Ashfield Meetings & Events is a reputed international event management company, which is based in the United Kingdom. It is located in the city of Leicestershire (ashfieldhealthcare.com 2018). It is one of the most sought after event management companies in the world. They cater to the requirements of small to large companies ranging from pharmaceutical, medical devices, biotech and medical diagnostics companies, around the world. The company majorly provides a series of services including the production of various product launch events of various companies, tours and award ceremonies, both in a national as well as on international scale. Here the event of Apple’s new product launch, which is set to take place in Liverpool has been discussed about.
The major event venues of the company include Rome, Zurich, and Paris (Pharmafile.com. 2018). The company has won numerous prestigious awards and accolades in the form of “UK event 2013: Agency Of The Year”, “Conference & incentive Travel excellence Awards 2014: Pharma event Of The Year” and many others (Bloomberg.com. 2018). The company, which has the division named after it, the Ashfield Division, has a wide range of expertise in the form of various healthcare professional and other personalised services, for effortlessly providing services in the form of expertise in providing management of events, at both in a national as well as international scale.
Results of Market research about the commercial viability of similar events:
Ashfield Meetings & Events has been conducting events on a national as well as international scale since its inception. It has garnered adequate amount of profits along with an indelible reputation for conducting events with meticulous planning. Details of some of these events have been provided below:
Alternative sources of finance for funding of events:
Funding of events is one of the most important aspects of any successful event, be it any award ceremonies, meetings and conferences. It is also true for Ashfield too. Some of the sources of finance are as follows:
Major purposes of financial management within the events industry:
The major purposes of the need for managing the finance for the event industry are as follows:
Pricing strategies:
For executing such kind of events, effective pricing strategies could be use by Ashfield:
Critical evaluation of cost-volume-profit (CVP) analysis:
The cost volume profit analysis or the CVP is mainly used by companies for assessing the impact of changes in cost and volume on its operational expenses and income. It is also widely used in case of event management companies; its usage is all pervading (Ziakas and Boukas 2014). There are three pivotal elements of a CVP analysis, which are the profits, volume and the cost of the products. Here the contribution margin is calculated by deducting the variable cost from the total sales (Torriti and Ikpe 2014). It is mostly used for decision making purposes for determining the level of sales, which is necessary for making a profit in the process of selling of goods by the company.
In the case of Ashfield, CVP would be very useful in the condition that the costs remain fixed till a particular level of output or production. Another condition which would help in CVP’s hassle free implementation is the assumption that the tickets would be sold and only variable cost and fixed cost remains. Some important points need to be kept in mind, for ensuring the success of the implementation of the CVP, such as the contribution margin must be greater than the total fixed costs (Noreen, Brewer and Garrison 2014). It could also be utilised for calculating the breakeven point, by dividing the aggregate fixed costs with the contribution margin.
Some of the hypothetical figures, which would help in using the CVP analysis, are mentioned below, in a tabular format:
|
Particulars of costs |
Prices |
|
Average revenue for each consumer |
£ 45 |
|
Average variable cost for each consumer |
£ 15 |
|
Contribution margin for each consumer |
£ 30 |
|
Incremental fixed cost |
£ 15,000 |
|
Number of consumers |
700 |
Table 1: Basic hypothetical figures, to be used for Ashfield’s event.
(Source: Author’s creation)
In accordance with the table provided above, the average revenue from each consumer would be £45, the average variable cost for each of the consumers is fixed at £15, with the contribution margin being £ (45-15). Here the increasing fixed costs have been taken to be at £15,000 and the number of consumers expected to be 700. With the help of these hypothetical figures, the break even of the customer and sales amount can be calculated, as has been provided below:
|
Particulars |
Units |
|
Revenue |
£ 31,500 |
|
Total variable cost |
£ 10,500 |
|
Contribution margin |
£ 21,000 |
|
Incremental fixed cost |
£ 15,000 |
|
Total profit |
£ 6,000 |
|
Break-even (in customers) |
500 |
|
Contribution margin ratio |
66.67% |
|
Break-even (in sales) |
£ 22,500 |
Table 2: Break-even in terms of consumers and break-even sales for the event
(Source:Author’s creation)
If we decipher the table, it could be seen that the contribution margin for the event of Ashfield is at £21,000. Generally a healthy and positive amount of contribution margin is always favoured for retaining greater amount of profits for expanding purposes in future. It can also be derived from the table that after deduction of the fixed cost, the net profit would stand at £ 6,000. Thus, it can be said that Ashfield needs a total of at least 700 consumers to be on the no profit and no loss margin, which is the breakeven point.
In the table given below, various levels of revenue have been shows, which would eventually help in preparation of the traditional break even chart.
|
Revenue |
Contribution |
Fixed cost |
Profit |
|
£ 15,000 |
£ 10,000.00 |
£ 15,000 |
-£ 5,000.00 |
|
£ 30,000 |
£ 20,000.00 |
£ 15,000 |
£ 5,000.00 |
|
£ 37,500 |
£ 25,000.00 |
£ 15,000 |
£ 10,000.00 |
|
£ 45,000 |
£ 30,000.00 |
£ 15,000 |
£ 15,000.00 |
Table 3: Different revenue levels for breakeven point
(Source: Author’s creation)
Figure 1: Break-even chart for the planned event of Apple conducted by Ashfield meetings & events.
(Source: Author’s creation)
Based on the close evaluation of all the factors, strategies, pricing strategies, need for financial management and the cost benefit analysis, a series of recommendations have been provided for smooth growth of Ashfield in the successful completion of the event of Apple’s new product launch. For the income streams, banks are one of the most viable sources of easy finance. Since Ashfield has been operating under the flagship banner of UGDD, for many years, getting loans from the banks won’t be a very difficult issue. Similarly, sponsors would also be available, because of the joint brand name of one of the most reputed event management company of the UK and for associating with Apple, which is in itself, one of the pioneers of the Silicon Valley. For the pricing strategies, the hourly rate and the commission mechanisms are very viable options, which must be utilised. Considering the brand name of Apple being involved, Ashfield must also increase its own profit percentage; keeping in mind the venue rent strategies.
Conclusion:
Thus it can be said and concluded that for the successful execution of the event of Apple’ s new product launch in Liverpool, UK, Ashfield must assess all the intricacies of the project in hand. Right from the costs, the pricing strategies, the cost benefit analysis of the relevant incomes, expenses, and the sales must be taken into careful consideration. For this, a thorough preparation of a proper capital structure is very important, where all these issues would be addressed. A final projection and forecast must be done for all the components of the event, before final execution. Along with all this, finally the sources of income in the form of bank loans and sponsorships from reputed sponsors must be used.
References:
Ashfield Healthcare. (2018). Ashfield Meetings & Events scoop life sciences event award | Ashfield Healthcare. [online] Available at: https://www.ashfieldhealthcare.com/gb/news/ashfield-meetings-events-scoop-life-sciences-event-award/ [Accessed 15 Aug. 2018].
Ashfieldhealthcare.com (2018). Ashfield Healthcare. Ashfield Meetings & Events named in CMI 25 list | Ashfield Healthcare. [online] Available at: https://www.ashfieldhealthcare.com/gb/news/ashfield-meetings-events-named-in-cmi-25-list/ [Accessed 15 Aug. 2018].
Atkins, M.G. and Moyer, D.S., International Business Machines Corp, 2013. Facilitating event management and analysis within a communications environment. U.S. Patent 8,347,143.
Bayer.co.uk (2018). plc, B. UK – Bayer plc. [online] Bayer.co.uk. Available at: https://www.bayer.co.uk/ [Accessed 15 Aug. 2018].
Bhatt, S., Manadhata, P.K. and Zomlot, L., 2014. The operational role of security information and event management systems. IEEE security & Privacy, (5), pp.35-41.
Bloomberg.com. (2018). Terms of Service Violation. [online] Available at: https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=46300437 [Accessed 15 Aug. 2018].
Citmagazine.com. (2018). The Masterplan: Ashfield Meetings & Events. [online] Available at: https://www.citmagazine.com/article/1310193/masterplan-ashfield-meetings-events [Accessed 15 Aug. 2018].
Citmagazine.com. (2018). Universal World Events rebrands as Ashfield Meetings & Events. [online] Available at: https://www.citmagazine.com/article/1229573/universal-world-events-rebrands-ashfield-meetings—events [Accessed 15 Aug. 2018].
Entrepreneur. (2018). Financial Management. [online] Available at: https://www.entrepreneur.com/article/21926 [Accessed 15 Aug. 2018].
EventMobi. (2018). EventMobi. [online] Available at: https://www.eventmobi.com/ [Accessed 15 Aug. 2018].
Kavanagh, K.M., Rochford, O. and Bussa, T., 2015. Magic quadrant for security information and event management. Gartner Group Research Note.
Noreen, E.W., Brewer, P.C. and Garrison, R.H., 2014. Managerial accounting for managers. New York: McGraw-Hill/Irwin.
Pharmafile.com. (2018). Ashfield Meetings & Events | Pharmafile. [online] Available at: https://www.pharmafile.com/directory/ashfield-meetings-events [Accessed 15 Aug. 2018].
Sba.gov. (2018). The Importance of “Financial Management” | The U.S. Small Business Administration | SBA.gov. [online] Available at: https://www.sba.gov/offices/district/nd/fargo/resources/importance-financial-management [Accessed 15 Aug. 2018].
Torriti, J. and Ikpe, E., 2014. Cost–Benefit Analysis. In Encyclopedia of Law and Economics (pp. 1-8). Springer, New York, NY.
Ziakas, V. and Boukas, N., 2014. Contextualizing phenomenology in event management research: Deciphering the meaning of event experiences. International Journal of Event and Festival Management, 5(1), pp.56-73.
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