Executive Summary

An Executive Report advising HMV’s Management on competitive strategies. In this analysis we will take a look at the biggest entertainment media seller with physical stores in the UK. The contents of the report are an analysis of the company’s current competitiveness and recommendations on the future strategic direction of the company.

Introduction

With the rise of digital media and broadband capabilities, many brick and mortar sellers are faced with challenges to sustain a competitive advantage. Not more than a decade ago customers who were seeking entertainment media had to walk into high street stores to purchase or rent a CD or DVD. The shift to digital content was fuelled by the Apple iPod and other …show more content…

The current strategy for HMV, according to HMV UK & Ireland CEO Simon Fox, is “to maximize our position as the last remaining high street entertainment specialist through a clear plan for continuing to outperform the markets for music, visual and games”. (HMV 2010 Financial Report)

Value Chain Analysis

The value chain views the organization as a sequence of value adding activities that creates and sustains competitive advantage. HMV's primary value-creating activities and supporting activities are shown in Figure 2.

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Figure 2: Value Chain Analysis HMV UK & Ireland

HMV implemented Qlogitek SaaS (Software as a Service) software technology to better manage their supply chain. The benefits have been (QLogitek, 2011):

• Guaranteed delivery of POs from stores and receipt by suppliers, which has resulted in a 95% reduction of HMV's lost time and 1% reduction in store operations costs. • Elimination of stock-outs during special campaigns and marketing promotions. 2% increase in campaign sell-through due to availability of stock. • HMV's head-office achieved year-over-year savings from 75% reduction in finance head count. • Suppliers reduced invoice error related processing and reconciliation time spent with HMV by 75%.

HMV implemented a cash management solution through Cashmaster International. The advantages of this