Strategy Positioning is Vital and Sustainable--------Foreign Television Channel Development in China: A Case Study of Xing Kong Wei Shi
Student ID:1310387
Media Research Methods, Msc Media Management
University of Stirling
Email: sf064@students.stir.ac.uk
Date of Report: Dec 3, 2004
1. Introduction
Nowadays, foreign TV companies are all active in China, but without much success until recently. News Corp has enjoyed moderate success by operating a Chinese Mandarin Entertainment Channel called Xing Kong Wei Shi (Or Starry TV”) in China for 3 years. This channel has been considered as a wolf for Chinese TV market for the reason of its private ownership and its strategy theories carry on.
News Corp’s limited market access comes on the footsteps of China’s admission into the WTO. Although there is no explicit timetable for opening up the TV sector, WTO will indirectly help relax China’s TV rules on provincial connection with foreigners for their expertise. And more recently, the new media ownership rules, which come into effect on November 28, 2004, allow foreign firms to buy up to 49% of local production companies. (SARFT website, Oct. 28, 2004)
Xing Kong Wei Shi is offering general entertainment programmes to Chinese urban, white-collar consumer segment. It broadcasts “cross-over” programmes, such as movies, game shows, sports, and sitcoms. With permission to launch its programmes to a province in China now, Xing Kong is developing for its target of covering whole China, an audience market with 1.3 billion people and target for the share of the present market of £7.6 billion TV advertising (Media Guardian Website, Dec 1, 2004).
The research intends to provide valuable experience case from Murdoch’s TV success in China. This dissertation proposes to reveal Murdoch’s successful strategies in China. The marketing strategies of Xing Kong Wei Shi are carefully examined.The focus is on its strategy positioning and marketing communications employed by this channel. Specifically, the roles played by environment analyses, value chain and business models research. The so called “4 ons” strategy implemented by Xing Kong Wei Shi for marketing communications are examined too.
Firstly, the problems and goals will be outlined; Secondly, a literature review will cover various knowledges on satellite TV issues and marketing theories, especially the theory of “First Mover Strategy” and “Strategy Positioning”. Thirdly, the methods employed for this dissertation will be examined. Finally, the expectation of this dissertation will be call for further study on the questions the author has highlighted.
1.1. Problems statement and Goals
One of the most important steps in conducting a research case study is the definition of research questions (Yin, 1994). The research project is seeking to answer a number of questions relate to “How can we explain the success of Xing Kong Wei Shi in China since its launch in 2002?” Regarding the problems and aims, the following would be addressed:
Primarily,
a) What is Xing Kong Wei Shi’s marketing strategy and goal in China? How successful is Xing Kong Wei Shi’s financial operation? For example, what is the size of its annual profis or loss?
b) Who are the main competitors of Xing Kong Wei Shi? What kind of strategies does Xing Kong Wei Shi utilise to compete with its counterparts?
c) Why is Xing Kong Wei Shi positioned as a Mandarin entertainment channel for Chinese Satellite TV market? What is Xing Kong Wei Shi’s strategy position for its sustainable development in China?
Additionally, this study examines Xing Kong Wei Shi’s marketing communication techniques and their effects.
1.2. Relevance and significance
Concerning relevance and significance, the following should be mentioned:
An internet search the “case study”on “Xing Kong Wei Shi” suggests that there is a lack of information detailing academic research on similar issues. Therefore, the dissertation proposed will be significant and innovative in providing more experience and research results for other foreign media groups, who are wanting to share China’s super size media market, like the Pearson Plc, and the Viacom, and others.
The dissertation proposed has many research links with both media economics and strategic management. Furthermore, the marketing communications of media companies is also a popular subject for research interest.
1.3. Barriers
Possible barriers including following, the first and also the biggest problem is difficult for interviews. The reason for this being that the researcher has to tackle to meet Jamie Davis,the President of Star China. If this is impossible, the researcher would contact the Sales Director of Xing Kong Wei Shi or a veteran sales agent of Xing Kong Sales Team.
The second problem, also a vital problem for such a case study, is that the TV channel will not be stable for the other foreign TV channels in China. As a universal research result is not the researcher’s intention .There is no solution to this barrier.
2. LITERATURE REVIEW
Although the shortage of researches on the topic of this proposed dissertation are found, there are considerable research data on various aspects of those problems which a foreign satellite TV station has to face and tackle.
2.1. Corporate Strategy Theories and Models
There are lots of big names who you have to mention in your essay on corporate strategy case study. Michael Porter, the lead scholar of competitive strategy; Kevan Sholes, the co- author of Exploring Corporate Strategy; Al Ries and Jack Traut, who are the pioneer on strategy positioning of marketing communication.
I will present some ideas from China veteran Satellite TV operator, Tao Wu, who now is the director of a consultancy company of ZenithOptiMedia, Croton Company China. He is thinking Chinese TV company development strategy from the idea of Chinese ancient military strategist Sun Tzu.
The concepts of First Mover and Strategic Positioning will be reviewed( to be omitted here)
2.2. Media economics and ownership research
Much research related to media firms are not in book but in reports, not in academic research but in media’s own survey or analysis. However there are plenty of books which are researching how media firms behave under different market structures like those economists: Albarran, 1996; Alexander et al, 1998; Doyle, 2002a; Picard, 1989; 2002.
Doyle (2002a:1) indicates, ”[E]conomics, as a discipline, is highly relevant to understanding how media firms and industries operate.” She explains how importand and prevalent of economies of scale and economies of scope amid the media industry. It has been concerned by media economists that how media firms behave under various market structure. (Doyle, 2002a: 10) In the meantime, convergence and globalisation and deregulation of national media industries are increasing important for media economics. (Doyle, 2002b: 4)
2.3. Satellite TV research
Chen (1996) conducted a study on the localization of satellite television in Taiwan. Local and foreign satellite television channels available in Taiwan were examined. Reasons for their success and failure were probed.
Chen pointed out STAR TV, TVBS, Chinese Television Network, and MTV Asia were cited as examples of successful localized satellite channels. These channels provided different satellite feeds to cater for the different need in the Asian region. Their separate feed for Taiwan could offer either Chinese subtitling or Mandarin dubbed programs that overcame the language barrier. The study concluded that the trend of localization of satellite television was a dominant phenomenon in Taiwan and localization of satellite television was a proof of catering to the need of Taiwan viewers by foreign media organizations.
2.4. Research on Xing Kong Wei Shi and News Corp..
In 1993, Rupert Murdoch’s News Corporation purchased a 64 percent share of Star TV and in 1995, he acquired full control. The purchase of Star TV illustrates the rapid entry of major western broadcasting firms into Asian broadcasting industries in the 1990s (Langdale, 1997a / Chan & Ma, 1996).
More research on Xing Kong Wei Shi and News Corp can be found in various newspapers and magazines and especially report on Murdoch. There is special collection in website of http://Media.Guardian.co.uk.
Annual report 2004 of News Corp will be cited in researcher’s case study.
3. Methodologies
As an exploratory research in essence, the study is mainly conducted through case study, in-depth interview and content analyses.
3.1. Research methods to be employed
Due to the fact that the China foreign satellite television service has been the hottest topic in the television industry worldwide today, the case study of Xing Kong Wei Shi is chosen to be researched in this project. In this project, a case study is applied as the research strategy because this might be particularly useful for investigating a contemporary phenomenon in which the boundaries between the phenomenon and its context are not clearly distinguished and the context conditions are part of the study. In this project, China is both part of the phenomenon and the context of the study.
Besides, case study is most suitable for answering "how" and "why" questions. How to tackle the challenge what Xing Kong Wei Shi is facing and how it gets success and why it applies its strategy in such a way are the focus of this project. Therefore, case study may be the most appropriate research method for this topic.
One of the main reasons for undertaking this case study is that the researcher is an operator of a provincial satellite channel in China. Not only is he familiar with this industry, but also the competitors, especially Xing Kong Wei Shi, the most powerful potential competitor in China’s TV industry.
Regarding to the time scale for the research, this will include the period between early year of 2001 when Xing Kong Wei Shi was established, when China officially entered the WTO and the year 2004.
Concerning data collection, this will be based on the following: For documentation, press releases, newsletters, and sales brochures issued by Xing Kong Wei Shi and other official report and regulation policies of China State Administration of Radio Film and Television (SARFT) have been obtained. More researches on WTO in China will be examined from the regulations and report of China Commercial Department. Market research reports on Xing Kong Wei Shi 's services, information from the web sites of Xing Kong Wei Shi and other members of the News Corp, news clippings on News Corp and the Asian satellite television industry will be checked. And author will ask for the statistics of audience rates of Xing Kong Wei Shi from the CVSC- Sofres Media (CSM), a leader of Television Audience Measurement in China..
A great number of trade magazines and publications will be consulted including Advertising Age, Asia-Pacific Broadcasting, Broadcasting & Cable International, Cable and Satellite Asia, Media, and Television Asia, Financial Times, Guardian Media, Broadcast, and other newspaper or magazines produced in the UK.
As a qualitative methodology is utilised, the majority of information for this study will be provided from contacts and interviews with the elite and researchers in China.
Jamie Davis, the President of Star China. Jamie Davis worked as the General Manager of Xing Kong Weir Shi since its launch in 2002 and was promoted as the president of Star China after James Murdoch moved to the UK. He represents the official voice of Star and Xing Kong Wei Shi. The researcher has ever met and had a talk with him in China. Hoping a remote interview conducted by my colleagues in China going deep with him to get material of the vision of Xing Kong Wei Shi and his comment on the development of Xing Kong Wei Shi.The author is trying to get plans and their ideas on a foreign owned satellite TV from the management or “inside view”.
Tao Wu, the director of Croton Media Consultancy, a part of ZenithOptiMedia China; a veteran vice president of AHTV, a success Chinese provincial satellite TV station. He is very familiar with Chinese television industry from both sides, home and foreign. With interview with Wu Tao, researcher will get some ideas on foreign satellite TV channels development from the professional people in television industry and advertising industry.
Yun Zhang, a senior advertising planner and a media consultant in Guangdong province, where Xing Kong Wei Shi can be received through cable networks. Interview with him will results the audience response of programmes that are broadcasted by Xing Kong Wei Shi, and more comparator between domestic satellite TVs and foreign TV channels, which are broadcasting in China.
Since the writer has been working in a competitor of Xing Kong Wei Shi, evidence from direct observation and participant-observation has been obtained. Physical artifacts in the form of television programs broadcast on the Xing Kong Wei Shi and Xing Kong Wei Shi channel have been reviewed.
Content analyses is the best way to undertake research on TV programmes, consequently, this method will be employed to examine the programmes strategy of Xing Kong Wei Shi, such as its localised theory in programming. This method can also be utilised for research on the marketing strategy of Xing Kong Wei Shi.
3.2. Specific Procedures to be employed
Explanation-building technique is applied in this study so as to analyse the environment and reasons of the business development of Xing Kong Wei Shi. Moreover, the influence from the leadership of News Corp, parent company of Xing Kong Wei Shi, and a situational analysis using the concepts of SWOT (The SWOT approach tried to assess the organization's strengths (S) and weaknesses (W) and analyse the opportunities (O) and threats (T) in the external environment.) adopted from strategic planning will be applied to get a thorough understanding of Xing Kong Wei Shi's business decisions.
3.3. Reliability and Validity
To ensure the trustworthiness of this research, several measures were taken. Multiple sources of evidence were used in order to ensure the validity of the study. The procedures of conducting the study will be clearly documented so as to ensure the reliability. Because that the case is a pioneer in China, and with possible changes of policy on foreign satellite TVs, there is less validity unfortunately for this research.
4. Expectations
The author would research the case of Xing Kong Wei Shi in two different phrases: industry level and company level. Hopingly, the result of research on industry level would be benefit for the later comers around world, and more suggestions for Chinese media policy makers. The research of company level will reveal how strategic positioning and corporate strategy determine a TV channel’s life and its sustainable development. The research will leave more experiences and academic observation for other satellite TV players, no matter home or abroad.
In the globalization and information society today, as a pioneer, every effort it takes would be great useful for the development of satellite TV world wide.