Case Study 3
SOUNDBUZZ’S MUSIC STRATEGY FOR ASIA PACIFIC
Q1 : Analyze Soundbuzz and its business strategy using the competitive forces models. What strategies did it develop for dealing with competitive forces?
There are four concepts of the competitive forces models: new market entrants, substitute products and services, suppliers, and customers. In terms of customers, Soundbuzz were really well responded to situation that they faced. When they launched B2C model, they found that because of customers` behavior (customers are seeking to download music freely) they cannot make much margin compared with the time when they used B2B model. So they aim other business as their customers. In terms of products and service, they serviced new encrypted MP3 format which makes them be able to sell music in their web sites. Also, they started to treat the music video contents which never treated on-line before. Finally, they launched ISPs billing systems for customers, which makes customers easily purchase their products.
Q2 : What are the critical elements for an online music service? Using the value chain model, analyze Soundbuzz's business processes.
Administration and Management : Online and Mobile music company.
Technology : Source from local and independent record label and content is secured using digital right management technologies consisting of web server , license server , database server and media server.
Procurement : Internet and finance industries
Q3 : Why did Mototrola acquire Soundbuzz? What synergies will be created through the partnership?
Through its MOTOMUSIC service, Motorola has more than two years experience delivering mobile music to consumers with its carrier customers in China, Hong Kong and Taiwan. The acquisition of Soundbuzz allows Motorola to expand MOTOMUSIC beyond China, into India, Southeast Asia, Australia and New Zealand. With well over 90 percent of all digital music content in Asia sold via mobile channels, a level expected to remain in the coming years, Motorola's strength in music delivery will help its carrier customers access this growth opportunity.
The expected timetable for completing the proposed transaction between Motorola and Soundbuzz, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and products, any other statements regarding Motorola's or Soundbuzz's future expectations, beliefs, goals or prospects and any statements that are not statements of historical facts might be considered forward-looking statements. While these forward-looking statements represent managements' current judgement of future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those stated in the forward-looking statements. Important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, include:
i. the parties' ability to consummate the transaction.
ii. the conditions to the completion of the transaction may not be satisfied, or the approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule.
iii. the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction.
iv. the possibility that the parties may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all.
v. Motorola's ability to successfully integrate Soundbuzz's operations and technology into those of Motorola and the possibility that such integration may be more difficult, time-consuming or costly than expected.
vi. revenues following the transaction may be lower than expected.
vii. operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining...
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