Strategic Plan for Digital Music Organization EMI Essay

Strategic Plan for Digital Music Organization EMI - Essay Example According to a report by Cimilluca and Colchester (2011), in November 2011, the Citigroup announced a deal to sell EMI’s recorded music business to Universal Music Group for $1.9 billion and music publishing business to Sony/ATV consortium for 2.2 billion. This paper will suggest a strategic plan for this digital music organisation by referring to a number of strategic management theories including PESTLE analysis, Porter’s five forces model, SWOT analysis, and BCG matrix. PESTLE analysis Political factors The EMI maintains good relationship with overseas counties with intent to expand its business operations globally. Since the company offers extensive employee benefits including flexible work schedule, family friendly policies, and other flexible benefits; it gets full support from political environment. Economic factors The recent global economic recession has dreadfully affected economies worldwide and many of those economies are still under the process of recovery. Hence, the current economic environment is not favourable for the company. Socio-cultural factors Historically, music is present everywhere regardless of cultural variables such as customs, lifestyle, language, values, and beliefs. Hence, socio cultural factors provide the company with potential business environment. Technological factors The technology sector has been dramatically improving for the last two decades. The emergence of internet was a milestone in the history of music entertainment industry (BBC News, 2000). Therefore, current technological landscape is better for EMI’s business growth. Legal factors Governments worldwide have developed strict intellectual property laws and many of them specifically deal with music piracy issues. Thus, music entertainment industry is encouraged globally. Environmental factors People today are highly concerned about environmental sustainability. Therefore, increasing environmental concerns raise some sorts of challenges to every sector, and music entertainment industry is not an exception. Hence, EMI has to invest more on environmental sustainability so as to enhance its business growth. Porter’s five forces Degree of rivalry While analyzing the music entertainment industry, it seems that degree of competitive rivalry is very high. Since EMI is a multinational company, it struggles to confront with regionally focused rivals that are more knowledgeable about people’s music tastes. Hence, the company is forced to depend upon price cutting and M&A strategies to survive market competition. Buyer power In music entertainment industry, buyer power is relatively high since there are numerous potential sellers. In addition, market giants like Sony offers quality products to customers at cheaper rates; this situation compels EMI to cut its prices in order retain its customers. Supplier power EMI has high bargaining power over its suppliers as the organisation is well reputed for its quality music prod ucts and services. Since there are large number of potential suppliers in the industry, supplier price changes would not affect EMI’s business activities. Moreover, supplier switching cost is very low in the music entertainment industry. Threat of new entrants Threat of new entrants is very high in the industry, particularly because of the