Strategic Plan of Contemporary Organizations Term Paper

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Strategic Plan of Contemporary Organizations

The Sydney Symphony Orchestra

Started in the year 1932, The Sydney Symphony Orchestra (SSO) is a complete 90-member orchestra that is based in Sydney. The SSO has in recent years enjoyed good profitability through both high concert attendance and strong government support. However, despite these successes, the music industry in which they operate is constantly facing a changing external environment that makes SSO future profitability a frequently pondered issue. This paper seeks to project or rather predict the future profitability of Sydney Symphony Orchestra within this competitive music industry. By the end of this essay an educated prediction is made using the general environmental framework and through the conduction of an environmental analysis using Porters five forces model of competition (Porter, 1998).

A collection of dimensions that influence an industry and the companies that are within this industry form a general environment. These dimensions include: Technological, Demographic, Political, Economic, Global, and Socio-Cultural dimensions, all of which affect the Sydney Symphony Orchestra. The political aspect of the SSO is strongly linked with the heavy support they receive from the government via heavy funding. The economic dimension of the SSO is highly positive, with evidence such as the $1.022 million in surplus reported in 2011, plus a bequest of $500,000 (Hanson, n.d). Apart from the money the SSO receives from the government, approximately 65% of the revenue that was earned by the Sydney Symphony Orchestra was generated through profits (Sydney Symphony Orchestra, n.d). The socio-cultural and demographic environments, on the other hand, are strongly linked to the location of the symphony in Sydney and the city's unique features. Sydney is regarded by many as one of the liveliest cities in the world, with a population of over 4.5 million individuals. The residents of the city are also economically well off, enjoying one of the highest per capita incomes. The city is also home to a large well off middle class who can afford expensive inner city housing. A ticket to a Sydney Symphony Orchestra concert costs between $50 and $71 and these prices are considered affordable by many residents (Hanson, n.d). Technology is another dimension of the general environment that has heavily influenced the profitability of music. The growth in popularity of music websites such as Pirate Bay and YouTube offering free music at the click of a button have greatly reduced the perceived need for attendance to actual physical concerts, as recorded music is free and available on demand. However, technology has on the other hand also opened up new media which the SSO can use to reach a wider and more diverse audience.

Porter's five forces model of competition offers an additional insight into different segments of the music industry, adding to the overall understanding of the future profitability of the SSO. Porter's model, utilizing the diagnostics of five forces, allows future understanding of any industry's profitability (Porter, 1998; Recklies, 2001). First, it must be understood that new entrants to an industry pose threats to any firm's existing market share; thus product differentiation is a crucial tool, which is evidently utilized by the SSO in terms of their standards in employing only the better of first rate musicians. In the music industry, it is crucial to also consider substitute offers such as online music videos, live rock and pop concerts, listening to music at home, and many other different forms of alternatives, which may be less expensive compared with attending the orchestra. Moreover, the power of suppliers also affects the music industry in that they cause an increase in costs such as that of instruments and venues that may reduce profitability.

Another important aspect is the extent of rivalry between companies. In this segment of the music industry, the rivalry is between the Sydney Symphony Orchestra and other artists, orchestras and bands that perform in Sydney's live music sphere. As noted by Hanson (n.d), intense competition or rivalries are common in industries that have many firms. As there are several other chamber groups in Sydney that offer the same kind of music as the SSO, it can be argued by many that the intensity of rivalry is strong within this industry. Buyers or rather listeners in the music industry can quite easily access different types of live music without necessarily incurring huge switching costs. On the opposite side, the SSO is widely known for its high quality and the unique experience it offers which cannot be easily substituted.

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When analyzing the overall environment and the industry that surrounds the Sydney Symphony Orchestra a strong survival is expected in the long-term. This is evidently shown through a strong general environment, especially, the orchestra's sturdy economic standing. However, technological developments pose a threat to the music industry in general; potentially it might have a negative effect on SSO's future profitability. Regardless, the technological advances might also, on the other hand, provide opportunities that the SSO can utilize. When utilizing Porter's five forces model of competition, a competitive music industry sector is shown. This is due to the many chamber orchestras and other live performance music artists and bands in Sydney (Hanson, n.d).

Sydney Symphony Orchestra's 4 sources of competitive advantage are:

Good hiring policy and first rate musicians

Affordable tickets

Simultaneous online streaming of concerts and digitized filming

They are in a niche of their own -- a classical niche that is backed by the government.

North Australian Pastoral Company (NAPCO)

The North Australian Pastoral Company (NAPCO) is a predominantly privately owned firm in the Australian ranching industry. The firm was established over one hundred years ago in 1877, and beef production is its main business. The firm's internal environment strengths include huge resources, such as its thirteen cattle stations occupying over 5.8 million hectares, and its herd of over 200,000 cattle. The cattle in NAPCO's stations are grass fed and grain finished. The firm is vertically integrated and breeds and finishes its own composite cattle to supply quality beef products to both export chilled beef markets and the domestic market (NAPCO, 2012). Several factors contributed greatly to the early and quick expansion of the industry, including the Gold Rush and high population growth rates across Australia. Cattle numbers have continued to increase steadily and by the year 1900, beef cattle population had risen to about 8.6 million. The late 1950s witnessed the introduction into the Australian Cattle industry of different cattle breeds, which played a key role in the growth of the industry. By 1976 the herd in Australia had increased to 29.8 million cattle (Australian Bureau of Statistics, 2005).

As noted by Kwan (2014), NAPCO faces medium pressure in terms of the threat posed by new market entrants, low pressure from competitive rivalry, substitutes, supplier bargaining power, and medium pressure from buyers bargaining power. Over the last fifteen years, the Australian cattle industry has increasingly been affected by significant external fluctuations. These include: the detection of BSE (bovine spongiform encephalopathy), more generally referred to as "mad cow disease" in the United States of America (U.S.), Japan, and Canada (and the related impact on consumption patterns; the 1997 Asian economic crisis; fluctuations in the value of the Australian dollar; cattle herd rebuilding in the U.S.; and renewed economic growth in Asia and the U.S. As well, the recent drought in Australia cut cattle herds by about 1.4 million head between the year 2002 and 2004 (Australian Bureau of Statistics, 2005; Northern Australian Beef Sector: Planning For Recovery and Profitability, n.d).

Veal and beef exports to Japan have decreased significantly (by as much as 50%), especially after the discovery of mad cow disease in some of the Australian herds. Increasing competition with USA beef in the future is also likely to affect Australian imports to Japan. Lower demands from the service food sector, and high local cattle slaughter has resulted in increased competition in the U.S. market. However, despite these effects it is projected that manufacturing type beef exports to the U.S. will increase due to reduced cattle slaughter in that country (Linnenluecke, Griffiths & Carr-Cornish, n.d). Thus NAPCO is operating in a very unpredictable market. Furthermore, even though there are entry barriers, beef is still substitutable (Long, 2014). The buying power has also been greatly affected in the last 4 decades as the eating habits of Australian have changed greatly over that period of time. Reasons for the changes in eating habits include, health concerns, new cultural influences, products marketing, change in prices of food and alternatives compared to beef and so on. While veal/beef remain the most popular meats, they have both suffered and enjoyed the effects of these changes. Consumer preferences for substitute sources of beef such as chicken has have also changed with these other changes in eating habits. For example in terms of chicken meat, its consumption increased to 35 kg in 2002-2003 up from 24 kg in 1988-1989, with the Australian Bureau of Agriculture and.....

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