6-2 Final Project Milestone Three: Section 2: External Competitiveness

Running Head: JOB COMPENSATION AND MIXES 1

Executive Summary

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The paper discusses the company profile for the e-sonic Company, which falls under the

Computer Manufacturing industry. It further details several factors that impact its businesses

externally. Some of the factors discussed are competition, innovation, technological change, the

impacts of international piracy, and human resources. The paper compares the various

compensation strategies for leading companies like Amazon and eBay. It proposes that the

e-Sonic Company can overcome the external obstacles through the right job mixes and good pay

for its employees.

Milestone 3, Section 2: External Factors

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E-Sonic is a company located in Rosh Haayin, Israel. It is part of the computer

manufacturing industry. It has a total of 25 employees across all its locations. The Company

generates revenue of about three million in sales. It falls under the computer manufacturing

industry and deals with electronic computer system software development. The study aims to

look at all the marketing conditions externally and develop a compensation program for all the

employees who work within the Company.

External Factors

External factors have tangible impacts on the compensation strategy at the Company. The

online music industries have been affected by numerous challenges, including illegal music

downloads and international piracy, which has forced the e-music company's profit to decline

(Berg et al., 2007). Also, innovation has been defining for the online music industries.

Companies like Amazon have been able to expand their market share solely because of their

innovative strategies. Apart from innovation, competition has been phenomenal for the e-music

industries. Competition has been intensified by the ever-evolving technology, making access to

technological products easier. Further, technological advancements have led to increased markets

because of the increased internet connectivity around the world. Most people now own

smartphones or have access to one. Lastly, human resource has also affected the success of the

e-music industry.

a. Competition from other Firms

Competitiveness in the e-music industry has rapidly increased. Some of the prominent

industry companies are Amazon, iTunes, Dell, and eBay. Competition in the e-music sector has

increased due to the reduction in the cost of retailing physical music devices such as the Discs.

Also, the price for paying suppliers and different employees working in the various retails has

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subsided. Overall, when the internet is used correctly, it allows the companies to reduce the

physical retailing cost of the physical music media (Berg et al., 2007). In realizing the many

profits that come with online music sales, the industry's leading companies have launched

several strategies to attract consumers to their companies. Competition has been fuelled by the

e-music giant companies like Amazon and all small companies like Napster. With increasing

technological developments, some companies can readily acquire computers and other

technological devices at relatively low prices (Berg et al., 2007). Such companies have affected

the market because they offer downloads of music to customers freely. The free download has

been a challenge to e-Sonic Company since it has primarily intensified competition. Consumers

can listen to music on the internet and download them and store them on mobile devices for

future use. Therefore, the competitive nature of the e-music industry as a result of new

companies offering free download music industry has affected the businesses of e-Sonic. Apart

from the free download, some companies like Amazon and eBay have an established marketing

strategy that ensures consumer loyalty, making it difficult for e-Sonic to get new customers.

b. Technological Change

Another external factor that affects e-sonic Company is technological change. Since the

1990s, technology has rapidly evolved, and contemporarily, there are new products in the market

that support the e-music industry (Berg et al., 2007). For instance, many people around the world

have smartphones that can connect to the network, unlike before. Thee-sonic Company needs to

tap into the market through various favorable marketing strategies to utilize the expanded

market. Internet connectivity around the world has also been increased, which implies that most

people can now connect to the internet and purchase e-music. Therefore, the technological

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improvement that has been witnessed over the years provides an opportunity for e-sonic to

expand its markets and attract new customers.

c. Innovation

Innovation is another key that drives success for the e-music industry. The success of

e-music depends on how much the companies give to consumers during business transactions.

For instance, in 2018, Amazon music launched innovative Alexa features (TelecomDrive

Bureau, 2018). The available voice feature is found only on Amazon Prime music in its mobile

app and Echo family devices. With the innovation, amazon users use voice instead of words to

play their favorite songs at convenience (TelecomDrive Bureau, 2018). The innovation has had

significant impacts on Amazon's marketing strategies as it has enhanced access to Amazon

music. The eBay company has also engaged in various innovation programs that have propelled

the Company to become one of the world's largest online music shops. Hence, for the e-Sonic

Company, innovation is inevitable since the external markets are mainly being influenced by

innovation.

d. Identifying a Market Niche

Moreover, another external factor that affects the e-music industry is the focus. Focus

refers to specializing in one key feature and delivering the best on it. For instance, the e-music

sector could focus on providing cultural music that only covers a specific region. Still, the

Company could provide music with a global following (Berg et al., 2007). The strategies for

each of the pieces focus on the global one demanding more techniques to compete for markets

with other companies offering e-music. Focus helps the Company to serve a small segment

efficiently and effectively. For instance, if the e-Sonic Company focuses on providing music in

high demand by the youth, it could give very efficient and effective music experiences for the

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youth (Berg et al., 2007). On the other hand, if the Company only focuses on cultural music, it

will provide the best experience for the people from the respective culture. The result will be

increased utilization of the available markets, and thus, high sales volume increased consumer

loyalty and sales volume.

e. International Piracy

The main external factor affecting the success of e-sonic is international piracy

and illegal music download. Global piracy is robbery or access of online music without

authorization from the Company. Therefore, some people have accessed e-Sonic online music

without payment, making the Company operate at a loss. Another challenge has been the illegal

download of the music. Online companies earn profits when clients pay for music downloads.

However, if they do not pay for the download, the online music industry's sales revenue

decreases.

Further, illegal music download could have implications on the general sales volume.

That is because the freely downloaded music could be shared with clients at relatively lower

prices than the usual download prices. Therefore, international music piracy and illegal

download impacts the way e-Sonic should pay other employees

f. Human Resource and Compensation

Human resource is another essential element that defines the success of e-music

industries. Human resource is needed to deliver on the company objectives in the market.

Consequently, the employees have to be fully skilled in the industry to offer quality service to the

customers and drive innovation. Some of the e-music industry jobs are software development

engineers, quality assurance engineers, finance managers, project managers, and music

publicists. The human resource has to be motivated through good pays (Hawke, 2017). For

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instance, the Amazon Company pays its employees an average of $53000 to $62000 annually

('Amazon Music Salaries,' n.d). The average pay for the employee at eBay is around $127000,

which is far above the employees at Amazon. On the other hand, the employee salary at e-sonic

is below that of Amazon and eBay.

Compensating Employees at E-Sonic

After analyzing the human resource and their compensation in the standout companies in

the same industry with e-Sonic, it is indisputable that the Company needs to find new ways to

compensate the employees. A good employer is willing to compensate the employees for their

excellent work at the Company (Hawke, 2017). Therefore, the e-sonic Company needs to raise

the annual pay for its employees to match those of other industry companies (Hawke, 2017).

Introducing paying rise will positively impact the competitiveness of the e-Sonic Company at it

will encourage the staff to put that extra effort. It will also increase innovation and expand its

market.

Conclusively, the e-music industry is affected by international pirating, competition,

human resources, and innovation. To expand its market within and abroad, e-Sonic Company

needs to motivate its employees by enhancing compensation. Like other companies, it should

source employees with diverse expertise to tap into the new markets.

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References

Amazon music salaries.

(n.d.). Glassdoor. https://www.glassdoor.com/Salary/Amazon-Music-Salaries-E6036_D_

KO7,12.htm

Berg, A., Fransson, J., & Sorendal, F. (2007). Competitiveness in the Music

Industry [Unpublished doctoral dissertation]. Jonkoping.

Hawke, S. (2017, February 14). E-sonic compensation

project. HubPages. https://discover.hubpages.com/business/e-Sonic-Compensation-Proje

ct

Telecomdrive Bureau. (2018, August 29). Amazon Prime Music launches innovative voice

controls powered by Alexa. Telecom

Drive. https://telecomdrive.com/amazon-prime-music-launches-innovative-voice-controls

-powered-by-alexa/

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