e-sonic Develop Internally Consistent Job Structures example

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Executive Summary
The following is the Strategic Analysis of Sonic Records so that it may move forward with its venture into the online retail world of music downloads. Sonic Records is moving forward with their new venture in digital downloads, streaming, and online sales via the online store E-Sonic. As such they have hired a consultant firm to assist them in analyzing their needs to be an industry leader in the new online market so that they may be able to find where their needs lie in finding the best possible way in which to have this business be just as much of a success as the current business.
By examining the external market for challenges they may face and the current industry standing of the company, the competition, foreign demand, long-term industry prospects, labor market, Internal Functions, Functional Capabilities, and the Capabilities of the Human Resources Department they have the tools and resources information to make this an industry leading downloading and streaming system that other companies will model. While this new way of listening to music is evolving and changing constantly they must provide customers with an easy to use and appealing way to use the system while providing the customer service they have become known for in their brick and mortar stores. Many online stores currently exist but with over half of all sales for music being processed and conducted solely online there is no limit to what the business may achieve by having the talent to support them – and possibly branch out into other areas of online streaming services.
Examination of the management system in place shows no experience or knowledge with online, streaming, or downloading systems. Thus Human Resources must find the talent necessary to assist in the new venture. By conducting an internal analysis of the current company structure and talent pool they can better find what is needed and what may be in place already. By extending
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their services online thru marketing and the software development they can better serve consumers and find a bigger and broader client base. These jobs are critical to the new company as they will set the pace and the first ‘foot steps’ to success of the company. With the growing market for this type of product, compensation should be competitive and recognize the contributions of the individuals.
Strategic Analysis
E-Sonic, a subsidy of Sonic Records, falls into 2 different NAICS codes as it provides the download music that customers want. The NAICS, North American Industrial Classification System, at www.census.gov , lists them in code 33614 and 512220 according to the 2012 Statistics. Code 334614, Software and Other Prerecorded Compact Disc, Tape, and Recording Producing states:
“This U.S. industry comprises establishments primarily engaged in mass reproducing computer software or other prerecorded audio and video material on magnetic or optical media, such as CD-ROMs, DVDs, tapes, or cartridges. These establishments do not generally develop any software or produce any audio or video content. This industry includes establishments that mass reproduce game cartridges.” (NAICS, n.d.)
Code 512220 Integrated Record Production/Distribution states:
This industry comprises establishments primarily engaged in releasing, promoting, and distributing sound recordings. These establishments manufacture or arrange for the manufacture of recordings, such as audio tapes/cassettes and compact discs, and promote and distribute these products to wholesalers, retailers, or directly to the public. Establishments in this industry produce master recordings themselves, or obtain
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reproduction and distribution rights to master recordings produced by record production companies or other integrated record companies. (NAICS, n.d.)
External Market Environment
Industry Profile, Competition, Foreign Demand, Long-Term Industry Prospects, and Labor Market Assessment are all components of the External Market Environment that must be examined in order to gain a full understanding of e-Sonic. With the move from CD’s and tapes to the digital download E-Sonic has seen a decrease in its sales. In order to stay evolve and stay relevant the business needs to reexamine its business model for the changing times. Recruiting talent for this expansion of the company is needed as the internal management has no experience. The need to develop a competitive, inviting atmosphere with compensation packages that will help attract and retain the proper talent is the focus.
Industry Profile
E-Sonic is viewed an industry leader having had sales revenues over $15 billion. However, with the excess of 30 percent decline in sales due to pirating and customer demand access change, E-Sonic must evolve, even with government regulation, it has been difficult. CD burning is just not popular anymore as businesses move online with online music stores for a customer’s instant needs. Customers are now, through these online stores, able to download and listen instantly instead of waiting for a physical store, a brick and mortar store, to open.
Competition
With one of the highest Company profiles in the industry, competition is high and growing. More and more people are downloading music and moving into the era where CD’s are no longer wanted. There are several businesses - Spotify, Google Music, Rhapsody, ITunes, Amazon – that have already started to move into the direction of international downloads and have done so
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successfully – as shown in their increased revenues.. These sites offer their customers music from all over the world. Their digital business model needs to be a balance of competitive advances and strategic use of software that limits online piracy. The forum must be user friendly and engaging so that customers can tell them apart from the competition. Wishing to create a leading online store and “ensuring Sonic Records’ prominence in the record industry’s future” (Martocchio, 2015) is the goal.
Foreign Demand
Digital downloads are growing and the foreign market for these is doubling. With several articles showing that digital downloads are growing at four times the rate of hard copy purchase (actually going to a brick and mortar store and buying the album). (IFPI, 2012)“The Norwegian music market rose 7% in 2012 due to streaming. This is the first year with an increase since 2004.” (IFPI, 2012) The opportunities for sales and revenues in this area are vast even though there are several different online stores at which to go to. There is some risk of uncertainty as in certain markets piracy is high – Russia, China, etc. (Burrows, 2009)
Sonic Records is going to have to stay ahead of the market in protecting the customer, the artist, and the privacy of all consumers to keep their industry standing. Many recent incidents of leaks in online retailers – Best Buy, Home Depot, and Bank of America – have cost consumers and businesses millions. With over half of all music sales being digital downloads the need to move the business of Sonic Records to an online store is necessary. Add these sales to the lowering of the costs of music production and you have a great amount of profits and sales to be ‘raked in’. Thus insuring that shareholders, company employees, artists, and customers get the best of both worlds – low costs and high revenues.
Long-Term Industry Prospects
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46% of the music industries revenues for 2014 came from digital sales – including downloads. (Facts and Stats - IFPI - Representing the recording industry worldwide, n.d.) This tied what the physical sales were for the same year. The US alone had $6.9 Billion in digital sales (a 6.9% increase over 2013) Demand is growing in this area and e-sonic needs to be a part of it. Most markets have doubled each year with the amount of digital sales as more and more markets come online to the digital download revolution.
Labor-Market Assessment
Completing a Labor Market Assessment is vital for any business but more importantly and as in the case of E-Sonic, when they choose to branch out into a new area. Knowing where your current labor divide is and where it needs to be can help you in moving toward the new labor market goal. At current E-Sonic’s current labor is divided between the following: Customer Service Representatives, Software Developers and Engineers and Marker Research Analysts. Current information, as provided by Sonic Records, indicates that Customer Service Representatives (CSR) handle customer orders, complaints, and questions about products and services offered by Sonic Records. The current salary for CSR is $14.70 with a projected job growth of 13% between 2012 and 2022 (which is about average growth). (Occupational Outlook Handbook, 2012) The outlook for this job is good and having computer skills is necessary as more and more of this position is handled online via the computer.
E-Sonic should consider an above average pay for this position and be aggressive in their recruitment of persons for these jobs, as many times these persons are the only contact that the customer has with the company. They need to understand that the company as a whole exists to serve the customer and that providing the superior customer that E-Sonic is to be known for they must have those skills. One bad or good experience with the customer service of a business can
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hurt a business or help a business succeed. E-Sonic needs to set itself apart – and above – its competition so that customers will want to come back and often times when they do they bring friends and family with them.
E-Sonic has Engineers and Developers that design computer programs, they can also be used to help with the software issues that may arise. According to the Bureau of Labor Statistics for 2012 data, Software Developers/Engineers earned $44.88 per hour and has a job outlook of 22% (much faster than average) from 2012 thru 2022. (Occupational Outlook Handbook, 2012) These persons are highly skilled and often hold bachelor degrees or above, each with an emphasis on a specific area or they can generalize. They have creative minds that can allow for the different ways and uses that the online store can be seen and accessed. They can help in protecting the customers, artists, and the company from different threats – piracy, hacking, etc.
Market Research Analysts see the trends and study the possibilities of the current and upcoming markets of the consumers’ potential sales. They earned $28.99 per hour, most have a bachelor’s degree or higher, and has a 32% job outlook (much faster than average) thru 2022, according to the Bureau of Labor Statistics. (Occupational Outlook Handbook, 2012) They are key to helping a company decide a direction to go as they have a better idea as to what a customer is looking for and possibly wants.
Analysis of Internal Capabilities
The company must have the persons internally to do all the new functions of E-Sonic and at the same time the functions of the current company, Sonic Records, and the talent they currently have. This way they can see where the company stands and help the Human Resource department understand where they need assistance and where to look for possible candidates. After all, you wouldn’t put a job ad out for a Customer Service Representative when you need Software
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Developer Technical Support staff. Developing this program, the analysis of the internal abilities and capabilities of the current staff, is the job of the Human Resource department.
Functional Capabilities
Knowing the functional capabilities of E-Sonic will prove to be the move toward success of the company. Thru the analyzing of the developers, management information systems, human resources, marketing, and engineering departments and to move those in the direction the business wishes to go. Moving all of these departments toward the company’s objective – to offer downloads, access, and the ability to buy music and other items via an online store. The competition in the online store venue will be and is intense, having a compensation that views the skills and abilities of the persons you wish to employ – the best in their line of expertise – is needed. Developing a talent pool and retaining those persons should be part of the compensation strategy for the company.
Human Resource Capabilities
The labor force of E-Sonic should reflect the successful analysis of strengths and weakness by the Human Resources department to recruit and retain talent so that Sonic Records and E-Sonic can continue to be an industry leader in music distribution. Working with those that are in company to figure out what is needed and to learn a little of the systems they work in is what will set E-sonic apart. Having this knowledge will assist in retention of key employees. Developing a review and compensation program that will advance the company in the direction of the wishes of the company is the charge of the Human Resources Department.
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Job Descriptions
Office Manager
Job Summary:
The Office Manager is responsible for the day-to-day running of the office by coordinating the smooth operation and effectiveness of the E-Sonic Office.
Job Duties:
- Monitors the use, up keep, and operation of the office equipment
- Answers phone calls, directs calls, and takes messages
- Maintains the filling, inventory, mailing, and database systems
- Responsible for maintaining the office budget
- Prepares schedules, assigns duties, and oversees the administration of yearly reviews
Work Specifications:
- High School Diploma is required
- Experience in managing an office environment
Creative Director
Job Summary:
The creative director contributes to the creative process by encouraging others and protects the copy writers of all works.
Job Duties:
- Provides creative support, with feedback, to copy writers in regards to advertising – campaign or copy.
- Manages all copy writers
- Helps, supports, and encourages copy writers with presentations and ideas submitted to management
- Prepares schedules, assigns duties, and oversees the administration of yearly reviews
Work Specifications:
- High School Diploma is required
- Degree in Marketing, Advertising, or Creative Discipline is required.
- Four years of experience in technology or music production environment
Director of Customer Service
Job Summary:
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The Director of Customer Service is responsible for supervising and coordinating all employees engaged in customer service activities and, occasionally, handling extremely difficult customers.
Job Duties:
- Supervises all employees in customer service roles
- Provide employees with ways to resolve customer complaints
- Prepares schedules, assigns duties, and oversees the administration of yearly reviews
- Establishes and implements policies, goals, objectives, training programs, and procedures with the assistance of the board of directors, organizational officials, support staff, and Human Resources
- Plans sales promotions while coordinating the activities and direction with other departments
Work Specifications:
- High School diploma is required
- Degree in Business related discipline or nine years’ experience in customer service industry
- Minimum five years’ experience in customer service industry
- Minimum four years’ experience in Store Manager or higher position with advanced training in conflict resolution
- Excellent customer services skills are required
Artist Relationship Manager
Job Summary:
The artistic relationship manager is responsible for the creation of new relationships with artist and production companies, maintaining relationships with current artists and production companies. This position is also responsible for the favorable negotiating of royalties for artists and production companies.
Job Duties:
- Establish and maintain effective working relationships with artists and production companies. Fosters these relationships while using them to develop and build new ones
- Write interesting and effective press releases about artists on E-Sonic
- Develop and maintain the company image and identity with artists and production companies
- Assist external agencies with the development and implementation of communication strategies and information programs.
- Review and evaluate advertisements and promotions for compatibility with artists and production companies.
Work Specifications:
- High School Diploma is required
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- Minimum four year degree in business
- Minimum five years’ experience in development of business in a technology or music based environment.
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Job Structures
Administrative
Sales and Marketing
Development
Customer Service
Executive Assistant
Marketing Director
Director of Software Development
Director of Customer Service
Administrative Assistant
Creative Director
Software Project Manager
Customer Service Manager
Office Manager
Copy Writer
Software Engineer
Customer Service Agent
Market Research Analyst
Software Testing
Artist Relationship Manager
Point Evaluation and Point Calculation
Administrative
Compensable Factors
Weight
Total Possible Points
Total Points for each factor
1
2
3
4
5
Administrative and Management Knowledge
30%
1250
425
125
200
275
350
425
Computer software application knowledge and skill
15%
1250
175
50
75
110
150
175
Writing and attention to detail knowledge and skills
15%
1250
175
50
75
110
150
175
Oral and Written Skills
25%
1250
300
100
150
200
250
300
Time Management Skills
15%
1250
175
50
75
110
150
175
Totals
375
575
805
1050
1250
13
Sales and Marketing
Compensable Factors
Weight
Total Possible Points
Total Points for each factor
1
2
3
4
5
Marketing and Sales knowledge
30%
1250
425
125
200
275
350
425
Societal Perspectives knowledge
15%
1250
175
50
75
110
150
175
Critical Thinking Skills
15%
1250
175
50
75
110
150
175
Communication and Media Relations Skills
25%
1250
300
100
150
200
250
300
Oral and Written expression abilities
15%
1250
175
50
75
110
150
175
Totals
375
575
805
1050
1250
Development
Compensable Factors
Weight
Total Possible Points
Total Points for each factor
1
2
3
4
5
Engineering/Technology Knowledge
30%
1250
425
125
200
275
350
425
Decision making skills and Judgement
15%
1250
175
50
75
110
150
175
Design Knowledge
15%
1250
175
50
75
110
150
175
Critical Thinking Skills
25%
1250
300
100
150
200
250
300
Oral and Written expression abilities
15%
1250
175
50
75
110
150
175
Totals
375
575
805
1050
1250
14
Customer Service
Compensable Factors
Weight
Total Possible Points
Total Points for each factor
1
2
3
4
5
Customer Service and Personal Knowledge
30%
1250
425
125
200
275
350
425
Computer Skills
15%
1250
175
50
75
110
150
175
Critical Thinking Skills
15%
1250
175
50
75
110
150
175
Problem Solving and Sensitivity
25%
1250
300
100
150
200
250
300
Oral and Written expression abilities
15%
1250
175
50
75
110
150
175
Totals
375
575
805
1050
1250
15
Jobs Industries Unionization Sizes Cost of living adjustment
Administrative Assistant Retail Nonunionized only Medium 3%
Executive Assistant Large
Office Manager Market Pay Line
y = -8399.28x + 10539875.27
r2 = .89
CompAnalysis Results
Job Structure:Administrative
0
2000000
4000000
6000000
8000000
10000000
12000000
0 200 400 600 800 1000 1200 1400
Salary
Job Evaluation Points
Market Pay Graph
Annual Salary
Predicted
Annual Salary
16
Jobs Industries Unionization Sizes Cost of living adjustment
Administrative Assistant Retail Nonunionized only Medium 3%
Executive Assistant Large
Office Manager
CompAnalysis Results
Job Structure:Administrative
0
10000
20000
30000
40000
50000
60000
70000
1247.5 1248 1248.5 1249 1249.5 1250 1250.5
Salary
Job Evaluation Points
Pay Policy Lines
At Market Pay (Average) Market Lead (Highest Quartile) Market Lag (Lowest Quartile)
17
Ranges Industries Unionization Sizes Cost of living adjustment
Retail Nonunionized only Medium 3%
Range 1 ( 1 - 1150): Spread = 10 Large
Range 2 ( 1151 - 1250): Spread = 10
Administrative Assistant (1249)
Executive Assistant (1250)
Office Manager (1248)
CompAnalysis Results
Job Structure:Administrative
0
10000
20000
30000
40000
50000
60000
Grade/Range 1 Grade/Range 2
Annual Salary
Pay Grades and Ranges
`
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Job
Minimum
1st Quartile
Average
Median
3rd Quartile
Maximum
Office Manager
52,775.40
55,562.03
57,562.26
57,472.93
59,476.60
62,590.27
Administrative Assistant
44,500.35
47,118.88
49,194.98
49,218.77
51,199.30
54,169.50
Executive Assistant
36,167.45
38,482.60
40,763.70
40,718.66
42,882.08
45,701.97
IndustriesUnionizationSizesCost of living adjustmentRange2RetailNonunionized onlyMedium3%Minimum Pay46,875.02 LargeMidpoint49,218.77 Maximum Pay51,562.52 Median49,218.77 CompAnalysis ResultsJob Structure:Administrative
19
Jobs Industries Unionization Sizes Cost of living adjustment
Copy Writer Retail Nonunionized only Medium 3%
Creative Director Large
Marketing Director Market Pay Line
Market Research Analyst y = -11074.26x + 13889787.16
Artist Relationship Manager
r2 = .48
CompAnalysis Results
Job Structure:Sales and Marketing
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
0 200 400 600 800 1000 1200 1400
Salary
Job Evaluation Points
Market Pay Graph
Annual Salary
Predicted
Annual Salary
20
Jobs Industries Unionization Sizes Cost of living adjustment
Copy Writer Retail Nonunionized only Medium 3%
Creative Director Large
Marketing Director
Market Research Analyst
Artist Relationship Manager
CompAnalysis Results
Job Structure:Sales and Marketing
0
20000
40000
60000
80000
100000
120000
140000
1245.5 1246 1246.5 1247 1247.5 1248 1248.5 1249 1249.5 1250 1250.5
Salary
Job Evaluation Points
Pay Policy Lines
At Market Pay (Average) Market Lead (Highest Quartile) Market Lag (Lowest Quartile)
21
Ranges Industries Unionization Sizes Cost of living adjustment
Retail Nonunionized only Medium 3%
Range 1 ( 1 - 1050): Spread = 10 Large
Range 2 ( 1051 - 1150): Spread = 10
Range 3 ( 1151 - 1250): Spread = 10
Copy Writer (1248)
Creative Director (1249)
Marketing Director (1250)
Market Research Analyst (1247)
Artist Relationship Manager (1246)
CompAnalysis Results
Job Structure:Sales and Marketing
0
10000
20000
30000
40000
50000
60000
70000
Grade/Range 1 Grade/Range 2 Grade/Range 3
Annual Salary
Pay Grades and Ranges
`
22
Industries Unionization Sizes
Cost of
living
adjustment Range 3
Retail Nonunionized only Medium 3% Minimum Pay 57,510.15
Large Midpoint 60,385.66
Maximum Pay 63,261.17
Median 60,385.66
CompAnalysis Results
Job Structure:Sales and Marketing
Job Minimum 1st Quartile Average Median 3rd Quartile Maximum
Artist Relationship Manager 87,880.83 98,490.68 106,815.28 105,478.58 116,756.95 127,133.20
Market Research Analyst 46,495.25 49,344.79 52,153.93 52,094.41 54,818.32 58,420.28
Copy Writer 67,593.01 72,942.55 78,734.13 78,669.21 84,676.19 90,277.19
Creative Director 52,770.24 57,073.32 60,606.09 60,385.66 63,965.21 69,016.93
Marketing Director 41,503.36 44,534.44 47,217.88 47,164.88 49,776.60 53,020.44
23
Jobs Industries Unionization Sizes Cost of living adjustment
Software Testing Specialist Retail Nonunionized only Medium 3%
Software Engineer Large
Software Project Manager Market Pay Line
Director of Software Development y = -29364.05x + 36749324.79
r2 = .92
CompAnalysis Results
Job Structure:Development
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
0 200 400 600 800 1000 1200 1400
Salary
Job Evaluation Points
Market Pay Graph
Annual Salary
Predicted
Annual Salary
24
Jobs Industries Unionization Sizes Cost of living adjustment
Software Testing Specialist Retail Nonunionized only Medium 3%
Software Engineer Large
Software Project Manager
Director of Software Development
CompAnalysis Results
Job Structure:Development
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
1246.5 1247 1247.5 1248 1248.5 1249 1249.5 1250 1250.5
Salary
Job Evaluation Points
Pay Policy Lines
At Market Pay (Average) Market Lead (Highest Quartile) Market Lag (Lowest Quartile)
25
Ranges Industries Unionization Sizes Cost of living adjustment
Retail Nonunionized only Medium 3%
Range 1 ( 1 - 1050): Spread = 10 Large
Range 2 ( 1051 - 1150): Spread = 10
Range 3 ( 1151 - 1250): Spread = 10
Software Testing Specialist (1247)
Software Engineer (1248)
Software Project Manager (1249)
Director of Software Development (1250)
CompAnalysis Results
Job Structure:Development
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Grade/Range 1 Grade/Range 2 Grade/Range 3
Annual Salary
Pay Grades and Ranges
`
26
Industries Unionization Sizes
Cost of
living
adjustment Range 3
Retail Nonunionized only Medium 3% Minimum Pay 79,059.29
Large Midpoint 83,012.25
Maximum Pay 86,965.22
Median 83,012.25
CompAnalysis Results
Job Structure:Development
Job Minimum 1st Quartile Average Median 3rd Quartile Maximum
Software Testing Specialist 113,656.43 126,215.34 135,703.71 134,848.17 145,091.81 159,134.68
Software Engineer 82,746.38 92,385.51 99,717.73 99,899.16 107,014.40 116,896.90
Software Project Manager 56,854.04 63,341.33 70,100.19 70,139.95 76,331.62 84,750.86
Director of Software Development 36,445.35 42,405.76 47,696.04 48,401.82 52,978.67 58,435.16
27
Jobs Industries Unionization Sizes Cost of living adjustment
Customer Service Agent Retail Nonunionized only Medium 3%
Director of Customer Service Large
Market Pay Line
y = -10540.45x + 13217233.04
r2 = .74
CompAnalysis Results
Job Structure:Customer Service
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
0 200 400 600 800 1000 1200 1400
Salary
Job Evaluation Points
Market Pay Graph
Annual Salary
Predicted
Annual Salary
28
Jobs Industries Unionization Sizes Cost of living adjustment
Customer Service Agent Retail Nonunionized only Medium 3%
Director of Customer Service Large
CompAnalysis Results
Job Structure:Customer Service
0
10000
20000
30000
40000
50000
60000
70000
1248.8 1249 1249.2 1249.4 1249.6 1249.8 1250 1250.2
Salary
Job Evaluation Points
Pay Policy Lines
At Market Pay (Average) Market Lead (Highest Quartile) Market Lag (Lowest Quartile)
29
Ranges Industries Unionization Sizes Cost of living adjustment
Retail Nonunionized only Medium 3%
Range 1 ( 1 - 1050): Spread = 10 Large
Range 2 ( 1051 - 1150): Spread = 10
Range 3 ( 1151 - 1250): Spread = 10
Customer Service Agent (1249)
Director of Customer Service (1250)
CompAnalysis Results
Job Structure:Customer Service
0
10000
20000
30000
40000
50000
60000
Grade/Range 1 Grade/Range 2 Grade/Range 3
Annual Salary
Pay Grades and Ranges
`
30
Industries Unionization Sizes
Cost of
living
adjustment Range 3
Retail Nonunionized only Medium 3% Minimum Pay 44,616.77
Large Midpoint 46,847.61
Maximum Pay 49,078.45
Median 46,847.61
CompAnalysis Results
Job Structure:Customer Service
Job Minimum 1st Quartile Average Median 3rd Quartile Maximum
Customer Service Agent 46,550.00 49,622.43 52,212.26 52,199.31 54,555.25 58,422.41
Director of Customer Service 36,291.42 38,971.31 41,671.82 41,740.25 44,129.15 47,789.62
31
References
Burrows, P. (2009, March 1). Demand for Online Music Services Is In The Rise, but So is Uncertainty About Their Business. Retrieved from businessweek.com: http://www.businessweek.com/the_thread/techbeat/archives/2009/03/kodaks_on-line.html
Entertainment Markets Electrosonic. (n.d.). Retrieved from esonic.com: http://www.esonic.com/entertainment
Facts and Stats - IFPI - Representing the recording industry worldwide. (n.d.). Retrieved from ifpi.org: http://www.ifpi.org/facts-and-stats.php
IFPI. (2012, November). IFPI Digital Music Report 2013: Engine of a digital World. Retrieved from ifpi.org: http://www.ifpi.org/content/library/DMR2013.pdf
Martocchio, J. J. (2015). Strategic Compensation: A Human Resource Management Approach, 8th Edition. Upper Saddle River, New Jersey: Pearson Education, Inc.
NAICS. (n.d.). Retrieved from NAICS Search: http://www.census.gov/cgi-bin/sssd/naics/naicsrch
NAICS. (n.d.). Retrieved from NAICS Search: http://www.census.gov/cgi-bin/sssd/naics/naicsrch
O*Net Online. (2015). Retrieved from Occupational Job Handbook Guide: http://www.onetonline.org/
Occupational Outlook Handbook. (2012, May). Retrieved from Bureau of Labor Statistics: http://www.bls.gov/ooh/Office-and-Administrative-Support/Customer-service-representatives.htm
Zoominfo - ESonic Productions L.L.C. (n.d.). Retrieved from Zoominfo.com: http://www.zoominfo.com/s/#!search/profile/company?companyId=351477258&targetid=profile

E-Sonic Executive Summary and Strategic Analysis

E-Sonic Executive Summary

The proceeding evaluation provides a strategic analysis of Sonic Records compensation system and their newly established subsidiary and online music store E-Sonic. The development of a strategic analysis guides all decisions made regarding compensation systems. This strategic analysis reveals firm-specific challenges, objectives, and initiatives that allow E-Sonic to align the goals of a compensation system effectively with those of the company’s strategy, challenges, and objectives. The strategic analysis allows a better understanding of the business environment and the external market challenges E-Sonic may face in addition to its internal capabilities as they aim for better alignment of a competitive system design.

Through the examination of external market challenges such as industry profiles, competition, foreign demand, long-term industry prospects, and labor market assessments as well internal functions and Human Resource capabilities, e-sonic is poised to become a leader in the online music industry. The study determines their influence over the distribution of music online as E-Sonic embarks into an industry that is ever-evolving with revolutionary software and marketing tactics. In an effort to corner the market it is imperative to offer consumers an innovative product through outstanding customer service and ease of use. Nevertheless, market research regarding the needs and wants of knowledgeable consumers will also play a key role. Despite competition, room remains for not only online music distribution, but for added products within the entertainment industry such as e-books and on demand movie streaming.

The declining demand for music CD’s has opened the door for the new business model of an online music store. While offering innovative online products would be valuable in this technological era, it is likewise important and would benefit E-Sonic to understand and meet the needs of foreign demand. Globally, digital sales make up more than half of the music revenue.

Management has no experience in software development and online marketing. Taking advantage of offerings through exceptional service that extends beyond the domestic market would offer a larger customer base. Besides skilled Market Researchers and Developers, highly knowledgeable and qualified, friendly talent is key to the success of E-Sonic; therefore, it is equally important to offer competitive incentives for recruitment and retention purposes. With a positive and encouraging outlook for E-Sonic, the compensation consulting team suggests a market competitive compensation system that recognizes the achievements of the individual contributors.

Strategic Analysis

As a subsidiary of Sonic Records, E-Sonics provides an online service of downloadable music. The identification of E-Sonic’s industry based on the North American Industry Classification System (NAICS) falls into two different codes: 334614 and 512220. According to the United States Census Bureau, 334614 falls under the category of “Software and other Prerecorded Compact Disc, Tape, and Record Reproducing” and is comprised of

establishments primarily engaged in mass reproducing computer software or other prerecorded audio and video material on magnetic or optical media, such as CD-ROMs, DVDs, tapes, or cartridges. These establishments do not generally develop any software or produce any audio or video content. This industry includes establishments that mass reproduce game cartridges. (www.census.gov)

The second code, 512220, applies to “Integrated Record Production/Distribution”.

This industry comprises establishments primarily engaged in releasing, promoting, and distributing sound recordings. These establishments manufacture or arrange for the manufacture of recordings, such as audio tapes/cassettes and compact discs, and promote

and distribute these products to wholesalers, retailers, or directly to the public. Establishments in this industry produce master recordings themselves, or obtain reproduction and distribution rights to master recordings produced by record production companies or other integrated record companies. (www.census.gov)

External Market Environment

Examining the five elements of the external environment, the strategic analysis will investigate industry profile, competition, foreign demand, industry long prospects and the labor market that comprise the business of E-Sonic. E-Sonic’s external market environment has been faced with a declining demand for music CD’s; therefore, it is in the company’s best interest to shift their focus and evolve their business model. Internally, management has no experience in software development or online management. Recruiting talent in this realm would aid in catapulting the company to the next level. Needless to say, establishing a competitive and inviting compensation structure would attract and retain the proper talent.

Industry Profile

Having been a leader in the production and recording studio industry boasting in excess of $15 billion in revenues, Sonic Records has experienced a decline in the demand for music CD’s within the last five years. With the evolution of technology and advances in media access, alternatives to CD’s have challenged the industry. Despite government regulations attempting to control music pirating, CD burning and general consumer preferences, Sonic Records has been challenged to the point that declining sales have exceeded 30 percent. Incessant regulation enforcement by the Recording Industry Accusation of America coupled with fear of litigation on behalf of culprits has deterred illegal activity. Additionally, the rise of numerous on line music stores are evidence of high consumer demand. In this regard, Sonic Records is inspired to adapt to the new revolutionary music delivery method, adjust rapidly and in response to the market shift decide to form a subsidiary company named E-Sonic.

Competition

Although E-Sonic’s competition may be fierce, they are determined not to be left behind by creating an online music store that will compete with already established players in the industry. With competitors such as ITunes, Rhapsody and Amazon, along with free Online and Customizable Radio Stations such as Pandora and IHeart, they must be careful to establish a competitive strategy and a digital business model to compete with the lure of online piracy. They need to be distinguished from the competition through not only branding but a user-friendly software platform. Their mission is to “create the world’s leading online music store; ensuring Sonic Records’ prominence in the record industry’s future.” (Martocchio, 2015)

Foreign Demand

According to a 2013 NY Times article, foreign demand figures reported by the International Federation of the Phonographic Industry provided significant encouragement. Nonetheless, although the music industry’s decline in general appeared dismal, digital sales and other new sources of revenue grew significantly enough to offset the continuing decline in CD sales. Although once believed that the so-called digital revolution was killing music in fact it is believed that today it is indeed saving music according to Edgar Berger, chief executive of the international arm of Sony Music Entertainment. Digital delivery of music has lowered the record companies’ overhead; therefore, jumping on the band wagon, E-Sonic can take advantage of the demand and experience robust profitability in the coming years.

In the United States as well countries such as India, Norway and Sweden, digital sales already make up more than half of the music revenue while executives’ skills and knowledge are

back in demand. For example, “book publishers in London and New York…have been hiring digital experts away from record companies, analysts say, as they seek to build up their e-book businesses.” (Pfanner, 2013) Just one more competitive edge that E-Sonic will have to overcome. Additionally, it has been reported that in countries like Russia and China, where the industry is still emerging, piracy remains prevalent and legitimate digital services are struggling.

Industry Long-Term Prospects

The long-term industry outlook for E-Sonic is not only positive but encouraging. According to PwC (PriceWaterhouseCoopers), two-thirds of revenue growth from consumers and advertising will be digital. Additionally they suspect that

of the US$241bn growth in total entertainment and media consumer and advertising revenue from 2013 to 2018, US$157bn will come from digital sources. So 65% of global entertainment and media growth – almost two in every three extra dollars – will be from digital.(www.pwc.com)

Through the expansion of new markets and creation of new models, the music industry continues to evolve and grow. This evolution has amassed users and expanded the global audience for artists. Digital downloads remain a key revenue stream; nevertheless, downloads account for two-thirds of digital revenues serving to drive digital growth in developing markets such as South Africa, Hong Kong, Philippines and Slovakia. According to a report publicized by the International Federation of the Phonographic Industry (IFPI), revenues for the digital industry grew 4.3% in 2013 for a total of $5.9 billion. (Figure 1) Streaming and subscription revenues rose by more than 50% over the past year to reach $1.1 billion, helping overall sales of recorded music in Europe grow for the first time in 12 years. Globally, digital formats today account for 39% of the global revenues with the majority of the revenues coming from three out of the ten top markets. Generally, revenues from recorded music grew in Europe and Latin America, stablized with a growth of .08% in the United States and dropped 16.7% in Japan- the world’s largest market. In Sweden, France and Italy streaming is already more popular than downloading. Music subscription services have surpassed $1 billion in sales worldwide while consumers increasingly opt to pay for online music. In a three-year period the number of paying subscribers rose from 8 million to 28 million.

Labor Market Assessment

A labor-market assessment is necessary to describe key market characteristics, the current labor supply and future trends influencing the availability of qualified employees for E-Sonic. Besides some of the typical occupations, the most important positions at E-Sonic are comprised of Customer Service Representatives, Software Engineers/Developers and Market Research Analysts. Customer Service Representatives’ handle customer complaints, process orders, and provide information about an organization’s products and services. The median hourly wage was $14.70 in May 2012 with a projected growth of 13 percent from 2012 to 2022, about as fast as the average for all occupations. Overall job opportunities are good and possessing computer skills should offer the best job prospects.

Customer service is important to E-Sonic for many reasons. First of all, customers are vital to an organization; therefore, it would be challenging for E-Sonic to be successful without customer service. Customer service is often the only contact the consumer has with an organization. If customers expend a lot of money per year with a company they expect a company's customer service department to resolve their issues. Customer Service is also important to E-Sonic because it can help distinguish the company from its competitors. A company who offers excellent customer service is more likely to get repeat business consequently benefiting with greater sales and profits. When a consumer has a positive experience with a company's customer service department there are more likely to share their experience boosting sales. On the other hand, bad Customer Service can often tarnish a company’s reputation potentially resulting in loss revenue.

According to the Bureau of Labor Statistics (BLS), in 2012 an Engineer or Developer in this industry earned an average of $99, 000 per year. With an expected job outlook of 22% expected growth from 2012 to 2022, this highly skilled and accomplished profession will experience greater growth than the average of all occupations. The main reason for the rapid growth, according to BLS, is a large increase in the demand for computer software.

Software Developers are described as “the creative minds behind computer programs. Some develop the applications that allow people to do specific tasks on a computer or other device. Others develop the underlying systems that run the devices or control networks.” (www.bls.gov) They must possess qualities that enable them to solve challenging problems, be able to quickly acquire knowledge as the field constantly evolves, have a business oriented approach to software development and be team oriented.

Lastly, Market Research Analysts “study market conditions to examine potential sales of a product or service. They help companies understand what products people want, who will buy them, and at what price.” (www.bls.gov) The median annual wage for market research analysts in 2012 was $60,300. Market Research Analysts jobs are projected to grow 32% from 2012 to 2022, much faster than the average for all occupations. Employment growth will be driven by an increased use of data and market research across all industries as the needs of consumers evolve and the company aims to quantify their marketing results with the organizational strategy.

Functional Capabilities

Considering the functional capabilities will prove crucial to E-Sonic’s success. Through the assessment of such operations as engineering, research and development, management information systems, human resources and marketing a comprehensive compensation strategy can be develop that operates in line with the organization’s business objective. Competition among online music stores makes it necessary for E-Sonic to maintain functional capabilities specifically in marketing and operations to spread the word of competitive offerings. Nonetheless, talent acquisition and retention should successfully align with the company’s compensation strategy.

Human Resources Capabilities

Human Resource capabilities are assessed through the analysis of the strengths and weaknesses of E-Sonic’s labor force in an effort to design a compensation approach consistent with talent procurement and retention initiatives. The knowledge of the workers along with enhanced productivity drives the core of their competiveness within the industry. Instituting merit programs can enhance the customer service experience by rewarding employees with predetermined performance incentives. Likewise, pay-for-knowledge programs would reward Software Engineers and Developers, as technology evolves and they aim to maintain ahead of the competition.

References

Garside, J. (2014, March 18). Music streaming breaks through $1bn sales barrier. Retrieved from http://www.theguardian.com

Global data insights. (n.d.). title of article? Retrieved from http://www.pwc.com/gx/en/global-entertainment-media-outlook/data-insights.jhtml

Martocchio, J. J. (2015). Strategic compensation: A human resource management approach (8th ed.). Retrieved from https://view.ebookplus.pearsoncmg.com

Moore, F., & Domingo, P. (2014). IFPI Digital Music Report 2014. Retrieved from http://www.ifpi.org/

Pfanner, E. (2013, February 26). Music Industry Sales Rise, and Digital Revenue Gets the Credit. Retrieved from http://www.nytimes.com/2013/02/27/technology/music-industry-records-first-revenue-increase-since-1999.html

Shuttle, R. (n.d.). Why Is Customer Service Important to an Organization? Retrieved from http://smallbusiness.chron.com/customer-service-important-organization-2050.html

"U.S. Bureau of Labor Statistics." www.bls.gov. U.S. Bureau of Labor Statistics, n.d. Web.