The Porter Five Forces Analysis Performed On the Case Study of the Music Industry In 2006 - Article Example

The paper tells that market attractiveness in this context refers to the general industry gain of profitability. On the other hand, in an unattractive industry or market setup, is one that does not conform to the five forces analysis, since it offers a projection of losses within the market in the long run. In other words, an unattractive market would be one that is approaching the level of "pure competition", that is, the available profits for all firms within the market are depicted at a normal profit.

The porter five forces analytical model has the following components the facilitate the examination of a particular product within the industry: The first part of the porter five forces model is the Internal Rivalry, which explains the competitive level within the industry. In this particular scenario, the intensity of competition within the music industry in that specific year is high because given the numerous number of players in the music industry. The major players in this market include Universal Music Group which owns 26% share of the music global market and has the prospects of merging with Sony BMG Music Entertainment to increase the production rate of publishing music media.

The merging of companies within a market tends to consolidate the industry. For example, in the year of 2004, the entertainment and recording companies, Sony Music and the BMG, merged to change the equilibrium within the competitive market. The major companies highlighted in the case study regarding the prospected changes in the music industry form mergers with the expectation of each company trying to favorably compete with each other by developing new products or increasing the mass of production in the market all the time.

For instance, the 50-50 joint venture between Sony and BMG Music Entertainment which made it the second largest major in the music industry.