Evolution or Revolution in the Music Industry? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Evolution or Revolution in the Music Industry?
This case allows students to explore the impact of the Internet on an industry structure, value chain, and business models. The combination of broad band Internet access, faster computer processing, and compression software (MP3) has encouraged the evolution of online music trading and distribution. The case encourages students to view appropriate actions for all industry participants: retailer, music companies, performing/recording artists, government regulators, and emerging online distributors.
Authors :: Paul W. Farris, Ervin R. Shames, Eric A. Gregg, Sonia Almeida
Swot Analysis of "Evolution or Revolution in the Music Industry?" written by Paul W. Farris, Ervin R. Shames, Eric A. Gregg, Sonia Almeida includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Music Compression facing as an external strategic factors. Some of the topics covered in Evolution or Revolution in the Music Industry? case study are - Strategic Management Strategies, Pricing and Organizational Development.
Some of the macro environment factors that can be used to understand the Evolution or Revolution in the Music Industry? casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing energy prices, increasing transportation and logistics costs, there is backlash against globalization, increasing commodity prices, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Evolution or Revolution in the Music Industry?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Evolution or Revolution in the Music Industry? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Music Compression, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Music Compression operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Evolution or Revolution in the Music Industry? can be done for the following purposes –
1. Strategic planning using facts provided in Evolution or Revolution in the Music Industry? case study
2. Improving business portfolio management of Music Compression
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Music Compression
Strengths Evolution or Revolution in the Music Industry? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Music Compression in Evolution or Revolution in the Music Industry? Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Music Compression in the sector have low bargaining power. Evolution or Revolution in the Music Industry? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Music Compression to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Music Compression has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Evolution or Revolution in the Music Industry? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Music Compression is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Music Compression is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Evolution or Revolution in the Music Industry? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Music Compression is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Paul W. Farris, Ervin R. Shames, Eric A. Gregg, Sonia Almeida can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Music Compression is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Music Compression are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Music Compression
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Music Compression does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Music Compression is present in almost all the verticals within the industry. This has provided firm in Evolution or Revolution in the Music Industry? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Organizational Development field
– Music Compression is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Music Compression in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Music Compression digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Music Compression has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the Evolution or Revolution in the Music Industry? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Music Compression is one of the most innovative firm in sector. Manager in Evolution or Revolution in the Music Industry? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Evolution or Revolution in the Music Industry? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Evolution or Revolution in the Music Industry? are -
High operating costs
– Compare to the competitors, firm in the HBR case study Evolution or Revolution in the Music Industry? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Music Compression 's lucrative customers.
Lack of clear differentiation of Music Compression products
– To increase the profitability and margins on the products, Music Compression needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul W. Farris, Ervin R. Shames, Eric A. Gregg, Sonia Almeida suggests that, Music Compression is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Evolution or Revolution in the Music Industry?, in the dynamic environment Music Compression has struggled to respond to the nimble upstart competition. Music Compression has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Music Compression is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Evolution or Revolution in the Music Industry? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Evolution or Revolution in the Music Industry? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Evolution or Revolution in the Music Industry? can leverage the sales team experience to cultivate customer relationships as Music Compression is planning to shift buying processes online.
Need for greater diversity
– Music Compression has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Music Compression is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Music Compression needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Music Compression to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Music Compression has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Music Compression has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Music Compression has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Music Compression even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Evolution or Revolution in the Music Industry? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Evolution or Revolution in the Music Industry? are -
Using analytics as competitive advantage
– Music Compression has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Evolution or Revolution in the Music Industry? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Music Compression to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Music Compression can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Music Compression has opened avenues for new revenue streams for the organization in the industry. This can help Music Compression to build a more holistic ecosystem as suggested in the Evolution or Revolution in the Music Industry? case study. Music Compression can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Music Compression to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Music Compression to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Music Compression is facing challenges because of the dominance of functional experts in the organization. Evolution or Revolution in the Music Industry? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Music Compression can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Music Compression can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Music Compression can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Music Compression can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Music Compression can use these opportunities to build new business models that can help the communities that Music Compression operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Music Compression can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Evolution or Revolution in the Music Industry?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Music Compression in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Music Compression can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Music Compression can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Evolution or Revolution in the Music Industry? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Evolution or Revolution in the Music Industry? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Evolution or Revolution in the Music Industry? are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Music Compression business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Music Compression with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Music Compression demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Music Compression in the Organizational Development sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Music Compression.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Music Compression will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Music Compression in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Music Compression has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Music Compression needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Music Compression needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Music Compression can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Music Compression can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Evolution or Revolution in the Music Industry? .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Evolution or Revolution in the Music Industry? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Evolution or Revolution in the Music Industry? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Evolution or Revolution in the Music Industry? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Evolution or Revolution in the Music Industry? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Evolution or Revolution in the Music Industry? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Music Compression needs to make to build a sustainable competitive advantage.