Strategic Analysis
E-Sonic's Industry Analysis
The e-sonic company is an affiliate of Sonic records. Being an affiliate, e-sonic has grown to become one of the responsible companies that have created an online store that has become a large online music seller. E-Sonic's industry identity forms its basis in the North American Classification Systems (NAICS). The industry identification has two NAICS codes, namely 512220 and 516110 (Moore & Domingo, 2014). According to the US Census Bureau, 516110 is categorized as Publishing and Broadcasting in the internet. It constitutes of developments which are focused on broadcasting and publishing content exclusively on the internet (“U.S. Bureau of Labor Statistics”). They have no provision for the ancient forms of content in the establishments of the contents they broadcast or publish (Moore & Domingo, 2014). The sell audio, video and textual content (Moore & Domingo, 2014). The other recognized NAICS code is 512220 that involves Integrated Record Production/Distribution that constitutes of establishments responsible for releasing, distributing, and promoting sound recordings (Moore & Domingo, 2014). They make arrangements for the manufacture or personally do the manufacture of audio cassettes and compact discs recordings as well as the distribution of the products to retailers, wholesalers, or to the customers.
Analysis of the External Business Environment
Industry Profile
E-sonic records began generating revenue after five years of age, with financial proceeds amounting to $15 billion. Their revenues have gone down by 30% in recent years due to the changing face of music consumption and technology ( Barcelona & Martocchio, 2015) . The main company Sonic records used to lead in production and distribution of content with the sales as mentioned earlier. The government has put a lot of regulations to control the pirating of music and buyer preferences as well as CD burning, but the E-Sonic has continued to struggle ( Barcelona & Martocchio, 2015) . Sonic records needed to develop more revolutionary approaches to music delivery make rapid adjustments. In response to the shift in marketing, they decided to develop an affiliate named E-Sonic.
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Competition
Being Sonic Records’ affiliate company, its evident that E-Sonic established a business name that all customers of Sonic Records had familiarized with. Despite them being familiar with it, e-sonic cannot avoid marketing and must develop distinguishing attributes that make them unique and different from competing for music stores such as AOL Music, eMusic, Napster, Amazon MP3, among others ( Barcelona & Martocchio, 2015) . For e-sonic to compete effectively in the market, they need to establish they needed to develop an independent brand name and an online platform different from its competitor's online music stores. Still, before achieving this mission, they will need to attract customers and ensure customer loyalty to their brand so that they can prevent piracy.
Foreign Demand
The interment has led to the increased globalization of companies. The foreign demand statistics, as per the International Federation of the Phonographic Industry, proved the globalization of music e-stores and their foreign demand. With the decline of CD sales, digital platforms have continued to report increased revenues ( Pfanner, 2013) . Digital sales constitute over half of the revenue in countries with digitalized countries such as the United States, and India. There is also an increased demand for the knowledge and skills needed by executives of these companies. However, global data insights indicate that the rise in foreign demand of the music industry in emerging markets such as China, there is a big problem in digital servicing and privacy ( Pfanner, 2013) .
Long Term Industry Prospects
The future of digital music sales looks more positive. As mobile music devices improve, digital sales of music have a positive future, and these devices are projected to have more prevalence than CD players ( Moore & Domingo, 2014) . On the other hand, the rise of digital music downloads come in as a risk to music pirating due to their many uncontrollable loopholes. According to Steve Meyer, formerly an executive at Capitol and MCA records says the internet wave is unstoppable and that labels should accept the situation, and people will continue to download more ( Moore & Domingo, 2014) . Music recording labels and artists should focus more on putting their music on digital platforms such as iTunes because they guarantee a substantial revenue ( Moore & Domingo, 2014) . Music downloads are expected in the future to include not only music subscription services but also pay per downloads. Some companies have begun such strategies, and artists are gaining more.
Labor market Assessments
Labor market assessments are essential in describing the specific market attributes, the supply of human resources in the market, and the trends in future that will influence the presence of skilled personnel for the company. E-sonic employs different kinds of people, such as customer service representatives whose roles include order processing, handling customer complaints, and ensure the company is well equipped with information concerning its products and services. The hourly wage in 2020 has grown up by 13% from $14.70 in May 2012. Employees working in these companies are required to possess analytical and computer skills ( “U.S. Bureau of Labor Statistics”) . E-Sonic needs to comprehend the training needed by employees who meet their threshold to stay alert with the online trends of the industry. They should also predict future technologies and also the forecast on the future costs of training employees.
Functional Capabilities
E-Sonic should ensure it has set strategies to conduct assessments on its functional capabilities. They are essential because they help the company to establish comprehensive operational strategies in departments such as engineering, human resource, marketing, management information systems, and research and development ( Barcelona & Martocchio, 2015) . The industry in which E-Sonic operates has stiff competition, and the company needs to establish and maintain proper functional operations, which increase its competitive advantage.
Human Resource Capabilities
These are the abilities of the company to maintain a qualified workforce that meets its needs. To establish a proper remuneration program that matches the organization's human resources, they should conduct an assessment for human resource capabilities ( Barcelona & Martocchio, 2015) . It should coincide with the retention initiatives of the company. The company should continuously check the critical competencies of the employees, thus making sure there is competitiveness in the industry.
References
Barcelona, D., & Martocchio, J. (2015). Building strategic compensation systems project. Upper Saddle River, NJ: Prentice Hall
Moore, F., & Domingo, P. (2014). IFPI Digital Music Report 2014. Retrieved from http://www.ifpi.org/
Pfanner, E. (2013, February 26). Music Industry Sales Rise, and Digital Revenue Gets the Credit. Retrieved from http://www.nytimes.com/2013/02/27/technology/music-industry-records-first-revenue-increase-since-1999.html
“ U.S. Bureau of Labor Statistics.” www.bls.gov. U.S. Bureau of Labor Statistics, n.d. Web
