MP3 Portable Audio Players and the Recorded Music Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of MP3 Portable Audio Players and the Recorded Music Industry
To maximize their effectiveness, color cases should be printed in color.The emergence of the MP3 file-based music format not only disrupted the market for portable audio players, it also had a huge impact on the business models of major record labels. Modularity, and the commoditization spill-over enabled by modularity in the personal computer industry, was a major force in the development of the market. While Apple's iPod today holds the dominant market position, new forces of commoditization continue to drive shifts in the value chain. The case examines the commoditization cycle and contrasts integrated solutions such as the iPod-iTunes software-iTunes Music Store with emerging competition from other MP3 players and the Amazon.com Music Store.
Swot Analysis of "MP3 Portable Audio Players and the Recorded Music Industry" written by Willy Shih includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mp3 Commoditization facing as an external strategic factors. Some of the topics covered in MP3 Portable Audio Players and the Recorded Music Industry case study are - Strategic Management Strategies, Disruptive innovation, Supply chain, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the MP3 Portable Audio Players and the Recorded Music Industry casestudy better are - – increasing transportation and logistics costs, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , there is backlash against globalization,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of MP3 Portable Audio Players and the Recorded Music Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MP3 Portable Audio Players and the Recorded Music Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mp3 Commoditization, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mp3 Commoditization 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 MP3 Portable Audio Players and the Recorded Music Industry can be done for the following purposes –
1. Strategic planning using facts provided in MP3 Portable Audio Players and the Recorded Music Industry case study
2. Improving business portfolio management of Mp3 Commoditization
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 Mp3 Commoditization
Strengths MP3 Portable Audio Players and the Recorded Music Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mp3 Commoditization in MP3 Portable Audio Players and the Recorded Music Industry Harvard Business Review case study are -
Innovation driven organization
– Mp3 Commoditization is one of the most innovative firm in sector. Manager in MP3 Portable Audio Players and the Recorded Music Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Mp3 Commoditization 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 Mp3 Commoditization is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MP3 Portable Audio Players and the Recorded Music Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Mp3 Commoditization 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 Mp3 Commoditization
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mp3 Commoditization does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Mp3 Commoditization 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 Mp3 Commoditization in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Mp3 Commoditization has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in MP3 Portable Audio Players and the Recorded 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.
Sustainable margins compare to other players in Strategy & Execution industry
– MP3 Portable Audio Players and the Recorded Music Industry firm has clearly differentiated products in the market place. This has enabled Mp3 Commoditization to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Mp3 Commoditization to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Mp3 Commoditization is present in almost all the verticals within the industry. This has provided firm in MP3 Portable Audio Players and the Recorded 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.
Low bargaining power of suppliers
– Suppliers of Mp3 Commoditization in the sector have low bargaining power. MP3 Portable Audio Players and the Recorded Music Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mp3 Commoditization to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Mp3 Commoditization has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Mp3 Commoditization has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in MP3 Portable Audio Players and the Recorded Music Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Mp3 Commoditization is one of the leading recruiters in the industry. Managers in the MP3 Portable Audio Players and the Recorded Music Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses MP3 Portable Audio Players and the Recorded Music Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MP3 Portable Audio Players and the Recorded Music Industry are -
Lack of clear differentiation of Mp3 Commoditization products
– To increase the profitability and margins on the products, Mp3 Commoditization needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the MP3 Portable Audio Players and the Recorded Music Industry 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 Mp3 Commoditization has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study MP3 Portable Audio Players and the Recorded Music Industry, it seems that the employees of Mp3 Commoditization 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MP3 Portable Audio Players and the Recorded Music Industry, is just above the industry average. Mp3 Commoditization needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Mp3 Commoditization 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Willy Shih suggests that, Mp3 Commoditization 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.
Slow decision making process
– As mentioned earlier in the report, Mp3 Commoditization 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. Mp3 Commoditization 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.
Slow to strategic competitive environment developments
– As MP3 Portable Audio Players and the Recorded Music Industry HBR case study mentions - Mp3 Commoditization 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.
Skills based hiring
– The stress on hiring functional specialists at Mp3 Commoditization has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study MP3 Portable Audio Players and the Recorded 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 MP3 Portable Audio Players and the Recorded Music Industry can leverage the sales team experience to cultivate customer relationships as Mp3 Commoditization is planning to shift buying processes online.
Interest costs
– Compare to the competition, Mp3 Commoditization 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.
Opportunities MP3 Portable Audio Players and the Recorded 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 MP3 Portable Audio Players and the Recorded Music Industry are -
Developing new processes and practices
– Mp3 Commoditization can develop new processes and procedures in Strategy & Execution 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mp3 Commoditization to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Mp3 Commoditization can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mp3 Commoditization can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Mp3 Commoditization can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Mp3 Commoditization has opened avenues for new revenue streams for the organization in the industry. This can help Mp3 Commoditization to build a more holistic ecosystem as suggested in the MP3 Portable Audio Players and the Recorded Music Industry case study. Mp3 Commoditization can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mp3 Commoditization is facing challenges because of the dominance of functional experts in the organization. MP3 Portable Audio Players and the Recorded 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.
Building a culture of innovation
– managers at Mp3 Commoditization 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.
Using analytics as competitive advantage
– Mp3 Commoditization 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 MP3 Portable Audio Players and the Recorded Music Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mp3 Commoditization to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mp3 Commoditization can use these opportunities to build new business models that can help the communities that Mp3 Commoditization operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Mp3 Commoditization 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.
Leveraging digital technologies
– Mp3 Commoditization can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Mp3 Commoditization to increase its market reach. Mp3 Commoditization 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.
Threats MP3 Portable Audio Players and the Recorded 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 MP3 Portable Audio Players and the Recorded 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 Mp3 Commoditization business can come under increasing regulations regarding data privacy, data security, etc.
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. Mp3 Commoditization 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.
Stagnating economy with rate increase
– Mp3 Commoditization can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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 Mp3 Commoditization in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Mp3 Commoditization high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Mp3 Commoditization has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Mp3 Commoditization 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.
Environmental challenges
– Mp3 Commoditization 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. Mp3 Commoditization can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mp3 Commoditization with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Mp3 Commoditization
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Mp3 Commoditization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mp3 Commoditization 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, Mp3 Commoditization 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 MP3 Portable Audio Players and the Recorded Music Industry .
Consumer confidence and its impact on Mp3 Commoditization 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.
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 Mp3 Commoditization.
Weighted SWOT Analysis of MP3 Portable Audio Players and the Recorded 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 MP3 Portable Audio Players and the Recorded 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 MP3 Portable Audio Players and the Recorded 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 MP3 Portable Audio Players and the Recorded 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 MP3 Portable Audio Players and the Recorded 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 Mp3 Commoditization needs to make to build a sustainable competitive advantage.