Company Situation Analysis Summary and Conclusions
The first element of company situation analysis is overview of strategic performance indicators on a yearly basis, from 1997 to 2000.
[Tabular data omitted]
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The table composed on the basis of earnings report and given above shows constant gross revenue growth of the company on a yearly basis, which is good indicator. As for the profits margin indicating company's cost control effectiveness, the table shows that the highest margin was attained in 1998 and that it tends to decrease. This informs that the company does not perform very prosperously at converting its revenues into profits.
Since Darren Skanson is the only investor in the company so far, the return on equity figures are somewhat relative, showing relation between the profits and Darren's investment into the company. However, the figures, as those of profits margin, show the trend towards return on equity decreasing. This indicates growing expenses of the firm with comparatively stable income, which on with the gross revenue volume grows, but not in the rate comparable the expenses. To be attractive for potential investors, the company has to leverage its income and expenses figures.
The next issue to be regarded in company situation analysis is SWOT analysis. SWOT analysis was carried out and given early in the paper; in this section the most important moments will be emphasized.
Among strengths, the most serious factor is course low cost of transcription cheap ascribable new digital transcription technologies. Not only assembly of studio with all necessary equipment and hardware is cheaper, but duplication of CDs, storage and shipping are less high-ticket as well. Low cost of production, duplication (duplication of 500 CDs ranges from $1.90 to 3.63, duplication of 2000 CDs costs about one dollar per CD), shipping and storage makes the final product less high-ticket and more cheap for the clients, thus widening the range and scope of the target market. Second important strength factor is constantly growing client base and developing client loyalty inside the narrow market segment. Third strength can be regarded at the same time as strength and weakness. This strength is positioning of CCM in a distinctive market niche. For a microlabel company wish to preserve its positions this is strength, but for company strai to grow into independent label, narrow market focus is weakness preventative to expand the client base. And the last strength is good client service of the company.
Among weaknesses, the most important one is epilepsia minor epilepsy of reliable and traditional distribution channels, epilepsia minor epilepsy of clear strategic vision of the movement direction - either towards developing of transcription company or towards promotion of the artists' music by means of other companies' capabilities; low level of gross revenue, which is supported by limited client base (the issue discussed in the strengths section); weak promotion and limited business imaginations to pursue new goals and possibilities.
In the music industry environment, the opportunities of CCM dwell acquiring new channels of distribution to reach wider client base exposure, elaborating active presence stategy in Internet through expanding e-commerce and cathartic MP3, gaining extra client groups by expanding co-operation with other artists and enlarging the Acoustictherapy and other lines with new marketing strategies, developing new technologies of transcription for meet the rivalry.
Along with the opportunities, music industry environment contains such threats for the company as high number of new entrants and growth of other little labels ascribable the digital revolution, the possibility that major labels or independent labels could decide to enter into CCM's domestic markets and try to drive the little labels out of the market. Another threat is possibility to lose gross revenue to substitute products like mp3s or net downloads. From these, the most important threat is difficulty to stand the competition of large music transcription companies with CCM's limited imaginations and narrow target market.
The next section of the Company situation analysis is Competitive strength assessment which compares CCM's assets such as quality/product performance, reputation/image, manufacturing capability, technological skills, dealer network and distribution, new product innovation, business imaginations, relative cost position and client service capability with the major competitors in the industry. The results of the analysis are given in the table below:
Competitive Strength Assessment
[Tabular data omitted]
From this analysis it is open that competitive strength of CCM compared to major players in music transcription industry is not significant, though fairly decent as for the microlabel company. Thus, the company's strong points are quality and product performance, technological skills, relative cost position (ascribable the cheapness of production) and client service capability. Along with that, the weaknesses of company's performance are open, which let in manufacturing capability, dealer network and distribution, business imaginations and new product innovation.
From the abovementioned it is possible to conclude that the company's position in the music transcription industry is improving, but not in fast and steady manner. The leaps in profits margin and return on equity indexes show that the company's development is not consecutive but rather abrupt. Along with that, the trend towards growing is evident, and gross revenue growth and market share serve reliable proof for that.
The company has such competitive advantages as superiority of products and performance, distinct music and performance style, specialized niche on music market, flexibility in the insurance and development strategies, application of nontraditional distribution methods such as net, catalogs, gift stores and others.
Competitive disadvantages of CCM let in little imaginations in possession, narrow client base, presence in only one market segment, comparatively inferiority of record (digital technology if worse that records of analogue equipment), low popularity of musicians, weak advertising and promotion, low gross revenue levels.
Therefore, in the first place, the company should address such strategic issues as creating a profitable music transcription label with enlarged range of artists and performers; positioning Darren Curtis Skanson label to contend with major artists with contracts to Sony Classical. For this, acquiring traditional distribution methods is necessary. The next issue is creating new line similar to Acoustictherpay which would be saleable and provide medium of exchange system imagination for the previous two goals. First of all, the company should decide on the major scheme of further development: enhancing the transcription studio or promoting the music by marketing CCM's lines to transcription studio big then CCM, independent of major labels with access to traditional outlets.
Conclusions and Recommendations
The current work contains the discussion and analysis of CCM's performance and competitive situation in music transcription market. From all the information given above, following conclusions and recommendations can be made.
The first recommendation concerns the need for creating corporate culture inside the organization. Corporate culture acts as a tool for achieving structure goals and portion CCM adapt to challenging external forces. CCM necessarily to engage HR and create a separate group to cente corporate culture and inform the employees of the benefits of the changes. Corporate culture and inculcation vision in employees is no easy task, small stairs will be necessary. First, CCM should begin by creating cross-functional work teams and offer incentives supported company-wide performance versus individual performance. Cross-functional work teams will also help to eradicate some of the silo product teams. CCM should also implement a program that rewards managers and employee alike for what they produce rather than for seniority or specialized knowledge. These will kick-start the move to align CCM on business unit versus lines. CCM also necessarily to make an effort to share information and support accidental changes in the culture. Additional training will help managers and employees fit into the dynamic culture and support the structure vision. CCM necessarily to make the corporate change prosperous but also necessarily to recognize that all employees need to be involved in the change process.
Second, CCM necessarily to embrace genetic diversity and in response, its structure culture must be sensitive and make victuals to manage it. If CCM continues to promote from inside on an current basis, they will have little, if any, genetic variety in upper direction. All of the managers will have the same or similar traits and possibly the same or similar backgrounds, education, direction practices, leadership, and many other similar direction practices. Although this may be a competitive advantage in some circumstances, it is actually quite the opposite. CCM is under pressure to increase productiveness and overall growth. It is this pressure and the ever-dynamic competitive environment that should force CCM to throw aside their standard direction practices and increase the genetic variety of the direction ranks. New social control beliefs and practices will become a breeding ground for long-term success.
Direct gross revenue method in art festivals would be profitable for CCM as it promotes good cash flows. But on the other hand the small business should strive for instant distribution and effort in its served market delays allows the competitors to retaliate, especially big ones, and it drained imaginations, especially limited capital.
CCM recognized that global competition was increasing and that in order for it to maintain its role as the industry leader; it must diversify and expand its line and services into other areas without lost from its core contendncies. CCM's manufacturing facilities are models of efficiency, leaner structure structures, more efficient factories, and a much-improved direction of supply and distribution, but its lines are too dependant on the industry behavior. CCM necessarily to revolve around diversifying and growing the company by focusing on the most attractive opportunities that make use of the company's key strengths.
Therefore, in short-term perspective, the main recommendations on the company's insurance let in opening new promotion and advertising channels for the artists of Colorado Music Creative, determination new distribution channels for the products of the studio. This may be made by sign language contracts with major labels for distribution of the music of CCM's performers. But in long-term perspective such scheme would prove damaging for the development of the company since sign language the contract with other transcription company would promote the products but won't contribute to the development of the studio itself.
That is why, in long-term perspective, the company should aim at sweetening ascribable business imaginations plagiarised either from gross revenue volume increase or from investment into the company's medium of exchange system imagination. On this basis, the company has to expand its repertoire, hire new artists and conduct efficient promotion campaign so that the artists become notable to the wide public. Also, CCM necessarily to expand its array of music styles. Now, the leading and only style of music recorded is classical and traditional acoustic. To become independent label, the company should comprise at to the worst degree three or four music styles, thus acquiring new segments of music market. One more interest be done for development of the company in the long-term perspective is upgrade of hardware and music transcription technologies from the cheapest to more quality equipment, which power let in tape transcription and other means or genuinely quality analogue sound production.
Read other parts of the series in Marketing [http://www.personal-writer.com/maketing] section.
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