Direction of the Company Avid Technologies Inc - Essay Example

This paper presents the strategic Analysis of the company Avid Technologies Inc – a company that pioneers in digital media production, management anddistribution. 1.0: Strategic Direction Mission Statement: The mission of the company as mentioned in its website is ‘to make creative teams more productive through production asset management’. This makes it clear that the company is committed to innovative methods of design and development of digital media to enable its customers to accomplish effective marketing communications. The industries focused by the organization include 1. Computer Based digital media production and distribution 2. Marketing Communication From the aforementioned it is clear that the organization’s primary operating industry in digital media production for not only commercial purposes but also for marketing communication and support services. The business segments operated by the organization include - Computer-based digital, non-linear editing systems - Online editing and finishing systems - Content creation tools for 3-D character animation and special effects - Multi-track, non-linear digital audio workstation The range of services offered by the organization as identified in the company profile (2005)i include - Digital media production - Digital media management - Digital media distribution The company’s ability to deploy latest technologies to develop innovative solutions to its customers in different industries and business segments identified justifies that the organization predominantly depends upon the technology to develop its products although the business is driven with the vision of providing efficient digital media services to its customers. From the aforementioned arguments it is clear that the scope of the organization’s business for development is bright as the efficiency of the organization to develop digital media for not only commercial purposes but also for marketing communication opens the doors for corporate business development for the organization. This is in line with the arguments of Gerry Johnson and Kevan Scholes 92003)iiwho say that the level of innovation retaining the core business strategy will leverage competitive advantage and new market development for an organization. Bench Marks The company’s involvement in the marketing communication and its position in the games industries are the key areas for development to accomplish for future development. The key objectives set above can be measured against the company’s accomplishment in the form of market share for the organization in the aforementioned market segments. The benchmarks thus include 1. Market share 2. Increase in the revenue generated contributed by the company’s performance in the new business segments and 3. The company’s leadership in the market. 2.0: Business Model – Performance The company generates revenue mainly through the production and distribution of digital media to clients in the film industry, games industry and other media related commercial business markets. The fact that the company pioneers in the postproduction media management and manipulation of the video in using a computer is the key to the company’s revenue generation. The range of products sold by the company mainly depending upon the requirements of the customers and their specific needs with respect to the projects they handle like the movies and visual effects for a given movie project makes it clear that he company’s core strategy of producing, managing and distributing digital media is the generator of revenue for the organization. Furthermore the company overview provided by Data monitor Inc further reveals that the organization is not only digital media production and management but also pioneers in producing products that are used world wide by other organization involved in media business both for production and postproduction activities right from film studios up to cable television stations. The industry overview (2005)iii on the media business reveals that there is a steep increase in the demand for production and postproduction services in line with the tremendous growth of the media entertainment industry. Furthermore, the increase in the need for media in the marketing communication by organizations in every sphere of business to increase its presence in the market and thus increase sales further justify that the organization can increase its revenue generation through venturing into new markets whilst leveraging strategic competitive advantage. 3.0: Strategic Issues The key issue faced by the organization in the European market is the regulations with respect to the competition law that hinders its growth in the media industry of European Union nations. This although a hindrance to the organization’s rapid development will leverage a sustainable market position in the European markets. Alongside the growth of the Chinese and Indian markets where the labour costs are low along with competitive product quality is another issue faced by the organization in the form of competition in the global business market. 4.0: Situation Analysis External Factors: The political factors influencing the growth of the company in the global market include the competition law of the European Union in the European markets and the import and export regulations of media related products in the Far Eastern countries. The Economic issues faced by the company is the increasing costs associated with the business both internal and external which is reducing the profit margin whilst the rapid growth in the technology and innovation is the major element that affects the organization’s stability in the market since constant re-engineering of the technologies are imperative to the growth of the business in new markets. Competitive Factors: The threat of new entrant in the digital media market is high mainly in the form of competition from the local business organizations that exist in a given geography. The organization although having an appreciable market share in the global market is prone to loose its business to the local vendors due to costs and lack of local knowledge. The local knowledge being the key for effective market development in a given geography as argued by Richard Lynch (2003)iv justifies the aforementioned argument. The threat of substitutes is not appreciable as the company’s presence is mainly in the business- to-business category where the organizations involved tend to change only when a strategy is effective to the existing one. In case of the digital media services, the organization holds a strategic position in an industry that forms the backbone for many corporate organizations in the entertainment as well as advertising industry. 4.0: Value Chain Analysis The company’s operation predominantly sitting in the business-to-business segment, can justify for effective customer service and end-products to the customers as well as after sale services through working closely with its clients both during production and post production scenarios. Since the finished product for the organization is not restricted to a set type and that there is no batch production of the products, the value chain for the organization does not take the traditional hierarchical form but actually embraces the model. This is clear from the company’s continuous investment in research and development as well as the partnership with leading organization in the media production and postproduction services. 5.0: Recommendations As the demand for media based marketing communication is increasing in the global markets, the company can deploy its resources in liaising with conglomerates in different segments of business like the FMCG, consumer clothing etc to increase its market share in the global advertising industry. Since the advertising industry is increasing its potential with the increase in the competition in the business markets, this move is recommended for the organization to achieve sustainable competitive advantage in the business. The following moves are recommended to accomplish the aforementioned strategy 1. To increase its market share in the advertising industry within North America in the first year apart from its current business in the digital media production and post production management for film industry and games business. 2. To expand the business into the European markets conforming the competition law in year 2. 3. To promote its products and services through strategic partnership with advertising conglomerates and global organizations that spend heavily on advertising and media based marketing communication in the third year. From the aforementioned it is clear that the organization can achieve a strategic position in the media-based marketing communication of the advertising industry in the global market. Read More