HMV

Strategic Management: HMV

Strategic Management: HMV

Company overview

HMV Group is a retailer specialising in providing entertainment products in-store and online. Its broad product range includes games, music, books and other entertainment related products as defined by Vakharyia & Verma (2007). It has also diversified and has been producing technology products such as MP3 player, speakers, headphone, tablets and other accessories. It has been operating in the U.K. and has online stores as well.

External Factors (PESTLE, OPPORTUNITIES & THREATS)

HMV has been operating in an extremely competitive industry where customers seek innovation, quality and reliability. Every organisation is affected by forces that exist in the external environment as stated by Levy & Powell (2004, p.116). These forces are known as PESTLE (Political, Environmental, Social, Technological, Legal and Economical). According to Levy, M. & Powell, P. (2004, p.116), the following is the detail of PESTLE analysis in the context of HMV Group.

Political

The Political factors are usually in the context of the influence the government has on the entire industry. Political changes have minimum or no effect on the entertainment industry. In rare cases, government may ban those music and videos which may go against the sentiments of some people. Also, inappropriate content may also be prohibited from being delivered or distributed. HMV should refrain itself from publishing such content which may be banned causing loss to the company and damaging its image.

Economical

Economic factors have a considerable impact on businesses. Economic factors include recessionary periods, changes in fiscal and monetary policies and exchange rates. All these factors affect the operations and market structures of the companies. If interest rates are increased, the consumer spending is decreased. Internet retailing has been very popular in recent years and HMV can benefit from growth in internet retail business. HMV retail stores, where customers have to travel to the outlet, browse through different products and catalogues requires a lot of time and increases travel costs. Customers nowadays commonly prefer to shop through online stores. ITunes being HMV's most prominent competitor in the industry runs online stores which save a lot of investment costs as well, ([A] http://www.ukessays.com/).

Social

Social factors such as psychological and demographic changes shape the way in which organisations develop strategies. For instance, increase in population of the younger generation who are more involved in entertainment products will mould companies to target their audiences using different marketing strategies. Psychological change refers to change that identifies the need for quicker response. Customer expects the products to be available in desired colours to select from. HMV must make sure that it delivers what it promises and satisfies it customers with innovative and reliable products.

Technological

Technological factors in the dynamic environment have enabled firms to be more responsive and innovative. Due to globalization and increase in the pace at which technological advancements are achieved, firms like HMV must bring innovative and technologically sophisticated products. Technology has enabled people to view and share music and videos through the internet without having to pay for. This has increased risk in the music ...