Case Study on "Bmg Music"

Case Study 3 pages (1245 words) Sources: 3 Style: MLA

[EXCERPT] . . . .

As a result, this has been declining based upon a small percentage of revenues from sites such as: I Tunes and Amazon.com. (Standard and Poor's) (Rivkin)

To make these adjustments, the organization must become more flexible. This is because customers are demanding specific songs they can download and play for one low fee. The technology partners they should be working with include: online retailers, independent labels, web masters, entrepreneurs and anyone who can help to make these songs readily available. This can be accomplished for a fee when someone buys it such as: $.80 cents per song. (Standard and Poor's) (Rivkin)

The biggest internally consistent choices are to encourage the management to become more flexible. This is because changes will occur rapidly inside the industry. To keep up with them, requires executives having the ability to quickly adjust. Moreover, various divisions are embracing particular attitudes and mindsets. This is troubling, as any kind of integration will make it difficult for them to work together. In the future, this has the ability to fail to understand the root causes of the problem and it makes it challenging for the company to adjust with these changes. Until managers become more flexible, there is the realistic possibility they could have trouble adapting with these shifts from embracing this culture (Standard and Poor's) (Rivkin)

BMG' leaders also face an organizational choice: they can (a) integrate their digital distribution into existing distribution operations or (b) establish a separate organization to serve digital customers. In making the choice, they must balance the static benefits of intra-organizational linkages against the inflexibility that such linkages often entail. Does the integration of digital and conventional distribution provide a benefit? Would it slow down digital efforts? Is there a tension between organizational coordination and speed of implementation?

The integration of digital and existing distribution segments does not make any sense. This is because it is combining two rival divisions of the firm and forcing them work together. In many organizations, one of the biggest problems is effectively merging them with each other. As each one, have specific practices, customs and traditions employees / managers are embracing. This makes any kind of transformations difficult, by failing to understand these transformations and the impact they are having on stakeholders. When this happens, the firm will continue to lose market share from not thinking proactively and failing to address how these variables will influence the operating environment.

This means that it will offer no benefits. Instead, it is slowing down efforts to make digital properties more profitable. This is from the tensions between the coordination and speed of implementing these transformations. To effectively deal with them, requires spinning off the most productive divisions and maintaining a certain amount of ownership in the new company. They have the ability to be run independently and the funds raised during the process can be used to consolidate BMG. This will occur through laying off managers and employees who are embracing the old mindset of them firm. At the same time, any divisions with declining revenues such as select recording companies can be sold off to other firms. The basic idea is to eliminate segments which are unprofitable and unable to evolve with changes inside the sector. As a result, the digital segment should become an independent firm that is owned by the company. Yet, it is run as a separate entity through a partial spinoff. (Standard and Poor's) (Wiechman) (Rivkin)

Works Cited

Hull, Geoffrery. The Music Business and Recording Industry. New York: Taylor and Francis, 2011. Print.

Rivkin, Jan. BMG Entertainment. Harvard Business School, 2005.

Standard and Poor's. S&P Stock Guide. New York: McGraw Hill, 2013, Print.

Wiechman, Daniel. The Impact on… READ MORE

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