Relationship Between Local And Global Media Essay

The relationship between local and global has created a large amount of puzzlement in the recent discuss on globalization. It is commonly known that globalization is a strong power in both economy and politics. On the other hand, Herod (2002: 83) points out the importance of localization by persuading transnational corporations to “Organizing, Globally, Organizing Locally”.

Theories of globalization have been developed, Walker and Goldsmith (2001) finds out the connection between local economic growth and decline and global force. Indeed, there are winners and losers in the connection. (Dunford, 1994: 94) Enterprise plays as a key role in this competition. As developing of globalized economy, the conflict of local companies and global conglomerates has been becoming a more and more serious business issue all over the world, especially the political and cultural competition behind the economy. Thus, the relationship of these two forces seems to be valuable to explore.

A globalized market, which was caused by business globalization, has possibly become one of the most significant changes in the recent decades. The studies of globalization were first started at the end decade of last century. According to Robertson’s (1997) ideas of globalization, the modern economical, political and cultural trends of the whole world are relevant to the development of globalization. The principal debate is between global and local at the moment. On the other hand, the globalized market increases the worldwide trades and the revolution of improving effectiveness of resource allocation. Moreover, it may promote the effectiveness of producing, the usage of new technology and improvement of management methods. Due to the motivation of commercial profits from the globalized market, every transnational corporation may have to face the first problem: making global profit from local.

Manning et al (2008) defines outsourcing as different institutes may involve an agreement about exchanging products, payments or services. This kind of business outsources the other suppliers out of the state. The study also claims that many companies would not have continued to exist after the last recession because the worldwide competition requires cutting costs in a large sum.

As Dunnam (2002) says, since the late of last century, Dell has had to face the fierce competition from the other powerful competitor such as IBM and HP. There is a need to significantly reduce both service and sales costs obviously. Therefore Dell began to change business strategies in order to enlarge operation through the globe. Seeking for the best strategy, Dell set up a call center in India instead of the former American centralized concept, which would offer the efficiency and low cost retails and customer services. Within three month, approximate 1/3 of labor cost decreased. After a few years, Dell has cut a large number of services provided in-house and developed business by constructing new globalized branches such as China, India, Brazil and Europe for outsourcing. Dell’s vice president Dunnam (2002), cited in Gareiss (2002) analyzes that outsourcing is Dell’s one of fastest developing business, making over four billion dollars income per year and increasing at 30% per annual.

In fact, the globalization strategy like Dell’s is not only benefit the company, but also a win-win. To local state, these foreign direct investments will enlarge the in-house income and reduce unemployment. According to Roy and Liebl’s (2004) Research, the export of India’s hand made crafts has rushed in 1990s, rising five percent during the last decade.

As a consequence, it seems that the relationship between the local and global is a sort of stakeholdership, because both local and global may take advantage of each other in order to maximize monetary profits.

2.2 A Globalized Cooperation

Continuing the study of globalization, Demers (2002:27) foresees that the international business may be controled by small groups of transnational conglomerates, for instance the global media market is dominated by a few “media giants” in the West like Murdoch’s News Corporation. In 20th century, there is an increasing number of global enterprises founded. Combining corporations are currently become a trend of marketing strategy in globalization.

2.2.1 Case Study 2: Murdoch’s partnership in China

Thussu (2007) states over 25 billion audiences in the world spend 1/8 day on watching television per day. In international TV market, it is clear that many developing countries has commercial increased on this market, for example China is becoming the biggest expansion all over the world.

Rupert Murdoch, the chairman of famous US media group News Corporation, has invested a large amount of money in Asian by setting up a local Asian brand in 1999 called Star, which stands for Satellite Television Asian Region. Star TV broadcast both news and entertainment via variety of programs of four main channels, including Star, Channel V, Star-Movie and Star-Sports in China. (Thussu, 2007)

Furthermore, Murdoch combine forces with some strength local media companies, like Phoenix media group. Phoenix media group, which is co-owned by Murdoch, is probably the only non-governmental media institution in mainland China, influencing millions of local people. Yun (2001) observes that Phoenix TV can reach about 12 percent of the TV households in mainland China. A mass of news and entertainment programs can be sold to a wide range of local audience. As a consequence, this television appeals a lot of quality sponsors, including national banks, medicine corporations and famous industrial firms.

Murdoch’s partner in China is Liu Changle, a former stuff of Chinese government who currently become a media mogul. In 2000, public can see the shares of Phoenix media corporation from the Hong Kong Stock Exchange (HKEX), Murdoch and Liu each kept hold of a 38% stake. For Murdoch, Phoenix is an approach to enlarge his transnational media empire to the top potential market. For Liu, Murdoch may provide the advanced technical assistance. In 1996, Murdoch supplied the satellite networks for Phoenix’s launch, and at the same time Liu offered public relations of government and local expertise.

Clearly, it is successful partnership between the Phoenix and Murdoch. In terms of this case, the relationship between the local and global seems like a kind of partnership.

2.3 A Localized Prevention

2.3.1 Free Trade vs Trade Protectionism

According to Pugel (2008), the main purpose of Free Trade is preventing international business from interference of local government. A series of trade policies have been made to permit trading goods and services among different countries. Trade Protectionism is the government interventions of trade between countris. Interventions such as taxes and tariffs on imported goods, non-tariff barriers, and kinds of other policies aimed to discourage imports, and prevent overseas companies.

Dutta (1999:193) uses game theory to analyze the relationship between Trade Liberalization and Trade Protectionism. Any country involved in international trade has to face the choice of maintaining free trade or taking trade protectionism. This issue is a “Nash Equilibrium”. The balance here is trade both sides to take non-cooperative game strategy, the results of the balance will make two sides compromise in the trade war. For instance, X Country attempt to restrict Y country’s imports, such as raising tariffs. Then the Y country must take actions to fight back, increasing a tariff as well. At the end, there is no one win. Conversely, if X and Y can reach a cooperative equilibrium like both to reduce tariff restrictions, that is, starting from the mutual benefit.

From Dutta’s (1999) idea, it seems that X Country and Y country should reach a cooperative equilibrium to earn a win-win. However, faced with the global competition, the local may not be cooperative all the time. Sreberny (1997) claims that every country needs to protect local industries and culture by building up local trade barriers.

2.3.2 Case Study 3: From Google.cn to Google.com.hk

Regardless of the attractive benefits from globalized maket, most of the transnational conglomerates have to face the local cultural clashes in some special case. This is a counterexample of the idea that the relationship between the local and global is a kind of partnership.

Exporting global companies may produce some products which against the local culture or policy. Levy (2006) describes a situation that all of the overseas networks want to do business in mainland China has to achieve the license by signing the agreement with the government. This agreement demands these companies to censor all the content on there websites. Yahoo and MSN agreed to sign this contract and censor the provided information, including search engines, websites and blogs in China.

Google.cn’s agreement should be resigned on the summer of 2010. Nevertheless the license may not pass to the corporation if Google continues providing services without censoring search engine results. Finally, Google.cn has decided to leave mainland China by changing its search engine at Hong Kong, where allows unfiltered search results. Google insist on launching a reputation that would like to care about the freedom of the consumers. Drummond, the chief legal officer of the company, cited in Levy (2006:4), explains the judgment is due to the “non-negotiable legal requirement” of the government.

No matter who won in this conflict, a government intervention plays as an important role. The relationship between the local and global seems like a sort of adversarial relationship. Local was prevented from global this time. Global should have enough localized awareness to seek for a suitable solution of local conflicts.

2.4 A Localized Competition

Trade Protectionism is not only issue that global has to face, another transparent barrier is the local competitor. It is widely known that local companies always have more knowledge about the local market, and better public relation in the particular region. Global corporations are making a mass of efforts to localization. For example, HSBC, which has been branding as “The World’s Local Bank” for many years, is operating a strategy to promote the understanding of different local markets. Starbucks also announced in July, 2009 that three stores in the Seattle area would use the local name “15th Avenue Coffee and Tea.” instead of the well-known “Starbucks”. Despite these efforts, global may lose the game as well in the local competition.

2.4.1 Case Study 4: Facebook’s lost the largest social network

Globalization brings universal information to the local, but it doesn’t mean global can seize the local due to the strong local competitor. RenRen.com (used to name Xiaonei), one of the most well-known Chinese social networks, now is playing as a primary role in Web2.0 market in mainland China. In spite of Facebook always takes this pioneer position in many other countries. It is clear that Facebook has lost the largest social network.

Facebook have a large number of benefits of being the industry leader, however, it is not appropriate to just copy the business rules to China. When Facebook was struggling to deal with the public relation with Chinese government in order in get the license, Xiaonei was building its campus based social network. Xiaonei.com was started in December 2005, at the beginning concentrated on college students. At the end of 2007, Xiaonei continued to develop the access to the middle school and the other young markets. After 3 years’ effort, Xiaonei has seized millions of student users. Now Xiaonei rebrand to RenRen, which claiming the goal of connecting everyone in China. This company proves a rising determined in China, because the growing speed of users is out of imagination. Zhang (2010) reported that there were more than 40 million registered users of Renren.

As the particular local market, global needs to do more to success in local, or both local and global may not benefit from globalization. Global corporations ought to either adapt to the cultural and political environment or do more market research about local competitors. Like Facebook, if a global institution wants to win under new conditions, there is a need to learn something from the local competitor. The relationship between the local and global seems like a kind of competition relationship.

A globalized market caused international homogenization. Some leading transnational organizations will spread the so the called global idea to local via the products.

This paper has overviewed the background and some performances of a globalized media and media conglomerates in the West. By analyzing some typical cases, it shows the relationship between them: a globalized media does not exactly mean media conglomerates in the West.

On the one hand, a globalized media may partially lead to media conglomerates in the West, due to it’s enhance the companies’ profits and satisfy the audiences’ information need. On the other hand, media conglomerates may not be successful because of the competitors and the cultural conflicts, even under the same globalized media environment.

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