The product mix of Universal Music India

Abstraction

The Extended Essay written is on the music company – Universal Music India. Universal India trades with the sale of Cadmium ‘s in the Indian part, both international and domestic creative persons. Today there are n’t a batch of Cadmium gross revenues due to easy handiness of the same vocals for free. So in order to halt this, Universal India is be aftering to administer these same vocals via cyberspace and pre loaded vocals on cellular devices. Therefore with the easy handiness of these vocals and through more convenient methods of distribution the house plans to control buccaneering and maximize its net incomes. This led to formation of following research inquiry

Should Universal Music India Private Ltd modify its merchandise mix and introduce digital signifier in order to increase its gross revenues and net income border?

An interview[ 1 ]was conducted with Mr. Rajat Kakar, Managing Director of Universal Music India on grounds why the company is be aftering to switch from Cadmium to digital gross revenues along with other strategic determinations. Besides how this determination was traveling to profit the house. A study[ 2 ]was conducted of the current and possible clients to calculate out the purchasing form with regard to music.

The information for bing competition was besides examined looking at assorted factors such as Market portion, Revenue generated, Products etc. in order to do the research more meaningful by looking at the external factors.

Since the primary focal point was the feasibleness of the determination, I assessed it utilizing the undermentioned tools

BCG Matrix

Product Life Cycle

Decision Tree

Lewin ‘s Force Field

Porters Five Forces

Competition Matrix

Investing Appraisal

After complete analysis of the study and the tools, there was a definite consequence

The better option for the house is to present digital signifier as a merchandise of their merchandise mix. It will bring forth greater benefits and profitableness with regard to qualitative factors that have led to this determination.

The restriction faced by us is that the information provided to us may merely be based on estimations therefore the information collected is merely partly right. Word Count: 289 words

Contentss

Introduction

Company Background

Universal Music India Pvt. Ltd. ( UMIPL ) is a 100 % subordinate of the US based Universal Music Group. UMIPL has an highly rich Indian catalogue consisting vocals from Authoritative Hindi and Regional Films, IndiPop, Bhangra, Ghazals and Devotional. It ‘s enviable catalogue includes artistes such as Asha Bhosle, Anup Jalota, Bombay Vikings, Jagjit Singh, JoSh, Malkit Singh, Pankaj Udhas, Panjabi MC, Raghav, Bohemia, Mohit Chouhan to call a few. UMIPL `film ‘ catalogue ( the 2nd largest in India ) spans music from blockbusters such as Sholay, Qurbani, Amar Akbar Anthony, Chori Chori Chupke Chupke, Devdas and Munnabhai MBBS amongst the legion gems which symbolize the musical journey from the 70 ‘s to day of the month. On the International music forepart, UMIPL are the clear market leaders with artistes such as ABBA, Akon, Bon Jovi, Bryan Adams, The Black Eyed Peas, Enrique Iglesias, Eminem, Lady Gaga, Taylor Swift, Justin Bieber amongst host of others, popular music icons and family names in India.

There is alteration in the purchasing form, due to the increasing buccaneering and the easy handiness of vocals via cyberspace. Consumer prefer to download the music for free instead than looking for CD ‘s which are sold via a physical distribution channel, which is shriveling as a consequence of cut downing gross revenues. Besides the cost is high as compared to downloading. The consumers use pre-loaded vocals on their cellular devices, which is an chance in order to bring forth gross from company melodies and ringtones. This affects the music industry to a great extent and has affected the degree of net incomes.

The altering consumer form and new chances has made it truly of import to alter the merchandise mix as per the client use form and thereby increasing net income.

This lead to the undermentioned research inquiry

Should Universal Music India Private Ltd modify its merchandise mix and introduce digital signifier in order to increase its gross revenues and net income border?

Procedure and Methodology

The research consists of both primary and secondary method of informations aggregation.

The primary research involves a elaborate interview with Mr. Rajat Kakar the Managing Director of Universal Music India.

The aim of the interview is to obtain elaborate information sing the state of affairs. This aggregation shall cover with the current position of the house look intoing its internal and external factors and the current concern program.

Analyze any competition that might be faced by the house. Along with fiscal paperss provided to us we can analyse the state of affairs and make up one’s mind which option to travel for.

The secondary research involves

Research conducted by Universal Music on the mark markets and the type of people presently purchasing the music.

The usage of online web sites to happen the needed information needed

Fiscal studies provided by the company to hold an overall position of the place of the company

Detailss about the competition with regard to respective merchandise mix in order to come up with sensible recommendation.

All this information will help in the procedure of making a decision as to which option to take thereby deducing the maximal benefit..

SWOT Analysis

The SWOT analysis for the company switching into digital gross revenues has been provided by the house

Table 3 – Swot Analysis

Strengths

Failings

There is no stock heap up involved

It is much cheaper to fabricate

No packaging involved

Single paths can be sold

No restraints ( in CD ‘s 500 units and supra hold to be sold per creative person or the company in penalized )

No distribution cost

No faulty stock

Can be sold straight to consumer

No selling of imagination

No packaging invention

Less gross generated

Will non make people who are non connected to internet and mobile

System failure will take to loss of all informations

Controling buccaneering is even more hard

Opportunities

Menaces

As the engineering grows and becomes more user friendly the digital gross revenues will besides turn

As the nomadic market additions ( i.e figure of people utilizing nomadic phones additions ) the gross revenues gross will increase

As the cyberspace market increases the gross revenues will increase

Social media and societal networking sites make music really relevant

Music is individuality of the young person across the universe

Piracy through equal to peer file sharing

Larceny is really easy

No competitory advantage among companies

Leak of album before existent release

Digital vocals holding no physical signifier is expected by the consumer to be free

Survey Findingss

The chief consequences are represents in charts below

BCG Matrix

The BCG matrix is used to find what precedences should be given to the merchandise portfolio of a concern unit.

From the diagram above we can see

Stars: they have high market growing and high market portion. They are already good new in the market and bring forth big amounts of money for the house. In this instance it is the “ concert and music DVD ‘s ” . They are the high merchandising merchandises of the house and bring forth a batch of gross. A batch of money is besides invested in them

Question Marks: They have a high market growing but a low market portion. They are needed to be nurtured and turned into stars. A batch of money is invested in them and if non marketed decently they can turn into Canis familiariss. In this instance it is the “ callertunes ” which are new in the market and have a really high growing potency as the gross they are bring forthing now itself is in great Numberss.

Cash Cattles: They have a low market growing and a high market portion. They are the old merchandises of the house and continuously generate net incomes for the house. Not a batch of money demands to be invested in them as they are already good established merchandises. The gross generated from them is used to construct on the inquiry Markss or the stars. In the houses instance it is the “ music Cadmium ‘s ” which generate most of the income. This money earned is used to develop new undertakings.

Dogs: They have low market growing and a low market portion. They hinder the advancement of a company and do non bring forth any net incomes for the house. They should be disposed and non maintain. “ Cassettes ” are the Canis familiaris of the house. It does n’t bring forth any income and demands to be disposed every bit speedy as it can

Product Life Cycle

Product Life Cycle of Music Cadmium ‘s

The merchandise life rhythm of the music Cadmium ‘s has reached its adulthood phase. If no extension is reached so the merchandise may make its diminution phase and it will non bring forth any net incomes for the house. Therefore in order to keep their net incomes they must follow assorted extension schemes

The illustrations of schemes that can be adopted by the house are

Examples of extension schemes are:

Monetary value Decreases: By cut downing the monetary value of the merchandises more people may purchase the Cadmium ‘s and which in bend can ensue in the house deriving net incomes.

Promotion: New publicity techniques will assist in retaining the current involvements of the clients.

New Markets: Investing in new markets besides can assist the house to retain its net incomes

Repackaging/Redesigning: Making the packaging or the album art more interesting can be a factor which helps the client to take the determination whether to purchase the Cadmium or non.

Competition Study

The major completion face by Universal Music India is

T-Series

Saregama

Sony Music

These are the major menaces to Universal Music India

It is clearly apparent from the graph above that T-Series has the highest market portion in the music industry. T-Series controls 35 % of the full market. Relatively Cosmopolitan Music has merely 9 % of the full market[ 3 ].

The ground for this is that most of the Indian creative persons and New Bollywood Music are controlled by them. This music is chiefly bought by the multitudes.

But if the gross revenues are divided separately, in International music gross revenues and company melodies Universal have the highest market portion. This is because most of the International creative persons are controlled by them.

Therefore we can see the competition faced by Universal Music and the alterations that the demand to do in order to command the market.

Investing Appraisal

Cost and gross revenues estimated by the house

Investing Option

Continue with CD ‘s

Expand into digital merchandise

Amount Invested ( Rs )

60000000

90000000

Cash Outflow ( runing costs/year in Rs )

40000000

24000000

Gross saless per twelvemonth ( Rs )

55000000

70000000

Cash Inflow = Gross saless – Cash outflow

Option A

Cash Inflow = 55000000 – 40000000

= Rs. 15000000

Option B

Cash Inflow = 70000000 – 24000000

= Rs. 46000000

Payback Period

With this method the house can calculate out the sum of clip after which its hard currency influx from the option will be to its hard currency escape

Continue with CD ‘s

Year

Cash Flow ( 00000 ‘s )

Net Cash Flow ( 00000 ‘s )

0

( 600 )

1

150

( 450 )

2

150

( 300 )

3

150

( 150 )

4

150

0

5

150

150

6

150

300

7

150

450

8

150

600

9

150

750

10

150

900

Payback Period =

= 4 old ages

Expand into digital gross revenues

Year

Cash Flow ( 00000 ‘s )

Net Cash Flow ( 00000 ‘s )

0

( 900 )

1

460

( 440 )

2

460

20

3

460

480

4

460

940

5

460

1400

6

460

1860

7

460

2320

8

460

2780

9

460

3240

10

460

3700

Payback Period =

= 1 twelvemonth and 11 months about.

Net Present Value

Continue with digital sale

Year

Cash Flow ( 00000 ‘s )

Discount Factor

Present Value

0

( 600 )

1

( 600 )

1

150

0.9091

136.37

2

150

0.8264

123.96

3

150

0.7513

112.97

4

150

0.6830

102.45

5

150

0.6209

93.14

6

150

0.5645

84.68

7

150

0.5132

76.98

8

150

0.4665

69.98

9

150

0.4241

63.62

10

150

0.3855

57.83

Net Present Value = Present value of return – Initial investing

= 9,21,98,000-6,00,00,000

= Rs 3,21,98,000

Expand into digital gross revenues

Year

Cash Flow ( 00000 ‘s )

Discount Factor

Present Value ( 00000 ‘s )

0

( 900 )

1

( 900 )

1

460

0.9091

418.19

2

460

0.8264

380.14

3

460

0.7513

345.60

4

460

0.6830

314.18

5

460

0.6209

285.61

6

460

0.5645

259.67

7

460

0.5132

236.07

8

460

0.4665

214.59

9

460

0.4241

195.09

10

460

0.3855

177.33

Net Present value = present value of return – initial investing

= 28,26,47,000 – 9,00,00,000

= Rs 19,26,47,000

Decision Tree

Option A ( Continuing with CD ‘s )

Result

Success

Failure

Probability of Outcome

0.5

0.5

Costss

40000000

40000000

Gross

55000000

44000000

Option B ( Adding digital merchandises to merchandise portfolio )

Result

Success

Failure

Probability of Outcome

0.8

0.2

Cost

24000000

24000000

Gross

70000000

( 10000000 )

Success 0.5

33000000

55000000

Option A

Failure 0.5

10600000

2

44000000

17600000

( 40000000 )

70000000

Success 0.8

49000000

1

Option B

3

( 10000000 )

Failure 0.2

22000000

( 24000000 )

( 30000000 )

Key

Decision Node

Opportunity Node

Discarded Option

Peopless Perspective

The study conducted by me of about 60 possible and bing clients, which analyzed the assorted facets of whether switching would really profit the company.

After tabling the research it is seen that most of the people who really bought Cadmium ‘s were in the age group of more than 30 old ages old. The young person of today prefers downloading music instead than traveling and purchasing it in the shops.

The assorted grounds for this are:

The biggest ground is that the music provided via the cyberspace is free of cost on most sites. Hence the people feel that there is no usage passing money on what is already available for no cost.

They feel that traveling to shops and picking up music Cadmium ‘s is a waste of clip and they can use it making something more utile

Besides now yearss people do non desire the full album of the creative persons and prefer merely certain vocals that they want, hence downloading music turns out more convenient in that manner.

But from the study it was seen that 30 % of the people said that they were willing to purchase music if it was sold at more convenient locations such as via cyberspace etc.

The chief ground why the gross revenues are maximal for those above the age of 30 is because

They either do non desire to back up buccaneering and want to acquire rid of it

A batch of the people believe in CD ‘s as aggregator ‘s point and so pick up CD ‘s of their favorite creative persons.

The quality of the music provided via cyberspace is non really good and clear.

Besides it was seen that people since prefer downloading peculiar vocals and non the whole album at one time. They felt that if individual vocals were available online for a sensible monetary value they would purchase it.

Hence we can see from the study that although people may be downloading music now after the debut of music through digital agencies there is a great possibility that people one time once more travel back to buying music instead than downloading it free of cost

The study conducted by me of about 60 possible and bing clients, which analyzed the assorted facets of whether switching would really profit the company.

After tabling the research it is seen that most of the people who really bought Cadmium ‘s were in the age group of more than 30 old ages old. The young person of today prefers downloading music instead than traveling and purchasing it in the shops.

The assorted grounds for this are:

The biggest ground is that the music provided via the cyberspace is free of cost on most sites. Hence the people feel that there is no usage passing money on what is already available for no cost.

They feel that traveling to shops and picking up music Cadmium ‘s is a waste of clip and they can use it making something more utile

Besides now yearss people do non desire the full album of the creative persons and prefer merely certain vocals that they want, hence downloading music turns out more convenient in that manner.

But from the study it was seen that 30 % of the people said that they were willing to purchase music if it was sold at more convenient locations such as via cyberspace etc.

The chief ground why the gross revenues are maximal for those above the age of 30 is because

They either do non desire to back up buccaneering and want to acquire rid of it

A batch of the people believe in CD ‘s as aggregator ‘s point and so pick up CD ‘s of their favorite creative persons.

The quality of the music provided via cyberspace is non really good and clear.

Besides it was seen that people since prefer downloading peculiar vocals and non the whole album at one time. They felt that if individual vocals were available online for a sensible monetary value they would purchase it.

Hence we can see from the study that although people may be downloading music now after the debut of music through digital agencies there is a great possibility that people one time once more travel back to buying music instead than downloading it free of cost

Lewins Force Field Analysis – Angstrom

Reasons for switching to digital gross revenues

Universal Music India is looking to turn and hold an addition in net incomes. Switching to digital gross revenues from Cadmium gross revenues would now assist in the addition of the net incomes as now yearss no one buys Cadmium ‘s anymore.

There are assorted types of digital gross revenues would include

Caller Tunes

Ringing tones

Pre Loaded vocals on nomadic phones

Selling vocals via online shops i.e. iTunes

Selling vocals via tieups with Mobile Handset makers i.e. Nokia Ovi Suite

These are the assorted methods, hence since these methods are more easy available and alternatively of whole purchasing whole album creative person the consumer can travel for a individual vocal that he/she likes.

Hence we see there are many driving every bit good as keeping forces. These have been listed down with the aid of Lewin ‘s Force Field Analysis. Each point put frontward has been given a weight from 1 to 5 ( 1 being weak and 5 being strong )

Table 1-Driving Forces

Driving Forces

Weight

Switching will increase the client base

5

The gross revenues gross will increase due to the newer methods of sale of music

4

Cost of hive awaying in warehouses non needed

5

No distribution cost is incurred

4

The entire weight of the drive forces is 18/20

Switching from Cadmium to digital gross revenues will increase the client base, as people who earlier could non or did non travel to the shops to pick up the Cadmium ‘s could now merely with the aid of cyberspace or their cell phones really easy acquire the vocals they desire. Besides with leting the downloads per vocal would besides promote the clients to purchase the vocals of their likings

Besides due the new channels of distribution since the consumers will now purchase more than before the gross revenues gross will besides increase. Besides it is cheaper to fabricate.

There will be no cost of puting up warehouses as all the vocals are digitally sold. Besides there wo n’t be any stock heap up and there is no leave clip of the stock

There is no distribution cost that is incurred by the house and besides the house can sell the vocals straight to the consumer. Extinguishing any in-between work forces and diminishing the monetary value of the vocals besides

Table 2- Restraining Forces

Restraining Forces

Weight

Benefits of attractive packaging non available

2

System clang

2

More Gross from Cadmium ‘s

3

Not make all people

3

The entire weight of the restraining forces is 12/20

There is no selling for these gross revenues therefore non everyone will be cognizant of it. The house is to a great extent dependent on word of oral cavity sort of publicity. Besides there would be no packaging as a batch of people find the Cadmium ‘s visually attractive and pick them up

A clang in the system could take to loss of all package and vocals, which could do major jobs and lead to great losingss incurred by the house as there would be no difficult transcript back up

Besides the gross generated from selling a Cadmium is more. Selling single vocals is n’t really profitable

It will besides non be able to make those who are connected with the aid of nomadic phones or cyberspace

Therefore it is apparent that the drive forces outweigh the restraining forces therefore switching to digital gross revenues from Cadmium gross revenues is a better option based on Lewin ‘s Force Field Analysis.

Porters Generic Stratergies

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Cost Leadership

It involves cut downing the cost of production and monetary values every bit far as possible without impacting the quality of the merchandise supplied.

This is one of the cardinal factors that Universal Music tries to concentrate upon. It reduces its production cost greatly in order to cut down the monetary values of the finished goods.

Differentiation

By distinguishing from other companies and spread outing into digital gross revenues before the other houses do it gives an upper manus to Universal. It can keep a hallmark on the peculiar merchandise. As of now its ego by spread outing into callertunes at the really get downing Universal has forecasted with the enlargement into digital gross revenues by the terminal of 2011, callertunes will consist of 90.9 % of the entire digital gross revenues. Therefore by switching early to digital gross revenues can give them an advantage over other companies be aftering to come in this sector.

Focus

Although all age groups of people will be buying the digital music online and through assorted agencies, cyberspace etc. The chief focal point of the house will be on the young person that is from the age of 15 old ages to about 30 old ages. This is the chief mark market as they are the most active on the cyberspace and most knowing about new merchandises come ining the market.

Fiscal Discussion

From the histories given to us we can see that in 2002 and 2003 before the debut of callertunes. The music industry was enduring heavy losingss. The loss made by Universal Music India itself was Rs 3,00,00,000 in Dec 2003. This was a major concern for them.

After the debut of company melodies the Music Industry started lifting once more. Universal Music made Rs 4,00,00,000 net income from the sale of callertunes in Year ended Dec 2009.

We can see that with merely the callertune gross revenues the net incomes have gone up. Now with the debut of assorted other digital methods the company can do a batch of net income. Therefore in order to obtain a higher degree of net income and higher market portion in the Music Industry in India, they must capitalise on their trade name image and see enlargement into digital gross revenues.

Lewins Force Field Analysis – Bacillus

Using Lewin ‘s Force Field Analysis with Respect to the two options

Driving Forces

Point

Weight

( Continue with CD gross revenues )

Weight

( Expand into digital gross revenues )

Easy handiness of the merchandise

2

4

Monetary value of the merchandise

2

4

Attraction of the merchandise

4

3

Distribution Cost

2

4

Entire

10/20

15/20

The entire weight of driving forces is 10/20 for go oning with CD gross revenues and 15/20 for spread outing into digital gross revenues

The easy handiness of the merchandise is a cardinal factor in its sale, many clients do non purchase the merchandise due to the incommodiousness. So buy doing it available at several locations and ways it hase opportunities of increasing gross revenues

The monetary value of the merchandise has to be really justly set as by maintaining a high monetary value there will be non excessively many clients willing to purchase it. The cost of digital music will be relatively less compared to CD ‘s as there is barely any cost of production.

One of the factors that the digital merchandise will lose out on is that it does n’t hold an attractive quotient which drives the client to purchase it. Whereas Cadmium ‘s have that with the album art inlay etc.

The distribution cost of CD ‘s is high because there are a batch of in-between work forces that come in before it reaches the consumers. But in the instance of digital music it is supplied directly from the company to the clients. Hence a batch of cost is reduced which leads to the overall monetary value of the merchandise to cut down.

Restraining Forces

Point

Weight

( Continue with CD gross revenues )

Weight

( Expand into Digital Gross saless )

Data Backup

2

4

Supply to all

2

2

Selling Cost

3

3

Stocking

4

1

Entire

11/20

10/20

The entire weight of the restraining forces is 11/20 for go oning with CD gross revenues and 10/20 for spread outing into digital gross revenues.

If the information clangs of the digital music there is no difficult back up whereas in the instance of Cadmium ‘s there are proper physical dorsum ups

Both CD ‘s every bit good as digital gross revenues can non make everyone. Cadmium ‘s on one manus can non make those who are located really far off from distribution Centres. And digital music can non make those who do non hold entree to the cyberspace or assorted other engineerings.

The selling cost of Cadmium ‘s every bit good as digital music is about the same as the same advertizements etc will hold to be displayed

In the instance of digital music there is no instance of carrying therefore there are no demand of warehouses. But in the instance of CD ‘s many warehouses are needed in order to hive away all the Cadmium ‘s. There is no instance of inordinate green goods when it comes to digital music.

Therefore from the informations provided we can clearly see that to go on with Cadmium gross revenues there are more keeping forces than driving forces, but as for spread outing into digital gross revenues there are more impulsive forces than keeping. Therefore spread outing into digital gross revenues seems to be the most good and profitable option.

Introducing Digital Gross saless in Product Portfolio

Universal Music India is sing presenting digital gross revenues as the gross generated by CD ‘s alone is non plenty to prolong the house. The music industry is non what it used to be 25 old ages ago. Earlier there was no downloading music. Now there are barely a smattering of people who still buy CD ‘s. The client base has decreased greatly. Universal has already introduced company melodies which has been really successful for the past few old ages, and therefore they want to spread out farther.

Introduction of company melodies greatly good

The digital Income collected from company melodies became the largest subscriber to the Entire Net Gross saless from 2010. In the old twelvemonth ( i.e. 2009 ) the gross generated from company melodies was Rs 7,95,40,000 but in the twelvemonth 2010 the gross generated greatly increased to Rs 10,49,48,000. Caller melodies continues to demo high growing and a 84 % growing planned in 2011 over 2010.

The Market

There is a great possible market for the debut of digital gross revenues. Universal Music is already be aftering to bind up with nomadic companies to assist in the procedure of presenting digital music and doing it successful. The undertakings that may get down are

Reliance SMP

Mobile Radio

Nokia CWM

IVR services to be introduced

The Rivals

The chief rivals faced by Universal Music as discussed earlier are

T-Series

Sony Music

Saregama

Therefore in order to maximize net incomes Universal should spread out into digital gross revenues and capture the market and keep a good client base.

Continuing with CD gross revenues

Universal Music is besides sing non presenting digital music into the market. They are besides sing go oning the distribution of Cadmium ‘s. Although it is non really profitable it is a safer option as they do non hold to travel to something wholly new. There are no hazards involved in go oning with selling Cadmium ‘s.

Positives

Although the sale of CD ‘s is n’t a batch the gross generated from an overall Cadmium is much more than what is made from selling the same sum of individual vocals.

The quality of a Cadmium can be guaranteed compared to the vocals sold over assorted digital channels

The physical presence of the merchandise with the consumer is more fulfilling than holding the same vocals on the phone or computing machine

The Market

The market for the Cadmium gross revenues is already defined and each company has its ain market portion and can concentrate on bettering it for themselves. There is no outstanding menace for any industry

Competition

There is no major new competition faced by the house. It continues to work the same manner and can hold the procedure of presenting digital signifier boulder clay another company does so. After analysing that they can cut down their hazards and so travel into the undertaking.

Analysis of Investment and Decision Tree

The Investment assessment conducted shows that option B is really profitable. It has a speedy payback period of 1 twelvemonth 11 months, whereas option A has a payback period of 4 old ages. This states that option B will hold wholly recovered it investing in 1 twelvemonth and 11 months about. This is non a really long delay for grosss to flux in. Besides from the payback period we can see that in the following 10 old ages option B turns out to be much more profitable that option A.

From the determination tree constructed it is seeable that if successful the undertaking will derive great sums of gross. Although option B involves a high degree of hazard as if the undertaking it non carried out decently and consequences in a failure the loss incurred will be Rs 10000000 which is non a little sum.

The ground the investing assessment techniques and Decision can non be wholly relied upon it that cost and gross revenues figures given to us are all merely approximated figures. Therefore there is non 100 % truth in the consequences. Besides when the hard currency influxs and escapes are to be calculated for a long period of clip ( eg 10 old ages ) there are traveling to be external factors that affect that values which are non taken into history. Therefore all the appraisals made are non wholly dependable.

There are a batch of qualitative factors besides that have non been taken into history. A determination on investing can non be taken on the profitableness of the investing. There are assorted other factors that have to be taken into consideration, like the competition faced by the house. Whether the house will hold to take a loan and if they will hold the money to pay the bank back and the authorities Torahs that are presiding.

Decision

Therefore from all the analysis conducted earlier it is clearly apparent that in order to bring forth healthy gross, Universal Music must present digital gross revenues in their merchandise portfolio. It is really indispensable as to cover up for the worsening Cadmium gross revenues they need new ways of bring forthing net income. There is no usage of modifying Cadmium ‘s and cut downing the cost as even the minimum cost of a Cadmium is really high for a common adult male. And since the multitudes of today are so technologically advanced it is merely right to present gross revenues though cyberspace, phones and other convenient beginnings. Everyone today does n’t desire to exercise to acquire want they want. If people are acquiring vocals free of cost via the cyberspace why will they travel out and purchase a Cadmium which is so expensive. They believe in convenience. So by supplying music via convenient beginnings it will give an inducement for the people to purchase the music instead than downloading it for free. The grounds clients might purchase it are

It will be from a dependable beginning and warrant will be given by the house

The quality of music provided by the house is much better than those that are downloaded for free

From cyberspace there is no menace of viruses

Therefore it is clear that Universal must present digital gross revenues.

All the findings have been summarized in a tabular array below

Tool

Continue with CD ‘s

Expand into Digital Gross saless.

Net income & A ; Loss Account

Retained Net income

Rs 1,40,00,000

Rs 2,44,00,000

Investing Appraisal

Payback Period

4 Old ages

1 Year 11 Calendar months

Net Present Value

Rs 3,21,98,000

Rs 19,26,47,000

Lewins Force Field Analysis

Driving Forces

10/20

15/20

Restraining Forces

11/20

10/20

Decision Tree

Internet Expected Value

Rs 3,89,00,000

Rs 3,20,00,000

Recommendation

Looking at all the factors that have been considered it would be about ideal for Universal Music India to include digital from in its merchandise portfolio in order to maximize its gross. Hence the reply to the research inquiry “ Should Universal Music India Private Ltd modify its merchandise mix and introduce digital signifier in order to increase its gross revenues and net income border? ” is that yes they must present digital signifier in their merchandise portfolio.

Restrictions

The study that was carried out was merely of 60 clients and possible clients and so is non wholly accurate. Therefore for a house like Universal Music more extended research is required in all countries.

The fiscal values in the Net income and Loss history for 2010 – 2011 have all been forecasted and hence there is no warrant that those are the values that are traveling to be generated.

All the figures used in the tools are all premises of the prognosis that are provided to us by the house. Hence can non be relied upon wholly

Unresolved Problems

One of the chief jobs that have n’t been taken into history is the rival ‘s response to Universal Music spread outing into digital gross revenues.

The possibility of new rivals coming into the market has besides non been taken into history, this can take to a decrease in gross of the house as the client s may alter their trueness as the new rivals will hold a really low pricing in order to make a client base and to come in the market

Another of import issue is that we have non taken into consideration is the efficiency of the house into history. That is how fast they update the music that is being provided as if they are non excessively efficient so the clients are non traveling to go on purchasing music from them.

Appendix 1

Survey Questionnaire

Name:

How old are you?

10-20

20-30

30-40

40-50

Do you purchase CD ‘s or make you download music?

Buy

Download

If buy so how frequently?

Once a hebdomad

Once a month

Once in two months

If download so why?

Convenient

Free of cost

Want merely peculiar vocals

How many vocals do you download in a hebdomad

0-10

10-20

20-30

More than 30

If vocals sold at more convenient locations would you purchase

Yes

No

If monetary value of Cadmium ‘s lessening would you purchase

Yes

No

What would act upon you to purchase a Cadmium?

Would you prefer to purchase per vocal?

Yes

No

Would you purchase vocals if distributed online?

Yes

No