18
Chapter 2 The Media Business Environment: Markets, Business Models,
Mergers, Alliances, and Partnership
OUTLINE
I. Electronic and Digital Media Markets
A. Defining the market
II. Market Structure
A. Concentration in the market
1. The number of producers or sellers indicates the degree of
concentration
3. Product differentiation
5. Cost structure
7. Types of market structure
III. Business Model
A. The categories of business model of media industries
IV. Forces Affecting Markets
A. Economic conditions
B. Technological forces
C. Regulatory forces
V. Alliances and Partnership
A. Strategic alliance
B. SWOT analysis
D. Alliances to develop and market content and applications
E. Alliances for newsgathering
VI. Implications for management
A. Partnerships and strategic alliances have become routine ways of doing
business for many electronic and digital media companies
B. The executive level will likely be fully engaged in developing the alliance
or partnership
C. The middle and supervisory levels will take on most of the responsibility
for implementing changes and new directions ͒
G. Electronic and digital media managers must continue to balance the needs
of the marketplace with those of their audiences in new ways
H. Each of the major industries presents unique characteristics in terms of
how strategic alliances will impact their enterprises
ASSIGNMENTS/PROJECTS
1. Consulting newspapers and industry periodicals from the past 12 to 18 months
2. Identify top-eight electronic and digital media companies in the United States, and
MULTIPLE-CHOICE QUESTIONS
1. Which of the following is not discussed in your text as a factor influencing the
markets of the electronic and digital media?
2. Which of the following is not a purpose for forming a strategic alliance?
3. Which of the following suggests that two different entities will operate more
efficiently as one business than separately?
d. a local marketing agreement
e. a merger
4. Which of the following is not owned by Disney?
5. Which of the following is not a factor that drove the large number of mergers and
acquisitions in electronic and digital media over the last decade?
6. Managers must increasingly be able to handle many responsibilities at once—a skill
known as
7. Which of the following operates in an oligopoly market structure?
8. According to your text, which of the following is not a characteristic of a successful
strategic alliance?
a. companies involved must have complementary strategies
b. companies involved should be engaged in complimentary business
9. Which of the following statements about media acquisition is not correct?
10. Electronic media companies operate in a dual-product market, which means they
produce or distribute a product to two different sets of consumers. These consumers
are
11. Concentration of buyers and sellers, product differentiation, and barriers to entry are
important criteria used in determining
a target markets
b. geographical market
12. Which of the following is not a type of market structure?
13. Which of the following is not a tool or technique of product differentiation used in the
electronic and digital media?
d. unique formats
e. target-specific consumer interests
TRUE/FALSE QUESTIONS
14. The consolidation that has taken place since 1996 in the radio industry is
representative of intra-industry alliances.
15. The number of producers or sellers in a market indicates the degree of concentration
in the market.
16. Barriers to entry are the expenses needed to create products in a market.
17. A SWOT analysis considers both internal and external factors.
23
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
False
18. The internal factors of a SWOT analysis include the opportunities and threats in the
environment.
19. Media alliances have the goal of developing or expanding into new market at both the
domestic and international levels.
DISCUSSION/ESSAY QUESTIONS
1. Describe four types of market structures found across the electronic and digital media.
3. Discuss the internal and external factors of a SWOT analysis.