Emi Case Analysis

Kevin Tejada

Professor Scott

MRKT412-A

22 April 2016

EMI Group, PLC Case Analysis

Situation Analysis:

EMI, or Electric & Musical Industries, was established in 1931 in London. They were ranked as the 3rd largest music company in the world and is actually the world’s largest independent music company (not being a subsidiary or division of a conglomerate or larger corporation). EMI is comprised of two divisions: EMI Recorded Music (accounting for 81.6% of EMI Group’s sales and 59.3% of the company’s operating profit in 2013) and EMI Music Publishing. EMI Recorded Music has well over 100 recording labels; including some of the best artists in history. Some of their more notable artists include The Beatles, Coldplay, and Queen. EMI accounts for 12.6% of the global market share. EMI is known for their success in recording, producing, and distributing music through CDs. Although EMI is based out of London, England, North America serves as the largest market for the music industry.

Defining the Problem & Possible Cause

In my opinion, the problem lies with EMIs pricing strategy stacked up against UMG’s new pricing structure. EMI is pricing their CDs in accordance with the industry which is the epitome of straddling. Considering that EMI’s CD sales peaked in 2000 and are projected to decline around 30% over seven years, I would safely say that EMI’s problem lies with their pricing strategy. Like any industry, companies are looking to gain and maintain a competitive advantage. EMI is looking at $1.2 billion in revenue and $477, 615, 157 in profits. In a market that is progressively getting smaller and smaller due to electronic downloads and uncontrollable pirating of music, UMG made an intelligent and tactical business strategy move by introducing pricing strategy in hopes to gain market share. EMI needs to decide if they are going to create their own pricing strategy or copy EMI’s. The CD industry is one that is very price sensitive and doesn’t really lack...