HMV Group is one of the world’s leading retailers of music and DVD and the leading retailer of books in the UK and Ireland in terms of total sales. Including the acquisition of Ottakar's, the Group operates from over 730 stores in 8 countries. All of the Group’s operations, both in the UK and internationally, are wholly owned.
Music is the Group’s largest product category, accounting for 37% of Group sales for the year to April 2006, closely followed by DVD, which was 32% of Group sales. Books, which comprise the vast majority of Waterstone’s sales, contributed 24% of Group sales in the same period.
The Group is a focused international retailer and highly selective about the countries in which it operates.
Executive summary
I concluded through my findings that HMV Groups markets had experienced rapid change over recent years and have become more competitive and with a diminishing amount of in store sales as consumers choose to use the internet to fulfil their needs.
To counteract these changes I recommended that the HMV group change their current philosophy and rely more heavily on the services that the internet provides as consumers are branching out when it comes to services that they require.
Main findings
Environmental Audit
There are a number of environmental factors or forces that can influence the behaviors of the market place affecting the consumers or the competition just as much as any business. For this reason it is necessary to conduct an environmental audit of the HMV Group to evaluate what these factors and forces are.
An environmental audit is a study into environmental trends and events that have the potential to affect strategy and is used to analyse and identify such trends and events and to estimate their likelihood and impact.
The primary tool for evaluating the factors that influence an organisations environment is PEST