Sunday, September 29, 2019
Electric and Music industries limited Essay
Ã¢â¬Å"EMIÃ¢â¬ or Electric and Music industries limited is a British music company founded in 1931 as a result of a giant merger of two companies namely the UK Columbia Graphophone company and Gramophone company. Initially it was involved in manufacture of recording and playback equipment and provision of music to play in its machines. EMI Group Plc comprises two major companies i. e. EMI music based in Kensington, London England and EMI publishing based in New York. EMI is one of the four music companies in the world. The other three are Sony BMG, Warner group, and Universal music group. As we shall see Terra Firma, capital partners now own EMI since august 2007. This change of ownership was because of drastic decline in sales and a huge loss to the tune of 2000 million pounds in 2006/20007 financial year (http://www. businessweek. com/magazine/content/03_06/b3819058. htm? chan=search). This transition saw several artists walk out of EMI including Radio head, Sir Paul McCartney among others. The takeover also saw Guyhands, the new owner bring in new restructuring policies to reduce the labor costs by two hundred pounds. This was to be achieved by cutting up to two hundred workers out of the 5000 plus EMI labor force (http://www. cornerc. com/emi. htm). Initially EMI majored in the manufacture of gramophones, which went on successfully for a period of 40 years. However, during and after the world war two they ventured in the manufacture of radar equipment and guided missiles. They later began to manufacture broadcasting equipments with BBC being their main customers. They employed skilled engineers an example such was Godfreys Hounsefield who came up with the first scanning machine, used in medical imaging. EMIÃ¢â¬â¢s strategic choices Although EMI was established along time ago, an indicator that it had cut itself a niche in the music production industry, it had to come up with regular strategies to maintain its position in the market. This was also necessary to stay in level with its business rival e. g. Warner music group and others. In any business, it is mandatory that to acquire a large market share a manufacturer must produce quality products. This aspect of quality is what customers look for and therefore EMI embarked on producing quality and efficient products through the employment of skilled work force such as engineers. For instance the re skilled and able engineers who made sure that quality and efficiency was not compromised. Another very important tool EMI used to edge out its competitors was by signing contracts with popular artists. It roster of artists included both local and international artists who releases new albums every now and then. These regular releases helped EMI to offer its customers a wide rage of music choices. Emi continued investing heavily in the very best song writing standards across the world. Local artists included the Beetle Boys, Nora Jones. Lenny Krawtz, among others while artists from other regions included JapanÃ¢â¬â¢s Noriyoku Matiara, Latin AmericanÃ¢â¬â¢s Marissa Monte, continental EuropeÃ¢â¬â¢s Raffael, Diam among many others. These best talents enabled EMI to maximize all potential revenue opportunities. Due to hypercompetitive nature of the music industry, EMI has always been on the look out to remain executive in the industry. This, they have achieved by making systematic decisions, monitoring the decision effects, and adjusting where necessary. EMIÃ¢â¬â¢s fast, efficient and flexible business intelligence team draws these strategies. Through this intelligence team, EMI was able to embark on facilitating a new architecture for selling its products. They engaged an IT firm, Avanade who successfully designed a web services solution. This new architecture helped EMI to take advantage of unique interactive marketing opportunities, which offered a competitive advantage when signing new artists. EMI has also labored tirelessly in creation of new products, formats, channels, and new partnerships as a real competitive tool over its rivals. For instance, EMI diversified its distribution channels by introducing digital online selling. This has supplemented the physical selling method. As expected, this online selling has helped to cut the costs of shipping, and offered value to its customersÃ¢â¬â¢ dollars. Another competitive advantage of this method is that itÃ¢â¬â¢s dynamic, secure, and itÃ¢â¬â¢s flexible for easy extension to new E-commerce business technology initiative (http://www. avanade. com/customers/casestudy. aspx? id=39). EMI has also focused on creating of very attractive music content and making it available where consumers want it, when they need it, and in the format, they want it. This has helped them to maximize the demands for its artist works. Of more importance is the diversification of its product range, which has been a routine exercise as part of their business products. New corporate partnerships have been created and therefore making EMIÃ¢â¬â¢s music available in more than 56 countries. However, this market diversification has posed a greater challenge due to sprouting of both physical and digital piracy. However, through a series of successful legal suits the company has made progress in combating unscrupulous pirates. Another tool EMI continues to use in order to broaden its international market is by establishing right relationships on the right terms. This has made them to be in the fore front of the music industry and there fore exploiting new products and possibilities that digital technologies brings e. g. this innovative digital approach, saw EMI music produce the first ever album available on i-tunes. An indicator of how EMI music is exploiting new opportunities that digital technologies brings (http://billboard. blogs. com/billboardpostplay/2005/06/sales_and_marke. html) . Through these digital innovations, EMI music has therefore ventured in a wide geographical region with ventures in N. America, Japan, Continental Europe, Latin America, Australia, and in S. East Asia. In all this regions EMI music has entered into joint ventures with local companies, making its products to be widely accepted by the locals, a phenomenon, which could have been the other way if EMI music decided to go on its own. These international ventures have been successful because British had many colonies across the globe. Therefore, it has been easy to market EM products in the common wealth countries (http://www. ybase. com/detail? id=1025595). EMI limited is now one of the four leading companies after Universal music group, Warner music group and Sony BMG. Therefore, measures to protect it and make it sustainable strong in the music industry market have to be arrived at. His measures are not only purely for protection but also for building the company further. An example of such measure was EMIÃ¢â¬â¢s bold proposal move to buy its music rival Warner group. EMI argued that this move will not only cut down the cost of unnecessary competition but also will add value to the company share value in the London stock exchange market. Warner on its side did not take the proposal positively. EMI has also invested hugely on intensive marketing and promotion through collaboration with mobile phone manufacturers e. g. T-mobile which uses EMI music as its ring tunes. In addition, EMI music has entered into contracts with advertisers and media houses as a way of diversifying its revenue opportunities. Another milestone EMI has achieved in protecting its market share is by proper use of copyrights and hence reducing piracy. Critical success factors In order to achieve all the above strategies and objectives, EMI had to come up with a series of practices. These practices, which are in other words referred to as critical success factors, included the following; developing a distinctive approach towards its list of artists, which are its main assets. Also making consistence investment in artists with long-term carrier potential and maximizing its local and global sales. Another factor was getting in partnership with willing music companies across the world. This approach was seen as the only way EMI products would be readily accepted by customers globally. From EMIÃ¢â¬â¢s financial and performance data, it is evident that to some extend they achieved these success strategies. This is clearly shown by the number of business ventures it entered into the globe e. g. in Asia, Australia, North and South America among many other places. In addition, the roster of artists affiliated to EMI speaks volumes about this. It s evident then that EMIÃ¢â¬â¢s strategies and objectives were very much appropriate initially. This is the reason as to why EMI has been successful for a very long period. The strategies were in line with its resources and capabilities. EMIÃ¢â¬â¢s recourses and capabilities It is evident that the long term EMIÃ¢â¬â¢s success did not just come on a silver platter, it was occasioned by; intensive investment of capital, intensive marketing and promotion, tireless efforts by its skilled and able workers, regular releasing of albums by its long roster of artists, and lastly prevailing peace and stability in many countries it ventured into. To begin with, the main asset towards the support of EMIÃ¢â¬â¢s strategies was their large numbers of artists who were blessed with immense real musical talent. These artists released new hits every now and then and therefore this made EMI to be constantly in business, hence its expansion to overseas market. EMI being a company that started back before the start of the world war two stands a better chance in terms of competitive advantage from its rivals. This is so because its long time presence in music production industry makes it to have built a reputation with new and old artists. Long time presence in music industry makes it to be popular with its customers and therefore its volume of sales have always been high until lately when it started making losses. To satisfy its customer s demand as we saw earlier EMI achieved this by investing heavily in new technology whereby new brands of products were released every now and then. This new technology was achieved through EMIÃ¢â¬â¢s large workforce of able and skilled technicians. EMI group have two branches i. e. EMI music, and EMI publishing though they are very much separate from one another as its normal in music industry. These two branches have contributed a lot in making EMI what it is today. This is so because they supplement one another in that, the publisher branch publishes and records musical tracks while the music branch offers distribution and marketing services and thus EMI managed to sail successfully in its business endeavors. Its variety of branches also gave its customers a wide choice of products. These brands included music packaged in physical devices like disks and music digitally delivered to customers online. The above recourses and capabilities and many more others are what made EMI to be strategically capable in edging out its rivals, business wise. An evaluation of EMIÃ¢â¬â¢s current strategies Today the company being under the ownership of Terra Firma it has to make new strategies as one of the core actions in its efforts of regaining its lost glory. An example of these strategies is the labor force down sizing which its new owner, Mr. Guy Hands, brought in. Literally, this strategy will mean that a quite number of workers will face the axe. Its suitability therefore is wanting, because it will be contracting the companyÃ¢â¬â¢s initial policies since quite a number of sectors of production will remain understaffed. All the same, it is worthy the cause since in the end expenses will shoot down and the saved funds channeled towards the main objective of reviving the once renowned music powerhouse (http://helium. com. tm/494190/music-industry-dying-painful). By looking at EMIÃ¢â¬â¢s business environment it not clear whether it will regain its lost market share. This is because the take over by terra firma was worsened by the walking away of some of itÃ¢â¬â¢s of long time artists therefore it will be difficult to win the back. It can also be argued that Mr. Guy Hands strategy was not in good faith because may be his main intention was to come up with a plan that will see him recover his money he paid for the takeover deal (http:www. whatmakesagoodleader. com/Porters-five-forces. html). In terms of feasibility, which is concerned with whether the strategy is implemental it can be said that cutting the labor force although easy to implement can be of no consequence when it comes to regaining its lost market share. This so because when some of EMIÃ¢â¬â¢s artists left, they obviously signed contracts with other music companies, which are probably its three major rivals and therefore increasing the level of competition. Basing this argument on competition, cutting the number of employees will not bring down the level of competition. Again, EMI badly needs the services of some of its experienced workers to turn around the situation facing it. For instance, EMI needs the services of IT technicians to bring new and fresh technological ideas to gain that competitive advantage over its three main rivals. It is in order that the money which were to be paid to the retrenched workers will be invested in researching for more technology, but in real sense new technologies mean more labor force to work on it (http://www1. ximb. ac. in/users/fac/dpdash/dpdash. nsf/pages/BP_Evaluation). On acceptability of this strategy, it remains to be seen because now EMI has been faced with financial constraints and hence itÃ¢â¬â¢s subsequent change of ownership. This change of ownership saw EMI being delisted from the London stock market, and mass walkouts of long time loyal artists. This is a phenomenon, which means that its volume of sales went down considerably, and consequently making EMI to find its self in a financial quagmire. This also affected the capital structure of the company with the shareholders being forced to sell their shares to the new owner. This policy also affected the functions of different departments in the organization. Some departments were merged, while others were scraped all together. The companyÃ¢â¬â¢s reputation also went down especially its customers, suppliers lost faith in it, and therefore it can be said the general acceptability of this strategy was relatively poor. In conclusion it can be deduced that it will take some time for the company to fully regain its lost glory this so because in the music a single flop can lead to long time consequences. Music production is unique in that it involves the signing of long-term co tracts with artists, suppliers and stakeholders and therefore breaching such contracts is not a common thing. Unless during abnormal occurrences like in the case of the take-over of EMI by Terra Firma. However, EMI can build on from its other range of products to regain its popularity and market share.