Art Management and Marketing: Baxter Theatre - Essay Example

Art Management and Marketing Assignment Baxter Theatre name) (Institutional Affiliation) Abstract Baxter Theater is an art organisation with vibrant, multicltural entertainment within the art industry located within Cape Towns’s southern suburbs, between the University of Cape Town (UCT) and the Devils Peak mountain. The Thearter organisation has been ranked among the best performing theaters in the South African country and and also featured in the world arena as the one of the best performing art orgnisations. The organisation was a major pillar during the era of apartheid, when it presented multiracial and progressive art work at a time when non racial interactivity was censored. However, owing to the fact that there have been recent dynamics and shifts in this industry, stakeholders have been compelled to undertake proper analysis in relation to the facets of the art industry in order to make sound decisions. This project focuses on a case study analysis of Baxter Theatre and its external and internal environments that affect its success either positively or negatively. Moreover, it focuses on a discussion of forecasted cashflow and income statement of the organisation as well as the financial risks it faces as it continues with its operations. In addition, the case study uses the SWOT analysis tool to analyse the company’s enviroment in terms of strengths, weaknesses, opportunities and threats. Values and Strategies of the Collectors Creative Mission “To provide an exciting forum for the celebration of life, which is the essence of live theatrical performance, music and dance.” Short Term Organisational Goal The organisation focuses on curation and facilitating performances such as overnight hotel collaboratives and residency performances as well as provision of a platform for university and high school students to produce films and engage them in networking for a period of approximately two months, thus improving their capacity to perform in the favorite art activities. Long Term Organisational Goal The long term goal that the organisation aspires to achieve is to create a society where art is appresciated and perceived not as an altertanative means of income, but rather a pertinent aspect of social and economic development. This is to be achieved through capacity building by narturing talent of young artists at university and high school level while creating awareness in the society on the need to appreciate art. Analysis of the External Environment There are various external factors that directly or indirectly affect the success of the organisation towards achieving its mission, short-term and the long-term goals. This because of the inherent potential threats and challenges these factors can cause to the organisations. Competition from Properly Established Art Organisations One of the major external factors affecting the success of the organisation is competition from other well established art organisations (Mark, 2011). There are several large art organisations that have been in this business and have established themseleves properly overtime. Such organisations pose a great challenge to Baxter Theatre organisation, especially when it is making attempts to penetrate deep into the industry where many clients have remained loyal to specific art organisations. Some of these organisations it to a high level of competition include: Barnyard Theatre, Johannesburg Youth Theatre, Market Theatre, Playhouse Company, Sibikwa – Benoni, Windybrow Theatre, State Theatre etc. Technology Technology is another pertinent external factor that plays a great role in determing the success of the organisation. The rate at which technology has been changing overtime has greatly affected the operations of various art organisations both positively and negatively. Research has shown that the current art industry is charaterised by utilisation of advanced technology geared towards production of various works of art e.g. film production through the use of advanced cameras that produce high quality images (Mark, 2011). In the case of Baxter Theatre, changes in technolgy have enhanced its efforts towards film production both for the university and high school students and the general public at large. Moreover, technology plays a pertinent role in facilitating the success of art organisations when it comes to marketing and creating awareness among the consumers regarding the specific services and products offered by the organisations. For instance, the use of social media among businesses has played a crucial role in marketing of products and services e.g. new films. Cultural Dimensions Research has shown that culture does not only affect the art industry, but also affects other businesses. However, the film industry is among the industries that are highly affected by cultural dimensions because of difference in taste and preference among people of different culture i.e one apsect of an art may not be culturally valued or accepted in some regions while it would be highly valued in some other regions. Therefore, Baxter Theatre need to take this aspect into consideration as it may affect its success both in the short-term and long-term (Griswold, 2008). Analysis of Internal Aspects Competencies and Capabilities that are Important for the Organisation The success of Baxter Theatre depends heavily on the operational skills that are possesed by its management. One of the key competenies expected from the management for smooth operation and coordination, which are integral elements for any organisation to succeed is communication skills. Members of Baxter Theatre, specifically those that are incharge of marketing require proper communcation skills to enable them to effectively coordinate their their marketing activities to attract consumers to their products and services. Moreover, the team needs to be in a position to identify and nuture talent among young artists in order to ensure that the mission of the organisation is achieved as stipulated in the organisation’s mission statement. The ability to identify talent is imperative owing to the fact that it would allow the organisation to achieve its long-term organisational goal, which is to promote community development through nurturing of artisitic talent among the youth. In addition, the organisation requires a team that respects and observes cultural diversity. This will enable them to operate in highly competitive environments that are characterised by divserse cultral aspects. The respect of cultural divsersity also ensures that the organisation incorporates cultural tastes and preferences in producing its art work. The respect for culture is also imperative owing to the fact that it will allow the organisation’s members to develop proper inter-personal skills that are eminent in operating in a diverse cultural environment. ` Key Risks faced by the Organisation Loss of Talented Artists and Workers to already Establshed Organisations One major risk that is facing the Baxter Theatre, is the lose of identified and developed talent other well-established art organisations i.e talented young youths who have undergone the three month training, have been identified by other organisations and absorbed. In addition, the organisation has also lost some of its most qualified management to other well-established organisations that have huge and better assets. Rapid Technology Change Another major risk facing the organisation is ascribed to the challenges posed by the rapidily changing technological environment. Research shows that the current art industry is faced with challenges associated with the rapidily changing technology. This is a risk facing the Baxter Theatre organisation owing to the fact that, in event of any technology change, the organisation is be compelled to invest unexpected or unbudgeted financial resources towards purchasing and installing the new technology (Griswold, 2008). Simplicity vs. Security Because the organisation operates under a system that allows its members and clients to login and purchase their tickets online, this has posed challenges to its clients who find this procedure hectic hence end up avoiding the discounted tickets. This has also seemed challenging to the organisation owing to the fact that it is compelled to perfom monitoring activities in relation to the online purchasing system for its discounted tickets. Provision of discounted online tickets has also caused frustration in the past among its customers who purchase tickets thinking discount offers on the tickets are still on, only to find the offer period has expired. Ways through, which the Organisation may Mitigate these Risks In relation to loss of talented artists and team members to other established art organisations, the the organisation has embarked on a strategy of increasing its renueration to management and its artists in a bid to attract and retain better talent. The organisation has either embarked on a process of arranging motivational workshops for its managemnt and artists to educate them on the need to work with the organisation for personal development and growth. Moreover, the organisation has also opted to enter into partnerships with other well established organisations in the industry in order to have access to better facilities to enable its young talented artists to get a platform to showcase their talent. On the other hand, the organisation employs a strategy that involves setting a team charged with the responsibility of performing research to identify current technolgy that is used by other art organisations in the industry to enable it develop competitive advantage. The organisation outsources its IT services to external experts to help it gather information on current and new technology that has been invented and how it can be applied in the orgnisation and the entire industry. Ways through, which the Organisation Builds Trust on Itself Respect and Application of Proper Inter-personal Skills The organisation applies the concept of proper inter-personal skills to facilitate a proper and harmonious relationship between and among its team members. This has created a high sense of trust among its management, employees as well as other talented young artists. Operations under one Orgisational Mission and Goal The essence of working towards a common organisational mission and goal, contributes immensely to its efforts towards creating trust and loylty among different customers and team members. In addition, this mission statement of the organisation enabales it to provide quality services to its clients hence creating trust for its services among customers. Ownership Structure of the Organisation and its Appropriateness The organisation was created by Jack Barnett in the year 1977 and bequathed to the late Dr. Duncan Baxter who through his will bequathed the organisation to the UCT to enable it develop and cultivate art in the city of Cape Town and adjacent districts. Currently, the university manages the affairs of the organisation and appoints all management from different cultural and ethinic backgrouds. This composition structure is important because it builds a diverse team, which is able to produce art work that takes into consideration different cultural factors hence improving its succcess in the current competitive art industry. Moreover, the ownership invites young individuals to participate in the management of the organisation, which facilitates the attracttion of young and talented artists hence increasing its popularity among the young generation that have an interest in issues ascribed to film production and artistic presentation. Key Stakeholders in the Organisation The Organisation has two key stakeholders; the first stakeholders are the management team, which is composed of older experienced people and young people from the university who come from diverse backgrounds. The needs of the management team are based on their mission statement and the organision’s long-term and short term goals. These needs are achieved by the organisational objectives, which involves working with the local populace to identify artistic talent in various high schools and within the university hence nurturing and providing them with a platform to display their artistic talents. The other stakeholders of the organisation are the clients who are consumers of its artistic presentations, and the young artists in the university, high schools, and other tertiary institutions all over the country. In meeting needs of its clients, the organisation employs a strategy that involves providing clients with current modes of artistic presentations and interesting films produced by young and talented high school students. On the other hand, the organisation ensures that the needs of its young artists i.e. actors, traditional dancers and theatrical performers are met by providing them with an opportunity to showcase their talents, which earns then income hence motivating them. Using SWOT Analysis to Analyse the Environment of Baxter Theatre SWOT is a strategic management tool that used to analyse the strengths, weaknesses, opportunities, and threats that face an organisation. SWOT is a powerful tool for evaluation and analysis as it helps an organisation uncover opportunities that it is well place to exploit in the industry. By helping management identify weaknesses of the organisation, then it can be able to control and eliminate threats that are facing it. In addition, because SWOT can help an organisation analyse itself and the competition, then it stands in a better position to craft the best business strategy to give it competitive advantage in the industry. Strengths of Baxter Theatre Strengths can stem from both the internal environment of the organisation, market, or customers. Strong experienced management team coming from diverse background. Online e-commerce platform where it sales its tickets The company involves the local populace hence creating good relationship, which for the past a few months since its conception has seen the customer base of the company increase due to engagement of the company in CSR thus earning it customer loyalty. The company targets a specific market segment e.g. students and tourists unlike its competitors that have no specific market they are targeting. The company has built strong trust among its management, employees, and the young recruits through e.g. good interpersonal skills. Weaknesses The company has no sophisticated sound systems but rather relies on public facilities, which would sometimes pose technical challenges e.g. another company may hire the facilities in advance. Inefficient online platform because the system is automated and hence no live customer support to guide customers in purchasing their tickets The company does not have a R&D team to gather information about market trends and other crucial information especially concerning strategies employed by competition to attract its artists. Company has no team monitoring cultural diversity trends to enable it to operate under highly competitive environments characterised by divserse cultral aspects. Opportunities The art industry is a volatile industry which calls for efficient management to identify the emerging market. Baxter Theatre has an opportunity to grow in this industry especially through penetrating into the new markets e.g. The toursm industry which is growing at an alarming rate. Invest in adnavaced technology to bring services close to customers especially through its online system. Threats Strong competition from other well-established art companies e.g. Barnyard Theatre, Johannesburg Youth Theatre, Market Theatre, Playhouse Company, Sibikwa – Benoni, Windybrow Theatre, State Theatre etc. Rapid technology change which calls for sudden unplanned investment. Stiff competition from other organisations Sales and Marketing Target Market The target market for the Baxter Theater is in the entertainment industry, especially, in films, theatrical performances, classical music, comedy, drama, zabalaza, and traditional dances. Specifically, its consumers are audiences of its films, traditional dances as well as those who are interested in theatrical performances consisting of students from institutions of higher learning and high and lower schools. For instance; the organisation has created a platform for its talented traditional dancers to perform in tourist hotels and other residential places where people value and respect traditional dances. In this regard, the need for entertainment through different forms of artistic presentations is met by the company as it offers its services to its clients. How the Business Differentiates itself from its Competitors To begin with, the organisation operates through effort directed towards identification of talent that is nurtured by providing platforms to its young artists to display their talent. This strategy is different from that of most organisations that usually focus on recruitment of already established actors, dancers et cetera. Moreover, in the context of product positioning, the organisation focuses on production of films at the university and high school level thus attracting a young audience, majority being university and high School students or audiences within lower level school age bracket. In addition, the organisation focuses on provision of its services in Tourist Hotels through presentation of traditional dances, theatrical performances et cetera. This has enhanced its success over time owing to the fact that most large art organisations focus on one aspect of production that is basically sold or marketed on the internet and other modes of distribution. Key Aspects of Promotion and Product Placement The organisation applies different strategies to promote its products and services; one of the strategies applied by the company entails the use of internet technology through an online platform where it markets its products and services as well as creating awareness among consumers regarding its presence. For instance, the organisation has a website where people can access all the information concerning its activities for upcoming events, new movies, where they will be performing on some give date etc. In relation to product placement, the organisation offers its products to persons that love traditional dances mostly in tourist hotels, university students and high schools students where it encourages talented youths to come out and join the organisation. The organisation is located in the city of Cape Town where tourists flock all year round and within the proximity of the university where it offers a number of Disciplinary art performances to different audiences. On its website, the organisation has ensured that it has it contacts on social media channels like Twitter, Facebook, Flickr and an email address where most of its clients can access any information concerning its operations. Financial Forecasts of the Organisation and Requirements Estimated Sales of the Company The company expects to make an average sale of $510,000 million US dollars; approximately 60% of this amount will be generate the last six months of the year given that the industry’s high season occurs toward the end of the year. The types of sales that shall be provided to the clients are online sale tickets, and beverages. Cash Flow Statements of the Organisation Projected Monthly Cash Flows for the 12 Months Ending 2014 The table below indicates the summarised projected statement of cash flows of the company for the 12 months ending 2014. The statement was prepared from the company records starting with a cash balance of $19, 286 both at hand in the bank. In addition, the owners have injected $20,000 to help them increase their assets base due to increasing demand for its services. In addition, the company receives $1200 donation from the Cape Town university each month (Expatica.Com, 2014). In total, the organisation has projected to generate a cash total of $ 550,999 for the fiscal year ending 31, December 2014. Fig. 1 Profit and Loss Statement The table below indicates summarised projected gross revenues of the company (Expatica.Com, 2014). The expenses are also indicate; the annual expenditure has been deduced from the monthly expenses like costs of transporting artists from one point to another as well as other expenses such as repair of certain artistic devices etc. Fig. 2 (Expatica.Com, 2014) This table represents the annual projected net profit that will be generated by the company for the fiscal year ending 31 December 2014. The projected revenue for the organisation is about $510, 000 while the projected expenditure for the organisation is $ 282,400. However, with the current trends in the market, showing different populations are appreciating artistic work, the business projects that its cash sales revenue will increase at a rate of approximately 10% for the first quarter of the year and then increase at a constant rate of about $1000 for the remaining 9 months of the year. In addition, revenue from beverages is projected to be constant at $3000 for the first quarter and then at $ 6500 for the remaining months. These are good indicators of attaining customer loyalty and hence increase in market share. Therefore, within a period of three years the profit shall be $411, 600 US dollars, taking into consideration that the production costs remain constant. Assumption: The price of the tickets concerning the financial statement indicated above is expected to remain constant; however the number of clients visiting shows organised by the organisation is expected to increase as time goes on which has been averaged at about 1000 every month after the first quarter. Investment Strategy Assets Investment Requirements The company has skilled team members who are working on a voluntary basis. In addition, it also requires an office or a theatre hall where it can train identified young and talented artists. Moreover, it also requires artistic equipment, majorly those that are offered at a cheaper costs due to the fact that the company has not recovered from past financial problems. Financial Risks that may face by the Organisation The organisation faces challenges regarding to its financial capacity to purchase capital assets like equipment for production. This can majorly be attributed to the fluctuating prices of artistic equipment, which may increase at times and reduce some other times. Another financial risk is instances where the organisation makes losses especially the first quarter of the year because this is the low season in the industry especially concerning to hotel performances. Future Challenges/ Dilemmas/ Opportunities Core Challenge that may face the Organisation The core challenge that may be faced by the organisation is competition. This is majorly resulting from properly established organisations that produce similar products and services. Potential Turning Points for the Organisation The potential turning point of the organisation may occur when it enters into a partnership with other already established art organisation that are more popular and more successful. This may provide it with the opportunity to showcase and market its services properly hence making large amounts of profit. Bibliography Alexander, V. 2003. 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