Assignment of week 15

CASE STUDY

1.  Why has this artist been so successful? What are her key sources of sustainable competitive advantage? Think about her unique resources and core competencies, think about how she has responded to changes in the external environment, why is she difficult to imitate?

Madonna is an American singer, actress, writer, dancer and entrepreneur. She is so successful that no one can be compared with Madonna.  Ruling the music industry for 30 years is not a small thing. Simply, she was successful because of her strategy. As the time changes, she also changed her strategy in order to sustain in the industry.

So how has Madonna been able to maintain her incredible success? The answer to this question lies in five key ingredients of successful strategy that are equally relevant to companies and individuals. These five strategies have provided the foundation underpinning Madonna’s stardom, and if diligently pursued can provide the ingredients for sustained company and career success. The five strategies are as follows:

Elements of Madonna’s Success

1. Vision.

Madonna has demonstrated a clear commitment to super-stardom goal that was pursued with single-mindedness throughout her career. Other dimensions of her life have been either subordinated to or absorbed within her career goals. Rather than wait for industry trends, she has acted to shape the world around her.

2. Deep understanding of consumers and the industry environment.

Madonna has developed her strategy through a deep and insightful appreciation of customers and the music industry. Critical to her continuing success has been a deep understanding of the ingredients for sustaining popular appeal.

3. Leveraging competences and addressing weaknesses.

Madonna has been able to exploit her abilities to develop and project her image and to exploit emerging trends, while protecting areas of weakness. Her weaknesses have been more than compensated for by her use of an extensive network of support personnel, including musicians, technologists, producers, dancers, and designers. Her personal relationships have often been important in building her career.

4. Consistent Implementation.

Without consistent implementation, even the best strategies are unlikely to succeed. Madonna has surrounded herself with individuals and organizations that have enabled her to deliver upon her vision. Through her various companies, such as Maverick, she built organizations that allowed effective marshaling of resources and capabilities, and quick responses to changes in the competitive environment.

5. Continuous Renewal

A key ingredient of Madonna’s success has been her ability to renew her popularity again and

again .She is known as the ‘queen of reinvention’ within industry circles. Compare her abilities in re-invention to many’ one-hit-wonders’ in the music industry, or to performers such as the Rolling Stones who have enjoyed long periods of success, but whose fan-base has aged or remained largely unchanged.

Madonna’s strategy from 1893-2010 by which she has responded to change

•      No frills (1983 A.D.)

Low price/Low added value

An opportunity for a new entrant to carve out a niche or to use no frills as a bridgehead to build volume before moving to other strategies” As Madonna was new to the industry it was important for her to have something unique and innovative. Her voice, looks and dancing style were her unique resources for her.

•      Differentiation (1984 A.D.)

She provides products/services that offer benefits different from those of competitors and widely valued by the audiences.

•      Focused differentiation (1985-2013 A.D.)

Her high perceived benefits justifying a sustained price premium usually to a selected market segment made her to be a sustainable in the market. Her songs are regarded as a premium product and they are heavily branded. Also the image and brand of Madonna was difficult to imitate.

1.   What strategy directions could the artist pursue over the next ten years to continue her commercial success?· Consider each of the four boxes from the Ansoff matrix. What new products or markets could she enter? How might she diversify or continue to penetrate her existing market? Try to think logically but also creatively and innovatively.

ANSOFF MATRIX FOR MADONNA

Market Penetration Target different geographical markets at home or abroad. Target different groups of people, perhaps with different age groups, genders or demographic profiles from normal customers.	New products and services Involve in new business.
Market Development Advertise, to encourage more people within an existing market to choose your product, or to use more of it. Introduce a loyalty scheme. Promotions. Increase sales force activities. Buy a competitor company (reputed music company or production house)	Conglomerate Diversification Launch music in foreign language for foreign audience. Active involvement in politics.

References:

• H.I. Ansoff, Corporate Strategy, Penguin, 1988, Chapter 6

• Johnson, Whittington and Scholes (2011) Exploring Strategy, 9th Edition, Pearson Education, Chapter 7

• ‘Bennett takes the reins at Maverick’, Billboard Magazine, 7 August (1999); ‘Warner Bros expects Madonna to light up international markets’, Billboard Magazine, 21 February (1998).

• ‘Maverick builds on early success’, Billboard Magazine, 12 November (1994)

• 1994); A., Jardine ‘Max Factor strikes gold with Madonna’, Marketing, vol. 29, (1999), pp. 14-15