Warner EMI Strategic Development Essay

4134 Words Nov 14th, 2013 17 Pages
Innovative Marketing, Volume 2, Issue 1, 2006


Warner EMI Music. Strategic Development for the First
Decade of the New Millennium
Demetris Vrontis
This case has been compiled to put forward the author’s suggestions for future strategic development open to Warner EMI Music as they develop during the 1st Decade of the 21st Century.
The case is divided into four main sections. Section one is concerned with an environmental scanning including an analysis of Porters’ Value Chain and Five Forces models. This section identifies the key strategic issues for the new company and industry and provides an overview of their internal strengths and weaknesses and external opportunities and threats. Section two provides meaningful
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The world’s leading Media Company with an array of world-class brands
Diversification to cable networks and systems, publishing, music, films
Cut corporate overhead
Strong loyalty to and from employees
Intensive programmes encourage high-quality production
Training production employees reduces waste and scrap
Global purchasing delivers low-cost components
‘win-win’ relationship results in supplier’s passing through cost savings Economies in scale Experience effects raise efficiency Computerised routing lowers transportation expenses
Distributing in bulk lowers transportation costs

International advertising creates economies of scale Advertising through the

High standards of service PRIMARY ACTIVITIES


Fig. 1. Value Added Chain Analysis for Warner EMI Music

The next strategic model to analyse is Porter's Five Forces (see Figure 2). Michael Porter’s five factor map illustrates what potential threats can impact when a company is trying to segment the market and identify competitive strategies. This is based on the understanding of the ways in which the competitive environment influences strategy (Vrontis et al., 2000).
Potential Entrants
High entry barriers
International competition
Operation scale and scope
Supplier Power
Importance of volume
Importance of price

Increasing opportunities in the
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