Emi Case Study

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Company Overview
Electric & Musical Industries (EMI) was established in 1931. EMI Group, PLC is the world 3rd largest music company which based in London. It is the world largest independent music company, not being a unit, subsidiary or division of a larger conglomerate corporation. EMI’s business is comprised of two main group; EMI Recorded Music and EMI Music Publishing. EMI Recorded Music accounted for 81.6% of EMI Group, PLC sales and 59.3% of the company’s operating profit in fiscal 2003. EMI Recorded Music has over 100 recording labels featuring some of the greatest rock and pop artists in recorded music history. Its major recording label includes: Capital Record and Capital Record Nashville, Chrysalis, EMI Classics, Java Records, Mosaic Records and many more. Its artist with major albums in 2002 and 2003 included: David Bowie, The Beatles, Blue, Cold play, Norah Jones, Queen and many more. EMI Music Publishing owns the rights to more than one million musical compositions, which its market, licenses and sell. Royalties derived from EMI-owned compositions for the sale of music in the CD format comprised 53% of EMI Music Publishing revenue in fiscal 2003. Performance income derived from the public performance of song in EMI catalog, accounted for 25% of EMI Music Publishing revenue. Among the major music compositions and catalogues is “getting better” (The Beatles), James Bond Theme, We Will Rock You (Queen), Mamma Mia (ABBA) and Our House (Madness).

Problem Statement
How EMI Group, PLC has to access and response to the likely impact of UMG’s pricing initiative action on the recorded music industry.

Company Mission & Goals - described and evaluated
Mission Statement

External Analysis – general and industry, environments examined for opportunities •Competitive rivalry examined
Internal Analysis - core competencies and source of competitive advantage identified •Corporate Strategy identified and consistent with environmental analysis •Business Strategy identified and consistent with environmental analysis •International Strategy

SWOT Analysis
Strength

Strong global presence - EMI Group, PLC has a worldwide market in nearly 50 countries; among its major market are North America, Continental Europe, Latin America, UK & Ireland, Australia, Japan and Asia. World largest independent music company - In 2002, EMI worldwide market share is 12.6%. Its large size gives many benefits such as cost reduction through economic of scale. Vast resources and strong market share also give the benefit of being able to attract the best staff and artists to the company which have a strong position for the future. Financial Performance - Although EMI Group sales in fiscal 2003 decline compared to 2002, the company operating profit show excellent increased about 33.1% in 2003 compare to 2002. The improvement in operating profit was due to a comprehensive reorganization of EMI Record Music Division. World class artist roster - EMI releases more than 1000 albums every year and has a roster of over 1300 artists. Among them are David Bowie, The Beatles, Norah Jones, Queen, Robbie William and many more.

Weaknesses

Difficulties in the US Market - EMI has consistently been towards the bottom of the five majors in the US market share, which is the world largest recorded music market in the world. In 2003 it only command 9.8 % of US market share. Don’t have conglomerate backing - EMI is the only top five music company that solely independent which not being own by larger corporation. This mean EMI has to generate its own resources without any help from other larger company. Decreasing in worldwide market share - EMI Group, PLC worldwide market share dipped from 13.4% in 2002 to 12.6% in 2003. The worldwide decreasing were resulted from the decreasing of EMI Group market share in several major region in 2003 compared from 2002 which included North America (-0.03%), UK & Ireland (-0.01%),...
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