Market study of the HMV Group

Thèmes abordés

HMV group, commercialisation, livre, DVD, son, CD, jeux vidéos, ordinateur, Boulanger, Darty, Amazon, Priceminister

Résumé du document

As HMV announced its considerable profit loss last January, the leading entertainment retailer's company strategy has immediately been called into question. With its profit decline of 90% in Ireland in 2010 as well as its intention to close over 40 stores in Britain and Ireland , the company must reconsider its current strategy in order to maintain its place on the pedestal of leading entertainment retailers. This report aims to analyze the current company strategy, in particular its current participation in online markets. The analysis will include the scope of online operations, the strengths and weaknesses of their current online business model as well as the analysis of the possible paths the company may choose to take in the future. Despite its recent misfortunes, this entertainment company is particularly interesting to examine as it is currently dramatically changing its business model to diversify away from retail towards a "cross-selling" online strategy (Harris et al, 2009).

The HMV group is a UK entertainment retail chain specializing in audio, books, DVDs, Blueray CDs, video games, computer software and hardware as well as its newly developed fashion sector. Established in 1921 in the UK, the group consists of HMV, which specializes in various types of entertainment and the bookseller Waterstone's . HMV and Waterstone's are run as two separate retail brand entities, each concentrating on its specific product ranges. However, only HMV (entertainment) will be examined for the purpose of this report.

Extraits

[...] As a result, such content drives traffic to the website and may also encourage customers to make a purchase in the process. According to Chen and Cheng (2009), the benefits” of using a website influence consumer attitudes about the website, which in turn affects how the consumer “behaves” on the website (i.e. whether the customer makes a purchase in the case of HMV). Therefore if the consumer does not receive the benefit” of user-generated reviews as in the case of HMV, this will decrease his user satisfaction and create an unfavourable attitude towards the site, which will consequently divert him away from purchasing a HMV product. [...]

[...] Concerning B2C, the company has quite a broad and diverse target market due to their diverse product range. The company has always given preference to a business model which concentrates on selling physical products to the final consumer rather than online selling. However, this model is rapidly changing in favour of an online “combination” model which aims to integrate the different activities/products in order to add value to the final customer[12] and will be discussed in due course. The company has also recently begun to engage in B2B activity, notably in ticket sales, live venues and artist management. [...]

[...] HMV must simplify the purchase process in order to incite more customers to stay on the site. In my opinion the website is also overloaded with content which renders it very difficult to find information the customer is looking for. And as customers always navigate a website with some goal in mind, they will leave the site if they do not succeed in finding relevant, straightforward and up-to-date content (McGovern and Norton, 2002), as in the case of the HMV site. [...]

[...] The Digital” platform was installed in HMV Canada in November 2009 and by the end of 2010, all four HMV domains mentioned above were equipped with the online downloading system, due to both the increasing competition from iTunes, a leader of online music downloads and to cope with the increasing consumer demand for music downloading. Moreover, as mobile commerce is growing, Digital” has created a series of apps for Android and Blackberry which allow users to purchase HMV offerings from their mobile. The company has also developed a series of apps for non-Smartphone users. An iPhone app was also created in order to target the increasing number of iPhone users[5]. [...]

[...] This report aims to analyse the company's current company strategy, in particular its current participation in online markets. The analysis will include the scope of online operations, the strengths and weaknesses of their current online business model as well as the analysis of the possible paths the company may choose to take in the future. Despite its recent misfortunes, this entertainment company is particularly interesting to examine as it is currently dramatically changing its business model to diversify away from retail towards a “cross-selling” online strategy (Harris et al, 2009). [...]