Assignment Questions
1. What are the dominant strategy-shaping economic characteristics of the digital music player industry?
2. What is competition like in the digital music player industry? Which of the five competitive forces is the strongest? Which is the weakest? Do a five-forces analysis to support your answers.
As MP3 manufactures continue to fight to maintain or gain in market share they are faced with strong competition. The rivalry among the competing digital music player manufacturers is the strongest competitive force that they are faced with. Industry leaders have the ability to be successful impart by satisfy their current customer base and by attracting new ones that are content with rival brands. Consumers are willing to pay premium prices for digital music players based on the perceived benefit of their purchase, opposed to purchasing from the lowest cost provider. There are only six legitimate companies that manufacture MP3 players that remain part of the competition at the end of 2006. There are well over 100 companies that produce MP3 players but their share of the market only estimates to be less than 6 percent. The remaining top six digital music player shareholders dominate the market with company market shares ranging from 65 to 80 percent.
3. What forces is driving change in the digital music player industry? Are the changes acting to make the industry environment more or less attractive from the standpoint of competitive intensity and long-term profitability?
4. What does your strategic group map of the competitors in digital music players look like? Are the makers of flash-based players poorly positioned relative to the makers of hard-drive players?
5. What are the key success factors in the digital music play ...