The attractiveness of the Music Industry for Warner Music
The attractiveness of the music industry from the perspective of Warner Group Music
Summary
Major transformation in the music industry over the last decade has resulted in the three major record labels; The Warner Music Group, Sony Music Entertainment and Universal Music Group finding themselves with rapidly decreasing revenues and company structures which no longer provide profitability. A brief analysis of the external strategic factors affecting the Warner Music Group has revealed the changes in technology and social habits of customers has had the biggest detrimental influence on the company. Further analysis of the competitive environment revealed a major change in industry dynamics and the need for this large companies to change their operations and adapt to the new environment in order to survive.
Contents
Summary
2
Contents
3
Introduction
4
Strategic Issues Facing the Warner Music Group
4
Macro Environmental Issues shaping the music industry
4
PESTLE Analysis
5
The Attractiveness of the music industry
5
Industry Dynamics
6
Globalisation
7
Risk
7
Ethics and CSR
7
Recommendations
8
Conclusion
8
References
8
Introduction
In the 1980’s the rather stable music industry started to transform. CD’s introduced digital music and this digitalization started a revolution in the industry and resulted in a rate of change which the three major music companies struggled to deal with. This report considers this transformation and how it affected on of these three companies – The Warner Music Group.
The strategic issues faced by Warner Music are firstly identified from a report written by Professor Theodore Peridis and Professor Cyril Bouquet (Peridis and Bouquet 2012) and then grouped using the PESTLE model of external factors. The impact of the factors on the attractiveness of the industry is then discussed.
Drawing in information from the Peridis report the structure of the industry is
Summary
Major transformation in the music industry over the last decade has resulted in the three major record labels; The Warner Music Group, Sony Music Entertainment and Universal Music Group finding themselves with rapidly decreasing revenues and company structures which no longer provide profitability. A brief analysis of the external strategic factors affecting the Warner Music Group has revealed the changes in technology and social habits of customers has had the biggest detrimental influence on the company. Further analysis of the competitive environment revealed a major change in industry dynamics and the need for this large companies to change their operations and adapt to the new environment in order to survive.
Contents
Summary
2
Contents
3
Introduction
4
Strategic Issues Facing the Warner Music Group
4
Macro Environmental Issues shaping the music industry
4
PESTLE Analysis
5
The Attractiveness of the music industry
5
Industry Dynamics
6
Globalisation
7
Risk
7
Ethics and CSR
7
Recommendations
8
Conclusion
8
References
8
Introduction
In the 1980’s the rather stable music industry started to transform. CD’s introduced digital music and this digitalization started a revolution in the industry and resulted in a rate of change which the three major music companies struggled to deal with. This report considers this transformation and how it affected on of these three companies – The Warner Music Group.
The strategic issues faced by Warner Music are firstly identified from a report written by Professor Theodore Peridis and Professor Cyril Bouquet (Peridis and Bouquet 2012) and then grouped using the PESTLE model of external factors. The impact of the factors on the attractiveness of the industry is then discussed.
Drawing in information from the Peridis report the structure of the industry is
References: Peridis, T. and Bouquet, C. (2012), 'Turmoil and revolution in the music industry ', IMD: Lausanne [online] available at https://learn2.open.ac.uk/pluginfile.php/1037221/mod_resource/content/2/Music%20Industry.pdf accessed December 2013 Viney, H. (2013) ‘Understanding the industry environment’, B835 Unit 2.3 [online] available at https://learn2.open.ac.uk/mod/oucontent/view.php?id=392400 accessed December 2013 Grant, Robert M. (2010) ‘Contemporary Strategy Analysis’ 7th Ed. Chichester, Wiley Viney, H, and Segal-Horn, S (2013) ‘Industry Dynamics’ B835 Unit 1.3 Activity 3.1 [online] available at https://learn2.open.ac.uk/mod/oucontent/view.php?id=319656§ion=1.3.1 accessed December 2013