HMV's Micro Environment

Essay by cloggieUniversity, Master'sA-, December 2003

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Assignment Part A, Question 1

Describe the micro-environment of an organisation of which you are a customer and explain how changes brought about by either its competitors or its suppliers have affected its approach to marketing.

The last five years have brought on massive changes for the music industry. Faced with not only the traditional competition of fellow labels and retailers, but also with competition through new technologies, they've had to play a completely new game.

So how would one of the oldest music trademarks, HMV, take on this challenge?


HMV recognised the need to research their Micro-environment in order to survive. What would looking at it's customers, competitors, suppliers, intermediaries and stakeholders reveal about the way forward?

New technology turned out to be a fierce new competitor. With the introduction of the recordable CD, it was now possible for anyone to copy any CD available.

Also, the internet became widely available and music lovers started to download and exchange music through websites such as Napster and Kazaa. Another new competitor came in the form of superstores such as Asda and Tesco, who started to sell even the latest releases at bottom prices.

So what did HMV's customers think of all this? Through marketing research, HMV found out that their current customers were attracted by the new possibilities of downloading songs and assembling personalised CD's. And although customers were tempted by the pricing by other retailers, HMV discovered something that none of the mentioned competitors could offer: the retail experience. Buying music, DVD's or games is often a social and shared experience.

HMV's suppliers were faced with the same problems as HMV itself. They decided the best way to go about it was to choose for the long term and file lawsuits against...