Situation Analysis of Music Retailer Real Groovy Including Changes in the Music Industry jrot012 4954602

New Zealand’s largest independent music retailer. Retailer of both new and used: CDs DVDs Books Console Games Designers of e-commerce website solution software.

New Zealand’s largest independent music retailer.

Retailer of both new and used:

CDs

DVDs

Books

Console Games

Designers of e-commerce website solution software.

Declining CD Sales Nation-wide decrease in total CD sales by 35% in New Zealand between 2001 and 2005. Future sales are predicted to follow the same decreasing trend. 2001

Declining CD Sales

Nation-wide decrease in total CD sales by 35% in New Zealand between 2001 and 2005.

Future sales are predicted to follow the same decreasing trend.

Factors Affecting CD Sales Mp3 Players Availability of digital music p2p (peer to peer file sharing) Online Music Stores Competition Technological Advances Price Numerous retail shops from a range of company’s, nation wide.

Factors Affecting CD Sales

Mp3 Players

Availability of digital music

p2p (peer to peer file sharing)

Online Music Stores

Competition

Technological Advances

Price

Numerous retail shops from a range of company’s, nation wide.

Development of Mp3 Players Mp3 players are: Socially desirable Have a larger capacity than a CD More portable than a CD player Allow easy transfer of music from a computer with no CD burning required.

Mp3 players are:

Socially desirable

Have a larger capacity than a CD

More portable than a CD player

Allow easy transfer of music from a computer with no CD burning required.

Illegal p-2-p Downloads Legal Downloads from Online Music Stores

Why Digital Music is Affecting CD Sales Convenience Readily Available “ Limitless Virtual Shelves” Choice - Customer can download a single rather than an entire CD.

Why Digital Music is Affecting CD Sales

Convenience

Readily Available

“ Limitless Virtual Shelves”

Choice

- Customer can download a single rather than an entire CD.

Competition Cheaper prices offered by larger retailers. Real Groovy, however, has a larger range of music titles and has the ability to source hard to find CDs through their Virtual Network Computing (VNC) software.

Cheaper prices offered by larger retailers.

Real Groovy, however, has a larger range of music titles and has the ability to source hard to find CDs through their Virtual Network Computing (VNC) software.

Strengths Name Status - New Zealand’s largest independent CD retailer 25 years of experience Sells both new and used goods On-line shopping is available Inventory is not limited to CDs - Books - DVDs - Console Games - Design and sell website solution software

Name Status

- New Zealand’s largest independent CD retailer

25 years of experience

Sells both new and used goods

On-line shopping is available

Inventory is not limited to CDs

- Books

- DVDs

- Console Games

- Design and sell website solution software

Weaknesses The business is competing with ‘big box’ retailers Statistics show that CD sales have continued to decline since 2001 Main good that is being sold is becoming obsolete Of the four lines the business sells, two are subject to piracy

The business is competing with ‘big box’ retailers

Statistics show that CD sales have continued to decline since 2001

Main good that is being sold is becoming obsolete

Of the four lines the business sells, two are subject to piracy

Strategy and Implementation

Unique e-commerce Software Packages Real Groovy has created unique backend software allowing the cataloguing, organising and accessing of the business’ inventory. The software has the ability to be adapted and manipulated to suit other markets (i.e. Paper Plus).

Real Groovy has created unique backend software allowing the cataloguing, organising and accessing of the business’ inventory.

The software has the ability to be adapted and manipulated to suit other markets (i.e. Paper Plus).

Further develop and sell the unique ‘end-to-end’ website solution software which was sold to the Paper Plus franchised book shops. Gradually establish the software as the business’ main product. Strategy

Further develop and sell the unique ‘end-to-end’ website solution software which was sold to the Paper Plus franchised book shops.

Gradually establish the software as the business’ main product.

Implementation Use the core resources of the business to form the new strategy. Focus materials and redirect resources to substantially support the development of the unique e-commerce system which so it can suit many markets. E.g. - Book stores - Video Stores - Hardware Stores - Electronic Stores

Use the core resources of the business to form the new strategy.

Focus materials and redirect resources to substantially support the development of the unique e-commerce system which so it can suit many markets.

E.g. - Book stores

- Video Stores

- Hardware Stores

- Electronic Stores

Anderson, N. (2008, January). A brave new world: the music biz at the dawn of 2008 . Retrieved from http://arstechnica.com/articles/culture/state-of-digital-music-2007.ars?rel Fisher, K. (2007). Accounting for the big plunge in "music sales": the digital singles effect . Retrieved from http://arstechnica.com/news.ars/post/20070321-accounting-for-the-big-plunge-in-music-sales-the-digital-singles-effect.html Fox, M. (2005, July). Technological and Social Drivers of Change in the Online Music Industry . Retrieved from http://www.firstmonday.org/issues/issue7_2/fox/ Jones, A. (2005, March). Groovy baby, yeah . Retrieved from http://unlimited.co.nz/unlimited.nsf/coolcompany/276123824F417E70CC256FB6006CB933 Slade, M. (2008, January). Real Groovy - a company adapting to change . Retrieved from http://nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10486047 Unknown. (2007, November). Recent Changes in the Music Industry and How They Change the Consumer Experience . Retrieved from http://telecom.co.nz/content/0,6845,205315-204205,00.html Unknown. (2006, November). The Real Groovy Story . Retrieved from http://telecom.co.nz/content/0,6845,205315-204205,00.html

Images Slide 10, Apple iPod Generation. Retrieved from http://content.answers.com/main/content/img/CDE/_IPOD08.JPG Slide 7, Office Meeting. Retrieved from http://www.flickr.com/photos/nikkovanblack/2088318906/ Slide 15, the Warehouse logo. Retrieved from http://rcd.typepad.com/rcd/Whg_2DLogo_2DLarge.png Slide 15, Kmart logo. Retrieved from http://www.kencocarcare.com.au/downloads/thumbs/KmartLogo.jpg Slide 15, JB Hi Fi logo. Retrieved from http://www.tgv.com.au/IPOH/TGV/resources/images/dynamic/050127_JPG_JB_HERO_1_resized_434_152.jpg

Images