'Apple' a unique brand in the technology and music industry. The history of apple fully concerns the up and downturn of the business, the company is known because of its highly progressive work that developed an innovative and successful image of company in brains of consumers which is a representation of its head, Steven Careers CEO Apple Inc.
Apple has introduced wide range of products and services successfully such as Macintosh personal computer, iPods, iPhones and iTunes, Apple Television etc. This record mainly focuses Apples dominance over music delivery business. The article contains the Macro environment and micro environment analysis which includes market position, political analysis, economic analysis, social evaluation, and technology evaluation, environmental evaluation, and legal examination with history of the industry and apple background. Swot analysis, porter 5 analysis. The report in addition has focussed and analysed the apple iTunes with Ansoff Model and there after discussed the futuristic approach. And finally concluded the report.
In early time the music was presented with equal importance, so as god; it was worshiped but as time handed down the worship became business and individuals greed turned it into parts i. e. musical composition, recordings and performances of music in the beginning. Until 17th century the procedure of official composition & printing of music considerably happened mostly with the aid of patronage from churches & higher classes.
In overdue 17th and early on 18th century the composers and performers like Wolfgang Amadeus Mozart has began seeking the commercial opportunities for marketing their performances and music to general audience. Later in mid of 18th century Constanze Weber an renowned musician continuing the commercialization of music to people via an unprecedented group of memorial concerts, offering manuscripts & collaborating with other musicians.
Whereby in past due 19th and early 20th century the dominance level in music industry increased by sheet music web publishers. Therefore by mid of 20th century the records had replaced sheet music as a biggest player in the music industry. Down the road in 2000, the sales of live music greatly increased and created its importance among the public, whereas saved music demand substantially dropped off. The reason for the drop off of noted music was the six "major labels" that dominated registered music Universal Music Group, Sony Music Entertainment, EMI, BMG, PolyGram and Warner Music Group every one of the organisations contain many smaller music companies & provide services in different market segments & region later the BMG, PolyGram merged in Sony music entertainment and universal music group respectively.
To give difficult competition to live music industry Live Nation an Ex-subsidiary of clear route communication a biggest promoter & radio stop owner. Though there was other critical music companies that incorporate are dominating players Creative Musicians and artists Firm (a management & reservation Co. ) & Apple Inc. (the world's biggest music store, iTunes Store, Apple Tv set and markets iPhones and iPod).
Probably, entrepreneurs involved with music industry have extended industry models into different industries i. e. folk music where in fact the structure & performance has suffered for centuries specifically indie basis.
Whereby in 21st century, the company's strategies and technology in music industry improved the pattern of consumers. Now, consumer spends much less money on saved music compared of 90's. The full total annual revenue for vinyl fabric, CDs, digital downloads and cassettes have considerably dropped from 14. 6 billion us dollars in 1999 to 10. 4 billion us dollars in 2008. This dramatic drop in the income has induced large size layoffs within the music industry. This drove the sellers out of business & forced industry to seek effective and useful new business models.
Earlier, 21st century the music record companies adopted extreme action against illegal data access or file writing. The nice example can achieve success shutdown of Napster Inc. in 2001 (the top leading online digital music showing company) and intimidating legal action to hundreds other individuals. The revenue is being sluggish and took a downturn because of this the public relationship also declined. The legal downloading of digital music of iTunes were availed in market with the advantages of apple iTunes stores in 2003. The level of popularity of paid downloadable digital music increased rapidly which increased the sales, customer believe in iTunes and on the other hand rapidly began incurring reduction from CD's.
A violent disturbance in the music industry acquired transformed the equilibrium on the list of record companies, promoters, musicians and artists, consumers and retail music stores. The most notable vendors of music business are known as Container stores like best buy, Amazon, Wal-Mart etc and also have been changed by specific music stores.
Now-a-days recording musicians and artists trust on live show and therefore the major part of income they earn out of this. It has made performers more reliant on music promoter's i. e. GMG Radio and such companies which govern travel sponsorship and possess a large quantity of music locations for such artists. Recording companies are progressively reliant on the "360 deal" to get benefits from artist's income. Such a fresh business relation has been initiated by EMI and Robbie Williams in 2007 can be threat to apple iTunes.
Record companies will offer distribution deal by giving a high percentage and bonuses to performers. Generally a newer musician doesn't see any record package as a essential part of these business strategy. High quality music could be created in a bedroom & sent out it through internet internationally to worldwide consumer through inexpensive technology and software's, which has managed to get possible by apple iTunes. It has triggered problems for record manufacturers, recording studios, music engineers.
Therefore, Regarding to Los Angeles Times reviews that more than half of the saving conveniences in the location have been unsuccessful. The revolutionize in the music industry have given customers a big variety of music access at easy price. It is worth to notice that over the last decade, customer bills over music related hardware and software has augmented significantly. In addition, it endow with a very important new stream of income for technology and music companies such as Apple iTunes etc.
The Environmental leverage for just about any organisation can be done unless the opportunities are properly determined and when determined the decision against the ability is taken effectively and successfully by the liable. Therefore the crucial task is to judge the internal and the external environment effectively in response to the power, weakness, menace and opportunity of the desired organisation. An actual opportunity is out there whereat the close connections between resources, value and environment of organisation. The beauty of Swot is reduce the weakness the durability automatically increases much like reduce hazard don't lose opportunity. Therefore in case there is Apple iTunes the statement has centered on the main aspects of the dominance of apple iTunes over the music industry with SWOT analysis:
ITunes Music Store is a great source of income, especially with the ipod device and iPhones and the availableness on Windows system.
Apple's niche audience provides the company with some insulation from the direct price competition
Low debt-more maneuverable in terms market examination of iTunes.
Web technology may be used to improve product understanding and sales.
Excellent brand commitment.
Technical savvy: The apple iTunes are well advanced in conditions of technology and user friendly.
Financial vitality: Robustious financial reserves and sound image despite of difficult competition.
To decrease the competition and market pressure apple began tactical alliances for protecting major distributors to get apple iTunes.
Innovative: the apple iTunes could be failure due to the in compatibility feature while being able to access in non apple device but later some changes made the weakness was settled.
Weak presence in business world: The apple iTunes services are strong and sensible in America, European countries, Australia and parts of east but poor in Asian regions India, Pakistan etc.
Dependency on new product launches. : the key problem is weather iTunes will be appropriate or not in new device as rivals use to improve techniques
Weak existence in markets apart from education and publishing.
Slow change on popular products like iTunes is easily available in UK and US however, not in Asia.
Huge part of society (Gen X&Y) which can be enormously individualistic and brand mindful.
Internet Downloadable digital music, MP3 players etc are highly marketable.
Innovative Stake in mobile phone industry example like iPhones project in the cellular phone industry.
Sound enough to type in emerging marketplaces like Asia- India, Pakistan, North America etc.
Companies not viewing Apple iTunes as compatible with their products.
Increasing competition with internet music downloading.
In Recession-the prices of Apple iTunes are higher.
Universal Music Group, Sony Music Entertainment, EMI, Warner GROUP will be the major competitors
The evaluation of macro environment is very imperative to recognize the factors affecting the demand supply level and cost techniques of an organisation.
The PESTEL takes on an important role in the lifestyle of any company as it is part of strategy in virtually any organisation that assists to interpret market position, development, potential etc. The PESTEL examination is effective at time of entry in new market whereas, commencement of new business or expansion at home or international level. PESTEL promises the productive and effective run of the business; therefore significantly the apple iTunes also implemented the PESTEL strategy and centered all the above tips by evaluating politics, economic, communal, technology, environment and legal factors briefly:
The Political aspects that Apple iTunes may need to maintain at the debut of a new product or service or new market entry i. e. Regulations and regulation like the competitive legislation, taxes, Consumer protection Regulation, terrorism, inter-country interactions, government constructions and Employment legislation.
For illustration, in few countries three is time restrictions for individuals to get used. The individual can't be employed till age 14 years in India however in other country the age limit may vary. In addition few countries demand to hire local person than the foreigner. The exemplory case of political effect on Apple iTunes took place in china:
The circumstance was that Apple added few applications about the expatriated Buddhist innovator Dalai Lama. The application form contains Dalai Lama's inspirational Prices, prayers and teaching of Buddhism. These applications were removed only from Chinese language iTunes stores as this take action was consider wrong in china and apple hold the political pressure which led to unwillingly modification in program (Athow. 2009).
The Economical aspects are inspired by the political and the government regulations as it influence the government decisions mainly. The issue that may impact the organisation like Apple the increase or loss of currency exchange rates. Change in the policies music or entertainment industry, abrupt change in taxation insurance policies etc though there are great quantity of factors that may effect the Apple iTunes in which the govt. decision will indirectly or straight would emphasis the company as it offers both risks and opportunities.
Whereby the economical aspects and government insurance policy has interrelation which affects the other environmental makes that influences the company. Taking an example of Apple Inc. (iTunes) that how the economic aspect affects the business. Overall global economic crunch experienced deeply impacted worldwide which has slowed down the every business weather online music, iTunes store etc. the crunch has afflicted the wallets of normal consumer which led to less spending for luxurious goods and service weather online music purchase or vehicles. Whereas the buyer is facing risk of unemployment that may impact the apple retail an iTunes stores.
Another example for economical factor affect on apple iTunes is that price difference issue in Europe. The Apple iTunes operate their service in three countries of European countries i. e. UK, Germany and France. The issue is that Apple iTunes consumers of UK pays 79 pence to download a song, whereas in Germany and France only 99 cents and 68p respectively. The problem was later solved by the apple officials reasoning that it's an currency exchange disruption which concluded in favour of apple.
The socio social atmosphere encapsulates preferences and demand that varies after a while, the income, trend etc of market changes which provide both threat and opportunities to the business enterprise. After a while need, demand, quality, features of all type of product or services change in market credited to which interior and exterior strategies need to be changed. The company should be alert about the change on the market environment as well as the consumer pattern.
This can be successful if organisations work somewhat socially. The interpersonal influence over company may reduce significantly. Seeking Apple iTunes example by analysing the affect of sociable factors on Apple iTunes. The apple iTunes will assimilate interpersonal features in advertising player through sociable networking sites facebook, Twitter, hi5, orkut etc. secondly iTunes can earn a living by curbing piracy. Another example can end up like if any one visiting facebook and received interest in being attentive song than he is able to listen as trial in case want to download should pay amount and buy it (Klurfeld, 2009).
The scientific aspect is a crucial factor that performs essential role in tactical management of any organisation. The affect can be like shift from a vintage era of music industry i. e. saving studios live music, stage performances etc. to new era of music i. e. digital music, online music like Apple iTunes.
This aspect in essence focuses on the competitive benefit in particular industry, the more the new technology more the competitive pressure on competitors. Therefore the life of any new product is brief due to consistent up-gradation in technology influences the company performance concerning keep up with the pressure and innovativeness companies have to get volume amount in research and development to keep up the decorum and brand value.
Similarly Apple iTunes have to frequently revise the version of these product and services for better compatibility and run on the market. Whereas the another exemplory case of Apple iTunes facing specialized problem is the harmful and virus episodes i. e. fraudulent online music files downloads and online sales in the name of Apple iTunes.
The environmental aspect concerns about the corporate social responsibility of organisation. The Apple iTunes effect over this is that the launch of iTunes drastically lowered the demand and offer of saved music in CDs. The impact of the was 30% decline in produce of CDs i. e. decrease of pollution. The CDs are manufactured through plastic material which releases unsafe gasses at time of development process.
Another recent exemplory case of apple iTunes is that it's collecting money through online sales of the music and conducting online occurrences for the account through joint venture with other companies too for Haiti catastrophe. Therefore Apple also carries out CSR activities through its main business that is apple computer systems. Now a day's apple is processing green products which are not hazardous to environment for this event apple was rewarded by renewable peace.
The legal aspect concerns about the precise legal system accompanied by the music industry in order by the Apple iTunes. The current online music industry has been developed fully lawless nature. There are numerous organisations like Apple iTunes and legal factors indulged among internet governance. It generally does not matters weather the problems is on cybercrime, e-commerce, liberty of manifestation, intellectual property rights (IPRs), consumer rights the laws and regulations therefore can be applied the same which is often treaties, industry criteria at national or international level. The following law is known as (Baxter, 2006), (Li, 2008).
AHRA (Music Home Recording Action of 1992): It says about individual who desire to protect the customer's right to create copies of music with performers, songwriters and record companies who wants to confirm this capability of copying doesn't cripple the music business. The Function immune's customers against any rules suits for makeover of non commercial digital music copies. So, inside our case, we're using a computer and therefore we cannot fall under the Act
DMCA (Digital Millennium Copyright Action of 1998): This work claims that the DRM systems of copyright goods is unlawful to circumvent The DMCA doesn't explicitly forbid circumvention by consumer for Rational Use. Whereas Apple DRM technology restricts total recorder and deny the change of iTunes data.
FAIR USE: this policy claims that if legal purchase of digital music, which means doctrine of fair use grants the given individual to convert in any format on clause of non writing. Example in case of Apple, by applying Total Recorder we could actually "space-shift" the sounds we bought from iTunes store in a format which would facilitate to listen melodies on various players.
Thus, these were the legal factors which influence the music industry weather Amazon, Sony or Apple iTunes.
Michael Porter's Five Pushes Research for Apple iTunes:
The porter five analyses is a tool for strategic examination of exterior environment associated with an organisation in this report we are going to determine the Apple iTunes. The Apple Inc. is the popular company in computer, software's and music industry, which combine online music service, MP3 players and cell phones etc. While Apple is well known company this gives online digital entertainment products and services. Therefore, now we are focusing on major segments of Apple i. e. MP3 players, online music services in stand below: (Baxter, 2006)
Threat of Accessibility:
The Google is considered a new strong entrant. The Yahoo can be an experienced player in field of video music circulation like YouTube. They also raise fund through advertisements by giving free downloads.
Omnifone launched its more than thirty music place worldwide in cooperation with handset makers Samsung, Sony, Nokia etc. The music train station provides cost-effective rate of music than Apple iTunes.
When Apple launched new Nano ipod touch, it provided the opponent difficult competition in market which led to windup of competitors like Olympus & Rio.
The Economies of Size of Apple iPod has occupies 80% talk about in market.
Product Differentiation: Apple contains own music stores the iTunes that allows consumers easy download of music and avails the entire selection of Apple products and services.
Cost Edge: The show of Apple iTunes dropped in Europe credited to price war. (Li, 2008)
Threat of Rivalry:
The apple faces tough competition through the competition like Universal Music Group, Samsung, iRiver, Sony etc. then after Apple occupies 80% of share in Western.
Innovativeness in products and services by Apple is priority as the same product and service are availed in good deal by other competition (Li, 2008)
Threat of Substitutes
The Existence organisation at alternate place ceiling prices that could be charged. A number of music data files like mp3, Palm, PDA player endow with similar functions & enhanced price performance. It is therefore not much stiff for companies like Apple to occupy good share in future.
The alternative to MP3 music player could be MD player, radio, Compact disk player etc. ; but cheaper and easier access to MP3 documents has been making customers leave from the other music players.
Threat of Suppliers
There are basically two types of Suppliers i. e. content supplier: niche distributors & Record brands:
The suppliers for uncooked resources & labour could be a threat, though the primary hold of music supply is in hands of performers, recorder and article writer. If all three exists by an company it can be threat to competitors. Example Apple iTunes, Google, Amazon etc.
The illegitimate music downloading through internet and individual writing. Convenient and cheap gain access to music could encourage market, so that it could threat to Apple iTunes.
Threat of buyers
An example to clarify the bargaining electricity of buyers the situation occurred on 29th June when huge collection is seen from the Apple stores awaiting outside to buy the new blockbuster iPhones. Whereby couple of months later, the downfall in cost of Apple iPhones advised not only in increased bargaining electricity of buyers. A few could be: insufficient ram expansibility, low storage capacity, non-replaceable power supply etc. The consistent increment in the potential buyers has increase the demand of ground breaking product and services (Baxter, 2006).
The day by day upsurge in technology as in increased internet velocity and development of easy availability of music in environment by the providers like Apple iTunes.
The Apple has relatively dedicated consumers.
Higher price sensitivity.
The environment in the music industry has become much more flexible for consumers after the influence of downloading on the saved music. But on e problem to the is that consumers may begin making their own playlists, compiling their own songs from the albums that already can be found and for this reason consumers will drop out the thought of listening to the whole album of sounds. This can turn out to be dangerous if consumers start overlooking the challenging monitors from the album but it does not mean that they can avoid through the filler songs. The technology is advancing it isn't only downloading music through computer systems at home, it is advancing. The digital music has appear, it is on the move and has opened new gates of accessing music.
Apple gets the opportunity to t make the iTunes open to the customers through mobile phones formats. Apple iTunes. Apple iTunes gets the scope of entering new market segments as it hasn't learned the untapped potential in market segments like Peru, Pakistan, Bangladesh and a great many other countries. It gets the prospects of signing up for hands with big companies like Disney, Sony and Nokia. Apple iTunes can collaborate with broadband and offer video as they only provide music which will be available to consumers at an extremely broadband. (Business Week, 2007), (Baxter, 2006)
The environment in the music industry has become much more adaptable for consumers after the affect of downloading on the registered music. But on e problem to the is the fact that consumers may start making their own playlists, compiling their own songs from the albums that already can be found and for this reason consumers will drop out the idea of listening to the complete album of tunes. This can grow to be dangerous if consumers start disregarding the challenging paths from the recording but it does not imply that they can break free through the filler tracks.
The technology is evolving it is not only downloading music through personal computers at home, it is improving. The digital music has appear, it is on the move and has opened new doors of accessing music. Apple has the opportunity to t make the iTunes available to the clients through mobile phones types. Apple iTunes. Apple iTunes gets the scope of entering new marketplaces as it hasn't learned the untapped potential in markets like Peru, Pakistan, Bangladesh and a great many other countries.
It gets the prospects of becoming a member of hands with big companies like Disney, Sony, and Nokia. Apple iTunes can collaborate with broadband and offer video recording as they only provide audio tracks which is open to consumers at a very high speed. There's a opportunity. Apple has a smart future as it has got a great deal of opportunities. Apple has got its each and every product as eco-friendly which may be recycled by the end of its life pattern. So people like top buy products that are eco-friendly and they have a good opportunity (Smith, 1994).
Music Industry has witnessed continuous changes with the duration of time displaying newer means of offering music to the public. Apple has surfaced as a pioneer in the proceedings supplying a new so this means to the industry. Its superior resources, tactics and operations put it as a dominating ruler of the market. After inspecting its macro and micro environment in UK, it is quite noticeable which it has effectively battled against all the industrial, competitive and organisational stresses employing effective strategies to stand victorious in the united kingdom market.
Entry of new and rising opponents is a potential risk to its standing. These rivals are attempting to outclass Apple any which way and adopting all the methods to overpower Apple in the united kingdom music industry. Thus, Apple needs to take care and devise new strategies and tactics depending after the changing environment. It must forsee the near future beforehand and develops counter approaches to battle against all types of competitive pressures. It will thereby, act as a fuel in assisting Apple preserve its dominance on the market.
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