COSC 7311 : Learning Unit 3 Transnational Media Corporations and Globalisation Flashcards

1
Q

Define a transnational media corporation using a relevant example ( 3 marks)

A

An organised , strategic system that aims to achieve financial/operational goals across local and international borders . Example Disney

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Explain the concept of free market capitalism with reference to a South African situation (3 marks ?)

A

Free market capitalism is the dominant world economic system . It aims to encourage foreign direct investment . Example : South African government accepting a trade deal with Russia .

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

List 5 reasons for companies to engage in foreign direct investment ( 5 marks )

A
Physical assets
Foreign Market penetration
Production efficiency 
Overcoming barriers to entry 
Empire building
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Physical assets , discuss in more detail (2 to 3 marks)

A

Refers to specific physical goods like coal , oil etc (or talent etc)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Foreign market peneration (3 marks)

A

TNC invests in a location in order to try ans establish a foothold in that market . The easiest way to do this is by purchasing a media house already located in the place that the TNC wants to expand to

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Production efficiency ( 3 marks)

A

Labour costs become a big part of costs for a TNC . Thus they look for then expand into states that offers favourable conditions for businesses and/or lower wages for employees . eg Hollywood v Bollywood .

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Overcoming barriers to entry 2 marks

A

TNC’s expand purely into foreign territories purely to avoid high tariffs . This could potentially lead to protectionist policy .

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Empire building (3 marks)

A

CEO’s are looking to expand the business into a global empire . This means that the TNC is looking beyond profit and more into becoming “famous” . This is usually a high risk .

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Explain the risks of foreign direct invest ments . (4marks)

A
  • Strict laws in foreign states
  • Possible socialist elections leading to pro-worker regulation being passed .
  • Fluctuations in required working conditions within the state being extended into .
  • Tech/media/tax specific laws
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Differentiate between mergers, acquisitions , and strategic alliances , using South African exmaples (6-9 marks)

A

*Merger : two companies become one , assuming assets and liabilities of both . eg: Engen and SA Oil refinery
Acquisitions : Purchase of one company by another , to enhance the buying companies production capacity . example : Advitech and Capsicum
Strategic alliances : Relationship between two companies that is beneficial to both . Doesn’t involve any purchasing of shares etc eg : Vodacom and Super Rugby to make Vodacom Super Rugby

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

List why mergers and acquisitions can sometimes fail . 4 marks

A
  • Lack of compelling strategic rationale
  • Failure to perform due diligence
  • Post merger planning and integration failure
  • Financing/excessive debt .
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Lack of strategic compelling rationale 2-3 marks

A

Expectations are unrealistic for the merger

*Strengths are overestimated and problems/weaknesses are underestimated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Failure to perform due diligence (2 marks)

A
  • In the rush to completer the merger , one/both parties fail to be through
  • The acquiring company then finds out later that the acquired company can’t meet the set objectives .
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Post merger planning (2/3marks)

A
  • One/both companies have little to no plan as to how to smoothen the transition .
  • The resulting confusion leads to frustration , divisions and sometimes even failed mergers .
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Financial problems / excessive debts ( about 3 marks-ish )

A
  • Acquiring company takes on large debt to finance the merger .
  • Pressure them mounts to make sufficient profits to cover the loans .
  • Failure to do so could lead to forced selling of assets/entire divisions/shares to raise capital . If the problem persists the company will default on payments .
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Discuss what is meant by broadband communication with specific mention to South African context . (2 marks)

A

*Broadband= the ability to distribute multichannel info and entertainment to the home . Usually involves internet access . Fibre is the latest development in South Africa .