A recent strategic alliance was made between Microsoft Press and O’Reilly Media. The example of this alliance shows that media companies use strategic alliances as one of the main tactics to compete in the global media market. Need to collaborate caused by changes occurring in the social, economic, and political environments. Strategic alliances allow media companies like O’Reilly to meet new economic and legal challenges. O’Reilly’s strategic alliances allow Microsoft Press to create sustainable competitive advantage and deliver quality products to the end audience. “O’Reilly will be the exclusive distributor of Microsoft Press titles and co-publisher of all Microsoft Press titles, on Nov. 30, 2009. We’ll be working with Microsoft to develop new books” (O’Reilly, 2009, paras 1). The attractiveness of alliances activity is the assumption that a merger will enhance the growth potential of the acquiring company. Microsoft Press and O’Reilly grow annually and require new ways and strategies to compete on the global scale. Many media businesses integrate themselves into the world economy through strategic alliances. Far-reaching changes are occurring in the social, economic, and political environments, affecting the strategies, structure, and management of business. The notion of strategic alliances incorporates the need for considering the current economic context affecting the firm (Doyle, 2002).
The example of that alliance shows that the main success factors are equal financial resources and mutual interest. Due to the uniqueness of the creation, the high costs which are related to this, as well as the high promotional and sales, costs these products are having a higher risk of failure. On the other hand for continuous creation products require conceptual continuity. The customers of newspapers mainly buy it not due to one or two specific articles but rather for its content selection, processing, and packing. Branding issues are more crucial for those products. Media companies producing continuous creation products are trying to improve the selection of the content and the packaging and meet better the customer’s needs; while strengthening the brand equity (Doyle, 2002).
For both O’Reilly and Microsoft press, a shift from short- to long-term thinking when developing and implementing acquisition strategies is necessary to ensure that strategies are properly implemented before they are abandoned. This requires calculated risk-taking and, most importantly, streamlined channels of communication. The underlying argument presented is that there are significant opportunity costs associated with restructuring. The attractiveness or the presumed merits of strategic alliances activity is the assumption that a given strategic alliance will enhance the growth potential of the acquiring company. O’Reilly with a lackluster product line or with underperforming business units might seek to acquire one that would enhance its portfolio and provide improved growth potential. Preferably, the goal is to acquire a complementary business unit with related lines of markets and products that would fit nicely into the firm’s long-term strategic direction, improving the acquiring firm’s overall growth potential and marketability. The selection of which company would fit best in the current corporate culture is based on many factors, and it varies from firm to firm. Even firms competing within the same industry segment might have very different acquisition strategies. If most of the firms in an industry are competitive in the sense of being able to make a profit and if they are not losing out to foreign competitors in foreign markets or their market, they would consider themselves internationally competitive.
References
Doyle, G. (2002). Understanding media economics. London: Sage.
O’Reilly, T. (2009). Microsoft Press Enters Strategic Alliance with O’Reilly. Web.