The Customer Base for the Symphony in San Francisco - Case Study Example

Case Analysis: Marketing Introduction Since its formation in 1911, the San Francisco Symphony has grown through vicissitudes in its experiences of the ever-fluctuating global artistic environment. Although with a remarkable leadership record in the industry, the company has severally been forced to operate on budget deficits that if were eliminated would open up the way for a doubled capability to grow. However, despite its financial distresses, the San Francisco Symphony has an enviable history (Hall & Taylor, 2014). The customer base for the symphony includes those in San Francisco, the larger USA, and others in Europe and Asia. The customer loyalty gained by this company emanates from the trust bestowed upon its good intentions and commitment to sharing the music experience with the community both locally and beyond. Although sharing a similar financial history, the companys principal competitors include the Detroit Symphony Orchestra, the Chicago Symphony Orchestra both of which have operated at deficits in the past. San Francisco Symphony has a high corporate strategy that appreciates its current position, its future aspirations and aims at defining the means of getting to its destination. Under its business strategy, the symphony can be said to have a good long-term plan on how to achieve its strategic objectives by the year 2018. In terms of its human resources, the company takes pride in the rich experience of its director, president and board members as a reliable, functional strategy for both its planning, development and marketing needs. The symphonys superior music experience in terms of recording and performance make up its strengths (Hall & Taylor, 2014). However, the consistent deficits and periodic poor financial performance is a weakness that must be improved to make the company’s future brighter. Considering the customer base, and its good leadership, the Symphony has an open opportunity for growth. However, competition and the unionization of the music industry are major threats. An analysis of the competitiveness of the company, the ethical issues that arise in its operations, its financial status and the overall framework shall be made with the aim of establishing its actual position. The competitive analysis will adopt the Porters Five Forces analysis and the VRIO framework. The unstable financial stability of the company marked by consistent deficits will be deeply analysed. The study will endeavour to make recommendations that can improve the company in both its corporate, business and functional strategies. Organization Defined Key Issues Through its rich history, the San Francisco Symphony has grown to become a vital member and a pillar of the cultural life in the San Francisco community since its start in 1911. With its leadership in the industry, the symphony has won several awards. The launching of the SF Symphonys label in 2001 was a significant achievement given that it was the very first to make such a move. Besides its music adventure, the symphony has a particular concern for communal outreach that helps to share the orchestra’s music experience with the community (Hall & Taylor, 2014). An active management history has seen the symphony survive major threats in the past including those emanating from the Great Economic Depression. San Francisco Symphony is a friend of the community around it. The financial stability of the company is, however, not admirable. The company had registered deficits in six consecutive years since 2009 after recording a slight positive net income in 2008. Among its major programs is the Adventure in Music (AIM) program that mainly targets the public elementary schools in San Francisco. The Instrument Training and Support is a free program that promotes instrumental music programs in both high and middle schools in San Francisco. The Concerts for kids and the Orchestra Youth are programs that aim at nurturing the talents of young people at an early age to give them an exceptional experience in music and artwork. Other organizational programs include the Music for Families, Keeping Score, the SFSKids (Hall & Taylor, 2014).Org and the free concerts. The organizations mission and vision statements are characterized by an unwavering zeal for an excellent musical performance that meets the highest possible standards both locally and beyond. Creativity, excellence, and beauty are the key values to which the symphony makes commitment and pursuit under the leadership of its current President Sako Fisher. Thesis Statement The essay endeavours to analyse the situation of the organization in all of the mentioned dimensions both in the introduction and the key issues critically. The aim is to make reasonable recommendations that could help improve the symphony’s performance in all aspects. Situation Analysis The future sustainability and the survival as observed by its president depend on the ability to formulate a viable long-term strategy that would help alleviate the deficits and guarantee financial freedom. The San Francisco Symphonys current situation is that mixed with strength, weaknesses, opportunities and threats. The companys performance is not pleasant and, as a result, records a consistent deficit and financial instability that requires a new approach to improve. The competitors of the symphony both in the US are in no way any better than San Francisco Symphony. In terms of financial stability, similar trends in the industry have been witnessed following the persistent strike by musicians (Hall & Taylor, 2014). The companys history reveals a competitive edge given the superiority of the products over those of the competitors. However, times keep changing. The consistent deficits show a need for a better strategy that would help maintain the company on leadership given the revolutions in technology. Future competition may pose threats where an action is not taken. The companys customer base makes a full coverage of its many programs designed to reach out to the customers and community. Customer loyalty and trust in the need for the existence of the orchestra gives it the ability to lead for any basis of investment must focus on the customers. Corporate Strategy The corporate strategy of the company recognizes the companys current situation and defines the policy to put in place to achieve its desired destiny (Hall & Taylor, 2014). The commitment of the company to develop a corporate strategy that outlines its objectives, the policies and allocation of resources in its day-to-day operational processes is aligned with its values, mission, and vision. The organizations strategic plan looks into the future and focuses on seeing a better company by 2030. The prioritization of the objectives of removing budget deficits from the symphonys operations by 2018 is consistent with the organizations vision and mission. However, the view of the San Francisco Symphony does not reveal a compelling and clear edge of where the company is going. However, coupled with its values, policies and mission statement, the companys direction into the future can be observed. Business Level Strategy The commitments of the company to satisfy the customer needs are manifested in its core competencies and the many programs that are tailored to meet the needs of varied target customer groups. The programs that are designed to meet the preferences of various groups in terms of age and income are aimed at achieving a competitive advantage. The success of the company’s business level strategy is evidenced by the promising customer loyalty (Hall & Taylor, 2014). At certain levels, the strategy appears to favour both the focused low-cost and focused differentiation strategies that meet the needs of varied customer groups. Such plan comprises of mixed action plans that integrate the cost leadership and differentiation of their products and services to outdo the key competitors. Low-cost programs are tailored to meet the needs of schoolchildren customers while relatively programs that are more expensive are tailored for the youths and adults. The company recognizes the existence of a client base that may not always afford to pay for the concerts and hence makes free concerts that are a promotional tool. However, the effectiveness of the low-cost strategy adopted by San Francisco Symphony could be a possible contributor to the consistent deficits and should, therefore, be reviewed for sustainable competitiveness. Functional Strategies The financial and marketing plans for San Francisco Symphony are fixed in writing. As part of its production strategy, the company values the attraction and retention of experienced musicians compared to its competitors (Hall & Taylor, 2014). A comprehensive financial strategy for the company includes a vast source of funds including concert revenues, development revenues, tours, annual funds and donations. However, the economic policy is not sufficient to source adequate resources to meet the companys expenses. The organization strategy for the Symphony is characterized by decisions on building a rich board with people of exceptional experience like Fisher, Dean, and other notably experienced board members. Internal Analysis To develop an effective and efficient strategy for the organization as directed by the president, the conduct of an internal analysis of the San Francisco Symphony is paramount. Such a strategy should be aligned to the competencies, weaknesses, opportunities and threats facing the organization in its music activities. A highlight of the companys competitive advantage should also be conducted to demystify any possible risks of unmanageable competition in future. For the corporate, business and functional strategies to bear fruit, a companys strengths must be pursued and exploited (Hall & Taylor, 2014). Weaknesses should be eliminated or reduced to acceptable levels to achieve meaningful profitability. The capabilities and resources of the company concerning its ability to reduce its expenses are questionable. SWOT Analysis Strengths-The company’s strengths are built on its recommendable market share and the customer loyalty that need to be exploited fully. The company’s superior products and services in music recording and performance add up to its strengths. Weaknesses-The weaknesses of the company draw from the inability to reduce its expenses resulting in consistent deficits and the disunity of the management that negatively affects decision-making. Opportunities- The opportunities for the business are founded on its ability to expand its tours both in the US and outside to secure more revenues. Threats-The company, however, is faced with the threat that competition may grow with the increased number of orchestras and changing music needs of the youthful generation (Hall & Taylor, 2014). Competitive Analysis Despite its deficits, San Francisco Symphony is a competitive organization given the ability to pay its musicians better wages than other competing orchestras. The demonstration of the company’s competitive ability builds on the commitment to its strong mission statement and value it attributes to both the community and customers. With a proper management of the financial and marketing strategies of the company further consideration of the changing customer needs, the company can maintain its competitive edge. Affordable products and services are an essential competitive tool used by the symphony (Hall & Taylor, 2014). Ethical Issues The high moral foundation of the company is reflected in the commitment to uphold the values of respect, excellence, beauty and creativity (Hall & Taylor, 2014). The companys strong commitment to the observation of the moral code in the face of unethical modern revolutions is to recommend. Financial Analysis The financial analysis of the company indicates the excess of its expenses over the revenues for several years. The company can be said to be in a financial distress. Th persistent loss making is an implication of poor financial planning and strategies that generate revenues. The excess of the expenses over the revenues can be greatly attributed to the high payments made to the musicians. A similar trend of deficits in the entire industry is notable. Strategic sources of income and investment activities should be pursued to guarantee the company’s financial stability. A strategy that aims at generating more revenues should be put in place. Framework Abel’s Framework- The varied customer groups of school children, the youth and adults, their particular needs and how the symphony should meet such needs is defined in its Abels business framework. Based on its understanding of its customers, the company has a broad competitive scope and differentiation of its music products and services. Porters Five Forces Analysis- Under the Porters Five Forces Analysis, the organizations supplier power is influenced by unionization (Hall & Taylor, 2014). The buyer power is relatively small given that the customers are willing to pay higher prices. The competitive rivalry keeps increasing due to improving capabilities and number of competitors. There are substantial threats of new entrants and customer substitutions. VRIO Framework- Under its competitive strategy, the company’s resources are highly valuable and rare. However, they are inadequate. They too are hard and costly for competitors to imitate, and the organization of the company permits the capturing of the value of the resources. Alternative Actions Considered Majoring on the changing consumer needs for differentiation should be considered as an alternative competitive tool. Making investments and establishing strategically reliable sources of income should be considered to alleviate the deficits. Training and developing their own musicians coupled with contractual agreements could bring the expenses down. Recommendations i) The company should institute financial strategies that aim to reduce its expenses as a means to eliminating the deficits. Strategic funding and investment projects should be considered for the expansion of the revenue base. ii) To stay ahead of competitors, the company must include the changing customer needs especially in the modern generations in its operations. The vision statement requires review to capture these recent trends and give the company a more definite direction. References Hall, C., & Taylor, F. (2014). Marketing in the music industry. Boston, MA: Pearson Custom Pub. Read More