Sony Music (INDIA) Harvard Case Solution & Analysis

Threat of Substitute

The threat is minimal as the substitutes for digital music are the CD’s and DVD’s which require consumers to reach retailers for buying. The cost is not very high, but the access requires much contribution that is why the consumer prefers digital music due to easy access.

Threat of New Entrant

New entrants can see an opportunity in the industry as the industry is becoming very lucrative. The cost of starting up a new business is not very high, but the major issue is gaining intellectual property rights of some major stars. This keeps the old players at an advantage and new players at the back foot and it is a discouraging factor for them.

Competitive Rivalry

The rivalry in the industry is intense as there are major players in the industry that have adopted the change and have entered the market of digital music. Whereas, the entrance of foreign e-tailors has made the competition more intense for Sony but still Sony is a leading player in the Indian industry.

Sony’s Response

Sony adopted the change or shift in the music industry very quickly and leveraging its success in the music industry took some bold steps to assimilate the concept of digitization. Sony has adopted a different approach as compared to other players in the industry and kept its focus on music contents and regional markets. Through joint ventures, the company entered different regional segments and genres in order to capture the regional markets.

Furthermore, through partnerships with IODA Sony took a major step by providing Indian artists a global platform and supported them at every level of promotion as well. This gave the company access to major superstars in the Indian industry and gained a competitive edge by making an association with those stars and buying their intellectual property rights.

On the other hand, the company also used specific labels in order to capture the local markets and kept their focus on local consumers by understanding their consumer behavior (Mary A. Castellano, J. J Bharucha, & Carol L. Krumhansl, 1984). Consumer behavior talks about understanding the taste of the consumers and then designing the offerings (Peter, Mcgraw Hill Higher Education).  In the international market, the company was using the subscription based model and was offering digital content with its various products which were the strategies not being followed by Sony in India. In India, the company’s main focus remained on catering the local consumer and their taste and assimilating the concept of digital music as much as possible in order to remain ahead of the competition.

Recommendation

The company should adopt the same strategy as it has adapted in the west and the launch the same platform “Music Unlimited” in the Indian market as well in order to gain clear leadership in the Indian market. The company can offer both downloading and streaming using the cloud technology as it will give the company a major advantage over its competitors and will be able to provide ease to the user. A satisfied user will bring customer satisfaction that will eventually result in customer loyalty.

The company can use the subscription model in India as well and can offer the digital content through its various products like PS3, PSP, etc. as the company is doing in the west. Besides that, the company should focus on retaining customers and for that the prices should be set using the competitive pricing model. The company has major advantages over its customers as the company is involved in diversified businesses. Due to this reason, Sony should allow its competitors to take advantage over prices.

In order to move smoothly in the long run and assimilate the rapidly changing trends in the industry the need of separate platform is immense and also vital for the company to make sure its dominance in the Indian music industry. On the other hand, a separate organization aligned with the parent group should be established in order to monitor and run the division smoothly. This approach will help the company to give equal attention and priority to this industry as well and will add another source of revenue for the company.............................

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