BBC Worldwide: Going Global, Research Paper Example

Abstract

The paper discusses and evaluates the recent changes in the BBC’s corporate strategy. The paper evaluates and justifies these changes and provides recommendations to help BBC Worldwide cope with the new conditions of doing business in global markets.

Phillips, S. (2009). BBC brands beyond Britain. License! Global, 12(8), 38-48

Globalization has already become the determining feature of the postmodern business reality. Thousands of companies choose to go global, to integrate with international markets and to access niches and consumers that had been unavailable before. The BBC is not an exception: with its new leader, the licensing unit of BBC Worldwide has changed its strategy to catch up with the ongoing developments in global business. Today, BBC Worldwide opens new business frontiers and has better opportunities to outperform its competitors in the international telecommunications business.

BBC Brands: Beyond Britain

In his article, Sam Phillips discusses the changes in the BBC’s corporate strategy under its new leader, Neil Russell. BBC Worldwide is the commercial affiliate of the BBC (Phillips, 2009). It is among the leaders of the world’s licensing business, the owner of Teletubbies and Planet Earth ideas, and the parent of the one of the world’s biggest telecommunications licensors (Phillips, 2009). Phillips (2009) writes that before Russell, BBC Worldwide and its Children’s and Licensing unit had been through a couple of choppy years. At the time when Russell became the new BBC’s leader, the company was set up for boom and was not prepared for lean times (Phillips, 2009). Russell saw a business that lacked an appropriate structure for a modern telecommunications licensing business (Phillips, 2009). Russell took a challenging decision to refocus the company toward global goals. “Just as BBC Worldwide moves into its sparkling new headquarters in White City, Russell implemented a significant realignment that would focus brand management, international expansion, and adult and family licensing” (Phillips, 2009). In May 2009, Russell made the first strategic move by appointing new U.S. brand executive (Phillips, 2009).

Keefer’s appointment was the key element of Russell’s strategic plan, because he considered the U.S. as the beginning of BBC Worldwide international expansion (Phillips, 2009). Russell decided that he had to re-import experience and knowledge of the licensing markets in the U.S. back to Europe (Phillips, 2009). Keefer and Russell organized a new team that would lead BBC Worldwide into global markets and would create a new international BBC brand. After the 2010 digital switchover, BBC Worldwide will become a part of the global telecommunications landscape (Phillips, 2009). Keefer and Russell view the U.S. as the area of the unlimited telecommunications opportunities and the door to global telecommunications markets. There are plenty of retailers and channels where the BBC brand is continuously underexploited (Phillips, 2009). Today, the BBC emphasizes the need to constantly refresh their broadcasting ideas. With tent-pole programming the company will be able to deliver exactly what customers in the U.S. and worldwide want (Phillips, 2009). Children’s brands are currently the top priority for the BBC’s international expansion, but Russell is still reluctant to reveal his plans regarding children’s channels in the U.S. (Phillips, 2009).

BBC and Going Global: Are Global Strategic Moves Justified?

That BBC Worldwide changed its strategic direction and chose to go global indicates the company’s desire to catch up with the changes in global telecommunications markets. Globalization opens new business frontiers and facilitates integration with other businesses, consumers, and markets. Businesses are willing to use these globalization opportunities to expand their business reach and to cover new business areas. Actually, many modern successful companies demonstrate a perfect ability to switch quickly from one strategic business orientation to another (Leontiades, 1997). These changes require that companies be willing to break with their past and re-orient toward the global future (Leontiades, 1997). In no way are these strategic switches universal: on the contrary, each company is unique in its striving to become a global competitor (Leontiades, 1997). By going global, companies like BBC Worldwide expand significantly their business opportunities and broaden the scope of their business and financial incentives. Today, BBC Worldwide exemplifies the so-called multinational mindset, when companies no longer produce products for domestic markets; they choose to produce products and services that meet the needs of individual markets and give their subsidiaries freedom to run business as they see fit in their local markets (Saee, 2008). BBC Worldwide is exploring expansion opportunities to the U.S, and is eager to develop products that will satisfy the needs of the U.S. consumers. What the BBC is currently doing is the first step in its way to developing the global mindset, which will help the company to develop a set of standardized telecommunications products and to meet the general needs of multinational consumers.

Whether the strategic change at BBC Worldwide was a success is difficult to define. Yet, the rationale of the strategic change in BBC Worldwide is in the benefits which globalization provides to companies and businesses. The exposure to different regimes, markets, consumers, and resources will make international expansion both challenging and productive. By going global, the BBC will develop a unique set of competitive advantages. First, the BBC can attain greater economies of scale and reduce their costs (Meyer, 2006). Second, the BBC will have an opportunity to “exploit comparative cost advantages across locations by disaggregating production and sourcing operations across different locations” (Meyer, 2006). Globalization facilitates the integration of research and development ideas from different locations (Meyer, 2006). The diversity of knowledge, talent, experience and expertise is, probably, one of the major benefits of going global. Global exchange of knowledge is an excellent source of innovative ideas and creative findings (Meyer, 2006). Finally, global companies have better chances to target global customers and meet their global demands (Meyer, 2006).

However, globalization is not always the determining feature of business success. The current strategic change in BBC Worldwide was an urgent response to the strategic problems that had been accumulating in the company for years. Companies like BBC Worldwide must be aware of the changes that occur in the global markets and respond to these changes. “Blind globalization” is one of the major strategic mistakes companies make whenever they change their corporate strategy. In other words, companies that choose to go global keep to a belief that the future will bring even more opening of the international markets and increased cross-border capital flows (Allen & Raynor, 2004). Yet, like any other business phenomenon, globalization does have its limits. The key to successful business strategy is not in being global but in being responsible and flexible in all strategic decisions. For example, Allen & Raynor (2004) discuss the signs of deglobalization and imply that firms must be able to shift their emphasis from globalization to regionalization of business opportunities. The major lesson BBC Worldwide must learn is that the future of global business is increasingly uncertain. To create a successful corporate strategy, companies must operate a set of assumptions of how the global marketplace will evolve in the coming years (Allen & Raynor, 2004). Strategic flexibility must become the determining feature of the BBC. The company must anticipate changes, formulate an optimum strategy, accumulate assets and capabilities necessary to implement this strategy, and implement it (Allen & Raynor, 2004). In future, the BBC should adopt a more profound long-term mindset, to make its strategy smooth and avoid dramatic strategic shifts, which are always associated with additional costs and potential losses.

Conclusion

In 2009, the new leader of BBC Worldwide took a challenging decision to change the strategic direction of the company and to help the BBC go global. The decision was an urgent response to the problems that had been accumulating in the company for years. Whether the new strategy will bring positive strategic outcomes is difficult to define. It is clear that by going global, BBC Worldwide opens new business frontiers and has better opportunities to outperform domestic firms. However, globalization is not always the best strategic option and to be successful, companies must be flexible and open to changes in the global business environment. The BBC must anticipate changes and formulate/ implement strategies that will respond to these changes and will help the company avoid additional costs and potential losses.

References

Allen, D. & Raynor, M.E. (2004). Preparing for a new global business environment: Divided and disorderly or integrated and harmonious? The Journal of Business Strategy, 25(5), 16-25.

Leontiades, J. (1997). Multinational corporate strategy: Planning for world markets.  Lexington Books.

Meyer, K. (2006). Globalfocusing: From domestic conglomerates to global specialists. Journal of Management Studies, 43(5), 1109-1144.

Phillips, S. (2009). BBC brands beyond Britain. License! Global, 12(8), 38-48.

Saee, J. (2008). Contemporary corporate strategy: Global perspectives. Routledge.