Strategy for BPM Distribution Company - Essay Example

? Strategy for BPM Distribution Company Table of Contents Table of Contents 2 Introduction 3 Music distribution Industry: Overview 3 Recommended Business Strategy 5 Recommended Information System (IS) Strategy 6 Recommended Information Technology (IT) Strategy 7 References 9 Introduction This report aims to analyse the position of BPM Distribution, a German music distribution company in the global music distribution industry. Additionally, the business strategy of the company will be also analysed to identify the prevailing strategic issues. Once the issues are identified, the company will be recommended with the changes needed to be implemented in the system. Along with that, the company will be also recommended with the information system (IS) and information technology (IT) strategy. Before getting further deep, the report will begin with a brief overview of the music distribution industry. Music distribution Industry: Overview Music distribution industry is a part of Media and Content Industries (MCI), which takes into account music publishing, video and motion picture production, broadcasting and distribution, and several other information services. The companies belonging to this industry mainly remains involved in producing musical recordings, generating in-broadcast revenues, music distribution and licensing rights for using music. Germany is ranked at the third position in terms of music sales. Globally, US top the charts with a staggering turnover of $15 billion per annum. Moreover, the industry is also forecasted to grow at a rapid pace. However, the biggest threat of this industry is illegal downloads and pirated cassettes. With the development of information and technology, companies around the world are redesigning their distribution pattern and focusing more on digital distribution. Some of the major companies of this industry are Sony Music Entertainment, Universal Music Group, Warner Music Group, German firm Edel etc (IFPI, 2013). The industry is also characterized by the presence of numerous small music distribution firms. Figure 1 – Market Share of Top Music Companies (Source: Lule, 2012) Figure 2 – Ranking of the Countries in terms of Music Sales (Source: IFPI, 2008) Recommended Business Strategy Business strategies are generally classified into three broad categories namely differentiation strategy, focus started and cost leadership strategy. The existing strategy of BPM is focus strategy. The company mainly focuses on a specialized segment of market. Its main customer group is local independent shops. The company has been extremely successful with this strategy, but due to technological advancement and increasing popularity of web based music shops and online download the local independent shops are losing their market share. As a result of this, the demand for vinyl and CD’s are reducing day by day and BPS is finding difficulties to maintain the desired sales volume. In order to deal with this situation, the company is recommended with the following strategies: - The company is recommended to consider the use of digital distribution in order to get success in the market. In order to pursue this strategy, the company should try to acquire digital distribution rights from the music production companies. This will allow the company to target those customers, who prefers to download music rather than buying CDs or DVDs. It is also recommended to the company that they should not focus on a particular group of customer, but the focus should be on mass customers. The company only sell their products to the retailers, but they can also consider selling products directly to the end consumers. This strategy will allow the company to earn more profits. The company is recommended to adopt differentiation strategy, rather than pursuing focus strategy. Although, the company does not have any scope of offering differentiated products and services to the customers, the only way by which they can differentiate their product line is through stocking different music genre. There is a long list of popular music genres such as rock, jazz, classical, electronic, pop and parody among many others. The musical taste of consumers differs widely and hence, stocking music from different genres will help the company to serve its purpose. The company is recommended to sell their products directly to the end customers and therefore to reach out to the potential customers, BPM must open an online music shop. In addition, the company is also recommended to start physical store operation. This strategy will assist the company to target mass population. Moreover, with the online store the company will get chances to serve overseas customers. Hence, this stagey will greatly widen their market base. In the meantime, the company also needs to concentrate on the promotional aspect. The company should carry out strong promotions for the purpose of creating awareness about the offerings of the company. Finally, the company is recommended to implement information technology to their system of operation in order to streamline their business process. Recommended Information System (IS) Strategy The information system (IS) strategy of an organization defines the application system and technical infrastructure of a company. The information system strategy plays a crucial role in maintaining a steady flow of information within the organization. Meanwhile, Teubner (2010), states that the information system strategy of a firm also refers to the organizational function management. Therefore the concept of IS relates to both human activities and technical components of an organization (Chen, Mocker and Preston, 2010). The use of information technology in BPM is very much limited and is only implemented in some areas of operation. However, a large number of organizations have already implemented IT in every department. Similarly, BPM should formulate IS strategy that supports the implementation of information technology throughout the entire organization. Among the type of information systems, it is highly recommended to the company that they should implement office information system. With the help of office information system, the company will be able to improve their communication process and enhance work flow. The company is recommended to open both online and physical store, in this context office information system will assist in smoother information flow. It has been observed that, the company manages its inventory levels manually, but with the implementation of office information system, it can be managed automatically and more efficiently. It is highly recommended to the company that they should create online platforms through which orders as well as payments can be accepted. In addition, the company should also register the profiles of the existing customers in the database, so that they can be notified about the new releases. In this context, office automation will automatically send notification to the registered users. The new IS strategy will also help the company track the orders placed online and can generate different type of reports. This will in turn help the company to manage the overall performance of the organization. Finally, in the context of the information systems strategy, it is recommended to the company that they should centrally implement the office information system. This will allow the company to have better control over the operation and can be managed from a single source. Recommended Information Technology (IT) Strategy Organizations around the world rely heavily on information technology to streamline their system of operation (Wexelblat and Srinivasan, 1999). Moreover, in this turbulent business environment the use of information technology has became a necessity. Some of the major functions of information technology are data storage, data processing, information receiving, information retrieval, information presentation and process automation. Apart from that information technology also plays a crucial in improving the communication system of the organization. Similarly, BPM Distribution is recommended to make extensive use of information technology to satisfy its information system strategy as well as business objectives (Wilson, 1991). The company is recommended to open an online platform through which they can directly reach out to the end customers. Therefore, to support this infrastructure the company is required to be improved. The company is recommended to implement computerised operation throughout the organization. In order to carry out the same, the company should buy additional computers. Another important recommendation to the company is that, it should inter link all its computers, with the help of networking. Hence the company is recommended to consider intranet facilities within the office. This approach will not only enhance the communication system, but will also streamline the flow of information within the organization. The company operates with a simple website, but they are strongly recommended to upgrade the website. The website should be support e-commerce and must be capable of handling online transaction. The software which will help to run that application should be user friendly. In addition, it is also recommended that the website should be attractive. This is because an attractive website is capable of driving more customers towards it (Weng et al., 2007). The company is also recommended to open physical outlets. In this context also, IT will play vital roles. The retail outlets should implement inventory management system so that it can track the levels of inventory. It has been also observed that the application of information technology in BMP is limited with the generation of invoice, but it is recommended that the company should widen the application of IT within the company. Finally, the company is also recommended to host the website centrally. This will allow the company to have better control over the activities. References Chen, D. Q., Mocker, M. and Preston, D. S., 2010. Information systems strategy: Reconceptualization, measurement, and implications. MIS Quarterly, 34 (2), pp. 233-259. IFPI, 2008. IFPI digital music report 2008: Revolution innovation responsibility. [pdf] Available at: < http://www.ifpi.org/content/library/dmr2008.pdf> [Accessed 19 March 2013]. IFPI, 2013. IFPI digital music report 2013: Engine of a digital world. [pdf] Available at: [Accessed 19 March 2013]. Lule, J., 2012. Understanding media and culture: An introduction to mass communication. [online] Available at: < http://flatworldknowledge.lardbucket.org/books/understanding-media-and-culture-an-introduction-to-mass-communication/index.html> [Accessed 19 March 2013]. Teubner, R. A., 2007. Strategic information systems planning: A case study from the financial services industry. Journal of Strategic Information Systems, 16 (1), pp. 105-125. Wang, W., et al., 2007. Integration and Innovation Orient to E-Society Volume 1: Seventh IFIP International Conference on E-Business, E-Services, and E-Society. Berlin: Springer. Wexelblat, R. L. and Srinivasan, N., 1999. Planning for information technology in a federated organization. Information & Management, (35), pp. 265-282. Wilson, T. D., 1991. Overcoming the barriers to the implementation of information system strategies,” Journal of Information Technology, 6 (1), pp. 39-44. Read More