Week 15

WEEK 15

                                            MADONNA – CASE STUDY

 

Why has the artist been successful? What are her key sources of sustainable competitive advantage?

Entertainment world has many faces that have been performing and entertaining whole world for years. Some are successful and have the name and fame while some are unsuccessful and are struggling to achieve that name and fame. Madonna is one of the most successful superstars. She is the star, the diva and the brand as well. An Italian-American entertainer who aspired to become a world renowned female performer, currently is the best selling female recording artist of all time recognized by the Guinness World Records by selling more than 300 million records worldwide. She is a multi-talented entertainer and is not only a performer but also dancer, actress, producer, fashion designer and much more. (Jock McGregor, 1997).

Here are some of the reasons for Madonna’s success and sustainable competitive advantage:

•          Innovative, creative and hardworking 
•           There is a chance in her style and pattern according to time. 
•      Good network with well-known and popular music houses. 
•      She has created different songs which are fit for fans of all age group.
•      Uses competencies to overcome weaknesses. 
•      Business minded person who has invested in many business sectors.

Madonna is still the pop sensation in the entertainment industry because she took time, worked hard and did everything to gain public support and hence gained fame and popularity.

What strategy directions could the artist pursue over the next ten years to continue her commercial success?

There is a huge competition in the entertainment industry and for the star like Madonna it is very necessary and important to maintain her success and competitive advantage over the successful new comers. Ansoff matrix helps to develop marketing strategies for both individuals and the firms. She can use Ansoff matrix and develop strategies to continue with her success. (Allesia Bertana, 2012).

Here, we are going to use Ansoff matrix and the directions Madonna can follow to sustain her success:

 Product development: In this strategy existing products and services are re-designed and launched in current or same market. Madonna can come up with same songs in different genres like many other artists have done and improve her acting skills to get more access on movies and television commercials. In this way she can undergo product development strategy.

Market penetration: In this strategy high market share in obtained with current products and services in the current market. Madonna can re-launch her hit songs in a collection album and include some of her not so hit songs as well and even enroll herself in music tours and entertain her fans.

Market extension: In this strategy existing products and services enters into a new marketplace. We know that Madonna is engaged in fashion industry and has her own clothing line which is famous in developed countries like US and Europe. She has fan following in less developed countries as well so she can launch her clothing in these countries and as a promotion method she can organize a concert in that marketplace so that people can notice it especially her fans.

Diversification: In this strategy new products and services are offered in new marketplace. Madonna is already a pop star and a fashion designer so she can enter into other businesses like perfume business as Jennifer Lopez did and even open her own music school. Se can also invest in music companies which are familiar with and can enroll herself in social service activities.

References:

1. Allesia Bertana. (2012). Madonna - Strategy Success and Business Development. Available: http://prezi.com/ovitr7eycw49/madonna-strategy-success-and-business-development/. Last accessed 20/10/2013.
2. Jock McGregor . (1997). Madonna: Icon of Postmodernity. Available: http://www.facingthechallenge.org/madonna.php. Last accessed 20/10/2013.
3. Marked by Teachers. (2013). Marketing Madonna . Available: http://www.markedbyteachers.com/university-degree/business-and-administrative-studies/marketing-madonna-describe-and-explain-the-strategy-being-followed-by-madonna-in-terms-of-the-explanation-of-compe. Last accessed 20/10/2013.

Week 14

WEEK 14 – LEARNING JOURNAL

In your own words and using referenced quotes describe the difference between “business unit level” strategy and “corporate level” strategy.

Strategy is the long term goal which each business prepares. Every business set targeted goals and operates accordingly to achieve that goal. Business strategies are hierarchically divided into three groups. They are: Corporate Level Strategy, Business Unit Level and Functional Level Strategy.

  Corporate Level Strategy: Corporate level strategy is establishes at the corporate level of an organization. It is the long term plan of an organization concerning its direction and scope. The process of establishing corporate level strategy begins by preparing the goals, objectives and scope by considering the internal and external environmental factors of the organization. (Donald W. Beard and Gregory G. Dess, 1981)

Business Unit Level Strategy: Business unit level strategy involves the process of pricing, promotion etc. Hence, we can say that business unit level strategy is related with facilitating customers with goods and services along with that gaining competitive advantage. (Donald W. Beard and Gregory G. Dess, 1981)

 Difference between ‘business unit level’ and ‘corporate level’ strategy.

BUSINESS UNIT LEVEL STRATEGY	CORPORATE LEVEL STRATEGY
ü  Line managers of each business unit develop this strategy. ü  Concerned with the performance of each business unit. ü  Concentrates only on specific business unit i.e. strengths and weaknesses. ü  Usually is short term because it changes with the change in the market and demand.	ü  Top level executives like BOD and CEO develop this strategy ü  Concerned with the organization’s structure, unit and size ü  Concentrates on broad areas which affect the entire organization. ü  Are long term in nature and does not change frequently. (Amanda L. Webster, 2013).

Discuss the corporate parenting style of Virgin group.

What type of corporate parent is Virgin? (portfolio manager, synergy manager or parental developer)

The reason for the success of Virgin Group is because of the reputation and name of Sir Richard Branson. Virgin group emphasizes on their own innovation and capabilities in order to add value to their business. Virgin group gives authority is completely to each operating business unit respectively. Hence, it falls under parental developers and follows the developer type of corporate parent. (Dess G, 2007).

How does the Virgin Group, as a corporate parent, add value to its businesses?

All the companies which operates under Virgin group shares similar and common kind of ideas, goals, values and interests so they are able to solve their problem by combining their similar ideas, goals, values and interests which helps them to create good rapport with each other. Along with that, it is a parent company so its even its competitiveness adds value to their business and even Sir Richard Branson’s reputation, style of management and partners also helps a lot to add value to their brand and the business. In these ways, the Virgin Group, as a corporate parent adds value to its businesses.

What is the logic of portfolio? Why do you think they are in mobile telephony, travel, financial services, leisure, music, holidays and health & wellness?

We know that if there is high risk then there will be high return but usually businesses want to achieve high return with low risk. Portfolio is the diversification of investment on different products which minimizes risk and increases the possibility of return. Hence, businesses maintains portfolio so that they can recover the loss of one business from another and portfolio even enables a business to enroll in every segment of business which helps to make strong brand image. Virgin Group are in mobile telephony, travel, financial services, leisure, music, holidays, and health & wellness because Virgin is the well known brand name so even the name attracts many customers and there many loyal customers of the brand Virgin. (Dick and Avaucourt, 2000)

What are the main risks facing Virgin Group as a result of their strategy? How might they be reduced?

One of the main asset or we can say the popularity of Virgin is because of Sir Richard Branson. They are able to maintain brand image and brand value because of Sir Branson. If anything happens with Sir Branson then the company will have to face with difficulties in spite of strong and expert management team.

References:

1. Amanda L. Webster. (2013). Difference Between Corporate Level Strategy & Business Level Strategy Read more: http://www.ehow.com/info_7829547_difference-strategy-business-level-strategy.html#ixzz2rlwcawWZ. Available: http://www.ehow.com/info_7829547_difference-strategy-business-level-strategy.html#page=0. Last accessed 2/10/2013.
2. studymode. (2010). Strategic Management - Virgin Case Study. Available: http://www.studymode.com/essays/Strategic-Management-Virgin-Case-Study-286757.html. Last accessed 2/10/2013.
3. Donald W. Beard and Gregory G. Dess. (1981). Corporate-Level Strategy, Business-Level Strategy, and Firm Performance. Available: http://www.jstor.org/stable/256169. Last accessed 2/10/2013.
4. Guest Contributer. (2007). Virgin Corporate Strategy. Available: http://www.techinasia.com/virgin-corporate-strategy/. Last accessed 2/10/2013.