Strategic Management and Strategic Competitiveness
BUS 499- Business Administration Capstone
Strayer University- Augusta Campus
The purpose of the paper is to research and understand how the changes of globalization and technology have impacted the music industry. This paper will also apply the industrial organization model and the resource-based model to determine how the music industries earn above-average returns. This paper will explain how the music industry’s success is through its mission and vision statements with Universal Music Group as an example. Finally, this paper will evaluate how the importance each category of the stakeholder impacts is to the ...view middle of the document...
” Because it’s believed that music is a global language, Universal Music Group makes money from all across the world. The company has artists and labels from multiple countries that are very successful in generating record sales. There are American artists that were at a point in their careers where their music was not selling as it once was, but now they are touring overseas. Technology and globalization have been a driving force in the music industry and Universal Music Group is reaping the benefits of both. It took the major labels a long time to embrace the digital age of music and they almost missed out on major money. Universal Music Group is thriving in a declining music industry that has gone from analog to digital right before our eyes.
Apply the industrial organization model and the resource-based model to determine how your corporation could earn above-average returns.
By using the Industrial Organization model to earn above-average returns, Universal Music Group will have to use the four underlying assumptions. First, the company will have to study the current state of the music industry and the economy as well. A struggling economy will bring record sales down, because people are budgeting their income a lot tighter and music will not be among one of the items they need to purchase. If people do not have enough money to purchase the music, chances are they will find other ways to get the audio through illegal links or burning compact discs. A struggling music industry can be caused by a bad economy, but another key factor is poor music quality. If the music is not good, then chances are the songs will not get purchased. Sales have been on the decline in recent years due to technology advances and lack of artist development is the main problems to this epidemic. The labels have been putting out manufactured music for the past few years and the consumers are unhappy. The next step is for the label to use its assets, such as an artist and labels to attract fans. More than likely, each big label company has a fair share of stars that can generate sales, so these releases need to be timed properly. Thirdly, the strategy must be selected for these stars to succeed. The final step would be for upper management of the record label, to use their highest selling acts to increase profit potential and create new trends. Universal Music Group has to come up with a marketing plan that caters to each act separately and uses the assets of the company to push these artists as high as they can go up the charts. Using the resource-based model for above-average returns assumes that “each organization is a collection of unique resources and capabilities. The uniqueness of its resources and capabilities is the basis of a firm’s strategy and its ability to earn above-average returns. (Michael A. Hitt, 2013)” Universal Music Group’s resources are identified as artists, labels, publishing companies, merchandising, and distribution. The strengths and...