An industry analysis of HMV company in the UK Essay

An industry analysis of HMV company in the UK - Essay Example Consumers have various products to choose from, either purchasing in blu-ray disc formats or on-line music downloads in MP3. Challenges of piracy and illegal downloading in the market have been playing a great role in the physical sale of music. Plans for dealing with piracy and illegal downloads would be to increase growth of live entertainment and ticketing, as stated on the HMV group website. As stated on Complete Music Update (2012) home page, HMV competitively shared the market for music entertainment with Amazon, with HMV having 19.9% and Amazon, 19.2%, though HMV’s percentage growth of its market share has faced considerable challenges from play.com, iTunes and supermarkets. Like any other company going through the various stages of growth which are market introduction, growth, maturity and saturation and decline, HMV has gone through different growth stages since its opening in 1921, which marked its market introduction stage. The company progressively grew, expanding its markets and consequently increasing sales, human resources and advertising, competition being minimal at the time (Reynolds et al., 2004). In the 1960s, HMV experienced tremendous growth. It expanded and doubled in size so that by 1976, HMV was the leading retailer in the UK, specializing in music and other entertainment products. Despite the completion which was slowly arising in the market at the time from the likes of Virgin Megastores and Our Price, HMV was more popular and somewhat unbeatable compared to its competitors. HMV purchased Waterstone’s book store chains in 1998 and joined it with Dillons. HMV saw its floatation in the London Stock Exchange in 2002, which was a significant indication of its maturity. However, it started trading poorly from 2003. Other competitors in the market arose, more so online music stores which competed with HMV for the same market share and saw its decline in the market share. This eventually led to low sales, low profits and closur e of some HMV outlets. HMV still bought some book store chains and music retailers, for example, Ottakar’s and Zawi. HMV’s performance in the market deteriorated progressively, some of its shares were up for sale so as to purchase other outlets, but its sales kept going down up to the selling of most of its outlets in London, including Waterstone’s chains. This marked HMV’s decline stage due to high costs of running, low sales and minimal profit margins. See the appended map of HMV Product Life Cycle. The main competitors of HMV, who offer a similar line of products, are Amazon.com, iTunes, supermarkets and Play.com, which have online music stores besides other online retail products. Amazon has a wide range of music and digital products and has been a stiff competitor of HMV, competing for the same market share but more so doing it online. iTunes by Apple Inc. also provides products along the same lines. HMV’s move to digitizing their music and vi deo clips has helped to catch up with the market trends and technology as its competitors in the market. Play.com deals in online retail of similar products as HMV and Amazon.com. With the tremendous innovation in technology and online trading, HMV’s competitors’ venture into online trading put them ahead of HMV which is embracing online trading. Supermarkets also offer competitive products though HMV provides a considerable wider product range than supermarkets, which would often