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E-Business Globalization on Columbia Records Business Strategy

Essay by review  •  December 1, 2010  •  Research Paper  •  5,149 Words (21 Pages)  •  2,400 Views

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The computer and the Internet are becoming of essence to achieve successful business with the unremitting technological advancements. One of the fallacies of people is that you can only do e-business through the Internet. Conversely, that is just a part of this seemingly clear-cut novelty. E- Business is the complex fusion of business processes, enterprise applications, and organizational structure necessary to create a high-performance business model. E-business is needed in today's market just to contend with the growing battle towards profitability. Companies can both buy and sell products on line. Similar business strategies should be practiced even though transactions are done online. Accordingly, e-Business is any business conducted through electronic form. The business clearly still desires to make a profit and the fundamental business skills are still being adhered to. Several businesses have been successful venturing into e-business but on the other hand, quite a good number have also fallen into the pits of mistaken hopes on technological systems. A good example of this is amazon.com. Amazon's business was selling books on the web. They started in 1995 and by the start of the new millennium they still were not making money. The reason for the lack of profits was the unplanned marketing and infrastructure costs. In order to start making some profit they had to start selling other items such as videos, health and beauty, games etc. Many companies have had to change their strategy in order to make profit, which is part of the revolution of e-business. Take Columbia Records as an example. The global music industry plummeted in profit rate from 2001 and had further regression in successive years (Music Week 11/01/03, p.1). Internet and physical piracy have been cited as the underlying causes for the drop in music sales.

The reason behind the widespread popularity of software piracy lies in the cost. Why pay $80 dollars for a piece of software, when you could get it for the price of a blank CD. Software piracy has boomed over recent years, which can most likely be attributed to the drop in price of CD Writers, which allow the user to copy from one CD to another in less than an hour. During the beginnings of software piracy, the floppy disc was the only feasible method of tangible transportation, and because of the size of most software, many floppy discs were required for storage. This problem has also been eliminated by the CD-writer and CD, which can copy and store approximately 700 megabytes of information, as apposed to 1.44 megabytes.

The initial problem lies in the producers of the piece of software, and to make up for the cost of production, they must sell thousands of copies. However, software piracy has caused the widespread loss of sales, which in turn reduces the amount of money received by the makers of the program. Ultimately, this result in the producers being forced to increase the price of their product, which again, encourages the use of cheap pirated software. This can be described as a piracy cycle.

Columbia Records must indeed keep abreast with the long-term changes both economic and technological.

As previously mentioned, businesses can either buy or sell on line. The buy side is the purchasing end of the supply chain, which consists of suppliers and the processes that connect with them. The sell side is the selling end of the supply chain, which consists of customers and the processes that connect with them. These two processes are established in what is called business-to-business e-business environment. With both of these sides privacy and payment are issues, which come in to effect. As a customer and a retailer you want to know that your money is given to the right people. The corporate strategy design of Columbia Records is the infiltration of foremost geographical markets. Music is a global industry. Consequently, the corporate strategy of Columbia Records will have to be a technologically driven omnipresence in all the major geographical markets that is reinforced by their business and functional strategies. An e-business solution for an enterprise is the incorporation of all aspects of the business operation into an electronic format. Many well-established businesses have been selling on-line for years. Columbia Records has been selling "music" directly and indirectly (through their artists' website) to end-users for years. When Columbia Records has incorporated an e-business solution, the business will experience a lower operation cost while at the same time increasing its profit. The e-business solution will allow the company to eliminate unnecessary paperwork. All paperwork and data can be transformed into an electronic format. Thus, it will eliminate valuable shelf space and data can be searched and accessed in a matter of seconds. E-business will also automate the sales process. Thus, efficiency will be significantly improved. With an e-business solution, the business will be open 24 hours a day, 7 days a week. People from anywhere in the world with Internet access will be able to visit the site at any time. They will not be restricted to the normal business operating hours. A brick plus mortar business is normally limited to serving the customers in its local geographical location. With an e-commerce solution, that business will not be limited a geographical restriction, rather it opens itself to the global on-line market. Essentially, the business' market exposure will be greatly increased.

The initial reaction to the Internet from the music industry was that it was of little importance. The industry had been selling cd's very well and through expanding markets through the cd format the internet was not considered to be very important in the future of music. From the point of musical artists little was suggested from their part as to the future of how they would present and sell there music. The first cases of artists using the Internet can be seen back in 1996 when U2 displayed rough images from the studio of the production of their new album. This was presumably the only need to adopt the Internet from the industry's point of view at this time. The need to adopt and change to incorporate the Internet was not noted within the industry for some time.

Through the technical change from long playing records to cassette to cd there was a new dawn and a new need for change in the music industry. The Internet is destined to be the music businesses' greatest markets, estimated to reach over 25% of sales by 2006. This led to some large structural changes in how the industry runs and what the industry plans to do with the new technology. With traditional brick and mortar retailers and distributors, which open a new store or warehouse, order and display the available cd's in a shop facing new competition

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