In an industry or competitive analysis, there are five forces at work. These help a company to determine whether its strengths are sufficient to mitigate its weaknesses, and concomitantly, whether the business is sufficiently competitive to survive in the industry. The company Arista Records has a longstanding reputation for excellence in the industry. The main factor that sets it apart from other companies is a tradition begun by Clive Davis, the founder of the company. This factor is also one of the key elements playing a role in the success of the company, regardless of fluctuations such as the Milli Vanilli scandal an a high turnover in managers. At the center of industry analysis is the competition factor. Competition, or rivalry, is offered by both existing companies within the industry, as well as new entrants.
             The first of the five elements of industry analysis is the threat of entry by new competitors. The music record industry is highly competitive, but also extremely voluminous. The demand for music in all its forms is continually increasing. Indeed, the industry comprises the majority of the entertainment industry, with a higher demand and a greater variety of formats than all other forms of entertainment. The growth of the industry also means a change in entry procedures and existing competition. Large conglomerates such as EMI, Time Warner and Sony Music came into being, competing with each other and making it very difficult for small companies to enter the industry unless they did so in affiliation with the conglomerates.
             Arista Records is part of the BMG conglomerate from Germany. The decision to change leadership of the company from Davis to Reid in the year 2000 emerged from the conglomerate rather than the company itself. Being part of a conglomerate then gives the relatively small company an important competitive edge. This, together with a relatively low threat of new entrants, provides Arista ...