Corporate Strategy Essay Example | Topics and Well Written Essays - 3000 words - 2

Corporate Strategy - Essay Example It is a fully owned subsidiary of Sony Corporation of America. The music company operates globally and includes a roster inclusive of a broad range of artists, both international superstars and local artists (Sony Music Entertainment, 2011). Data revealed from the financial results of the company during the year 2010 suggest that there was a decrease in the operating revenue and sales figures by 6.7% in comparison to its performance of the previous year (y-o-y). The sales figure was hit during the year 2010 due to the decrease in the sale of devices and consumer products. However, it is also evident that the decrease in the sale of this segment was moderately offset by that of the segment of financial services of the company. Due to depreciation in the value of Yen against both US dollar and Euro, the sale of the Sony in Japan suffered the crisis. However, there was an increment in the operating profit of the company by 259.6 billion Yen (Sony News and Information, 2010). Sony Music has however effectively managed to come out of the crisis and during recent times, the company has ultimately surpassed Universal Music Group through market share in the overall US market. The market share of Sony Music in the overall album segment including albums equivalent to tracks stood at 29.35% as of the end of the week on April 24, 2011. According to Nielson SoundScan, this percentage figure is only a few points above that of the Universal Music Group that stood at 29.26% during the same period (Christman, 2011). The neck-to-neck percentage figure of the market share suggests that there prevails cutthroat competition in the music industry. Apart from the Universal Music Group, the biggest competitors of the Sony Music are EMI Group Limited and Warner Music Group Corp. In this industry, demand of the products or the music publications is driven by spending of the consumers. The companies’ profitability is dependent on promotion of new talent of music and also discovery of those talents. The companies in this industry operate through generation of revenue from its assets whose base is created by publications and recordings. Large companies in this industry such as that of Sony Music hold the advantage of both distribution and marketing. The smaller companies dwelling in this industry are generally referred to as ‘indies’ and these companies compete by concentrating on local artists and varieties of music (Christman, 2011). 2. Internal Resources and Culture Analysis 2.1 Financial Resources The music segment of Sony that comprises of operations of the US based Sony Music Entertainment (SME) and Sony Music Entertainment (Japan) Inc. (SMEJ) generated sales of 522.6 billion yen during the year 2010 that rose by 35% from the previous year’s performance. Simultaneously, the operating income also increased by 31.1% and rose to 36.5 billion yen from 27.8 billion yen during the past year of 2009. The increment figure of sales in the musi c segment has only been due to the fact that although the segment had begun its operation during the month of October 2008, the sales figure has been considered for the full year on a consolidated basis. Had the sales figure been considered otherwise, there would have been a decrement in sales by 5%. On the other hand, considering the operating inc