Strategic Management Essay For Mama Mia! Made In China.

Internal

Strengths:

·         The market for music is existing on a large scale

·         The industry has low production costs and content costs (e.g. in comparison with the Japanese industry)

·         There is the presence of an increasing supply capacity of music because of the rising demand of the large scale domestic music market

·         There is aggressive promotion of the productions in the international music markets

Weaknesses:

·         Limited experience of production promotion abroad

·         There is the existence of unequal interests and language barriers

·         Existence of free music model

Opportunities:

·         China has a large domestic population, high GDP scale and effective economic growth rate

·         There is the presence of Chinese companies that have operations overseas and can bring in more opportunities for local productions

Threats:

·         There is the looming threat of language and cultural barriers, found specially in the performers, performances and stage plays

·         There are strict regulations concerning the importing the performers and conducting tours and stage shows

·         There is the rising concern related to piracy and replication

External

Political

The Chinese government has tried in different ways to help the industry grow. The copyright infringement concerns got improved over time. The government has also revised the deals and claims that were accessible by the domestic music artists after the profits from the production of such musical shows improved. Additionally, the domestic performers also enjoy majority of the revenues generated from the digital channels of the production. As it is a matter of the country’s over image and business, China deems it important to build up their reputation.

Economic

China managed to beat Germany and become the third largest media and entertainment industry market in 2011, and is followed closely by United States and Japan. In 2011 the media and entertainment industry market spent an amount of $109 billion and was expected to top $192.5 billion by 2016 with a compounding annual growth rate of 12%. This amount of growth rate in the entertainment industry gives a boost to the musical industry in China and the opportunity to the parent company.

Social

The Mama Mia production was so successful and accepted in China because of the backdrop of the story. The story revolved around the sexual revolution of the 1960s where Donna participated enthusiastically. Her Chinese contemporaries have been going through the spot of upheaval also, but could not appeal much to the people of China. They were not comfortable with the foreign story in order to promote the localization of staged musicals in China. The parent company thought that the central theme would be appealing, lifting the spirit of the audience. The translation to Mandarin was thought to be a challenge, which made several content to be edited out. There were some slangs and cultural references to China, moments of physical intimacy, which made the audience and performers uncomfortable. However, the Chinese press reacted well to the show.

Technological

The link between technology and content consumption represents and organization’s interest in the music industry all over the world. the advancements in technology has had a huge influence of the culture of music. The emergence of digital music is a result of technological change. It has changed the music communication methods. However, popular shows like Mama Mia! has still retained the flavor of 90s music.

Environmental

The promotional campaigns organized for Mama Mia! has always been conducted keeping the environmental aspects in mind. The organizers keep in mind the sound pollution concerns related to music concerts, so that the general do not face any concerns.

Legal

In their 12^th Five Year Plan of China’s central government, they gave huge significance to the development of the cultural industry of China. The Plan is supported by the financial support from the cultural companies and the preferential policies. There is also the presence of problems like lack of professionals, fluctuating customer preferences and immature industrial clusters, which made the managers of the parent company, look for a way forward.

Forces

Power of Suppliers

Low: There are two types of suppliers in this industry – talent agencies that develop and represent talented performers, and the production companies who help in recording or planning stage shows and produce and fund for tours.

Highly dependent on the performers.

Due to the fierce competition, every supplier tries hard to draw the attention of the customers.

Power of Buyers

High: there are two types of buyers in this industry – music consumers, and intermediate consumers who are interested in attending concerts or accompanying on tours. This industry sees the incoming of new production groups who have fresh elements of smart performers and strong on-stage performances. The buyers are the kings here and they decide where to spend their money and time. Their switching cost is low too.

Threat of New Entry

High: The barrier to entry is high in this industry because of the presence of a few dominant market players. They have set up a well-developed supply chain management process in order to be able to produce songs and train the performers to fit in the mold of the industry, therefore making it tough for any new company to break into the Chinese musical market.

Threat of Substitutes

High: There are alternative options for entertainment available in the music industry, which include TV shows, movies, band performances and plays. Other than, outside the music industry there are other forms of entertainment like theme parks, soaps and video games. China saw over 200 theme parks in 2006 and at that time more were getting developed. There was a growth rate of 23.6% in China’s video game market.

Industry Competitiveness

Moderate: The reason of moderateness in industry competitiveness in the musical industry is the result of the presence of number of entrenched companies that at present streamline the Broadway musical, however, there no dominant player. There is the presence of mature music systems and talented performers, who bring in the creative element to all the productions all over the world. Additionally they have tough competition from the American Broadway music industry.