the current situation

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N.Djordjevic

The music retail industry is a fast changing environment and as one of New Zealand’s few music retailers, Real Groovy is right in the middle of it.

This presentation will show my assessment of Real Groovy’s current situation with regard to the following things:

•Technology•Competition•The Market•Its Business Practices and Core Principles

My suggestion and a summary will be displayed at the end.

Real Groovy uses a cutting edge stock control system to manage its products

The system’s efficiency has been proven so conclusively that it has been sold to other businesses

With it, they can buy exactly what the customers want when they ask for it and keep the list of available products constantly varied.

This makes it a commercially viable option

Mr. Hart has expressed interest in letting customers buy CDs over their cell phones in the past

A significant number of people have cell phones now

Music Downloading – It’s convenient, accessible, and cheap

Music piracy was quoted as one of the main reasons for the closure of “Sounds” music stores and makes up a large portion of total music downloads.

But that’s not enough for some people…

The Warehouse is able to offer far lower prices for its music, but just how problematic is this for Real Groovy?

Real Groovy, on the other hand, sells a wide spectrum of material to suit a variety of different tastes. It caters to those The Warehouse ignores.

The Warehouse rides current trends and provides music which has the largest audience.

Not very.

JB Hi-Fi is Real Groovy’s biggest competition since the recent closure of “Sounds” music stores.

It provides similar material to Real Groovy but at a supposedly lower price.

Its rapid expansion plan has Real Groovy’s Auckland store outnumbered 4 to 1…and it’s not stopping there.

With the financial muscle of a multinational organisation, its able to promote more heavily as well.

The popularity of portable MP3 players is driving the demand for digital music up.

However, this could be a difficult or pointless to achieve because it takes resources away from the core business and competing with the likes of Apple is likely to be a waste of time.

To capture a bigger share of the teenage music market, Real Groovy may have to provide digital alternatives to their hardcopy products.

The online stores don’t provide the depth and variety of music Real Groovy’s extensive back catalogue does, so it has an advantage when it comes to selling second hand merchandise such as vinyl records.

Sales of vinyl have been increasing by up to 50% a year as more people are being attracted by the higher quality of recordings.

This obviously benefits Real Groovy whose main Queen Street store makes 1/3 of its revenue from second hand products.

And the customer are loyal

Real Groovy has a small number of stores so it’s able to stay close with its customers

Its employees are carefully selected and knowledgeable

The brand is well established

Diversification is the key word for Real Groovy’s approach to selling music and its business ventures in general.

In addition to music, it also sells music related merchandise, second hand DVDs, games and books. In all areas, it attempts to provide as big a range as possible.

Real Groovy’s diverse range of services and products is its greatest strength.

With large companies like Apple dominating the music downloads area, it should focus its resources on offering the things they can’t.

In particular, it should consider increasing its supply of vinyl records in response to current market trends.

Real Groovy is…

Providing a huge back catalogue of music

Facing strong competition from JB Hi-Fi and online digital music retailers

Benefiting from a vinyl revival

Using a great stock control system

It should…

Utilize its strengths and focus on selling things few other businesses do such as old vinyl records and second-hand DVDs.

Hiring knowledgeable staff