HI-FI CASE STUDY
1. Perform a SWOT analysis and use this to help think through the industry dynamics in the hi-fi sector.
STRENGTHS | WEAKNESSES |
Employees are audiophiles, passionate by music. * Good engineered department * Extensive retailer network * Old companies, famous in this industry for the quality of their products, and for the innovation of their products. *Large portfolio product * Customer relationship * They have a good turnover and they make profit. * Good servicing and repairs. | * Evolve slowly compared with technology * Expensive product |
OPPORTUNITIES | THREATS |
Growth of online, digital and portable music sources.Nowadays, music is omnipresent and can accompany us wherever we go.Consumers are heterogenic in this market, somesearch the quality of sound and others the portability (and now people want the two in the same product).Good servicing and repairsNiche market, with specific consumers: vinyl and streaming media may become the two dominants formats. | Price war between deferent type of retailers (supermarket, electrical goods store, specialist hi-fi retailers…).Technology increase very fast. * Development ofmusic on InternetDevelopment of Apple and its I ‘tunes (Apple have 65% of the digital market).Market of audio and video products growing slowly (3 to 9% in several years). * huge competition with many manufacturers |
What are the opportunities and threats facing these specialist hi-fi firms?
On the one hand, these firms do have the right strengths to take advantage of the opportunities inthe market. Indeed, we analyzed that these firms tried to develop new products in order to deal with the rapid growth in sales of audio and video products. Moreover, they have a good engineered department which tends to improve the quality of products with the aim of catching the rapid growth in sales of digital music for example. So these specialist hi-fi firms have to evolve towards new audioand video format. Indeed in few years, hi-fi market change completely, nowadays opportunities are in MP3 format, people search something they can have with us wherever they are. They want to have more and more storage and services like listening music but also watching video or looking photos.
On the other hand, Apple is more and more dominant on the market thanks to a new way of buying andlistening to music with the I ‘tunes. So these specialist Hi-Fi firms have to catch market niche, and, for example, specializes in quality of sound to catch audiophile people, because of Apple.
Do these firms have the right strengths to take advantage of the opportunities in the market?
These firms could take advantage of the opportunities in the market because their employees like music, sofirms have to specialize in MP3 format with a very good quality. Indeed Apple do very good product but their products are for all consumers and not for audiophile.
2. Identify some strategic options the specialists hi-fi manufacturers could pursue.
The Hi-Fi manufacturers could develop something similar to Apple in order to be more competitive on the market. Indeed, this is the mainpreoccupation they should care about. It could be efficient to concentrate the engineers in that project in order to develop an online store with a huge volume data to download tracks from internet. They should pursue their efforts to maintain a high quality of product (for example by improving storage and sound of products) and try to be “simply better”. Moreover, in the competitive market, it is importantto have good relationship with their customers in order to keep them. For example, the Linn’s technicians put their name on each product they make. To finish, they have to be able to adapt their offer to the changes in the market trends.
3. Discuss the nature of Apple’s business activities with regard to music. What business model(s) are they using and where are the opportunities for them...
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