BUS 6320 V DBR2

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Global Strategic Management BUS 6320 Unit V Discussion Board Reply 1

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Unit V- Corporate Strategy Mini Case 4

There are few key elements associated with mini case 4, Dr. Dre’s core competency “Coolness factor.” First, in 2014, Apple acquired Beats electronics from Dr. Dre (formerly known as Andre Young) for $3 billion dollars. Apple chose to finalize this transaction for a few reasons. First, in concluding the deal, they expected that the “coolness” factor would absorb into their own brand. Next, with the music industry experiencing streaming disruptions from the transfer of analog CD’s to digital files, Apple wanted to capitalize on this. Lastly, they were looking for a new brand image leader, someone similar to Steve Jobs. 

The “coolness” factor was overwhelmingly received from Dr. Dre, as many celebrity actors, athletes, and musicians brazenly endorsed his brand out in public or while performing. (Blankenship, C. 2014) In 2015, Apple’s iTunes became a serious competitor in the music industry as it introduced their new streaming service called Apple Music. In 2022, Apple Music achieved 100 million paid subscribers, while the industry leader Spotify, earned double that amount. 

Although some critics felt that Apple only acquired Beats for the brand’s “coolness” factor, others maintain that the transaction took place solely because both Dr. Dre and co-founder Jimmy Iovine, were two of the most beloved businessmen in the music industry. Considering the pre-mature passing of Steve Jobs, Apple’s iconic leader, the company has suffered from a disassociation of a brand leader. What Apple really needed was a new front man.

Despite Jimmy Iovine exiting Apple in 2018, Dr. Dre continued to create new content that would surpass that of music videos. He produced an original series on Apple + called Vital Signs. The goal was to gain additional subscribers, since they only achieved about 25 million, which was far less than industry leaders such as Netflix and Disney +. Unfortunately, Tim Cook, Apple’s CEO, decided to cancel the show due to excessive drug use and violence. The hopes of formulating a new corporate strategy failed. 

In defense to Dr. Dre, what would you expect from someone who grew up in that type of atmosphere and upbringing? Would you rather him lie and produce some questionable content that nobody would believe was true? Dr Dre did exactly what was asked of him, he produced an original series based on his own true life. If you are too scared of what the result might be, then why ask him to produce it in the first place? There are valid reasons why some TV shows have a rating of TV-MA, which is appropriate for ages 17 +, it is because it is for mature audiences only. If this type of content offends you, then simply change channels instead of whining about it. Apple could’ve achieved millions of more subscribers through their new corporate strategy, however they were too apprehensive. 

Reference

Blankenship, C. (2014). Beats Music: A New Subscription Streaming Service Business Model Takes the Stage. College Music Symposium, 54. https://www.jstor.org/stable/26574357

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