Strategic Analysis of E-Sonic Essay Example | Topics and Well Written Essays - 2000 words

Strategic Analysis of E-Sonic - Essay Example It’s success critierion was to be determined from the amount of market share It could extract from its competitor. At the moment, there are two key players who dominate the online music industry. They firms command atleast 85% of the over all market share in downloads. E-Sonic had to target these customers while fetching for new customers to the world of online music. While the idea of targeting a million customers and attracting them to digital music, seems like a far fetched one, the formula for its success is not that complex. All it needs is some simple marketing, sound selection of artists and a nice user friendly web interface that will assist it in establishing its position as the market leader. The paper will conduct a strategy analysis of E-sonic. External Market Analysis: Industry Profile The online music industry is a very competitive one. In the last couple of years it has churned up a huge array of competitors. Some of these include the likes of iTunes, Napster an d AmazonMP3. Their overall revenues in the market exceed 4.2 billion dollars as of 2009. At the moment, the online digital music industry comprises of 400 legal music services that have been engaged in delivery some 260 types of products belonging to different genres such as music, ringtones, audiotracks and video. The competition in the industry is intense and a threat of potential new entrants looms. Their entry is supported by the looming trends in the market. This includes higher consumer purchases of online music, bigger and faster access to the internet round the globe and the increased ability to download and listen to music on-the-go with developments in the mobile industry and mobile connection. The online music market has shown improvement and growth compared to last year. According to statistics published by the Billboard numbers, approximately 1 billion tracks were sold in the United States in 2010. This was only a 0.3% increase from 2009. Similarly, sales of online albu ms has also peaked, increasing to 13%. This is particularly true of the North American region of the industry. E-Sonic:. Opportunities: E-sonic has the opportunity to further develop music player into a more mobile phone friendly format. Something on the lines of Rokr mobile phone device by Motorola should greatly benefit the company. E-sonic can also capitalize on revenues that can be generated from podcasts and radio shows. They can be downloaded from the internet and then played back on iPod. Threats: Competition in this industry is very intense. E-sonic has to work very hard on its marketing and R & D to stay on the top of the rung. Competitor Analysis ITunes is the market leader in this industry despite stiff competition from various online music vendors such as Amazon. It has managed to increase its market share manifold. The music service now churns out around 66.3% of the online music market according to a research. Amazon runs second in the competitor list having a share of 13.3 % as of third quarter of 2010. The competition between Amazon and Apple is intense. In 2010 Apple was seen pressurizing artists in its bid to obstruct Amazon’s music promotions. They warned them of loosing all support from iTunes if they were seen supporting Amazon music. However, it cant be said that Apple’s growth has come at the cost of Amazon. Amazon’s online music share steadily increased to 11% in the first quarter of 2010. Both music stores are marching