Muzak Business Case

Muzak was a multi-million dollar company and over the years had created the largest digital music library in the world. Despite their past success, they were not conveying the modern image they wanted to the public. This led the new senior management team at Muzak to implement change.

Problem Definition
Muzak is a company that has been around for decades and is mostly known for their “elevator music”. In the late 90’s, Muzak’s reputation for “elevator music” began to lead the company down a path of little growth and increasing financial hardships.
The company’s negative public image reflected the same image Muzak’s employees had of their company culture. With over 200 offices, 3,000 employees, and 450 different versions of their business cards, they did not have a uniform company image to sell to their clients.

Company Objectives
Muzak’s strategy was to move away from the “elevator music” label and work towards conveying a hipper, more modern image. They wanted to get away from depicting music as a science and instead depict it as an art.

In order to re-invent their company, Muzak had to develop a unifying symbol. They chose to use a silver and black “M” in a circle. Their new logo replaced all the separate identities that once represented Muzak. It was a great first step in how they wanted to be perceived by new clients.
Muzak wanted to convey the message that they were a company of creative “audio architects”. To do this, they created an aggressive marketing campaign, which included new brochures with more color, graphics, and brief text. This was a complete change to the serious charts, graphs and presentations they had used for years. They designed their new brochures to be art. This was a huge selling point for the company, which began to generate new business almost instantly.

Data Analysis
These new changes helped Muzak’s business to grow 16% and in three years they were worth $750 million, up from $100 million in 1997 (Argenti, 2007, p.85). Muzak was rapidly growing financially, artistically, and everyone had more confidence in the future with this business. This lead Muzak to re-locate their business from Seattle, Washington to Charlotte, South Carolina; building a new headquarters that was less traditional and geared more towards their new image of young, modern, and creative. Their new headquarters, described as an Italian piazza with conference rooms, desks on wheels, and no private offices, had a fresh and original atmosphere they are proud to bring their clients to.

Alternative Strategies
Muzak did an exceptional job in changing their company image. They went forth with their objectives to become a new company with a central logo and a place that clients can trust. It is difficult to determine where they could have done better or what they could have done differently because they have had such a positive outcome. However, there a few things that could have been considered before this change took place while still obtaining their desired outcome.

Due to Muzak’s longevity and their weak public image, could they have changed their image sooner than they did? Instead of putting it off until they were no longer a growing company and their debt was growing financially, why did they wait so long being as stagnant as they were? Another alternative could have been to implement change using internal resources instead of using Pentagram. Using Pentagram cost more than it would have if they had pulled together a creative team within Muzak. Also, it seems that re-locating their headquarters from Seattle, WA to Charlotte, SC was a huge change that was not necessary. Such a move most likely cost a lot of money and a lot of employees their jobs, as well as some loss in business with their older, traditional clients.

Case Questions

1. How much change did Muzak need to communicate through its identity system to change perceptions of the company?

Muzak needed to change their brand perception by creating a new logo and streamlining new brochures to gain new clients.

2. What other corporate communication “levers” did Muzak have at its disposal to signal change?

Corporate communication “levers” that Muzak had that signified its need for change included a bad corporate culture, loss of money, increased debt, little growth and a negative public perception of the company.

3. How did changing its identity help/hurt Muzak’s overall strategy? Short-term? Long-term?

In the long-term, changing Muzak’s identity helped the company establish a good rapport with new clients. They were happier with their image and gained new public interest, trust, and loyalty. What may have hurt Muzak in the short-term was the re-location of its headquarters. Employees who were accustomed to the old system at Muzak could have a hard time transitioning. Previous clients, such as the traditional “mom and pop” shops were left behind. These older clients may choose to do business elsewhere feeling threatened by a younger generation. Also, the cost do re-invent Muzak may have hurt in the short-term, but given their financial growth, it did not hurt for a long period of time.

4. How important is it, and should the parent company educate franchisees about the new identity?

It is very important for the parent company to educate the new identity of Muzak to the franchisees. It promotes consistency and excellence within the company and gives a strong reputation among clients.

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