Marketing Analysis : Music Industry

4034 Words Nov 12th, 2014 17 Pages
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
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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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