By Jenna MorrisManagement Consultant

• This presentation aims to:

1. Investigate2. Discuss3. Summarise

Real Groovy’s current situation

Despite Real Groovy’s enormous trade in:

1. 2. 3.

The company has experienced…

A sales drop.

Factors such as…

DOWNLOADING MUSIC;

Legally

And illegally

Heavy Competition;

And a Declining economy;

All contributed to Real Groovy’s sales drop.

Let us

at these factors

a little more closely…

FACTOR 1: Digital Music Downloads

2001$200 Million

2006$147 Million

Total music sales fell from,

to

… CD’s have become a ‘clumsy’ way to package songs in the digital age.

ALSO:

e.g.Option 1:

1 C.D = 20 Songs 1 x 80 gb iPod = 20,000 Songs

Main Idea:

The physical increasingly cannot compete with the digital.

FACTOR 2: Economy

After its parent company collapsedin late 2007…

‘Sounds’ (the nation’s largest music retailer at the time) shut its doors…

…owing creditors almost $20 million.

‘Sounds’ blamed a weak

retail market and illegal

downloading from the

internet after its recent

closure.

FACTOR 3: Heavy Competition

JB HI-FI has increased profits by 50% during 2004 to 2006…

… a time where all the major music labels admitted

they had ‘taken a hit’ in their

financial reports.

It is not all bad news!

Real Groovy set themselves apart through:

“nooks, crannies and systems management”, and competing on range, not on price.

LOOKING AHEAD…

On an international scale, the Virgin megastore spokesman

believes that:

“If music was available only as downloadable material, it would be the beginning of the end for the music industry…”

“… after all, The Darkness aren’t likely to be appearing in-store to sign their latest downloaded album anytime soon.”

Real Groovy needs to implement an achievable and clear strategy of how the company is going to respond to its current situation.

Recommendations for Real Groovy

Using the Boston Consulting Group Tool, (The BCG Matrix)sort out what is working in the business and what is not working .

Implement a Growth Strategy. This involves organisational expansion.

Continue to set themselves apart from other companies in the music industry.