Capgemini Consulting presented Pandora with a number of opportunities for the immediate future and long term prospects. The consultants clearly stated that Pandora:
Hiring executives to create business strategies and the Open Mic notion are good for short term goals but the right decisions need to be made in order for both to be successful. For example, the right executives need to be hired; experienced and knowledgeable directors need to be found in order for them to plan the right approach for Pandora’s future. Also, the idea of Open Mic could create valuable revenue, increase Pandora’s song base and attract more artist and listeners but this proposal needs to be kept up with, monitored and set up correctly in order to be successful.
Finally, rebranding the company and globalization are long term opportunities that will allow Pandora sustainable growth. Rebranding the company through sharing will definitely have a large impact on the company as social media and online communications are leaving a large impression in the digital world. Pandora does have potential for venturing into international expansion but as mentioned that will need to be a future outlook for the company as it will take time to build their brand, secure licensing, research different countries, incorporate ethnic music and gain the audience of foreign listeners. All of this will take up a lot of time through research and development and will cost Pandora a great deal of financial investment that they do not have at the moment.
- Is not effectively monetizing their user base
- Banner advertising is not able to cover the company’s run-rate costs for employee salaries and licensing fees
- High royalties are causing more financial issues
- And if Pandora continues down the same path they will exhaust their cash within the next two years
Capgemini Consulting suggest the following alternatives that would allow Pandora to prosper in the future:
- Change in advertisement structure
- Develop mobile application for iPhone
- Battle royalty fees
- Hire executives for business strategy
- Open Mic
- Rebrand the company
- Globalization
Changing in advertisement structure and battling high royalty fees are immediate actions Pandora can use to aid their company in obtaining a positive cash flow. Although battling Congress in lowering high royalties would certainly solve the majority of the financial problems Pandora is facing, it will also create a burden on the company as legal and court fees are just as high as an expense. However, restructuring Pandora’s advertising strategy is a great idea and would assist in generating more revenue. As the consultants mentioned Pandora is playing the least amount of advertisements on the radio than their competitors. Increasing the current one per an hour advertisements will definitely make a difference and consumers may not even notice a change if it is kept minimal. Some consumers even enjoy advertisements as demonstrated in the Absolut study where listeners enjoyed listing to a fun “going out mix” while Absolut advertised their new Pear-flavored vodka. Also, dveloping a mobile application for the iPhone is also another immediate action and excellent suggestion as mentioned in the first analysis. This would give Pandora a competitive advantage and allow them to give listeners what they want while growing in a technology based society.
Hiring executives to create business strategies and the Open Mic notion are good for short term goals but the right decisions need to be made in order for both to be successful. For example, the right executives need to be hired; experienced and knowledgeable directors need to be found in order for them to plan the right approach for Pandora’s future. Also, the idea of Open Mic could create valuable revenue, increase Pandora’s song base and attract more artist and listeners but this proposal needs to be kept up with, monitored and set up correctly in order to be successful.
Finally, rebranding the company and globalization are long term opportunities that will allow Pandora sustainable growth. Rebranding the company through sharing will definitely have a large impact on the company as social media and online communications are leaving a large impression in the digital world. Pandora does have potential for venturing into international expansion but as mentioned that will need to be a future outlook for the company as it will take time to build their brand, secure licensing, research different countries, incorporate ethnic music and gain the audience of foreign listeners. All of this will take up a lot of time through research and development and will cost Pandora a great deal of financial investment that they do not have at the moment.
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