Innovative Marketing, Volume 2, Issue 1, 2006

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Warner EMI Music. Strategic Development for the First
Decade of the New Millennium
Demetris Vrontis
Abstract
This case has been compiled to put forward the author’s suggestions for future strategic development open to Warner EMI Music as they develop during the 1st Decade of the 21st Century.
The case is divided into four main sections. Section one is concerned with an environmental scanning including an analysis of Porters’ Value Chain and Five Forces models. This section identifies the key strategic issues for the new company and industry and provides an overview of their internal strengths and weaknesses and external opportunities and threats. Section two provides meaningful …show more content…

2. The 5 Forces (the music industry)

Buyer Power
Low price sensitivity
Increasing brand identity
Low switching costs

Innovative Marketing, Volume 2, Issue 1, 2006

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Dealing with the industry in which Warner EMI Music competes, it can be argued that industrial competition is drastically increasing. Competitors are becoming bigger and increasingly sophisticated and innovative. As a result of the nature of the industry, competition arrives from an international perspective. Moreover, the entry barriers of the industry are extremely high as they are monitored by the major players. Suppliers' importance is primarily placed on price and volume, while substitutes mainly emerged as a result of CD copy writers and Internet. Dealing with buyer power, there is low price sensitivity, however, companies should remain marketing orientated, as switching cost is low. As customers have low switching cost, the only way to retain them is by keeping them satisfied and offering them what they want. Therefore, Warner EMI Music should capitalise towards customer satisfaction. To achieve this, the new company should invest more in market research and develop products and services that would satisfy consumer requirements profitably.
Organisational Strengths and Weaknesses (Warner EMI Music) and Industrial Opportunities and Treats. SWOT
Figure 3