HBY Company has a digital music distribution firms that helps artists to distribute their music to a global audience. Apart from selling the music, musicians can view sales figures in real time and collect their copyrights. A mission statement outlines the reason the organization exists and assists in making decisions regarding the organizations actions, priorities, and responsibilities. A vision statement describes organizational objectives that guide decision-making (Jones & Hill, 2010). The mission statement of the companys digital music distribution business is Music Revolutionized. Its vision statement is To provide the best digital music distribution experience by utilizing smart and easy-to-use media, secure and transparent payment channels, and fast and high-quality delivery.
SMART Goals and Objectives
The acronym SMART refers to specific, measurable, achievable, relevant, and timely. By developing SMART goals, the business will have guiding principles that precisely articulate the approaches that it will apply in pursuing its desired performance results. They will outline the organizations performance expectations in a practical, observable, quantifiable, and predictable way. Specific goals summarize information that highlights business opportunities or problems while measurable objectives utilize qualitative and quantitative characteristics to create measures. Achievable goals aim at the enhancement of performance by influencing employee behavior, and relevant objectives apply to specific issues that the organization may face. Lastly, timely goals allow reviewing the targets at specific periods (Ireland, Hoskisson, & Hitt, 2014).
The businesss SMART objectives and goals will be:
i. Acquire 10,000,000 new customers in the next financial year at an average cost of $20 and an average profitability of $5.
ii. Gain a 30% market share in the digital music distribution industry in two years.
iii. Raise the average value of customer orders to $55 for every client.
iv. Increase the number of active customers making purchases at least once in a month to 3,000,000 in the market.
The business must assess its industry to understand its complexities. An industry analysis involves an evaluation of different factors that have an impact on industrial developments. An excellent framework is the Porters Five Forces Model that comprises of five competitive forces: industry rivalry, the threat of substitutes, suppliers bargaining power, buyers bargaining power, and entry barriers (Hunger & Wheelen, 2010).
Numerous digital music distributors are offering subscription-based or a-la-carte music download services. Success in the industry that hosts players such as Apples iTunes music store and Rhapsody depends on the companies capacity to manage digital rights and price their offering competitively. Music artists favor the distribution of their content using digital media as it eliminates or leads to drastic reductions in their distribution costs because it involves the electronic transfer of the purchased music. Additionally, it is a faster alternative than the physical shipping of CDs from a manufacturer through retail outlets. The numerous players in the industry imply that artists can negotiate the revenue allocation from digital sales; thus, the businesses have to find a way to balance between competitive pricing and offering a good proportion of the income to content suppliers to ensure that they have the content that customers demand on their platform.
Clients have the option to stream or download content depending on their payments. These options give them the ability to own the content they desire as opposed to purchasing physical music albums that often have content to which they may listen selectively. The numerous subscription and pay-as-you-go options provide customers with great flexibility in choosing content providers. Additionally, they can shift between providers depending on pricing and available content. However, some clients still prefer to purchase physically packaged music for sentimental value even though the majority of customers, especially the younger generation, prefer digital content that they can store and play using various entertainment systems and devices. New content providers have to make massive investments in technologies, distribution licenses, marketing, and rights management, which can be prohibitive for them.
SWOTT analysis refers to a framework for identifying an organizations strengths, weaknesses, opportunities, threats, and current trends (Ireland et al., 2014). HBY Companys digital music distribution segment has various strengths. They include the ability to monetize digital content in a market that still faces piracy, a platform for the new artists, and an avenue for long-term revenue generation. However, it faces various weaknesses as critics of the industry argue that the companies devalue music, and it presents a risk of cannibalization of sales. The digital music provider has numerous opportunities that it can exploit. The availability of music on online platforms is increasingly gaining popularity due to the ability to access content quickly and share it with peers. Moreover, there are various platforms that it can utilize to increase the accessibility of the available content. There is a higher acceptance of ad-supported digital content services. The threats that the business faces include access to free and illegal music downloads and uncertainty in the sustainability of its profitability levels. Various trends are going to define the digital music distribution industry: an increasing customer engagement with licensed digital content services, a rising popularity of streaming, growth of subscription services, partnerships with telecommunication companies, and development of new online payment channels.
A perceptual map is a visual framework that allows the business to demonstrate how average customers perceive or understand the positioning of competitors product offerings. Therefore, it seeks to present consumer perceptions on the product attributes that they associate with major industry players (Jones & Hill, 2010). The firm will focus on selling the benefits of its offering to existing and potential customers, who form the basis of the development of the perceptual map. The business has already established that pricing and availability of content are the two most important factors to its target market. The perceptual map below represents customer perceptions of the company and three other major distributors in the industry.
Figure 1: Digital music distribution industry.