Marketing Analysis : Music Industry

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EGRMGMT 590.06 Competitive Strategies Team 4 Anuraag Mishra Mani Ganesan Vaibhavi Kulkarni Zihe Meng Dhaval Trivedi Case 6: Music Industry CONTENTS EXECUTIVE SUMMARY 1 THE MUSIC INDUSTRY 1 INDUSTRY VALUE CHAIN 1 CONSUMER BEHAVIOR 2 DISTRIBUTION 4 RECORD LABELS 5 ARTISTS 5 TECHNOLOGY DISRUPTION 6 MEM RECORDS 8 MEM RECORDS VALUE CHAIN 8 VALUE PROPOSITION CANVAS 9 MARKET FORCES 10 PORTER’S 5 FORCES 10 ADDITIONAL FORCES AT PLAY 11 RECOMMENDATION 11 THREE HORIZON MODEL 11 HORIZON 1: 12 HORIZON 2: 12 HORIZON 3: 13 VALUE MIGRATION 13 DISRUPTIVE INNOVATION 14 EXECUTIVE SUMMARY The music industry has been undergoing a massive disruption owing to the change in consumer behavior with regards to how they consume music. As a result, the…show more content…
We have plotted the recommendations into value migration model to show value inflow and outflow. Finally the strategy has to be executed without disrupting the current model, so we have discussed the recommendations from a disruptive innovation framework as well. THE MUSIC INDUSTRY INDUSTRY VALUE CHAIN Figure 1 - Value chain of music industry In the music industry, the music moves through three major levels before reaching to consumers. The first operational step is the creation of music, where songwriters compose music and artists perform it, then label companies come in to record or manufacture the music. The next step is when label companies establish promotional plans to market the music they create, including concert plans, TV and broadcasting activities. Then the music has to be distributed through different channels. Traditionally, music was primarily sold physically through retailers, large chain stores and independent record stores. With digitalization phasing in, iTunes sales and online streaming has gradually taken over the market. Customer relationships have become more dynamic, changing from one-off purchases to more subscription-based service. CONSUMER BEHAVIOR There is a major shift in consumer sentiment toward experiencing live events rather than listening to recorded songs from an album. From a business
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