Recorded Music Industry Assignment Example | Topics and Well Written Essays - 2000 words

Recorded Music Industry - Assignment Example In so doing, it will make use of two strategic widely accepted strategic management techniques, namely PESTLE analyses and Porter's Five Forces Model. This report will end with the presentation of the identified industry's identified opportunities and threats. PESTLE Analysis stands for Political, Economic, Social, Technological, Legal, and Environmental which represents the important aspects affecting the operation and strategic direction of a business organisation and the whole industry. This strategic management tool gains wide acceptance among managers and industry analyst because it offers an extensive identification of the environmental factors that affects an industry. The past years have witnessed the rapid integration of economies into a global village due to the various political agreements. It should be noted that both geographical and political boundaries are disappearing with the creation of trade agreements, free trade zones, regional blocs, and economic zones. This rapid globalisation facilitates the influx of goods and services within geographic borders at lower tariffs, duties, and other trade boundaries. This is coupled with the free flow of capital especially in developing countries where foreign direct investments are warmly welcomed with financial and non-financial incentives. These policies which are instituted to promote globalisation have crucial implications for the global music industry. These enabled large music labels to penetrate profitable markets in other countries and allow the free flow of music formats such as CDs and MP3s from one location to another (Dolfsman 2000). 2.2. Economic One of the most significant developments in the global music industry is the rise of the former developing economies like China, India, and other Latin American countries. It should be noted that the rapid growth in these nations are strongly indicated by the rise in gross domestic product and per capita income. Currently, China is the fastest growing economy in the world, posting a GDP growth rate of 10.7% during 2006 (GDP Growth 2007). With this rapid growth, the Chinese economy is eyed by various business organisations as a profitable business venue. Economic growth also signals higher disposable income for customers which can further trigger and enhance spending in the consumer sector. 2.3. Social The internet technology has been warmly embraced by customers around the world. According to the latest data from InternetWorldStats.com, worldwide internet penetration is at 16% as of January 11, 2007. Asia accounts for the largest portion of this population with the large share increase from China. Usage growth has been escalating, posting a growth rate of 202.9% during the eight year period 2000-2007 (Internet Usage Statistics 2007). Similarly, the number of global mobile phone users is also in an uptrend. It is reported that the number of mobile phone subscribers have increased by 25% during 2004, 2005, and 2005. However, experts forecast that this trend in increments will slowly decelerate in 2007. According to iSuppli, mobile phone users will be growing at slower rates of 12.8% and 9.6% in 2007 and 2008,