Strategic Management: Arista
In creating strategic alternatives for a company, it is important to take into account the various challenges and dynamics of the current business world. Particularly, it is also important that the company focus on the specific industry within which they function, and how they can best use industry developments in order to create a sound strategic management program. Functioning within the music industry, Arista Records is no exception to this paradigm. The music industry has seen rapid and extreme changes over the decades since the 1950's. Vinyl records have for example been replaced by CD's, which has been supplemented by digital music technology. On the industry scale, large conglomerates such as Sony and BMG have begun to monopolize the industry, making competition and market entry difficult for small-scale companies without affiliations with large-scale conglomerates.According to Heather Page (1998), affiliations is one of the most prominent strategic alternatives for the modern business world. During the 1990's and beyond, in the new Millennium, businesses have begun to realize the importance of affiliate allegiances. This is particularly the case in the music industry. The dynamic of the music industry has expan
Arista's most prominent recording and affiliate contracts for example provide an image of a healthy, forward-moving company. Further alternatives should then also focus upon the necessary means of protecting the company from threats such as piracy, illegal copyright practices and online theft. In terms of the latter, Arista has made several strategic alliances, of which the two most prominent appear to be those with Whitney Houston (Jet, 2001) and Jermaine Dupri (Jet, 2003). A further recommendation is to control the company's expenditures by appointing responsible CEO's with an appreciation not only for the budget, but also for the art and commercial viability of music. The company can for example form alliances with other companies in the music industry, or with specific established artists on an individual basis. It appears that the company is fully aware of its need to maintain good relations not only with its customers base, but also with its contract affiliates. Dupri on the other hand benefits from Arista's prominence in the recording industry as well as their affiliation with the BMG conglomerate. This can then be used as a vehicle for further innovative ideas and a concomitant increase in revenue. Clients and artists can then be attracted by assuring the public of the latest in measures and software to protect the company, its products, its affiliates and its customers against such threats. In fact, it is one of the biggest deals in the music industry (Jet, 2001), and also the biggest recording contract signed by Arista. Brown (2004), the reason for this was a variety of factors, including the fact that Reid tended to spend lavish amounts of money not only on artists, but also on company-sponsored retreats for himself and employees. These are to the mutual benefit of each partner. Arista's future in terms of strategic alliance, budget control and innovative products appears to be bright. ded to such a degree that large conglomerates now dominate the music world.
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