The aim of this report is to provide recommendations for how Apple iTunes can enjoy a continued strong market position, in light of the recent moves by Nokia to enter the digital music industry.

Essay by richer1987University, Bachelor'sA-, December 2008

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How to make iTunes to have a continuous strong market position

Executive Summary

The aim of this report is to provide recommendations for how Apple iTunes can enjoy a continued strong market position, in light of the recent moves by Nokia to enter the digital music industry. While this report focuses on the digital music industry, it is imperative to understand the connection with the mobile phone industry, as product integration is the key to success, which is what Nokia is attempting to achieve.

In this report we define the market, including size, growth and recent developments. We study the external environment by use of the STEEPLE model, define key success factors and analyse industry forces using the Porters Five Forces Model. The market is studied by use of a competitor analysis. We provide observations for Nokia's challenges in their quest to enter the digital music industry. In regard to Apple iTunes, we employ a SWOT analysis, evaluate sustainable competitive advantage and provide recommendations for Apple iTunes' response to Nokia's recent moves.

These recommendations are provided in the form of a TOWS matrix, evaluation of a prescriptive and emergent approach and finally whether Apple iTunes should attack or defend.

The analysis showed that the key success factors for the music downloading industry are brand, product integration, supplier agreements and availability of selection.

The macro analysis highlights that the market is mainly influenced by the availability of Internet connections and the issue of piracy. The Porters Five Forces model showed a clear picture of the suppliers currently having the bargaining power. Therefore to survive Apple has to pay high attention to the major record companies. The competitor analysis showed that the industry is comprised of a number of different types of competitors and new players in the market...