the global marketplace have also become critical corporate decisions that impact a media firm’s competitiveness in the marketplace. Thus, to supplement the general strategic management concepts discussed in chapter 2, this chapter further reviews relevant theories in areas of diversification, M&A, strategic alliances and networks, and international strategy. It also discusses how these strategic approaches and theories might be applicable to media products in the context of a changing media marketplace. Note that whereas diversification, M&A, and cooperative strategies such as strategic alliances are examined in the context of an international marketplace, additional concepts in international expansion are discussed separately.
