Strengths and Weaknesses of the Utah Symphony before the Merger with Utah Opera - Case Study Example

Utah Symphony and Utah Opera: A Merger Proposal Name: Tutor: Course: Date: Analysis on the financial and leadership strengths and weaknesses of the Utah Symphony before the merger Strengths Utah symphony anticipates a world-class symphony. The firm is content with revenue streams especially from ticketing since their critical success factors is raising revenue through issuance of tickets which has been a success. The previous year seem to have been good which plenty of customers streaming in to watch the performances. The firm is also keen on skyrocketing annual revenue more than four times what was realized in the previous year. The current revenue of $116k is sufficient to remunerate all the employees who are on contract terms. The company is committed to improving profitability through renegotiating contracts with musicians (Selznick, 2007). The possible avenue to increase revenue is to decrease expenses and narrow on fundraising gaps. The objective of the company is to invest on repeat audience who will happen to sustain and improve ticket sales through referrals and personal marketing. More money is spent on conducting marketing campaigns which will successfully bring in more cash. The firm will likely hit the $500k if it retains the best musicians and have favorable pricing for tickets. It has prioritized on hiring quality talent which results in best performances, more customers and increased tickets and revenue. Legal considerations and labor concerns have been adhered to when hiring the musicians. Weaknesses The company may fail to hit the $500k if current revenue leakages are not sealed. Utah symphony’s quest for rising profits may be frustrated by low turn up in the number of musicians who delivers best and quality shows. The company has not disclosed tax returns which is essential for continued host of plays and performances. Employees are on a full time basis but are on contract basis which means they are not entitled to some benefits of being on permanent contract terms. The company has not embraced diversity in recruitment and hosting of diverse shows. Overcoming the weaknesses a) Automating the ticketing counters to lower cases of cash pilferage b) Increasing more benefits to musicians to motivate them for improved performances c) Allowing flexible schedules and sufficient space for musicians to contribute to a variety of genres d) Embracing a democratic style of leadership where musicians and key staff contribute to the success of all its shows Analysis on the financial and leadership strengths and weaknesses of the Utah Opera before the merger Strengths The firm has a solid reserve and endowment funds which are critical for its sustainability. The company has streams of ticket sales likely to meet its capital expenditure needs. It is poised to increase ticket sales by a greater margin. The company projects ways of raising additional funds and realizing its endowments through hosting sold out performances. It is focused on becoming financially stable which is a noble business objective. The company is keen on becoming a leader in quality performances. The company has good regional and national reputation through good and effective leadership. The firm is liquid and is able to pay all its musicians and actors. Financial stability is key and thus capable of retaining, motivating and training of talent. Weaknesses The company does not have disclosure mechanisms for taxes, revenues and remuneration of employees. There are revenue leakages because of loose ticketing systems. Profitability has not been measured hence the company cannot determine the level of financial success. The firm has not been able to have substantial sold out performances. Endowments funds have not been determined either making it difficult to create income statements and balance sheets. Employees’ relationships are still low while musicians and actors have low morale. Selection of performers is not based on diversity and quality of individual performances. Overcoming the weaknesses a) Integrating a system to capture stream of ticket sales and endowment funds b) Employing based on merit and talent c) Increasing the amount of endowment fund and reserve funds through capital expenditures d) Objective selection of top performers Business scorecards: Utah Symphony On the financial aspect, the company has been able to determine its current profitability $116k which is essential to knowing the business direction or vision. The company knows how to achieve financial goal through hosting a number of fundraisers sufficient to maintain similar pricing and retain a good clientele. By doing this, the company is destined for financial stability and profitability. On customer service, the firm knows receiving feedback from exiting patrons is essential to knowing their levels of satisfaction (Chaffee, 2005). This becomes a learning point to increase the levels of quality service offered. On way of impressing or delighting customers is to hire top quality and best talent. By doing so, it is possible for the company to achieve its desires for a world-class performance. Regarding its systems and processes, the company is keen on improving profitability. This is possible through renegotiating contracts with existing musicians and by doing so it is able to decrease expenses originating from fundraising gaps. Lastly, on learning and growth, the firm has recognized that there are a range of symphonies that can be offered to draw diverse audience (Drucker, 2004). To achieve this, the company has to conduct successful and a well thought-out marketing campaigns to young people capturing different symphonies. A more probable way is to focus on drawing returning and new audience who are likely to improve ticket sales. Business scorecard: Utah Opera Utah Opera has had challenges maintain its reserve fund account. It has to be improved for it to achieve financial stability and a formidable reserve fund. One way of achieving financial success is through realization of endowment funds and raising additional funds. Regarding customer service, the company still faces low demand for sold out performances. It has to quickly acclaim its performances regionally and nationally. This is a toll order and it can only be attained through excelling in quality performances. The main challenges on improving the efficiency of internal processes and systems are apparent. The company should invest on ways of improving profitability. This has to be measured using income statements and trading profit and loss statements. On way of increasing the efficiency of internal processes is through successful negotiations mainly selected performers. By attracting the top talent, the opera house will become financially stable (Chandler, 2002). Regarding learning and growth, the company had earlier covered its capital needs on borrowed money but it now needs to generate this revenue from sale of tickets. The company needs to ensure high-quality performances are produced by quantifying to at least five performances in one year. This is feasible and possible for the company to achieve this by increasing the levels of endowment funds and improving on the number of ticket sales. Development of a balanced scorecard for the merged company based on the specified strategic goals Utah Opera & Symphony Balanced Scorecard The vision for the Utah Opera & Symphony is to become a world-class opera and symphony house. The business model is to develop and improve on high-quality of the performances from more than 150 talented musicians and stabilize an endowment fund. Financial a) Strategic Goal: Being financially stable with an increasing profits to reserve fund b) Critical Success Factor: Raising ticket prices to support endowments funds c) Measure: Improving reserve fund amount to $ 1million from increased profitability Customer a) Strategic Goal: Having nationally and world-class acclaimed opera performances b) Critical Success Factor: hiring quality talent and excelling in quality performances c) Measure: Having sold-out or near sold-out performances and receiving feedback from exiting patrons Internal Process a. Strategic Goal: Closing in on fundraising gaps, decreasing expenses, maintaining financial stability, and attracting top talent b. Critical Success Factor: Having successful negotiations with selected performers c. Measure: Measuring profitability and having reviews noting quality of performances through renegotiating contracts with musicians Learning and Growth a) Strategic Goal: Ensuring production of high-quality and diverse performances to appeal to variety of audience. Hosting more than 10 shows per year five a year b) Critical Success Factor: Successful marketing campaign that advertises different symphonies to younger and middle-aged audience. Measuring endowment fund growth and increased ticket sales c) Measure: Improving capital reserves covered by revenue from ticket sales Utah Opera & Symphony Strengths The new company has increased synergy being a world class symphony and opera. They will have increased number of performances to more than 10 per year. Musicians averaging to about 150 will also be performing based on talent and quality. The new company will have an endowment and reserve fund of at least $1million. Ease of meeting capital needs from tickets issued to increased customers. The best talent will be obtained from the merger of the two companies. Hiring will not be an issue since the performers are known and will be introduced to both parties. Obtaining feedback will be easy from the customer service staff of the earlier company (Ansoff, 2005). Number of sold out performances are high. The company will be a world-class opera and symphony. Increased chances of renegotiating contracts with best quality performers. Huge capital reserves arising from sales of revenue tickets. Capital needs can easily be attained. Huge funding to the new Opera and Symphony marketing campaign due to higher ticket sales. The target audience will include youth and middle aged owing to diversity of performances. Marketing campaigns will have new face owing to talented marketers taking the platform. High quality and diverse performances. Ease of achieving financial stability due to decreased expenses and high revenue sources. Weaknesses Artists and musicians may not fit in and the relationships may be severed. Challenges in creating rules regarding management of the reserve and endowment fund. Some musicians will find themselves irrelevant due to increased schedule and approach to performances. Revenue leakages can still continue if the systems and process are not efficient to capture increased streams of income. Lack of proper consultations and management structure that best suits the new merger. Definitions of roles may take more time to be actualized and each one to know the specific roles and responsibilities. Strain on getting to project the company to be a world class Opera and Symphony. Divergence in the appointment of officials to endowment and reserve fund. Diversity of audience may fail to close the required revenue gaps. Employees with special skills may be left out due to robustness of the payroll, recruitment, and training. The new organizational structure may fail to deliver objectives owing to varied leadership style known to the various employees. Communication and employee relationships remain low in this moment of confusion. Employees remain de-motivated since they have to sign in new contracts which may have their compensation packages lower than earlier earned. Centre of control creates disharmony among employees. Issues arising after the merger Finance: Conflict in the management of the endowment and reserve bank. This will arise on who from either side of the merger will be a signatory, how will transactions be made and perhaps how much will be kept in the reserve bank. This will take time and drain the trust of the management if not solved in time. Human resources: Difficulty in selecting and recruitment of employees since all the merging parties would want to retain all their previous employees. This becomes an headache for the human resource as they try to review the performances, qualifications and skills of the previous employees. Customer satisfaction: Customers may recognize the internal inconsistencies as the company tries to harmonize internal operations. They may recognize some disconnect between performances owing to discontent among the parties. When quality is compromised customers will leave and the company will begin a rough path of plunging sales. Mitigation measures 1. On finance, the new company should have a brainstorming session to both parties and have a binding agreement on how to manage the endowment fund. This should be reached after lengthy and serious deliberations. 2. The new human resource manager should consider equal representation of employees from both parties to prevent internal blackmail and sabotage. If there are employees from the previous companies who should be relieved of their duties then they should be informed in advance and based on business needs and not others facial merits. 3. Customers should be made to see performances on the front of quality and creativity. Investing in innovative and creative shows will thrill customers and allow them rate the performances. References Ansoff, I. (2005).  Corporate Strategy. McGraw Hill, New York. Chaffee, E. (2005). Three models of strategy.  Academy of Management Review, vol 10, no. 1. Chandler, A. (2002).  Strategy and Structure: Chapters in the history of industrial enterprise, Doubleday, New York. Drucker, P. (2004). The Practice of Management. Harper and Row, New York. Selznick, P. (2007). Leadership in Administration: A Sociological Interpretation. Row, Peterson, Evanston Il. Read More