Time Warner’s Distribution Strategies

Time Warner uses multiple channels to distribute its products to its customers in
Argentina. It has developed these multiple channels to ensure that it captures a larger market
share than its competitors in the Entertainment sector. The company delivers entertainment
products to its customers through internet subscription packages, cable TV, Pay TV, and movie
DVDs distributed through conventional methods (Edgecliffe-Johnson, 2012).
Exportation of goods to overseas is the most adopted mode of entry into foreign markets
(Singh, Narain and Yadav, 2013). Singh, Narain and Yadav (2013) posit that exportation
involves the process of producing goods locally and exporting them to foreign markets. There
are two main forms of exportation which include direct and indirect exportation. Indirect
exportation involves the process of using existing distributors in the foreign nation to distribute
a firm’s products (Johanson and Mattsson, 2012). On the other hand, direct exportation involves
a firm directly exporting and distributing its products to the target market (Johanson and
Mattsson 2012). Exportation is mainly adopted by small-scale and medium-scale firms which
do not have adequate resources to finance the development of overseas plants; a technique
mainly took in the turnkey contracts entry mode (Fujita, 2012). Johanson and Mattsson (2012)
assert that the internet has had a big impact on the exportation of goods, especially for small
firms. For example, companies such as Amazon have developed online platforms to enhance
access to larger markets (Singh, Narain and Yadav, 2013). Subsequently, exportation has been

assimilated into the online platforms and the media as the primary internationalization entry
mode (Singh, Narain and Yadav, 2013).
Through Turner International Argentina, Time Warner distributes its entertainment,
sports, and programming news to millions of its customers through television. The company has
a total of 28 pay-tv channels (Edgecliffe-Johnson, 2012). The company as a broadcast television
channel Known as Chilevision through which it conducts sales and marketing for its products.
Time Warner Company has divided its customer base into five segments namely children,
entertainment, news, sports, and open TV. The company has different channels for each of these
groups through which it ensures that each group’s needs are fully met.
The main advantage of exportation is that a company can gain both local and experience
economies of scale (Singh, Narain and Yadav, 2013). Also, corporations that have a long-term
approach to settling in the foreign markets will benefit from a prior knowledge such as the
demands of the markets (Johanson and Mattsson 2015; 2012). Additionally, exportation boosts
a corporations profits margins by increasing its output levels (Bernard et al., 2011).
Consequently, the risk of loss is reduced since the organization is not focusing on one market.
Additionally, exportation of goods encourages research mostly based on enhancing products to
fit the new market’s demands (Bernard et al., 2011). However, exportation presents various
drawbacks such as increased mode of operation (Singh, Narain and Yadav, 2013). Additionally,
trade barriers increase the cost of exportation; countries are required to have a license that
allows them to transport their goods or services to overseas markets.
The company also offers subscription access options to its clientele in Argentina. By
purchasing packages that meet specific needs, the company’s customers are able to access their
products easily over the internet. The subscriptions are especially suitable for people on the

move and professional as they may use their computers and handheld devices to take advantage
of the company’s products. The company also provides mobile applications such as Phone 2 Go
and TWC TV (James, 2014). By providing the different channels through which the products can
be acquired, the company ensures that all its customers can access their products from the
comfort of their homes or workplaces.
Coase (2012) succinctly states that franchising is the right a firm acquires from another
company which allows them to carry out particular business activities, such as selling the good
or the service, under the name of an individual firm such as McDonalds. Furthermore,
franchising involves longer-term commitments, whereas licensing involves a shorter term
(Brown, 2013). Additionally, Edgecliffe-Johnson (2012) states that franchising and licensing
help in cushioning the risk of developing competition from collaborative firms in turnkey
contracts; through franchising companies get into long-term agreements. Johanson and
Mattsson (2015; 2012) assert that franchising is a specialized form of license. Subsequently, the
franchisee agrees to follow strict rules about how to carry on the business activities such as the
type of service, setting of the physical space and many others. Consequently, the firm selling
the franchise will receive a royalty payment, which is to the franchisee’s revenues (Johanson
and Mattsson 2015; 2012). However, the firm that sells the franchise avoids most of the costs
and risks incurred when opening a plant in a host country by its self. Coase (2012) states that
one of the problems of using franchising is quality control.
The company also distributes its products through conventional distribution channels.
The company provides its customers with their favorite products through retail outlets
throughout the country. As each of the product may need an initial purchase, the company
provides easy access from local outlets. Through companies like Carrefour, Walmart, and

Casino, consumers may purchase cable TV installations, movie DVDs, and pay for their online
subscriptions easily? Moreover, most of these companies provide delivery services and
customers may make their purchases and receive them through courier services as appropriate.
Complaints are easily resolved as the company has a customer service center in the country
(Time Warner, 2016).
In conclusion, Time Warner Company has been able to meet the TV and entertainment
needs of most of its consumers in Argentina. By using multiple channels like cable TV, online
subscriptions, and movie DVDs, the company is able to reach each of its customers with ease.
The company also makes sales both online and through conventional retail networks to its
customers. Customers are able to take advantage of the company’s products and make payments
through the most convenient methods (Edgecliffe-Johnson, 2012). Therefore, based on critical
analysis of the Time Warner in Argentinian markets presented above it is evident that firms have
a plethora of internationalizing modes from which to choose. However, each entry mode has its
advantages and drawbacks. Additionally, it is inappropriate to approach the internationalization
process without formulating a strategy; a plan of action that is expressed and carried out to
achieve a particular goal. Therefore, we can say that without a proper internationalizing strategy,
the firm is about to fail in their internationalization. Additionally, formulating a plan also
involves deciding when, how and which markets to enter. In the case of Time Warner the
Argentinian market was a very thriving market as they dominate the media sector.

References

Bandick, R., Görg, H. and Karpaty, P., 2014. Foreign acquisitions, domestic multinationals, and
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James, M. (2014). Time Warner focuses on its growth strategy for HBO. Los Angeles Times.
Retrieved 28 April 2016, from
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-time-warner-hbo-
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Johanson, J. and Mattsson, L.G., 2012, November. Internationalisation in Industrial Systems—A
Network Approach. In Strategies in Global Competition: Selected Papers from the
Prince Bertil Symposium at the Institute of International Business (Vol. 19, p. 287).
Lasserre, P., 2012. Global strategic management. Palgrave Macmillan.
Singh, B., Narain, R. and Yadav, R.C., 2013. Adoption of advance manufacturing technologies
in micro, small and medium enterprises of India. International Journal of Indian Culture
and Business Management, 7(1), pp.24-52.
Time Warner. (2016). Warner Bros. Consumer Products Opens Argentina Office. Time Warner.
Retrieved 28 April 2016, from http://www.timewarner.com/newsroom/press-
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