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Words 5891

Pages 24

Yerheem Cha● Beth Jones ●Seetal Patel ●Erik Pickard ●Mike White

University of Illinois Urbana-Champaign

Institute of Labor and Industrial Relations

September 2005

♦Executive Summary♦

In an attempt to reap the potential profits of the emerging online music industry, Sonic Records has established esonic, a subsidiary exclusively designed to serve as an online music store. In the wake of mounting anti-piracy campaigns concerning music downloads, increased demand for digital technologies that offer greater access and mobility, and an overall increase in consumer demand for access to digital media, esonic has a more than favorable forecast of success in entering the digital music market. Despite fierce competition from established online music providers such as Apple’s iTunes and Napster, esonic will find more than enough room for growth. Through strategic alliances with software and hardware technology firms, esonic can further magnify its reach and appeal to become a digital music industry giant. A unique opportunity presents itself to esonic: it can learn from and avoid the mistakes of digital music industry pioneers, whilst simultaneously mimicking elements of successful strategies at the rapid pace that an online music store with relatively little operating costs can provide. Designing a competitive business strategy remains imperative, however, and the success of esonic will be dependent on its ability to adequately recognize opportunities for growth. Growth in global spending and a naturally expanding digital distribution market invites esonic to capitalize on the digital music industries in foreign markets. Studies have shown the most significant growth in that sector to occur in Europe and Asia-Pacific. While the US is the largest market, its growth rate appears to be plateauing....

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