Real Groovy Real Groovy AssignmentAssignment

IntroductionIntroduction

This report is commissioned by Mr. Chris This report is commissioned by Mr. Chris Hart, Managing Director – Real Groovy.Hart, Managing Director – Real Groovy.

The purpose of this report was to carry out a The purpose of this report was to carry out a “situation analysis” which investigates, “situation analysis” which investigates, discusses and provides an insight into some of discusses and provides an insight into some of the key issues facing Real Groovy today. the key issues facing Real Groovy today.

DiscussionDiscussion

Popular peer to peer software such as Kaaza Popular peer to peer software such as Kaaza and Limewire offer fast illegal music and Limewire offer fast illegal music downloads.downloads.

Since 2003, legal music downloads Since 2003, legal music downloads skyrocketed because of Apple’s skyrocketed because of Apple’s I-Tune service, offering fast I-Tune service, offering fast ‘ ‘single’ downloads.single’ downloads.

“Why pay $20 bucks for an album when you can buy a song for just $1?”

As digital downloads As digital downloads

CD salesCD sales

Predicted figures suggest that the digital Predicted figures suggest that the digital downloading industry could account for downloading industry could account for more than half the total music sold in the more than half the total music sold in the near future.near future.

Latest figures (NZ Herald, 2007) show that total

turnover in music retailing dropped by 35% between 2001 and 2005.

Even though CD sales plummet, it has not sounded the death knell for traditional brick and mortar music retailers like

It still managed to turn over close to $20 million dollars last year.

The The MAINMAIN strength of the company is its strength of the company is its

RANGE!!!!RANGE!!!!

Real Groovy stock more than 28,000 new titles across all genres of music as well as 14,000 second hand titles!!!

To manage this huge stock,

USES

With Virtual Network Computing (VNC), the company is able to track 500,000 items AND….

1.3 million titles from suppliers anywhere from USA to Europe!!!

The new inventory tracking system allows Real Groovy to quickly check:

1) Product Availability

2) Likely Price

3)Product Delivery Time

Catering to niche markets is another of Real Groovy’s strengths:

It is the go-to retailer for insurance claims in the event of a burglary.

1)

2) It runs a successful ticket-box operation.

3)Merchandising is a growing category.

KEEP ROCKING!!!!

4) AND, it trades in secondhand vinyl, CDs and DVD’s.

According to Chris Hart, “giving customers the opportunity to trade their unwanted CDs, DVDs and records towards new ones, has proven very popular.”

CompetitorsCompetitors

In current times, Real Groovy has had a new Australian competitor called JB Hi-Fi enter the New Zealand market.

JB Hi-Fi have HIGH ambitions of conquering

the retail market.

JB Hi-Fi puts a special emphasis on its low price.

But according to Chris Hart, “Real Groovy competes on offering a wide RANGE of goods

NOT .”

But JB Hi-Fi could pose a much more significant threat in the future as it is opening a further 11 stores around New Zealand in the near future.

SO, it would have access to MORE customers in the future, which might harm Real Groovy.

E-CommerceE-Commerce

Real Groovy launched its own website in November 2001, spending about $500,000 on its development.

The website has been a massive SUCCESS garnering more and more of their sales, and also attracting more customers to set up online accounts.

RecommendationsRecommendations

I think that Real Groovy should expand in I think that Real Groovy should expand in New Zealand more. New Zealand more.

They are going to face stiff competition from They are going to face stiff competition from JB Hi-Fi in the future as it is opening a further JB Hi-Fi in the future as it is opening a further 11 stores here.11 stores here.

It is vital for Real Groovy to keep its It is vital for Real Groovy to keep its competitive edge and competitive edge and widenwiden its customer its customer base!!!! SO……..base!!!! SO……..

should consider expanding into large provincial towns.

Eg. Hamilton AND… maybe Tauranga!!!

I also think that Real Groovy should also spend MORE on advertising.

They have a good opportunity to reach international markets with their website, and they should capitalize on this BY…..

1) Spending on TV advertisements and…

2) Also sending regular flyers out to non-customers.

ConclusionConclusion

To conclude, Real Groovy has kept a To conclude, Real Groovy has kept a successful music retail business going successful music retail business going even though physical albums sales drop even though physical albums sales drop around the world.around the world.

To remain successful they have To remain successful they have diversified into niche marketsdiversified into niche markets..

They would face their main competition They would face their main competition from JB Hi-Fi in the future.from JB Hi-Fi in the future.

And by following the recommendations And by following the recommendations to an extent, they should remain profitable to an extent, they should remain profitable in the future.in the future.

ReferencesReferences- All the information contained here comes from my previously written All the information contained here comes from my previously written

business report.business report.- The pictures I used in this presentation comes from google images.The pictures I used in this presentation comes from google images.

1) 1) Real Groovy - a company adapting to changeReal Groovy - a company adapting to change . (. (2008, January 10, Thursday2008, January 10, Thursday). ). NZ HeraldNZ Herald, Retrieved March 28, 2008, from , Retrieved March 28, 2008, from www.nzherald.co.nzwww.nzherald.co.nz

2) Fisher, K. (2007) 2) Fisher, K. (2007) Accounting for the big plunge in "music sales": the digital singles effectAccounting for the big plunge in "music sales": the digital singles effect . . Retrieved March 29, 2008, from Retrieved March 29, 2008, from http://www.arstechnica.comhttp://www.arstechnica.com

3) 3) Griffin, P. (2007) Griffin, P. (2007) Blog: On a slightly sad noteBlog: On a slightly sad note. Retrieved March 30, 2008, . Retrieved March 30, 2008, from from http://www.blogs.nzherald.co.nz/blog/griffins-tech-blog/2007/11/28/blog-on-http://www.blogs.nzherald.co.nz/blog/griffins-tech-blog/2007/11/28/blog-on-a-slightly-sad-note/a-slightly-sad-note/

4) 4) ) Jones, A. (2005) ) Jones, A. (2005) Groovy baby, yeahGroovy baby, yeah. Retrieved March 26, 2008, from . Retrieved March 26, 2008, from http://www.unlimited.co.nz/unlimited.nsf/coolcompany/276123824F417E70http://www.unlimited.co.nz/unlimited.nsf/coolcompany/276123824F417E70CC256FB6006CB933CC256FB6006CB933

5) Music Download. (n.d.).Retrieved March 28, 2008, from http://www.en.wikipedia.org/wiki/Music_downloads

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