Case Study on Music World
CASE SUMMARY: It’s a classic case of a company who has proved itself since inception that it was built to last and how long term planning of a company can help it sustain against all odds. Music World is a part of the Rs. 65 billion Rama Prasad Goenka [RPG] group of companies. In a very short span of time after its launch in the 1990s, Music World had reportedly become a major factor that changed the way music was sold in India. In setting up of Music World a lot of planning and strategic thinking was used like conducting a survey for the ambience of the store, selection of location, suitable mix of music, tie ups with music companies as well as promotional companies. QUESTION FOR DISCUSSIONS: *Q1. Critically comment on RPG group’s decision to focus on the retailing business in the 1990s. Would you agree that the decision to set up Music World was mainly due to the existence of Saregama* and its existing product portfolio? Give reasons to support your stand. THE MAJOR REASONS FOR RPG GROUP TO FOCUS ON RETAILING BUSINESS IN THE 1990 WERE: Change in Strategic focus: With liberalization & the global companies knocking at the doorsteps of the Indian market, It was the right time for RPG to enter retailing. RPG was able to develop a strategy which made them diversify into Retailing in Grocery & Food Items Retailing in Drugs, Cosmetics & Health Products Retailing in Music They realized promising growth prospects in organized retailing industry in India. They were right in realizing this. We can see the growth rate in Indian retail from 1998 in the following graph. {draw:frame} By slowly phasing out the under-performing and the loss-making divisions from the main Retail business they wanted to concentrate on certain core competencies. Moreover, Spencer which was faring badly was attractive in terms of An Undervalued Real Estate Distribution Infrastructure Profitable Travel Agency