A questionnaire is simply a ‘tool’ for collecting and recording information about a particular issue of interest
Ntelianidou Linta
PART A
Analyze Soundbuzz and its business strategy using the competitive forces models. What strategies did it develop for dealing with competitive forces?
According to Porter’s Five Forces Model of Competition the nature of competition in any industry is personified in the following five forces:
Threat of new potential entrants
Threat of substitute product/services
Bargaining power of suppliers
Bargaining power of buyers
Rivalry among current competitors
These five forces are very important for strategy formulation. The potential of these forces varies from industry to industry. These forces jointly define the profitability of industry because they form the prices which can be charged, the costs which can be allowed, and the investment necessary to compete in the industry. The managers should use the five forces framework to define the competitive structure of industry before making strategic decisions.
In terms of new potential entrants, there were many potential entrants to the market, the new online music companies from Asia and the Soundbuzz decided to sign licensing agreements with record labels. Soundbuzz management decided to focus on Business to Business model.
The substitute products for Soundbuzz were music files provided illegally, freely shared files, digital music for a monthly fee, CDs, TV and radio. The strategy Soundbuzz followed to avoid the Threat of substitute products or services, were the creation of a large database/mediabase with various music files, and the partnerships with MP3 player manufacturers. They serviced new encrypted MP3 format which makes them be able to sell music in their web sites. Moreover, they started to treat the music video contents which never treated on-line before. Lastly, they launched ISPs billing systems for customers, which allowed customers easily purchase their products.
In respect to customers, Soundbuzz was responding very well to situation that it faced. When the
PART A
Analyze Soundbuzz and its business strategy using the competitive forces models. What strategies did it develop for dealing with competitive forces?
According to Porter’s Five Forces Model of Competition the nature of competition in any industry is personified in the following five forces:
Threat of new potential entrants
Threat of substitute product/services
Bargaining power of suppliers
Bargaining power of buyers
Rivalry among current competitors
These five forces are very important for strategy formulation. The potential of these forces varies from industry to industry. These forces jointly define the profitability of industry because they form the prices which can be charged, the costs which can be allowed, and the investment necessary to compete in the industry. The managers should use the five forces framework to define the competitive structure of industry before making strategic decisions.
In terms of new potential entrants, there were many potential entrants to the market, the new online music companies from Asia and the Soundbuzz decided to sign licensing agreements with record labels. Soundbuzz management decided to focus on Business to Business model.
The substitute products for Soundbuzz were music files provided illegally, freely shared files, digital music for a monthly fee, CDs, TV and radio. The strategy Soundbuzz followed to avoid the Threat of substitute products or services, were the creation of a large database/mediabase with various music files, and the partnerships with MP3 player manufacturers. They serviced new encrypted MP3 format which makes them be able to sell music in their web sites. Moreover, they started to treat the music video contents which never treated on-line before. Lastly, they launched ISPs billing systems for customers, which allowed customers easily purchase their products.
In respect to customers, Soundbuzz was responding very well to situation that it faced. When the