Pandora Radio – Strategic Development, Implementation, Change and Contingencies
Pandora Radio – Strategic Development, Implementation, Change and Contingencies
Pandora Media Inc. was founded in the year 2000 by Tim Westengre and Jon Craft and is headquartered at Oakland, CA. The company provides music streaming services to thousands of customers located in Australia, United States, and New Zealand. Moreover, the firm also provides exceptional services to listeners on tablets, smartphones, computers and other audio-playing devices. However, their services require an internet connection for operating and are quite famous for enhancing the very outlooks of listening to music. In this regard, the firm has developed a system that can adapt to various playlists as per initial feedbacks of customers and listeners. The services of the company are quite commonly available via different distribution channels. Also, the company has developed numerous applications for meeting the needs of smartphone users including iPhone, Android, and Windows operating systems. The company surely has a strong market presence; however, it is facing severe market penetration problems because of massive competition within the industry. The company has a mission of “To play only music you’ll love” that reflects the customers’ satisfaction above financial gains. To prove that Pandora Media has launched Music Genome Project® and is quite useful for analyzing the consumer’s taste of music and hence, providing the very song that is being requested by the customer.
Pandora Radio – Strategic Development, Implementation, Change and Contingencies
Pandora Media is one of the most prominent names in online music streaming industry. The company allows access to numerous audio songs for customers. Moreover, the website also allows the creation of around 100 different and highly personalized radio stations so that the customers can listen to the songs of their liking and preferences. Apart from that, the songs that are being played as part of a station are picked up by Music Genome Project® that enhances the customers’ level of satisfaction. Pandora Radio also offers different choices for users for availing the service. The free service allows people to listen to 360 hours of music for free.
Pandora Radio is currently operating in America, New Zealand and Australia that are some of the most competitive markets as far as online radios are concerned. Moreover, managing a company having massive external influences is of the essence and requires substantial improvements in their operational grounds.
To devise a strategy, the core understanding of market dynamics that includes external and internal environments play quite a crucial role. As mentioned by Daft and Marcic (2013), external environments are quite commonly divided into two categories of the task and general environments. The general environment includes demographic and technological aspects. For enhancing the understanding of demographics regarding Pandora Radio, Alexa (2015) has mentioned online traffic based on different factors. The firm has targeted market of Australia, America and China accounting for around 1.3%, 94.9%, and 0.5% respectively. In this regard, bouncing rate is of the essence and plays a crucial role in developing sales prospects. Bouncing rate is the rate at which the customers visit the websites and leave without availing the services of the firm.
From Quantcast (2015) analysis, it has been evident that the major target market of Pandora has suffered from a massive reduction in customers resulting to around 19% drop by the end of March 30, 2015. Besides that, the firm is facing bounce rate of 73.8% implying around three-fourth of customers leaving the website without being served. Hence, on the very immediate basis, the major consideration of this strategy would be to enhance the sales and revenue drive of the company by enhanced market penetration and by meeting the customers’ satisfaction level. For doing that, the technical as well as leadership vision of the top-tier of management is quite important.
As part of the strategic formulation, including change management strategy is also of essence which should have to be discussed with implementation domain. To get enhanced market penetration, customer perception should have to be developed and devised. The chief marketing officer should have to look for potential outlooks for exploiting the online resources. Among them, careful utilization of social media marketing channels can play a prominent role in the development of a sound customer perception. Also, Sara Clemens can provide her leadership expertise to devise a sound social media marketing campaign for Pandora’s revival. Prior to launching strong advertisement and marketing campaign is required at the cost of providing Pandora One subscription for free to users for two or three months. This will enhance financial outlooks as well as corporate brand recognition on social media scales. Apart from that, integration of the service with social media websites would also allow better edge over the Pandora Radio’s competition.
On technical aspects, various changes are required, and it requires the services of chief technology officer and chief strategic officer. This personnel can provide a sound integration of core ideas for developing technical edge against their competitors like VEVO and Spotify (Hoovers, 2015). Considering the external environments of a market, Pandora Radio is facing severe threats as part of their competitors and somehow lagging behind development in service deliverance. Spotify has included web-based videos as part of “a strategy meant to tap into fast-growing areas of digital media” (Dulaney, 2015). It would provide a strong competitive advantage over Pandora Radio thereby resulting in reduced among of profits for Pandora. In extreme cases, the outlooks of Pandora’s Media business would become a threat. Another core consideration in this regard is that Apple is also going to provide music streaming option for their customers based on iTunes catalog having more than 30 million songs (Booton, 2015). It is another imminent threat to Pandora. However, the base subscription fees of $0 for Pandora would be sufficed for outshining its competition. Nevertheless, the major competition is with Spotify that gives $0 base subscription along with access to 30 million music libraries as compared to 1.5 million of Pandora Radio. It would require enormous technical changes on information systems (IS) infrastructure basis and would allow better control over competition of Spotify. As part of including new technological advances of using IPTV and LTE, Pandora can get an edge over its competitors. Moreover, as mentioned by Booton (2015), “free music will drive the lion’s share of audio consumption over the long-term” that can be harnessed by Pandora Radio.
Services diversification can be the long-term key for attaining financial goals for a company. Differentiation of services based on consumer’s taste of music is quite vital for the music business. It is quit crucial that Pandora Radio expands its music libraries and incorporate video streaming options as part of the application and website. At the very stage, the company should also have to include integration of social networking plugins for their car users. It can also lead to enhancing the consumers’ interest on social media marketing (Hoffman and Fodor, 2010). In this regard, different deals and sales should have to be offered for allowing better revenue drives for the company. Also, it will enhance prospects of the company to compete in the highly competitive market with a secured customer base at its hand.
Conduction of market surveys and assessment of customers’ taste would allow formulation of a better library targeting the needs of individuals. Development of music library would be an online process, and it should have to be assessed on a continual basis for finding any anomaly and issues in song quality. Attainment of consumer’s perception would provide a sense of direction of incorporating new music albums and hence, provide the company with much better financial prospects. Nevertheless, trending songs should be available on Pandora One subscription for enhancing the sales and revenue drive. Also, it should have to be backed up with different sales and deals offered from time to time. It would allow better control over the financial expenditures on corporate scales. Hence, a creation of playlists based on different languages that are spoken in the majority in the targeted market region would also enhance the revenue of company thereby providing with a new customer base while retaining the previous customers.
Another core consideration is the inclusion of better options of video streaming. To compete with Spotify, Pandora Radio must have to provide a strong base of consumers with better user interface options. It includes refinement of Music Genome Project® to fit in with the developing needs of the market. Enhancements of volume equalizers and playlist shuffle options would bring about major improvement in performance of Pandora Radio operations and hence, targeted music savvy people from different parts of the target market (Shneiderman and Ben, 2003). Linking the social media accounts with it, would also gain substantial positive thrust for making customer experience much better. Successful integration would allow the people to share their taste of music with numerous peoples that are their friends, family and acquaintances.
Savings and different sales should have to be offered from time to time basis. This would seriously undermine the efforts of competitors of gaining customer base after the successful integration of primary strategy of regaining customer base. Different coupons and savings could be offered to regular users and users who are arrived from the rival website. The customer conversion scheme would allow enhancement of customer base and hence the profit margin for the company on the short-term basis.
Change Management Strategies
As part of implementing the strategy, it is of importance to note that a proper change management and risk management strategy is required. As part of developing the change, it is quite significant to devise a sound communication plan is required. The mid-level management would handle devising proper plans to put communicating the plans. For doing that, weekly and monthly meetings should have to be conducted regarding the development thereby answering any question raised by the lower management staff. It will enhance the degree of involvement and alignment of achieving a common goal for corporate success. It would also facilitate personnel with a feeling that they are an important asset of the organization and are involved in a decision-making process. Also, it is of importance to notice that the personnel is working it the firm are social beings having their culture and traditional values. Hence, the success of change management would also depend on redefining and restructuring of prevailing corporate culture thereby making it coherent with defined strategy. The change should be brought about in such a manner that it would be widely accepted by personnel working as part of the company (Todnem By, 2005).
Risk Management and Contingency Plans
Like any other Information Technology (IT) infrastructure, Pandora Radio is also vulnerable to different intrusions and in an extreme case, can lead to data and identity theft problems. Deployment of a strong system for analyzing any threat and dealing with counter measures is of the essence. Also, during the initial phase of inception and development, the firm would also be at elevated risk of intrusion; however, it is required that the firm would take respective measures to fix any bugs and answer to any of the anomalies. Hence, for the provision of the risk management plan, it is important to assess different risks and potential vulnerabilities. Within the very same domain, resource management and resource allocation are also of grave importance. The vacancies related to chief information security officer should have to be brought up for enhancement of the safety of the IT infrastructure of a company. It would count towards a more proactive monitoring of the issues and hence, providing solutions of the different bugs and technical issues at the very instant. Nevertheless, preparing for the consequences will also allow Pandora Radio with a much sound contingency plan against any process anomaly. Hence, a detailed risk analysis of each and every IT infrastructure should have to be conducted by the concerned IT and services departments to prevent any major situation development. However, mitigating the risks of account information and data theft activities within and outside of the organization is of significance. For that, it is required that the personnel will be provided with substantial training considering security protocols enforced within an organization and also in between different branches and offices of Pandora Radio. Understanding of any intrusion activity would provide an active monitoring from the end of individual employees and would serve to prop up defenses against intrusion. Common measures of backing up of critical and crucial data regarding the clients and customers should have to be done on a separate server for enhancing data integrity. Nevertheless, it is also essential to protect the very backup center from any intrusion attacks (ENISA, 2005).
On physical grounds, contingency plans would encompass the development of inter-departmental conflicts and other natural calamities. Most of the times, lobbies exist in organizations that favor certain person(s) in a decision-making process. Nevertheless, it could prove to be quite detrimental for the organizational culture and decorum. To counteract any different conflict grounds of open communication should have to be provided to almost every person. On the more extreme cases of law and order situation, the firm should have standby measures for securing the costly infrastructure as well as corporate personnel against any unforeseeable harm (Andrews, 1995).
Corporate Governance and Strategic Alignment
The current executive management has proved their efforts to be quite fruitful in enhancing the corporate financial outlooks. As witnessed in Wall Street Journal (2015), the company has attained an increase in 313.69% in revenues along with 15.83% net income increase. Nevertheless, it has to be noted that the earnings per share of Pandora Media has suffered a decline of 3.32% during last five years. Considering this aspect, the board of directors and a senior executive has their very own level of expertise that can help in complete formulation and implementation of corporate strategy.
Among them is Brain P. McAndrews, who is the CEO, Chairman, and President of Pandora Media Inc. He has been a part of the board of directors since September 2013. He has his expertise in advertising and publishing solutions. Besides that, McAndrews is also a part of the New York Times serving as one of the boards of directors. His experience with companies having strong online presence has provided him to be an active part of the company.
Tim Westergren is another core entity in Pandora’s paradigm. He is one of the founders of Pandora Radio along with Treasurer and Chief Creative Officer. Apart from that, he has also served in the music industry as a composer, musician, and record producer for more than 20 years. The very inception of Music Genome Project® has been laid down by Mr. Westergren thereby creating a personalized radio service in the year 2000. Tim Westergren plays an important role in devising the overall strategy of company along with defining its vision.
Prior to devising a strategy, Sara Clemens is another important pillar in the foundation of Pandora Radio. She serves as Chief Strategic Officer having the responsibility of developing business strategies for company’s growth together with looking for aspects of international operations, corporate development, and further expansions. Sara has quite an experience in leading different emerging technology firms. Her expertise in the corporate strategic development and vast experience of complex markets would enhance the outlooks of development and deployment of a new strategy on a corporate level.
Marketing of services is another core aspect in allowing better organizational prospects on the corporate level. Simon Fleming-Wood is the Chief Marketing Manager handles looking at different perspectives of business development, marketing, and communication functions. Simon is also responsible for Pandora One subscription business development. His expertise in designing and development of marketing strategies in emerging online market would allow better prospects for Pandora Radio in future.
Financial viability is another strong aspect that would guarantee the success of the venture. Also, the expertise of Mike Herring as Chief Financial Officer would allow Pandora Radio to succeed as part of a newly developed strategy. Mike has served at Adobe as Vice President for more than three years and before joining Pandora Radio. He has also provided his services as Executive Vice President at Omniture Inc. He has quite a brilliant expertise in rapid growth, financial planning and most importantly, executive management of public and privately owned firms.
Technological advancements are also of quite an importance for the Pandora Radio and for that Chris Martin can add value to it as Chief Technology Officer. At initial stages, Chris has taken the responsibility at the very transitioning period of Pandora towards redefining radio experience. Chris Martin handles bringing about changes on engineering grounds that includes tackling some engineering projects from optimizing playlists to different in-car service enhancements. Chris has some technical expertise for enhancing the quality of service during the IT infrastructure upgradation period.
Development of targeted products is another crucial aspect of the successful launch of the strategy. Chris Phillips can provide his services for the better integration of newly developed products of online video streaming. He can prove to be the most viable asset in providing enhancements in product management, product design and most importantly, product analytics domains. Based on his previous experience at Amazon Digital Music, he was proved to be competent enough to handle responsibilities that include deliverance of cutting-edge customer experience on different device platforms. He also has played quite a crucial role in the international expansion of Amazon’s business as the Director of Project Management and User Experiences within Amazon Digital Music domain.
Among other primary stakeholders include Kristen Robinson (Chief Human Resources Officer), John Trimble (Chief Revenue Officer), and David Gerbitz (Executive Vice President, Revenue Operations) (Investor – Pandora, 2015).
All in all, Pandora Radio is among one of the giant online music streaming industry at this moment and has the potential to surpass the very expectations of their customers. Nevertheless, it is lagging behind because of some reasons; however, Pandora Radio can enhance its customer base by providing saving coupons together with different customer retention methods as mentioned previously. There are also some grounds of improvement in Pandora’s Genome Project because of its massive capacity of enhancement. Also, the user expectation should have to be monitored and recorded from time to time basis to enhance the quality of service on the long term basis. The strategy would allow the company to go through a number of upgradation processes; however, it would also create a number of contingencies for the firm that should have to be addressed as part of strategic deployment step.
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