Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Communication
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry
The set of three cases Online Music (A), (B) and (C) trace the tumultuous developments in the online media sector since the commercialization of the Internet. Heralded by Napster, Internet-based sharing programs revolutionized the consumption and sharing of music in the late 1990s. Music majors struggled to respond to the technology-driven changes around them. The case series traces the responses of players such as Apple, who introduced a new model in the music business, and ends with a discussion in Case (C) on the lessons for the movie sector from the experience of the music industry.
Swot Analysis of "Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry" written by Soumitra Dutta, Patricia Reese includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Music Napsterization facing as an external strategic factors. Some of the topics covered in Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry case study are - Strategic Management Strategies, and Communication.
Some of the macro environment factors that can be used to understand the Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry casestudy better are - – there is backlash against globalization, increasing commodity prices, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Napsterization, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Music Napsterization 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry can be done for the following purposes –
1. Strategic planning using facts provided in Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry case study
2. Improving business portfolio management of Music Napsterization
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Music Napsterization
Strengths Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Music Napsterization in Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry Harvard Business Review case study are -
High switching costs
– The high switching costs that Music Napsterization 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.
Successful track record of launching new products
– Music Napsterization has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Music Napsterization 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.
Cross disciplinary teams
– Horizontal connected teams at the Music Napsterization 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.
Sustainable margins compare to other players in Communication industry
– Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry firm has clearly differentiated products in the market place. This has enabled Music Napsterization to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Music Napsterization to invest into research and development (R&D) and innovation.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Music Napsterization digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Music Napsterization 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.
Low bargaining power of suppliers
– Suppliers of Music Napsterization in the sector have low bargaining power. Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Music Napsterization to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Music Napsterization is present in almost all the verticals within the industry. This has provided firm in Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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.
Effective Research and Development (R&D)
– Music Napsterization 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Music Napsterization 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 Soumitra Dutta, Patricia Reese 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 Napsterization is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Music Napsterization 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Music Napsterization has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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.
Weaknesses Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry are -
Products dominated business model
– Even though Music Napsterization 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 - Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Music Napsterization 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry, is just above the industry average. Music Napsterization 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.
Skills based hiring
– The stress on hiring functional specialists at Music Napsterization 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.
Slow decision making process
– As mentioned earlier in the report, Music Napsterization 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 Napsterization 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry, in the dynamic environment Music Napsterization has struggled to respond to the nimble upstart competition. Music Napsterization has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Soumitra Dutta, Patricia Reese suggests that, Music Napsterization 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 to strategic competitive environment developments
– As Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry HBR case study mentions - Music Napsterization 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Music Napsterization is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry, it seems that the employees of Music Napsterization 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Napsterization 's lucrative customers.
Opportunities Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Music Napsterization 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 Napsterization to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Music Napsterization 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, Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Music Napsterization 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.
Building a culture of innovation
– managers at Music Napsterization 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 Communication segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Music Napsterization in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Music Napsterization 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.
Loyalty marketing
– Music Napsterization 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.
Better consumer reach
– The expansion of the 5G network will help Music Napsterization to increase its market reach. Music Napsterization 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Music Napsterization can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Napsterization can use these opportunities to build new business models that can help the communities that Music Napsterization operates in. Secondly it can use opportunities from government spending in Communication sector.
Manufacturing automation
– Music Napsterization can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Using analytics as competitive advantage
– Music Napsterization 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Music Napsterization to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Music Napsterization 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 Napsterization 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.
Threats Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry are -
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.
High dependence on third party suppliers
– Music Napsterization 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.
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 Napsterization business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry, Music Napsterization may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
Increasing wage structure of Music Napsterization
– 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 Music Napsterization.
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.
Regulatory challenges
– Music Napsterization 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 Communication industry regulations.
Stagnating economy with rate increase
– Music Napsterization 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.
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 Napsterization needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Music Napsterization can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Napsterization 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Music Napsterization in the Communication industry. The Communication 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.
Consumer confidence and its impact on Music Napsterization 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.
Weighted SWOT Analysis of Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from 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 Napsterization needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Online Music Case (C): The "Napsterization" of Movies - Take-home Lessons from the Music Industry