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Gibson and Fender, two of the biggest success stories in the guitar industry, were founded in 1902 and 1946, respectively. After both companies introduced their version of the electric guitar, their stories became intertwined, and they began a race for innovation interspersed with periods of financial crisis, corporate takeovers, and poor strategic decisions. But, over time, they captured a 70% share of the market between them and became world-renowned, producing legendary guitars that changed the face of popular music, and thus of culture. In response to declining sales of electric guitars in the mid-2000s, the two companies adopted very different survival strategies. Gibson opted for diversification, purchasing companies that expanded its product line, while Fender chose to attract new audiences with high growth potential. Gibson's overly ambitious strategy led it to bankruptcy, allowing Fender to retain its leadership status. Parts A, B, and C of this case present the two companies' history, their innovations, their evolving product lines, and the consequences of their strategies.

Case Supplement for Case HEC315

Case Supplement for Case HEC315

In 2013, musician Jack Conte realized that he could not make a living by posting videos on YouTube. Although part of the ad revenues generated by videos are shared with the artist, the videos can be viewed free of charge, and the artist is paid very little. This situation is explained in the "Jack the musician" section of the case. This section has been slightly fictionalized (without changing the basic facts) to interest students, but the story told is consistent with the information used to build the case study. The "Jack the entrepreneur" section discusses the issue of funding musicians from Jack's perspective. In 2013, Jack created a crowdfunding platform to address this problem. Called Patreon, it allows artists to solicit donations directly from their fan base. The concept is simple: fans agree to pay a set amount, automatically charged to their credit card, for each piece of content published by the creator. In return, the fan (or patron) receives rewards according to the amount paid. In this second section of the case, the Patreon concept is explained in detail. Students must figure out the reasons for the platform's success and recommend marketing strategies to promote this concept to a larger audience.

This case describes the innovative strategy implemented by musician Derek. V. Smith (aka Pretty Lights), to penetrate the electronic music market. In 2014, his latest album was nominated for a Grammy in the Best Dance/Electronic Album category, and he now heads a label that produces not only his own creations but also those of other world-renowned artists in that musical genre. A key component of this success was the decision to make digital files of Smith's tracks available free of charge using BitTorrent software. The music could be downloaded using bundles composed of a number of music tracks and a video clip of one of Smith's performances. Although the download was free, part of it was locked. To unlock this part, users had to provide their e-mail address, enabling Pretty Lights to develop a database that could be used to promote his concerts through direct marketing. Pretty Lights pioneered the use of the BitTorrent platform to distribute his creations, but this strategy has since been adopted by music industry stars Madonna, Moby, and Radiohead frontman Thom Yorke. The case serves as a springboard for exploring issues related to the monetization of music, copyright, and the marketing of cultural offerings.