Question

What types of political, economic, and competitive challenges does MTV Networks International face by operating worldwide?

Answer 1

The challenges in operating a global company include languages and cultures, different legal landscapes, communication and technology and differing environmental concerns.

Few major challenges that MTV networks international faces are:

1) Understanding Other Languages and Cultures

This is a competitive challenge faced by MTV and other companies operating worldwide.

The company has to take time to learn important cultural differences if their business is going to succeed across borders. While red may mean danger in most places on the globe, it is associated with good luck in China, so they might want to give marketing color-scheme a different approach while they market to the Chinese. Meanwhile, they should also have to invest in learning the languages of others, or at least have people on their teams, particularly the customer support team, that understand these languages to help them connect with all of your customers.

Also, they should study the preferences of the customers in the country they are operating so that they can choose the content they are broadcasting.

On the other hand, local companies are already aware of the preferences, languages, culture and hence marketing strategies in their countries. This might give competitors an advantage over them if they do not understand the language, preferences and culture of the country they are operating in.

2) Human Resources

This is an operating challenge in operating worldwide.
When taking business global, it is important to consider how MTV Networks will meet the manpower requirements for operating in a foreign country. They will need to hire new team members which will require an additional investment. If they decide to send some of the existing team members to new global markets, they have to account for the roles that they will leave vacant.

3) The Legal Landscape

This is a political challenge in operating worldwide.

As long as MTV's business crosses borders, they will be subject to many laws, tax rules, and numerous regulations surrounding trade in different countries.This compliance is challenging in the sense that it changes from country to country and requires you to keep up with different jurisdictions in order to ensure your business is always operating within the law.

As an example, showing erotic content in middle east or other conservative countries like India will lead them to legal trouble.

Also, in many countries, typically developing countries, there is a problem of corruption within the beaurocracy and politics. This creates problems in liasoning with the enforcement officers and politicians of that country.

4) Cost calculation and global pricing strategy

This is another major competitive challenge in operating worldwide.

Setting the price for products and services can present challenges when doing business overseas and should be another major consideration. They must consider costs to remain competitive, while still ensuring profit.

For instance, the cost of labor, marketing, and distribution (setting up physical broadcasting facilities) , as well as margin, must be a taken into account for their business to be profitable.

On the other hand, local channel operators in that country are already aware of the scenario and are in a better position to decide their price of products and services.

5) Political uncertainty

This is a major challenge MTV Networks should deal with in operating worldwide, specially in developing countries.

An obvious risk for international business is political uncertainty and instability. Countries and emerging markets that may offer considerable opportunities for expanding global businesses may also pose challenges, which more established markets do not. Before considering expansion into a new or unknown market, a risk assessment of the economic and political landscape is critical.

Issues such as ill-defined or unstable policies and corrupt practices can be hugely problematic in emerging markets. Changes in governments can bring changes in policy, regulations, and interest rates that can prove damaging to foreign business and investment.

A growing trend towards economic nationalism also makes the current global political landscape potentially hostile towards international businesses. Monitoring political developments and planning accordingly can mitigate political risks of doing business abroad.

6) Currency rates

This is a major economic challenge that MTV networks has to face (rather any firm which operates in many countries should face this problem).

While price setting and payment methods are major considerations, currency rate fluctuation is one of the most challenging international business problems to navigate. Monitoring exchange rates must therefore be a central part of the strategy for all international businesses. However, global economic volatility can make forecasting profit especially difficult, particularly when rates fluctuate at unpredictable levels.

Major fluctuations can seriously impact the balance of business expenses and profit. For instance, if MTV Networks is paying suppliers and production costs in U.S. dollars, but selling in markets with a weaker or more unpredictable currency, they could end up with a much smaller margin — or even a loss.