The Business Environment of Secret Garden Party - Essay Example

Creative Industries: Environment, Market Analysis and Strategy 1.0 Introduction In this paper, the strategic analysis of Secret Garden Party (SGP) is conducted, in order to understand the business environment of the company. Environmental analysis of the company is also studied; environmental analysis is the main theme of this paper. Carrying out market analysis helps in the research; this is because it assists in identifying challenges faced by the Secret Garden Party during the year 2014. The finding of this research study is very important; this is because it can be used in recruiting new visitors, and also in monitoring and including the involvement of interested customers, who are not able to physically attend the festival. Before proceeding to the main discussion, this research study will try to understand the background of the company. 2.0 Background Secret Garden Party (SGP) is an arts and music festival that is held annually in the last week of July. The program is conducted in Abbots Ripton, which is near Huntingdon, Cambridge shire. Fred Fellowes is the man who established this alternative music festival program. In its inception or inaugural in the year 2004, 1,000 visitors attended the program from one stage. In the year 2013 the program was conducted from ten stages; and the audience numbered more than 32,000 people. The organization follows the motto of ‘principle of participation’ in expanding the scope of its programs (Weinstock, 2010). The brand development process of Secret Garden Party can be explained using Aaker’s (2011) brand categorization model. Considering the research work of Aaker (2011), it can be said that Secret Garden party categorized its service offering in terms of vividness, subject diversity and wide range of entertainment options. According to Aaker (2011), firms can develop super category in the mind of customers by adding niche quotient in the positioning statement. The study explains that the Secret Garden Party applied the categorization model through; establishing separate brand positioning by engaging wide range of performances, action camps, variety of performers and art installations (Weinstock, 2010). 3.0 External Environmental Analysis In this section the research will analyze Secret Garden Party’s external environment with the help of applicable PESTLE factors, competitor analysis and Porter’s five forces; while its internal environment will be analyzed with the help of SWOT analysis. 3.1 PESTLE Analysis PESTEL is an abbreviation for the political, economic, social, technological, legal, and environment factors. These factors analyze the external environment of organizations, like the Secret Party Garden. PESTLE is used in environmental scanning part of strategic management in the SGP (Westwood, 2005). This concept is an effective management tool for understanding market growth, business position or direction of operations. 3.10 Political Factors Political factors entail the extent to which the government intervenes in controlling the national economy (Westwood, 2005). The United Kingdom (UK) government is supporting the country’s music and entertainment industry by providing tax benefits and legal support. These steps have been taken by the government to boost the competence of the British cultural and tourism industry sectors (Arnold, 2008). Therefore, it can be said that music festival organizing companies in UK have the opportunity to expand their business in a politically supportive environment. SGP’s growth has been enhanced by the government support (tax benefit and legal support) effected in the cultural and tourism sectors of the economy. The tourism and cultural potential of SGP is immense; hence government support drives its growth. 3.11 Economical Factors Economic aspects include interest rates, inflation rates, economic growth and exchange rates (Westwood, 2005). A national music and arts festival conducted is included in the nation’s tourism and cultural industry. It is found that the festival market has expanded in UK, both in terms of scale and scope of its operations. The extent of competition in the festival market in UK has substantially increased (Weinstock, 2010). Nurse (2004) also found that UK economy is characterized by strong economic growth and stable per capita income. Economic growth and stable per capita income leads to increased disposable income of the residents of United Kingdom. The level of unemployment continues to decline in the UK; this explains that many people have stable incomes, which they can use for entertainment activities like attending events of SGP. Rise of participants’ numbers in music festivals of Secret Productions is also supporting the fact that certain segment of customers of UK has the sufficient disposable income to afford fees of music festival organized by entertainment companies, like the SGP. When the general economy of a country performs effectively; the level of income by the residents also increase, part of this income is therefore used for entertainment events. 3.12 Social Factors Social factors involve the cultural aspects the affect a given sector of the economy (Westwood, 2005), for example the entertainment or tourism sectors. Some of these factors are population growth rates, career attitudes, and age distribution. The youth population has been growing in the recent years and this is a great opportunity for improvements in the entertainment industry. The youth are the major market segment in the outdoor entertainment events, and the entertainment sector at large. This growth in youth population is the main driver of the growth in the activities and revenue of the Secret Garden Party (Weinstock, 2010). The social impact created by an event of entertainment is directly proportional to the scale and the size of the event. Figure 1: Social Impact of Event Management Programs (Source: Nurse, 2004) Consideration of research works indicate that Hutchens (2009) and Slack and Nigel (2005) reveals the fact that consumer trend and choices of UK customers change rapidly with structure, layout and form of music festivals. Therefore, music festival companies need to experiment with artists’ criteria, number of shows, and hosting; in order to meet requirements of audience. 3.13 Technological Factors Technological factors include technology issues like rate of technological change, innovation, automation, technological incentives, and research and development activities. Technology if implemented appropriately ensures effectiveness and efficiency in the production system (Slack and Nigel, 2005). It is evident from the report of (Weinstock 2010) that the country lacks in providing technological support to people who are unable to physically attend the concerts due to non-availability of technological evolution on the field. Consideration of research of (Simon 2003) reveals the fact that live music performances got the chance to integrate state of art technological support to engage customers through sound effect, vibrant lighting and special effects. Therefore, it can be said that music festival companies have the scope to utilize technological resources such as online video streaming, and online broadcasting to increase popularity of music festivals among people who are unable to physically attend the concerts. The Secret Garden Party therefore must employ more sound technology in its operations in order to attract more people and remain relevant (Weinstock, 2010). The current technology used by SGP includes; internet video streaming through YouTube, and also a website for the organization is continuously updated with events videos. This give people who can’t be physically present in the events to follow proceeding live or later on using internet and telecommunication devices like satellite televisions. 3.14 Legal Factors Legal factors involve the laws and regulations affecting sectors of the economy (Westwood, 2005), for example the entertainment sector. Some of the laws include entertainment law, consumer law, health and safety law, employment law and antitrust law. These regulations determine how an organization operates, costs for products and demand for products. SGP’s operation is normally affected by mostly the health and safety, employment and entertainment law. Success of the SGP is due to the safety and health regulations that the management puts into place during events. For example fire control equipments like extinguishers, and also having the contacts of the fire control department. This protects against emergencies. Also, the organization utilizes the services of medical personnel during events, to solve medical emergencies (UNEP, 2013). The entertainment law ensures the event organizers use only genuine entertainment products; this improves the overall entertainment industry in terms of improved revenue and growth. 3.15 Environmental Factors Environmental factors involve environmental issues like water bodies, vegetation, climate and weather and other geographic features (Westwood, 2005), which affects sectors of the economy like entertainment or tourism. Unfavorable weather conditions like rainy seasons hinder or minimize outdoor entertainment events. The success of SGP is due to its unique geographic location which is attractive; its location has nice features like river, lake and beautiful garden (Weinstock, 2010). These features are attractive to people due to its natural characteristics, hence attendance of live outdoor events is good. Apart from the entertainment aspect of the events of SGP, the people are attracted by the nature tourism. 3.2 SWOT Analysis This is s structured planning method for evaluating the strengths, weaknesses, opportunities and threats involved in a business venture (Westwood, 2005). 3.20 Strengths One of the strengths of the SGP is its popularity in the UK. Hence, it’s well established and has adequate publicity. The second strength is that events are organized by the reputable events management company Secret Productions Ltd, which is already established in the entertainment market, following the launch of the famous Wilderness. The Secret Garden Music Festival is a multiple award winning festival. Strong popularity of the event is the biggest strength buoys the program. Thus, the reputation and growing popularity of the Secret Gardens Party help the event rule over majority of the market and overshadow its rivals in the industry. The third strength involves the event organizers who are employed in the Secret Productions Ltd; they are competent, very dedicated and sincere in work (Moffett, n.d). The motivation among the employees is one of the primary driving forces for the event management company. The fourth strength is that the music and arts events of the festival are held are in prime locations with favorable geographical features, this improves its attractiveness. The fifth strength is that the organization targets special events like Christmas parties, private wedding parties, Astronomers Ball, and Emporium Designer shows. Apart from these, the company also organizes various types of ball-dance programs like ‘Lost Lovers Ball’, ‘Bacchanalian Ball’, ‘Halloween Ball’ and ‘Brasenose College Ball’. Thus, this music and arts events captures a wide range of individuals, from different income and age groups. There are a lot of partners who actively desire to assist Secret Garden in its event and share their workload thereby. Thus, for its marketing or rather, the advertising plan for 2014, the Secret Garden Party organizers can always use their long learning experience for implementing efficient strategies; therefore, experience in the music industry is the sixth strength. SGP also has access to famous and influential people, this give it the seventh strength. In order to accommodate more viewers, the Secret Productions often offer tickets of acts by the famous pop stars like Madonna and such at a discount. 3.21 Weaknesses To begin with, here is minimal entertainment infrastructure available for the outdoor entertainment events. For example wireless connection and internet connection is normally low in remote events venue. This hinders streaming of live events. Also, there is no previous entertainment experience, which SGP can learn from. It is the organization which initially started this form of entertainment in the industry. Next weakness is that the organization does not serve people who are unable to attend the entertainment events (Muller, 2005). 3.22 Opportunities First, the Secret Gardens Party can endorse celebrities and public figures in its commercials. Pop stars like Madonna perform during the SGPs events; therefore they can be used in marketing and publicizing the events. Next, the event organizers of the Secret Garden Party can also set up partnerships with other famous event organizing companies. This would help the company merge its tangible and intangible skills with that of its partner and perform better by organizing music and arts events of higher excellence. Third, instead of setting the events annually, the Secret Garden Party can organize smaller music events throughout the year. Such initiative would help to build long term and sustained loyal viewers for the programs of the Secret Garden Party (Erin, Katie, and Hellen, 2011). 3.23 Threats To begin with, current competition in the entertainment sector is very intense, and this is a threat to SGP. Individuals possess a lot of alternatives for entertainment when it is a matter of their choice. There are various sports events conducted in the UK (Kuchler, 2013). Secret Gardens Party is already facing competitive threat from companies like Seaside Rock, Dumbfest Music and Comedy festival in Hampshire, Blackburn Festival, and Arabian Nights Festival. While fragmented nature of the music festival market has also increased threat of new entrant for the company in discussion. Also, there is threat due to increased number of substitute products. It is evident from the report of PWC (2011) that demand for online video portal of music festival and e-music concerts are also increasing in UK and these new substitutes of music festivals which needs physical presence of audience. Therefore, it can be said that changing customer trend regarding music festivals (showing liking for online music festivals) can be potential threat for Secret Gardens Party. 4.0 Customer Trend Analysis After the beginning of the recovery period in the crisis market from 2010, the aggregate consumer spending in the entertainment industry in UK has increased by almost 2.2% (Aaker, 2011). The non-digital spending in entertainment of the consumers has increased by 3.3% in 2010 (PWC, 2011). Thus, Secret Productions should try to grasp this booming market share in its profit. On the other hand, it is evident from the report of Weinstock (2010) that demand for alternative music festival program is growing among UK customers and data analysis shows that customer base for Secret Garden has increased 30 times in last 10 years. According to report published by PWC (2011) customers are showing more inclination to online video streaming and enjoying music festivals through online video podcasting. Even, customers also prefer enjoying music concerts through Smartphone applications (PWC, 2011). Therefore, music festival organisations need to think about the mentioned customer trends while making the business strategy in UK. 5.0 Porter Five Forces Porter (1980) five forces model can be used in order to understand competitive environment for Secret Garden Party/Secret Productions. Table 1: Porter’s Five Forces Buyer Power Buyer power in the music festival market is high due to large availability of choices and low switching cost. Supplier Power Abundance of suppliers supplying paper, music equipment, increased infrastructural supports and choice options for music festival organisations and decreased supplier power subsequently. Threat of Substitute Sporting outdoor events present a threat to the entertainment method of SGP. This is because sports also target the same market segment as SGP, and they are conducted almost at the same time during the year. Threat of New Entrant Establishing a music festival is not a high cost intensive process and entry barrier in the market is not very high hence threat of new entrant is significantly high in the industry. Competitive Rivalry Very high due to presence of multiple music concerts like The Northern Darkness, Seaside Rock, Dumbfest Music and Comedy festival in Hampshire having almost equal offering and resouces. (Source: PWC, 2011; Weinstock, 2010) 6.0 Competitor Analysis, Music Festival Industry & Market Trend Direct competitors for Secret Garden Party/Secret Productions are the Northern Darkness, Seaside Rock, Dumbfest Music and Comedy festival in Hampshire, Blackburn Festival, and Arabian Nights Festival. While electronic music festivals and online music podcasts are indirect competitors for Secret Garden Party/Secret Productions (The Festival Calendar, 2013). On the other hand, there must be more than 20 music festivals being organised in different parts of UK, this shows the intensity of competition (The Festival Calendar, 2013). Consideration of the report published by PWC (2011) reveals the fact that music festival industry is pretty much fragmented in nature and competitors with almost equal financial capabilities, human resources are competing with each other. Therefore, it can be said that Secret Garden Party/Secret Productions is facing intense competition in UK music festival market. After the beginning of the market recovery in 2010 the gross spending in the entertainment industry has increased by almost 2.4% (UNEP, 2013). As the UNEP (2013) report, UK music festival industry has the scope to achieve double-digit growth rate in future but to achieve this target, market consolidation is needed by the evolution of small numbers of market leaders. It is feared that Olympics, which is to be held in 2014, could detriment the popularity of the Secret Garden Party. It is believed by the analysts that the festival market in UK is oversaturated. Moreover, in 2013 the record braking rainfall cancelled several popular acts of pop starts like Kylie Minogue and Jason Donovans. Although some analysts believe that the bad weather is a deeper concern than the Olympics. The tickets of famous stars like Madonna are not sold at discounts as the gross demand for concert tickets have declined. The fear of cancellation of programs in case of a bad weather and the eventual loss of money is responsible for this reduced demand. Thus, at this critical juncture it becomes highly rational to analyse the strategic ways by which the Secret Garden Party may overcome all the difficulties and park more audiences with increased popularity in the upcoming event in 2014 (Kuchler, 2013). 7.0 Internal Environmental Analysis Secret Production has varied numbers of events and attractions. The followings are the events: Event production: The production team is prominent for producing the programmes including Wyresdale Park Open Day, Winter Voyage, and Alice in Wonderland, Halloween Ball, and Bacchanalian Ball. Festivals: Secret production LTD also the run the different sorts of festivals including well known ‘The Secret Garden Party’, Wilderness. Soul fire: It’s an arrangement for relaxation and connecting with other which ultimately refresh one’s soul and revive your energy. It also provides the experience of palatable food and space for marriage. Secret Emporium: It’s an arrangement of collecting and illustrating all beautiful and renowned photos and design together and in proper place for festival. They believe To Johnson and Cloonan (2009) music and arts can fill anywhere excluding controversial matters Boutique Camping: Provide the facilities of camping and comfortable living during any camping, festival or journey. Secret Forum: The forum is for supporting, expanding and producing arts and seminars in UK and other countries. These means that SGP has diversified entertainment products; diversification is a business strategy aimed at minimizing competition, and also creating a competitive advantage because the audience get many products at just one event. This is meant to fulfil all the needs and requirements of customers during the events. 8.0 Assessment of Secret Production’s offer to the market Secret Productions is a production company with more than ten years of experience. The main Secret Production’s offer to the market is to organise all kind of entertainment events with creativity and originality. The earlier discussion provides the ranges of Secret Production’s portfolio while there are lots offers and packages in each category. The Event production category deals with the different sort of events through the effective and skilled team. They have the resources and tools to provide best service to their customer. In case of festival they are the producer of two well known festivals The Secret Gardener Party and Wilderness. For instance, in ‘The Secret Garden Party’ lighting and internal structure designing for natural landscape was highly praised by all. Others spectacular aspects of Secret Production are: Secret Emporium, which has the collection of distinguished and popular design and photos and sights. The Secret Emporium is one of the most attractive arrangements for the visitors. This section supports all the people who are independent makers and built their own things. It is a way to promote this “own-work” and motivate all the participants to create their personal belongings. Boutique camping is another facility provided by the company for camping. It has accommodations for the visitors facilitate with the reception, security and chill out areas. Soul Fire Restaurant. Open since 2008, this restaurant is famous in each festival for offer a space where participants can feed themselves, relax and chill with friends. There are performances inside the restaurant in order the music do not stop any moment. The Sanctuary; his part of the festival offers two main areas: “The Healing Area” and “The Yoga Centre” for all the participants who want rest or just relax. The last category and the strategic one is the Secret Forum, who runs the intellectual sides of the company attending on different arts and social programme. 9.0 Marketing Communications and Public Relations Strategy Marketing communications are the tools that a company can use to deliver their own messages to its target markets (CIM, 2009). These tools can be; brochures, mailshots, websites, advertisments, sales promotions, exhibitions, personal selling, and press publicity campaign (CIM, 2009). SGP applied all these promotions in the marketing efforts. Most of the companies in the event industry follow integrated marketing approach and have both one to one and customer relationship management with proper accumulation, measurement and control system (Baker and Mitchell, 2000). With this concept, there is a need for effective concentration of other traditional and existing strategies and communication system and comparatively easy to target specific customers for the party. The Secret Garden Party has great media position through recent programmes such as Wilderness, Secret Garden Party and so on. Information provided in this given case is from online, news papers and other media. This means ‘The Secret Garden Party’ has great link with these media of communication. These tools are used in raising awareness, publicity of the party, engagement of the employees and customers. In case of successful communication system, Secret Garden party adopted different policies. They provide a major portion of their income from music and arts festival to gardeners and fund different games, camping, and competitions and inspire for dream and challenge (Santoro, 2009). Moreover, the system works in both internal and external level so that a party or company gets 360 degree benefit from marketing communication system. All of this means that Secret Garden Party identified accurately what is the main problem that they need to solve. The most important objective of all marketing communications is to achieve sales objectives, or in this case, recruit new visitors. “What you want to say?”, “Who you want to say it to?”, “How to present your message?” “When you send your message?” (CIM, 2009). This is the core script to develop a successful public relation strategy. At the end, it is important to take time to do an evaluation of the event and identify any mistakes that the company could have made, to avoid any problems in the future. Public relations strategy need to consider many elements such as, core competencies, stakeholders, timetable, events, budget, management and communication. These elements need to be in relation to make a 360 degree communication and be successful. The competitive advantage of the Secret Garden Party is the feeling of freedom that this event wants to develop into participants. The whole weekend living “in the middle of nothing”, enjoying the nature, music, peace and meeting people. This offer is what makes this festival different from the others. With this competitive advantage the festival creates an image in the public’s mind. The target group can be divided in to two main groups (Georges Benko, 2000): Internal target group: Such as loyal customers from past editions of the festivals, employees, and new participants; and external target group: Suppliers, distributors, and mass media. Georges Benko (2000) states, “It is important to add two more P’s to the 4 P’s of the marketing mix”, such as: “Power” and “Public Opinion”. These new “P’s” mean that it is necessary to listen to what other publics say about the festival, this will aid the company to understand and analyse the needs and satisfaction of their publics. The main objective for this festival is to find a way to gain new customers. For this reason, Secret Garden Festival must have an important social network presence. This is a way to “self-promote” the festival because the public could post and share photos through social media. The Chartered Institute of Marketing (2009) has developed a marketing theory that is important for attracting publics. This marketing theory is known as the “AIDA theory.”Attention of the customer must be secured. Interest, interest of the customers should be maintained. Desire, the desire of the customer in the product must be generated. Action, all efforts must be directed towards the marketing campaign. The Secret Garden Production could embrace this theory and implement it; so as to create publicity and thereby attract more customers. 10.0 The Key Strategic Issues The proportions of the literate individuals in the UK economy have increased overtime. The average men and women literacy rate in UK is above 95%; thus, empirical observations show that the number of Internet users has increased rapidly over time. Secret Productions must try to engage the Internet viewers in its programs. With the help of this initiative, the company would pull in a wider base of viewers for the programs. The organisers may provide a live broadcast of the programs on its official website and may charge a certain reasonable subscription fee from the viewers accordingly. In this way, the company would not only be able to augment its revenue but would also be able to include those individuals who were deprived earlier by lack of their physical presence (Brooksbank, 1990). As the bad weather in the form of excessive rains is forcing the organisers to cancel various programs, the organisers of the Secret Garden Party may try to conduct its events in indoor stadiums (Weinstock, 2010).Considering the recessionary trails in the market, the organisers of the Secret Garden Party must try to lower the ticket prices or should try to provide discounts on the pricy concert tickets (IMF, 2011). The company of Secret Productions must try to enter into strategic alliances with other music event organising companies and arrange bigger and stronger concerts together (Ansoff, 1987). Considering the competition with Olympics, the company should realise that arts and music have no substitutes. If the organisers do not compromise with the quality of the programs or rather improve it, then the popularity of the festival will not fall (Westwood, 2005). In order to capture more viewers, the organisers must try to setup commercials with celebrity endorsements (Gregory, 2009). The Secret Garden Party, apart from music and arts can try branching off to a dance segment, which would surely help the company house more loyal viewers (Nurse, 2004). 11.0 Conclusion It is evident from the above discussion that Secret Garden Party is facing multiple strategic issues regarding positioning, competitive threat, capturing subscription of those audiences who might not be physically present in the concert. Due to such strategic issues, Secret Garden Party needs to be careful in utilizing resources while making arrangement for 2014 music festivals. In conclusion, it can be said that implementation of online broadcasting of music concerts might help Secret Garden Party to achieve market penetration but before implanting such solution, the company needs to test the optimality of any kind of strategic initiatives. 12.0 Bibliography Aaker, D., (2011). Strategic market management. 9th ed. Hoboken, New Jersey: John Wiley & Sons. Ansoff, H. I., (1987). Corporate strategy. 2nd ed. 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