Pandora CaseEssay Preview: Pandora CaseReport this essayIntroductionPandora was founded as a project to categorize the DNA of Music, by Tim Westergren in 1999. It categorized music into a complex collection of attributes such as rhythm, form, instrumentation, orchestration, lyrics, vocals and other factors.
During the initial stages, they provided backend music recommendation engine for other companies like AOL.com, Best BuyBut the company was in dire financial straits around 2004. Westergren went through Investment Series B funding and raised $8 million in 2004, led by Walden Venture Capital in San Francisco. In the course of funding, Westergren and his Board agreed that it would be a good idea to bring in a new CEO. They hired Joe Kennedy.
Kennedy proposed that the company adopt a new strategy to become a direct-to-consumer Internet Radio service. This created Pandora.com, a free, highly customized online radio station powered by Music Genome. Consumers can log into www.Pandora.com and can create “Stations” by inputting their favorite songs or artists into their profile. Pandora then located the artist or songs in its music library and streamed “musical neighbors” that were rhythmically or artistically similar to the profile. This way Pandora provided users with a conduit to find music they were likely to enjoy based on other musical selections they already liked.
Pandora earned revenue in three ways: Advertising on its website, Subscription fees from consumers who wanted to opt out of advertising and Partners who leveraged Pandoras customer base. Ad Revenue contributed 93% of the total revenue. By 2007, Pandora was improving financially to reach a breakeven cash-flow. Pandora did not spend any money on marketing; its customer base was grown purely through word of mouth and “Viral Marketing”.
Industry:Four big recording companies controlled 80% of the industry (Universal Studios, Sony BMG Music Ent., Warner Music Group, and EMI Group PLC).They created a profitable market for them by dominating the connection channels between buyers and sellers. Due to high costs, they focused on hit songs. Non-hit songs with lower mass appeal could not reach the buyers due to this model.
Recent Technology changes are changing the industry. Production cost has dropped drastically and distribution through internet has eliminated the need for manufacturing CDs/Discs, reduced distribution cost dramatically. The reduced cost enables low appeal songs to be economically viable, but the “Big Four” still owned marketing and promotion. They preferred a “Push Strategy”, where they pre-selected the music for Promotion/Marketing and pushed them through their retail outlets/Distribution Channels (CDs, Radio, Satellite Radio)
Consumer Trend:Consumer purchasing trend was changing towards purchasing digital singles, away from pre-recorded CD albums. Some consumers were starting to rebel against the model that music with mass appeal fulfilled all of their needs. Despite the changing trend, the big four companies spent huge amounts to distribute, promote, and market a small number of “Stars”. Due to the push strategy by the big companies, consumers were left with fewer options to discover their music (pull option).
Growth Stage:In 2007, Pandora.com was growing rapidly, with 8 million users, 50% of them active. In July and August of that year, there was a 50% growth in online hours. They were moving on a demonstrable trajectory towards profit, albeit two years out. By end of year, they were raising an “E” round of financing. Funds raised will be used for development of mobile platform and increase marketing efforts. At the current growth rate, the company would run out of cash by Dec, 2008.
Future:Investors in Pandora.com had different perspectives. Some viewed it as “their Google,”, but other did not prefer to take that risk. Westergren had to balance between his investors and stay true to the company and his dream. Westergren was faced with two choices:
Should the company take a more conservative path-reduce growth by reducing marketing plans, reduce growth in headcount with minimal investment and exit through Acquisition?
Should the company take a more “Aggressive” path-increase marketing to maximum, hire aggressively, counting on raising a very large round of financing, including an IPO and take advantage of the first-mover advantage?
As per the case, the leadership of Cleveland Clinic is currently challenged with the Clinics future. The management has decided to move forward with three vastly different initiatives which have raised several questions.
* Was Abu Dhabi too much of a stretch culturally, operationally, and geographically to have a reasonable chance of success?* Did launching a new clinic in Toronto make sense in light of the challenges of executing a similar plan in Florida?* Were Canyon Ranchs elite clients the best use of the clinics scarce time and resources?We have done a thorough analysis of this case study and have provided our thoughts on various facts discussed in the case study and also our lessons learned from this case. Our thoughts are provided along the lines of the questions provided for this case study.
What is Cleveland Clinics (CC) mission?Cleveland Clinics mission is to provide world class healthcare to its patients supported by research, innovation and education.Cleveland Clinic aimed to improve the health of individuals in a way which it would serve as a catalyst to positively affect health beyond the borders of Cleveland Clinics organization. In other words, Cleveland Clinic believes that the service they provide in improving their patients health should leave a lasting impact. Dr. Delos “Toby” Cosgrove (President and CEO of Cleveland Clinic) desired to leverage that lasting impact not only for the patient, but for all of humanity. An example of this would be a Cleveland Clinic doctor innovating a safe, efficient and cost effective procedure to treat a specific health issue and if this procedure were successful, it would benefit numerous
Cleveland Clinic is now recognized as one of the best in the world in its efforts to create a better treatment and quality care system.
What are the advantages of CC/A?Cleveland Clinic continues to expand its role as one of the top quality healthcare facilities of its day and is now serving over a quarter of US hospitals. By increasing its global presence and adding its facilities to Cleveland Clinic’s geographical network over time, the Cleveland Clinic brand will be better recognized within the medical community. Cleveland Clinic, with its reputation and expertise, will be able to offer our patients with more and better benefits.
What are the advantages of an advanced research and development system?clevelandcare.clevelandcare, where an expert team of clinical personnel from over 150 teams from over 15 medical schools, universities, and research institutions has been performing extensive, comprehensive research on all aspects of cancer, in and around the world. Using a combination of computer- and human-powered software and a human resource management system, the expert team has created a comprehensive plan to ensure the medical community and physicians continue the benefits of CC and A as well as supporting each other. This system can assist in patient care, in the delivery of critical treatments and the implementation of effective treatments.
What are the drawbacks and benefits of CC/A?clevelandcare.clevelandcare, where the expertise of dedicated, dedicated staff members and their expertise provides a greater variety of treatments for patients with cancer, cancer-related illnesses, and general health problems than CC/A. This technology also creates significant savings for clinicians with more complex illnesses and injuries, and reduces their need for costly clinical care in the short-term. This model can be used to improve patient outcomes and patients’ safety. By using technology to provide the best possible treatments, our health care system would benefit as well. The quality of care produced by CC/A and its practitioners are unparalleled, and is the reason for this unique product.[p>About Cleveland Clinic}clevelandcare.com: Cleveland Clinic® Hospital is a registered trademark and is used under license in the U.S.S.A.
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