Abstract This paper explains that Bertelsmann, a non-public stock corporation with earnings of $1.28 billion on revenues of $21.17 billion with a strong cash position, is well known for its music labels, such as Arista and Columbia, the publishing houses,such as Random House, Dell, Doubleday and Ballatine and, less well known to Americans, the television and radio networks, an extensive list of newspapers and magazines in Europe and many other types of holdings. The author points out that the most significant recent development within Bertelsmann has been the 2004 merger of BMG with Sony Music Entertainment, which includes some of the most important labels in the music business and has a stable of many of today's most prominent artists. The paper relates that Sony BMG is being sued alleging that they tricked gospel music artists into firing their agents in order to reduce costs and maintain control over these artists; if the court decision is unfavorable, the suit could cost them millions of dollars and cause adverse publicity especially since gospel music is one of the fastest-growing segments of the music industry.
Table of Contents
History
Financial Condition of Company
Financial Ratios
Other Factors in Assessment of Company's Health
Problem Area
Key Management Initiative
From the Paper "Bertelsmann appears to be healthy in terms of short term liquidity. The Acid Test Ratio is normal for companies of this size and the Current Ratio is higher than normal and indicates that the company should have no trouble meeting short term financial commitments. The capital structure ratios also appear to indicate that the company is able to finance operations, but does not have too large exposure in terms of debt. The Return on Assets and Return on Investment are also strong, although there was a downturn in 2003. This was most likely due to higher interest expenses and a charge for amortization of goodwill."
Abstract The paper discusses that the current M&A flurry eases the pain of the declining market and that newer publishing companies are looking for a buyout instead of long term profitability. This paper describes the structure of the international publishing industry, especially the multi-national media conglomerate giant Bertelsmann, which now owns such companies as Doubleday and Random House. The author is concerned that ,with just six major companies in the media field, we are facing the prospect of living in the information age, where all that information will be controlled by very few people who feel that only the bottom line is important.
From the Paper "The fact is that in 1836 the Bertelsmann family ventured into the world of publishing because they didn't feel there were enough bibles available in Germany. This proved to be a profitable venture and Bertelsmann gradually grew over the next century and a half until they became the biggest trade book publisher in Germany. As Bertelsmann progressed, they also began adding print and broadcast media to their portfolio, ultimately making them one of the top (now number three) media conglomerates in the world. Then over the last five years, they really stepped things up. Being cash rich and debt-free, they began to take advantage of others in the industry -- who operating at a marginal level were hit hard when the world economy slowed and sales dropped. They acquired Doubleday, which includes Delacorte and Dell, and merged it with Bantam, a previous acquisition. They did make the front pages in 1998 when they purchased Random House, the largest and most prestigious trade book publisher in the U.S.."
Abstract The recorded music industry is in a state of flux. Thanks to technology, new opportunities have been made available, however, new challenges have emerged as well. The most significant concern is piracy, especially with peer-to-peer file sharing over the Internet. Sony Corporation's business unit, Sony BMG, is a new merger of Sony Music Entertainment and Bertelsmann AG. This paper discusses how the merger occurred as an effort to take advantage of economies of scale and ward off against declining sales and profitability the industry is faced with. The mega music organization is positioned at #2 in the industry. The writer examines how, by applying a strategy of utilizing the Internet as a channel of distribution and as a marketing tool, Sony BMG can ward against the piracy that is plaguing the industry. It points out that by offering inexpensive music downloads, it provides a win-win solution for both Sony BMG and their customers. Customers will get quality music, increased flexibility, and increased convenience from the service, while Sony BMG will see increased revenues and increased profitability due to reduced costs of distribution.
Executive Summary
Overview of Sony
Sony's Current Strategy
Financial Overview
Mission Statement
External Analysis
Industry Overview
Porter's Five Forces
Threats
Opportunities
Internal Analysis
Strengths
Weaknesses
Value Chain Analysis
Sony BMG Management
Strategies for Sony BMG
Figure 1
Figure 2
Figure 3
References
From the Paper "In 1955, the company manufactured their first transistor radios, and shortly thereafter they developed their first trademarked product, a pocket-sized radio. In 1958, the company changed its name to Sony, derived from the Latin word 'sonus' for 'sound' and 'sonny' for 'little man'. The company continued to flourish, bringing transistor TVs first to market in 1959, and solid state videotape recorders in 1961. For twenty years, Sony's history was punctuated by both successes and failures, such as the Beta video recorder and their Sony Walkman ("History")."
