Strategic management Assignment Example | Topics and Well Written Essays - 2250 words

Strategic management - Assignment Example As Atkinson (2011) reports, in November 2011, the Citigroup planned to sell EMI Group’s recorded music sector to Universal Music Group and music publishing division to Sony/ATV consortium. This paper will use a number of strategic management theories including SWOT analysis, PESTLE analysis, Porter’s five forces model, and BCG matrix to assess the level of competitiveness of EMI and identify the need for strategic change in the digital competitive environment of 2012. SWOT Analysis Strengths Strong global presence is one of the major strengths of the EMI group because this factor assists the company to spread its risk elements. In addition, EMI is one of the world’s leading music corporations with 12.6% global market share (Light Speed Research, 2012). The group has a roster of over 1300 artists and many of them are world class artists like David Bowie and Norah Jones. The merger of the Columbia Graphophone Company and the Gramophone Company in 1931 resulted in t he formation of EMI Ltd. Weaknesses The EMI Music’s poor performance in the US market, the world’s largest recorded music market, seems to be its most potential weakness. Since EMI is an independent music industry, it has to find its own resources without any assistance from a parent company. Declining global market share is another weakness of the organisation. Financial data indicate that the firm’s global market share dropped from 13.4% in 2002 to 12.6% in 2003 and eventually 9.55% in 2005 (Bridgewell, 2004). Opportunities Joint ventures offer greater expansion opportunities for the company. The company has often enjoyed potential advantages from its joint ventures with other larger multinationals such as Apple and Yahoo. Liberalisation of mergers and acquisitions in the music industry would significantly promote the company’s growth (Department of Business Innovation & Skills, 2010). In addition, the fast development of internet applications also crea tes a range of potential opportunities for the firm. Threats Declining scope of recorded music is identified to be the biggest threat to the EMI Group. The recent global recession drastically affected the global economy and this condition appears to be an impediment to the growth of the music industry as well. Evidently, music piracy and aggressive market competition also threaten the further development of EMI. PESTLE Analysis Political factors The EMI Group maintains good relations with foreign countries to expand its business territory and thereby improve global market share. The company obtains good support from the political spectrum as it has designed many employee benefit schemes such as flexible working hours, family policies, and other financial incentives. Economic factors The global economic landscape is not much appealing because of the drastic effects of the recent global recession. Many of the EMI’s markets are still under the process of recovery. Hence, the eco nomic factors are not favourable for the organisation. Social factors The EMI website claims, â€Å"whatever the culture, whatever the society, wherever there are people, there is music† (EMI, 2012). In addition, EMI gives more focus on specific cultural aspects of each country where the company has a music market. Hence, social factors are less likely to affect the EMI’s business. Technological factors The technology sector has been performing outstandingly over the