Discuss about the Strategic Management for Mamma Mia! Made in China.
Mama Mia!, the loved-by-all jukebox musical based on the songs of ABBA has been wowing the audiences since 1999. The characters of a mother, a daughter and the three possible dads have made more than 54 million people all over the world feel good and fall in love with characters. They arrived in China in 2011, the first ever Broadway-quality Western musical to be performed in Chinese language. It was also the first ever major hit musical to be an all-Chinese production. The show songs were composed by Björn Ulvaeus and Benny Andersson, former band members of ABBA. During the play in China, classic ABBA songs were sung completely in Chinese, like the “Money, Money, Money”. The creative team of the production was Western, but the cast was entirely Chinese. The China tour started with Shanghai and was set for about 200 performances across three cities, costing 40 million RMB.
The Chinese domestic market has a huge size and growth, which is a huge advantage for their music industry. Along with the growth in the domestic music market, there is an increase in the domestic music development capability. Additionally there is the possibility of the expansion of the Chinese music production companies into the global market and overseas.
By means of the SWOT analysis, the strengths and weaknesses of the Chinese music industry (internal environmental analysis) and the opportunities and threats of the Chinese music industry (external environmental analysis) has been acquired. The viewpoints accumulated after the extraction has been presented below in the table:
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Internal |
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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 |
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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 |
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External |
Mama Mia! is widely loved as a musical production all over from the last 18 years. It contains both visual and musical elements, with its conceptualization and commercialization based on ABBA songs. It is now one of the most loved musical shows in the world entertainment industry.
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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. |
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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. |
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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. |
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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. |
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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. |
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Legal |
In their 12th 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. |
The Chinese musical industry is crucial for any company’s global expansion. With its large growth rate and massive population, the Chinese market is a potential gold mine. Their entertainment industry is overall under developed and extremely fragmented, in turn providing a prospect for consolidation. Moreover, it is important to notice that Chinese people are vey much receptive to music trends imported from other countries. There are other alternative present too for musical entertainment, but the whole musical industry is yet to get saturated. In spite of the presence of different established companies in the music industry, they are yet to be consolidated in order to form a powerful entity. With time, the government of China has progressed the modifications in laws against piracy and individual property rights, which have led to a friendly and regulated environment. In the end, it has to be noted that the early development and receptive environment of the Chinese musical market has created an opportunity for the musical production companies to leverage cultural arbitrage and consolidate the Chinese music industry.
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Forces |
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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. |
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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. |
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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. |
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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. |
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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. |
A basic cutting-edge music market is China. Starting not very far in the past a business open door for paid music hardly existed in China as burglary won. Starting late in any case, online music services have ended up being more standard and Chinese music services, for instance, the genuine Chinese web file Baidu, completed deals with all genuine music associations. If Chinese need a certified change on present day well known music, they have to decide issue of deficient industry chain. The issue can be showed up on resources, capacities, advancing, content, channel, backup things, et cetera. Change of Chinese well known music industry must adjust to market control, consolidate resources of endeavors, finish feature arranged operation, have industrialization, convey fit as a fiddle a thoroughly regard included advantage structure. Chinese renowned music industry should moreover fortify correspondence, create and admire China standard music industry chain.
The Asian United Live Entertainment Co., Ltd. Is the funding partner of Mama Mia! in China. They are committed to the forming of a pattern and process for the setting of a standardized high-volume projects production to in the end create high-value original works and achieve sustainable development in the music industry and build a platform from a combination of investment, production and distribution.
Inside the primary activities of the company, their inbound logistics makes sure raw materials are received efficiently for timely production and operations. Their raw materials are environmentally safe to maintain the reputation of the company as being environmentally respectable. Their operations are continuous and improvements are made time to time for elimination of waste of time and cost. Their marketing and sales processes are increased by sharing and delivering corporate value. New and attractive new technology has been used to boost popularity and sales. Customers are the focus of operations and improvement in branding and management are conducted for excellence. In the Chinese musical industry, the production costs have reduced substantially along with the manufacturing costs.
The company’s management policies concerns dealing with supplier categories for fair procurement. These policies are included for making sure every supplier gets equal chance of business. They even attempt to strictly meet the expectations of their consumers by adhering to laws, standards and regulations. The use of new technologies for supporting the value chain activities also adhere to strict policies.
As an organization, they have been able to create a safe, happy and positive environment. They have improved training programs that have given the organization skilled workers who are physically and mentally prepared for handling responsibilities. The attraction of benefits and career development opportunities has helped in employee retention and employee satisfaction.
Conclusion
The music industry of China has been booming, and with the introduction of Mama Mia! the profit levels of the industry has increased. The introduction of the show in the economy of China has driven it towards a new level of creativity. The ultimate purpose of the show was to introduce musicals with Chinese stories to export all over the world.
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