Weaknesseso No clear strategic vision: CCM needs a long term vision which includes all areas of the business, from marketing and management to distribution and human resources. At the moment the company faces a dilemma of further strategic development, which will be focused on either enhancing or developing the recording company or more active promotion and distribution of the products through the possibilities of other companies (the company is currently regarded by its management as potential object of acquisition or investment)o Competitive disadvantages: CCM are not able to enter the retail market due to its current level of sales. Competitors such as major labels have advantage because they have major market power and influence. Such firms can specify when their music should be played on radio and negotiate large contracts with distributors and retail outlets, hence giving themselves broader appeal.o Limited channels of distribution: at present moment the company heavily relies on such distribution sources as direct sales, which include sales at the gig, shopping mall distribution and sales in the back end (800 number order, website order processing and mail orders). These channels are major sources of profit for the company. Nevertheless, to expand its consumer base, the company needs to acquire formal distribution channels, such as sales through traditional music distribution networks and others.o CCM is short in financial resources to pursue new opportunities. Profits are thin, meaning new opportunities may be unobtainable and long term improvements may not be afforded due to initial costs. To conclude a contract with major labels, which would provide the company with the access to traditional product distribution, the firm needs to sale at least 15,000 copies of its products per year. From the other hand, high sales numbers are impossible to obtain without good traditional distribution channels. o CCM is losing ground to larger firms because of limited exposure. CCM at present does not reach global or national audience like independents and major labels. CCM needs to broaden its reach and widen its customer base.
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Opportunitieso Serving additional customer groups by expanding co-operation with other artists and enlarging the Acoustictherapy and other product lines with new marketing strategies.o Internet through expanding e-commerce and releasing MP3s.o Expanding sales nation wide.o Acquiring channels of traditional distribution to reach wider customer base exposureo Developing new technologies to cope with the driving forces of the industry.o Releasing compilations with other artists has proven popular. One strategy could be to assembly the songs (such as Accoustictherapy) at the studio, and sell the completed disks at a discounted rate back to the performing artists in their hometowns. This method would cover the costs up front and give the players a financial incentive to push the product.o Pushing sales into non-traditional areas such as weddings, shopping center music etc.
Threatso High number of new entrants and growth of other smaller labels due to the digital revolution. In addition, major labels or independent labels could decide to enter into CCM’s domestic markets and try to drive the smaller labels out of the market.o Lose sales to substitute products like mp3s or internet downloads o Vulnerability to industry’s driving forces because of CCM’s weak position in its industry, taking into consideration the fact that the company occupies microlabel segment of the market and is profitable primarily due to the low costs of digital recording.
