The given case study talks about Hanson productions. The company had earned their name as from the top production companies in US. At one point of time company used to have lot of projects unremarkable reviews of the shows. However at present the biggest concern of the company is the current production. The company is still to finalize their show. The given report will highlight the pricing for the opening day for Hanson production. The problem statement which lies with the organization is which theatre to choose among the three which are Hilton Theatre, the Longacre Theater and St. James Theatre.
Situation Analysis
The main cause of concern is regarding the pricing and finalizing the Theatre of the show. The production houses shortlisted 3 theatres however they are you to finalize one. The mission of the organization is true theatre a wide range of audience with higher return on investment. The vision organization is to make the show successful (Quigley, 2017).
The situation as source of the organization can be done with the help of SWOT analysis. It is important for the organization to evaluate strengths and weakness before planning the show. The main mission of the organization is to increase the sales by following an effective pricing strategy for the show. The vision of the organization is to make the show successful. Due to this reason a proper market research is important for the organization to evaluate the target audience for the show (Lapsley & Rekers, 2017).
Strengths
The production house has several strengths based on which they can plan out their show. These are as follows:-
Brand image: Hanson Production has a strong brand name in the competitive market of event management. The event management company had the experience of producing many successful show which led to strengthening of its goodwill. Joanne Shen, own of the owners conducted market research regarding the changing taste of the audience which was aimed at offering more shows aligned to their taste and strengthening the goodwill of the firm further (Wang & Shaver, 2014).
Low operating cost: Hanson production was able to operate in the low operating cost owing to the strong supply chain management of Shen. She had strong communication with other big theatres as well which allowed her to obtain talented new actors for her shows.
Wide appeal: Shen designed the shows keeping the choice of the audience in view and thus, her shows has a wide appeal and were successful. The theatre producing company was able to attract highly talented actors and the house performed several shows in the United States and London. The wide appeal of the company allowed it to develop into a globally famous theater group (Baldin, et al., 2016).
Content of the show: The content of the shows of Hanson Group were varied which were the outcomes of the market research Joanne conducted. Thus, the content of the shows were led to their success and boosted the goodwill of the company.
Ready to share profit margin with the theater owners: The threatre group was ready to share a part of the profit with the owners of the venues. This encouraged the venue owners to rent venues to the company (Ye & Kang, 2017).
Weakness
Lack of planning: The case study clearly showed that the theatre group though was successful in the initial phase, failed to control its resources like music composers due to lack of planning.
No proper market research: The market research of Shen was restricted to the customer preferences and did not cover important areas like increasing pricing.
Low growth over few years: The theatre group experienced low growth over years according to the case study due to certain reason. First, Shen was not able to manage the increasing number of staff members and the lack of budget planning (Parra et al., 2016).
Opportunities:
There are certain opportunities present in this case. It has been observed that the company could not select any company to whom they can impose the duty to organise the show. There are three theaters for them and it has been observed that all these companies have certain weak points that must be detected and resolved. However, there are certain opportunities for the Broadway production company. The business regarding Broadway is a vast company and it has the capability to capitalize the social impact theory. The business is quite profitable and can get the response from different classes of people (Kerrigan, 2017).
There is an investment opportunity at the grass root level. Further, it can be stated that the company is the society will be benefitted by its creative ideas. Therefore, it can be stated that the company has certain potentials. Further, it can be stated that the company has chances to spread its ideology through its creativity. In addition to this, it can be stated that company is novice in the industry and wants to organize an event. Therefore, it can be stated that the company has all the chances to spread its name through this event and the company should have to take generous steps to attract the audience. This can be possible if the company can identify all the weaknesses and resolve the same (Wang & Shaver, 2014).
Threats:
However, apart from all the strength and opportunities, there are many threats in this industry. The scope of this industry is wide and there are many Broadway companies present in this industry. Therefore, one of the threats is competitiveness. Further, it is a fact that the company should have to fix the rate of the tickets to attract the audience. It can further be stated that the present company is required to make certain creative steps for their own development. In addition to this, the present company could not select the company and if this issue does not resolved, the production quality of the present company can be affected (Parc, 2017). On the other hand, it has been observed that the local legislation over the issue is quite strict and the company should have to take all the reasonable steps for the development of the base of the company.
The company should not make any infringement regarding the legal terms. Further, the company has a small investment capacity and this Broadway is a vast field. Money is an important matter to this effect and therefore, the company should have to resolve this problem. Further, the company should have to specify the company so that the production capacity of the company could not be hampered. Further, the profit sharing process of the company is quite rigid as per the agreement. It has been observed that the chosen theatre will get 6% on the ticket price in addition to 10% of the profit after tax and in case of any adverse situation, the contract will be terminated. Therefore, the company should have to implement proper plan so that it can earn profit from the business (Vollans, 2015).
Assumptions:
It is assumed that the production house will select 1 theatre among the 3 alternatives and determine the pricing strategy among them
The following are the assumption for Hanson Production:
Core Problem:
Lack of decision making:
Hanson Production lacked decision making regarding the new projects. This was evident from the fact that the theater firm was not able to align customers’ convenience to the cost of the theaters.
Lack of financial planning:
Hanson Productions revealed lack of financial planning particularly in case of new theatre. This was evident by the addition of wind machine and rain machine which would have bearing on the cost of production.
Lack of sustainability:
Hanson production lacked sustainability due to several factors like its markets were restricted to the US and London. This resulted in dwindling returns which made the operations of the firm unsustainable.
Evaluative Criteria
The organization needs to have an effective evaluation criteria to attain its respective mission and vision required for the success of the show. With implementation of evaluation criteria, the organization can select the best possible alternative for its show. The evaluation criteria has been selected based upon the core problem of Hanson Productions.
It is of great essence for the organization to evaluate among the three alternative theatres namely Hilton Theatre, the Longacre Theater and St. James Theatre. Therefore, the main cause of concern for the production house is to select appropriate theater among the three with proper pricing of the tickets so that they can earn higher amount of profits from gross revenue of ticket sales.
|
Criteria: |
Criteria Quantified: |
|||
|
Maximum Audience |
0.45 |
|||
|
Return-on-Investment |
0.45 |
|||
|
National tour |
0.1 |
Table 1: Evaluation Criteria for Hanson Productions
The primary objective for Hanson Productions is to get maximum audience for the show along with higher return on investment. This is the reason why 0.45 percent of the evaluation criteria has been assigned to each of Maximum Audience and Return-on-Investment.
National tour is the secondary aim for the organization and this will only happen if gross receipts are higher than the operating costs of the production house.
Alternatives
There are three main alternatives for Hanson Productions, namely Hilton Theatre, the Longacre Theater and St. James Theatre. Based on the given alternative, Hanson Productions will fix the prices of the tickets as per their aims and objectives identified. The production needs to select a pricing strategy based upon the selection of the theatre.
Analysis of Alternatives
|
Criteria: |
Criteria Quantified: |
Hilton Theatre |
Longacre Theater |
St. James Theatre |
|
Maximum Audience |
0.45 |
815.85 (Criteria*Seating capacity) |
493.2 (Criteria*Seating capacity) |
730.35 (Criteria*Seating capacity) |
|
Return-on-Investment |
0.45 |
27 |
40.5 |
42.3 |
|
National tour scope/Low operating costs |
0.1 |
0.3 |
0.4 |
0.8 |
|
843.15 |
534.1 |
773.45 |
Table 2: Analysis of Alternatives for Hanson Productions
From the above analysis, it can be inferred that the organization needs to select Hilton Theatre based on the evaluation criteria selected by the firm. There are several strengths and weakness for each of the theatre. These are as follows:-
Hilton Theatre
Strengths
Weakness
Longacre Theater
Strengths
Weakness
St. James Theatre
Strengths
Weakness
Decision and Justification
Based on the above analysis, it can be inferred that Hanson Productions need to select Hilton Theatre in order to run their show. The prices of the tickets needs to be $110 which is the standard rate for such kind of shows. The main reason behind the selection of Hilton Theatre is that they will bear 10 percent operational costs and the risk of debt will be on the lower side. Though, it is true that they will charge a percentage of profit margin, but, the chances of cancellation of the contract will be less and it will suit Hanson Productions in the long run as well.
The implementation plan will be divided among four different steps:-
This plan needs to be implemented before the show
|
|
Steps |
Time frame |
|
Activity 1 |
Planning |
1 month |
|
Activity 2 |
Resource collection |
2 months |
|
Activity 3 |
Selection of the theatre and pricing strategy |
1 month |
|
Activity 4 |
Implementation/ Contingency plan |
3 months |
References
Baldin, A., Bille, T., Ellero, A., & Favaretto, D. (2016). Multiobjective optimization model for pricing and seat allocation problem in non profit performing arts organization.
Lapsley, I., & Rekers, J. V. (2017). The relevance of strategic management accounting to popular culture: The world of West End Musicals. Management Accounting Research, 35, 47-55.
Parra, D. C., de Sá, T. H., Monteiro, C. A., & Freudenberg, N. (2016). Automobile, construction and entertainment business sector influences on sedentary lifestyles. Health promotion international, daw073..
Quigley, C. (2017). Fintan Walsh, Queer Performance and Contemporary Ireland: Dissent and Disorientation.
Vollans, E. (2015). Cross media promotion: entertainment industries and the trailer (Doctoral dissertation, University of East Anglia).
Wang, R. D., & Shaver, J. M. (2014). Competition?driven repositioning. Strategic Management Journal, 35(11), 1585-1604.
Ye, W., & Kang, S. H. (2017). The Evolved Survival of SM Entertainment in the Chinese Market: Legitimation Strategies and Organizational Survival. Kritika Kultura, (29), 272-291.
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