As a small jazz-focused record company encounters competition from larger rivals and the Internet, what are its options for growth?
As a small jazz-focused record company encounters competition from larger rivals and the Internet, what are its options for growth?
The small jazz record label SonicCD was facing some difficult decisions in 2000. Started in 1995 as a wholesale buying club, SonicCD had built a loyal customer base by providing hard-to-find recordings and offering a website with content such as artist interviews. But with online file sharing and bigger rivals such as Amazon.com threatening to horn in, SonicCD's founders and its chief executive needed to consider the company's future growth plan. Aside from continuing as a niche player, SonicCD's options included transforming into a mass player such as CDNow, leaving the retail business to become a distributor or selling itself to a major online music company. In this case students consider the dynamics of the recording industry, the financial issues related to each strategic option, and financial statements from SonicCD and rival CDNow to weigh the merits of each choice.
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