Environmental Analysis Essay Example for Free

Environmental Analysis EssaySample Responses to Questions1.Laws and Regulations. What are some key laws and regulations under which this smart set and the unison industry must operate?Key laws and regulations in the melody industry might include copyright regulations, contracts, royalty practices in both retail trades and wireless broadcasting, anti-trust, advertising regulations, foreign-trade practices.2.Economy. How does the state of the economy influence the sales of this fellowships products?The state of the economy has traditionally had less of an immediate impact on the medicinal drug industry than on some others. CDs and on-line euphony sales tend to be low-ticket items, and are less correspondingly to be bear oned too adversely even by a recession. A key driver of sales is the presence or absence of popular new talent.3.Technology. What new technologies strongly require the lodge you have selected?New technologies permitting on-line music sales, like iTun es, and scripting and playing devices like iPod and upcoming cellphone technologies, increase the easy availability and sale of music products. They also allow music companies to avoid the expense of manufacturing and distributing CDs, and sharing sales revenues with retailers. A major downside is that new technologies permit easy copying of music without payment. Technology that can provide copyright protection (e.g., preventing unauthorized copying) may be one solution to this problem.4.Demographics. What changes in the population might affect the companys customer base?Demographics affecting the company might include changes in the population of young people who are the primary purchasers of pop music (conversely, the gradual decrease in classical music sales as the demographic for that segment ages), and the growing importance of the Hispanic market.5.Social Issues. What changes in society affect the market for your companys music products?Social issues affecting the company in clude not only the increased tolerance for illegal copying of music, already mentioned, but also the increased fragmentation of public tastes and interests. Objections to obscenity in lyrics, and the rising influence of the religious market, are other social factors influencing the music business.6.Suppliers. How does your companys relationship with suppliers affect its profitability?The lower the cost of supplies, the more(prenominal) profit the company will make. In the music industry, supplies are both palpable (the cost of CDs and jewel cases, for causa) and intangible (the money paid to artists.) Companies that introduce new artists take bigger risks, but also have smaller costs than companies that record and distribute the music of established acts.7.Competitors. What companies compete with the firm you have selected? Do they compete on price, on quality, or on other factors?Key competitors in the industry include Bertelsmann, EMI, Sony, Universal, and Warner Music. There us ed to be many more companies, but the industry has experienced considerable consolidation. (There might be even more consolidation but for anti-trust regulations in the U.S. and Europe.) The companies do not compete on price at all, or even on the quality of their products per se the briny sources of competitive advantage are the companies backlist the music copyrights they own and, even more important, the new talent they are able to find and sign. Most music buyers do not know or care which company is selling the music they are buying.8.New entrants. Are new competitors to the company likely? Possible?Traditionally, new entrants were highly unlikely given the large capital investment the music business requires (millions to launch a new album, for example). That may still be the case, but directly potential new entrants include music distributors themselves, like Apple, who can decide to bypass music companies and sign new talent on their own. This is unlikely, as companies lik e Apple currently do not have the expertise, experience, or perhaps even interest in the business. But it remains a possibility that music companies need to take into account, particularly as on-line distributors become an increasingly important part of the supply chain. In addition, the ability to sell music on line may reduce the need for some well-known artists to rely on the marketing and distribution capabilities of music companies, and to sell directly to consumers on their own.9.Substitutes. Is there a threat of substitutes for the music industrys existing products?There are many substitute delivery systems for music, and the music industry is constantly existence threatened by non-paying delivery systems. Music itself is more difficult to replace, however time spent on other forms of entertainment may decrease the cadence of time and money spent on music.10.Customers. What characteristics of the companys customer base influence the companys competitiveness?Customers in th e industry are characterized mainly by the fickleness, volatility, and unpredictability of their tastes. Only a small fraction of new releases succeed and these are new releases issued by extremely experienced, knowledgeable companies, in an extremely competitive industry. Even sales of new albums by well-known groups are difficult to predict, and very few stars maintain their longevity. Customers also think theres nobody wrong with making free copies of music for their friends, nor do they have great affection and respect for music companies.Sample Responses to Discussion Questions1.What has the company done to aline to its environment?To adapt to the environment, music companies are taking over more of the supply chain, manufacturing their own CDs and managing their own music clubs. They are making deals with on-line music distributors to sell individual songs. They are also increasing their on-line marketing efforts, as in letting AOL offer its customers music video and song s amples.2.How does the company attempt to influence its environment?To influence the environment, music companies pay slotting fees to retailers to gain shelf space, and pay fees to ensure play time on radio stations. They firmly market new releases. They are aggressively seeking to enforce copyright laws forbidding illegal copying their success in shutting down Napster is an example of that. They are also enlisting the artists themselves in an effort to educate and influence the public on the illegal copying issue. In the U.S., they are also intercommunicate the government to pressure China to reduce the widespread music piracy in that country.