Update: The Music Industry in 2006 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Update: The Music Industry in 2006
The global recorded music industry was undergoing a major transition in 2006. Sales had been declining for a decade, and consumers were buying music in new formats and through different distribution channels. CD sales still accounted for the majority of revenues, but sales of music in digital formats (downloads, videos, ringtones) were growing significantly and accounting for approximately 10% of the industry's revenues in 2006. Many considered digital the future of the music business but the format posed both opportunities and challenges. While it had revitalized the singles market, for instance, digital had also facilitated rampant piracy. The music industry was retaliating, launching lawsuits against illegitimate peer-to-peer operators such as groups caught downloading illegally. Whether this would be enough to stop the trend was a matter of much debate. Meanwhile, the industry continued to consolidate. In 2004, Sony Music and BMG, the third- and fifth-largest record firms at the time, merged to form Sony BMG. Surprisingly, in 2006 the European Union's Court of First Instance anYou can order --casename-- analysis and solution here ed the merger--which the European Commission had approved two years earlier--after a group of independent music labels complained about the merger's effect on competition. While Sony and BMG were defending the merger in court, EMI Group plc wondered if its desired takeover of Warner Music Group--which it had been pursuing since 2000--would ever happen. If it did, how much business would the new entity have in the rapidly changing environment? All wondered how the industry would evolve.
Swot Analysis of "Update: The Music Industry in 2006" written by John R. Wells, Elizabeth A. Raabe includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Music Bmg facing as an external strategic factors. Some of the topics covered in Update: The Music Industry in 2006 case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Update: The Music Industry in 2006 casestudy better are - – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing commodity prices, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is increasing trade war between United States & China,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Update: The Music Industry in 2006
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Update: The Music Industry in 2006 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Music Bmg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Music Bmg 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 Update: The Music Industry in 2006 can be done for the following purposes –
1. Strategic planning using facts provided in Update: The Music Industry in 2006 case study
2. Improving business portfolio management of Music Bmg
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Music Bmg
Strengths Update: The Music Industry in 2006 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Music Bmg in Update: The Music Industry in 2006 Harvard Business Review case study are -
Organizational Resilience of Music Bmg
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Music Bmg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Music Bmg has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Update: The Music Industry in 2006 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Music Bmg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Music Bmg has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Music Bmg is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Music Bmg has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Update: The Music Industry in 2006 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 Bmg 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 Bmg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Update: The Music Industry in 2006 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Music Bmg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Music Bmg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Update: The Music Industry in 2006 firm has clearly differentiated products in the market place. This has enabled Music Bmg to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Music Bmg to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Music Bmg 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 Bmg in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Music Bmg 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 John R. Wells, Elizabeth A. Raabe 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.
Innovation driven organization
– Music Bmg is one of the most innovative firm in sector. Manager in Update: The Music Industry in 2006 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Update: The Music Industry in 2006 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.
Weaknesses Update: The Music Industry in 2006 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Update: The Music Industry in 2006 are -
Lack of clear differentiation of Music Bmg products
– To increase the profitability and margins on the products, Music Bmg 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, John R. Wells, Elizabeth A. Raabe suggests that, Music Bmg 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Update: The Music Industry in 2006, it seems that the employees of Music Bmg don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Music Bmg is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Update: The Music Industry in 2006 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Music Bmg 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Music Bmg needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Music Bmg 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 Bmg 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.
Products dominated business model
– Even though Music Bmg has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Update: The Music Industry in 2006 should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Music Bmg is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Music Bmg needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Music Bmg to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Update: The Music Industry in 2006 HBR case study mentions - Music Bmg takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Update: The Music Industry in 2006 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Music Bmg has relatively successful track record of launching new products.
Opportunities Update: The Music Industry in 2006 | 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 Update: The Music Industry in 2006 are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Music Bmg can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Music Bmg 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 Update: The Music Industry in 2006 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Music Bmg to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Music Bmg can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Update: The Music Industry in 2006 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.
Creating value in data economy
– The success of analytics program of Music Bmg has opened avenues for new revenue streams for the organization in the industry. This can help Music Bmg to build a more holistic ecosystem as suggested in the Update: The Music Industry in 2006 case study. Music Bmg can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Music Bmg can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Music Bmg to increase its market reach. Music Bmg will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Music Bmg can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Music Bmg 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.
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 Bmg can use these opportunities to build new business models that can help the communities that Music Bmg operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Music Bmg 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 Bmg 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 Bmg is facing challenges because of the dominance of functional experts in the organization. Update: The Music Industry in 2006 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.
Loyalty marketing
– Music Bmg has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Music Bmg in the consumer business. Now Music Bmg can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Update: The Music Industry in 2006 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Update: The Music Industry in 2006 are -
Regulatory challenges
– Music Bmg 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 Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Music Bmg has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Music Bmg needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Bmg business can come under increasing regulations regarding data privacy, data security, etc.
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 Bmg in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Music Bmg needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Music Bmg can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Music Bmg in the Strategy & Execution industry. The Strategy & Execution 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.
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 Bmg.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Music Bmg needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Music Bmg 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Music Bmg with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Update: The Music Industry in 2006, Music Bmg may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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 Update: The Music Industry in 2006 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 Update: The Music Industry in 2006 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 Update: The Music Industry in 2006 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 Update: The Music Industry in 2006 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 Update: The Music Industry in 2006 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 Bmg needs to make to build a sustainable competitive advantage.