Alzheimer s Society — Analysis Figure 1 — Charities

Alzheimer’s Society - Analysis Figure 1 - Charities industry • Crowded marketplace – 190, 500 charities though lots are schools. Small number of established strong key players. • Charities have adopted technology in support of fund raising – facility to provide online donations • Donors tend to favour the big, high profile charities e. g cancer research • Medium sized charities such as ALZ tend to get squeezed out • Income is increasing, 2002 – 2007 increase of 51. 18% • Hierarchy – Cancer research donations represent 50%, Children’s charities represent 32%, Poppy Day appeal 25%, Animal welfare 20% and Mental Health a mere 3. 8% of charitable donations. • Charity Commission acts as watchdog Figure 2. PESTLE Analysis Political • Governments and regulatory bodies need to find a way to increase support for carers, and fund more research to find a cure for Alzheimer’s. Doesn’t seem to be high priority for government today (only spend 13% of that on cancer research). • Time bomb waiting to happen as population is ageing especially 85*. 100, 000 people develop dementia annually and set to increase • Increasing strain on NHS where mental health is not as well understood • Economic • Global credit crunch has dampened consumer spending – has hit all industries. What will be the impact on donations? Likely to see people cutting back here as well though no evidence ye • Consumer confidence has hit rock bottom • Difficult times ahead as potential for unemployment to increase • Social • People understand the need to give – increasing use of Comic Relief, personalities to raise profile • Cause related marketing increasingly popular • Ageing population; older people living longer, divorce rates high so more single households – this will result in less carers and puts more pressure on medical services • Greater interest in environmental issues, ethical trading, reputation of companies and organisations • Amounts bequeathed in wills to rise fourfold between 2010 – 2050 though may be used to fund children/their own care • Social sigma associated with mental illness • Technological • Utilise to find a cure • Brain games e. g Nintendo DS a useful way to prevent Alzheimers • Opportunities are endless in terms of marketing • Sophisticated database marketing techniques now possible • More and more activity on internet and people willing to donate on line • Legal action can be taken against companies who are unethical, flaunt I. P, non compliance offences Power of bodies like NICE can impact ALZ and use of drugs – requires court action to fight • Environmental • C. S. R. - drug companies have to be more transparent, ethical sourcing and testing • Growing need for companies to target environmentally aware and cause related target segments

Figure 3. Porter 5 forces Supplier power- Low Only 3. 8% of charitable donations go to Mental Health charities. New entrants - High Low barriers to entry Crowded marketplace. Industry rivalry - Intense Competition in the UK is increasing. Competitors use sophisticated marketing. The strongest have developed their business by merging e. g Cancer Research UK and Imperial Cancer research. Buyer power – High Consumers today have so much choice in deciding whether to donate, and if so which causes to donate to. They can buy online, set up a DD, run a marathon for a charity of their choice, and engage in sponsorship events. Using broadband they can surf 24/7 on web sites to compare Charities and their ethical trading stance. They can donate to UNICEF whilst travelling on airlines or send a donation whilst watching a heart rending appeal on television. Threat of substitutes – Medium The number of charities is increasing as is the amount of conflicting monetary pressures on the public who are bombarded daily by sophisticated marketing techniques to tug at the heart (and purse) strings. Figure 4 - Financial Review Implications Income Increased by £ 4. 2 m 10%; 11% grants, 23% sales and fee income 19% legacies and 2% donations and subscriptions (120, 000 people) though this plus grants makes up 68% income. Need to focus on increasing income from donations Expenditure Fairly consistent with care homes taking 78% and fundraising costs 13%. Spent £ 1. 7 m marketing activity - 4% Reserves ALZ has some reserves which I could use if needed Figure 5 - Portfolio Analysis Question mark 6 Don atio ns £m 5 Star Cance r/heart h Internatio nal aid 4 Dog 3 2 1 Herita ge -10% Cash Childr cow en Animal 0% 25% % change in voluntary income 2004/5 – 2005/6 More people are donating to charities; with the top 5 charities taking 2/3 rd of market. Overall the voluntary income has remained the same between 2004 – 2006 with international aid seeing a large increase – may have been a disaster that rallied the nation but this has impacted on the income of other charities. ALZ held up well and saw a small increase though overall receiving 1% of voluntary income so very small Figure 6. Branding Personality improve quality of old age, find cure Big brands have greater fund raising power. Awareness of brand is important so potential Values integrity, passion donors know what ALZ stands for. Currently ALZ brand awareness limited. Memorable Emotional Reward feel doing something to help campaigns such as Cancer Research I shouldn’t be here key to driving Rational Benefits small amount. , won't miss support/donations. Functional benefits easy to donate

Figure 7. Value Chain Firm’s Infrastructure - Use of strong management teams to maximise effectiveness , use of strategic alliances/collaborations to strengthen buying power , and maintain lean structure and tight control of costs. Support Activities HR Management - Important to hire astute, adaptable people who share the company’s core values. Need to manage part time volunteers and have flexible HR policies Manage relationships with suppliers, high net worth supporters and all other donors. Technology Development - The Charity industry is highly competitive so ALZ need s to keep abreast of developments and continually maintain their focus on new technology. Maximise new technologies (mobile and internet), build database of high net worth individuals /donors to target for marketing campaigns. Procurement – identify the right partners to work with, affinity partnerships, investigate possible mergers and international acquisitions. Get best deals on purchases to minimise expenditure and drive profit. Inbound Logistics Sufficient number of distribution points to maximise income potential. Operations Ensuring that staff and volunteers/ supporters are proactive. Outbound Logistics Centralising donor acquisition and processing. Marketing & Sales Brand positioning Promote ethical trading Maj. of income is spent on finding a cure. Service Excellent customer service at all times in person/ Online/helpline. Customer intimacy – B 2 B and B 2 C Primary Activities Figure 8. 7 S framework Strategy Growing pressure internationally Grow value from new and existing donors Increase awareness of Alzheimer's and mental illness generally; ideally identify ways of early prevention. Lead research effort to find a cure Lobby government to put more resources into research and care. National Dementia Strategy launched (opportunity? ). Need to decide what primary role is and what is core offering plus also measure the impact of services. Structure Board of 12 trustees 230 branches 5000 volunteers UK based but intl presence 25, 000 members with voting rights and liable Committees for remuneration, nominations, audit (risk) and investment - Is too bureaucratic? . Systems Internet site Web forum with 130, 000 posts DVD training Phone helpline Usual HR, Finance systems. Shared Published values (Passion, Quality, Integrity, Inclusion, Mutual respect) Values Skills Improving skills/education of carers/donors. Strong in care and education. Innovation and change will be important skills. Exam for carers and training programme – ‘tomorrow is another day’ Internal audit skills Small marketing team only 3 years old. Need to be innovative in marketing/PR as competitive market. Do they have the skills to grow the business internally? Staff 5000 volunteers – great advocates for the charity. Have 25, 000 members Branch managers are salaried Rely on volunteers – is this enough? Do need to consider employed roles – what is the ROI? Style Nothing specific in case study but assume local autonomy, open and collaborative , transparent ethical and caring.

Figure 9 SWOT Strengths Income increasing year on year and sector growing Individuals will donate to causes they believe in Strong in care and education 30 years old Weaknesses Fragmented market Me too product Charity is medium size so not receiving enough share of donations 1700 services – what is core competence? Opportunities International exposure especially in research Could merge/form partnership with other charities Licensing products Raise awareness and get momentum like Cancer Research did Gift aid awareness – if more donors claimed could significantly increase charity income Utilise National Dementia Strategy and align Winning NICE appeal Threats Crowded marketplace – very competitive Barriers to switching charity is low Recession impacting donations Loyalty of donors is questionable People will need to fund their own care/pensions so may impact legacy income/large donations Legacy income expected to fall (currently 38%) Losing NICE appeal Figure 10 – Ansoff Matrix Existing products New products Market penetration strategy Product development strategy Existing markets Need to drive increased revenue from existing donors across all product categories – high net worth individuals, groups, companies and organisations Form partnerships with similar charities Develop new products e. g internal audit function for other charities, Franchising branded products. Develop licensing and patenting products e. g Brain games to help prevent onset. New markets Market development strategy Diversification strategy New distribution channels – additional online development – blogs, social networking, increase direct debits. Develop compelling messages- shock tactics, Use cinema, television, celebrity culture. Consider different approach such as providing consultancy services for new charities Figure 11. Business Portfolio Matrix (Harrell & Keifer (1993)) Country attractiveness High Medium ALZ compatibility with each country Italy Germany USA High France Sweden Spain Medium Japan Low = Primary = Secondary = Tertiary Low Italy has largest oldest population though pays the least. Sweden/Scandinavian countries spends the most on LTC. ADI has an annual conference – opportunity to expand/grow presence. Germany, France, USA spend more on research than UK = Very unattractive

Figure 12. Balanced Scorecard Financial Internal Objectives Donations in each country– UK, ROI & overseas Return on capital Cash flow Profitability Donor lifetime value Effectiveness of services offered CRM database Penetrate new donors Increase value from existing donors Increase website traffic Increase education Control costs Customer Value for money & donor satisfaction Donor loyalty Donor endorsements Brand awareness Learning & Innovation Innovate ways of targeting new donors Empowered workforce Figure 13 – Loyalty Ladder Price + - Value Ladder To create sustainable comp adv, and Believe the max. donations , long term cause – willing to invest time/effort relationships must be cultivated. By moving donors up the value / loyalty Start to want to ladder, they become more loyal to do more this charity. This can be achieved Added Value through social marketing; message Fund raising driven, change behaviours. Advocates will act as ambassadors and help actively promote charity recruiting new donors Buys the message Measures Sales vs targets in each sector ROCE Cash flow Net margin Donor LV calculation Return/take up per service No of donors on database and % change (new) Value of donations from new donors Increase in existing donations Income per donor Number of website hits/hits on knowledge centre Frequency of donations Donor acquisition /retention costs Donor satisfaction and perception surveys Donor retention levels Web based Level of brand recall Market share Return per campaign No of new campaigns offered/ROI Staff attitude surveys Advertising as % donations Marketing spend per donor Loyalty Ladder Partner/ champion Advocate/ member Offering Customise web page, personal thank you messages, Offer more social, personal (emails, news updates, Supporter/ volunteer Provide methods for donor feedback/give time/increase donations Perhaps paying by DD as more loyal customer First time Donor maybe one off Easy to donate – different methods; maybe cash. Newsletter Figure 15 – ALZ Assets/Competencies • ALZ has a strong ethical trading stance Knowledge of Awareness of charity Awareness • Starting to gain brand recognition charity • ALZ supports the carers as well as the Awareness of illness Knowledge of Prospect sufferers of dementia ALZ illness • ALZ offers wide variety of ways to Figure 14 – Critical Success Factors donate • Maintaining a good reputation • Socially responsible • Cares about the environment- recycles • Moving dementia up the government agenda and therefore the public agenda clothing, Oxfam/M&S scheme • Making it easy to donate e. g text, red button, - +

Figure 16. Segmentation, Targeting and Positioning B 2 B Segmentation Similar companies /affinities where synergies e. g financial service companies, SAGA, care homes, retirement homes, garden centres, post office Be aware of grants available and large fund raising opportunities Links to gyms for prevention – healthy mind/body Targeting Work in partnership e. g Help the Aged – use shops to raise awareness/identify new donors Consider campaign like Oxfam one with M&S Awareness raising/donors with SAGA Link with universities/research to drive thought leadership/awareness B 2 C Developed society/more affluent ABC female age 65* Time rich community minded, time to donate, no family Men and women aged 30* ABC 1 concerned dependents Couples aged 60* - potential carers Existing sufferers and carers Understand profile of lapsed donors and current donors and target similar segments Target and penetrate existing and new donors in the U. K. and also new markets internationally Buy database and use to target selected Segments Positionin g Socially responsible Number 1 in the UK and internationally for Proactively working to find a cure research into and treatment of dementia Leading the way in dementia research, prevention related illness and cure Figure 17 7 P Analysis Product Price Place What is the product? Not clearly defined as offer 1700 services includes training and development. Medical research. Information services Care support services Lobbying Thought leadership Training and education for GPs. Internal audit to other charities Donation channels and actual donations from individuals and companies, fundraising including initiatives such as Memory Walk. Time/resources of carers/donors, volunteers. 50% people give up time. Could use gift aid more especially with higher rate tax payers. DD most effective as locks donors in Offer all channels of donations – increase in payments by cheque. UK and International – Opportunity to expand here. Care homes, GP surgeries, Hospitals/NHS. Website/online/chat room (127, 000 messages). Opportunity to affiliate other charity shops. ALZ Café schemes Use logo, brand strap line in all advertising. Communications – direct marketing most popular (73%) (e. g forget me not campaign) but becoming less effective and 33. 7% thrown away. . PR /Celebrity endorsement e. g Jim Broadbent. Could target superrich? Publications/on Promotion line newsletter. More social marketing (message driven) Links to Twitter etc. Website Opportunity to do mobile marketing No adverts on TV (though expensive). ALZ awareness week, annual Memory walk, books ‘Feelings Matter Most’ Skilled staff Donors and volunteers, People Process Staff training, customer service processes e. g staffing helpline, measuring satisfaction, fundraising processes, marketing processes, knowledge of other charities Physical Evidence Won awards (PR Week award Coronation Street story though 2 years ago), press coverage, research papers, website, logo, merchandising, 1700 services offer Figure 18 - Key stakeholders/partners Other charities (Age Concern and Help the Aged), professional and public health bodies, pharmaceutical companies, Government, supporters, Universities, academia, industry, international research

Vision Recognised as the leading UK and international charity for Alzheimers/dementia with a significant share/value of charitable donations whilst driving the international agenda in research, prevention, cure and improving the quality of life for carers and sufferers profitably Mission Strengthening brand positioning as global leader in dementia whilst building partnerships internationally to aid advancement and awareness allowing us to leverage existing and potential new donors Values Passion Quality Integrity Inclusion Mutual respect plus • Transparency to key stakeholders • Ensuring donations are spent directly to benefit those who need it • Foster open and collaborative culture • Thought leadership • Dignity • Innovative in communications campaigns Figure 16. Segmentation, Targeting and Positioning B 2 B B 2 C Segmentation Targeting Similar companies /affinities where synergies e. g Developed society financial service companies, SAGA, care homes, ABC female age 60 -65 Time rich community retirement homes, garden centres, post office minded, time to donate Be aware of grants available and large fund Men and women aged 30* ABC 1 concerned raising opportunities dependents Links to gyms for prevention – healthy mind/body Couples aged 60* - potential carers Existing sufferers and carers Understand profile of lapsed donors and current donors and target similar segments Work in partnership e. g Help the Aged – use Target and penetrate existing and new shops to raise awareness/identify new donors in the U. K. and also new markets Consider campaign like Oxfam one with M&S internationally Awareness raising/donors with SAGA Link with universities/research to drive thought Buy database and use to target selected Segments leadership/awareness Positionin g Socially responsible Proactively working to find a cure Leading the way in dementia research, prevention and cure Number 1 in the UK and internationally for research into and treatment of dementia related illness

Figure 4. SWOT Strategic Fit • Key Opportunities Strengths Weaknesses • Access song codes • Bureaucratic • Harness the size and flexibility of the label to adapt to embrace the digital era in an ethical manner • Finance • Radio monopolies • Access to ‘pluggers’ • Risk averse due to costs • Build upon the digital capability to increase customer loyalty and exploit new income stream • Expertise • Inhibit creativity • Exploit current networks to contract an online plugger • Infrastructure • Reliance on CDs • Commercial prowess • Expensive / poor quality • Use existing commercial ability to develop new financial models to benefit artist and label • Control • Inertia towards technology • Use existing infrastructure to develop strategic • Digital presence • Financial constraints partnerships across the industry • Multi service • Access to mass market • Sustain multi platform / service offering to spread risk • Adapting to market • Dependent on key people when considering global markets • Nimble • Growth capacity • Develop expertise to offer new services to the industry Threats Opportunities • Problem Zones • Global reach of digital • ICT explosion • Bureaucracy can delay decision-making and lose momentum in a fast paced industry • Piracy • CRM • Legalizing file-sharing • Online pluggers • Inertia towards technology will inhibit reaching and tapping into global audience • International markets • Reaching audience • Artists are gaining more control and will not except • Strategic partnerships • Receiving royalties previous terms • New economic models • New technology • Cost focus has stifled creativity by considering it as a risk • New income streams • More control to artists and market now demands creative approach • Horiz/Vert integration • Diversify • Reliance on CD’s when digital is the preferred audience • CSR • Competition emerging from across the supply chain Figure 5. Arthur D. Little Matrix Stage of industry maturity Embryonic Growth Mature Ageing Recommendations • Divest in vinyl • Harvest CD’s by differentiating based on ethical approach Dominant Strong Competitive position Although well placed to continue to serve all platforms, market demand indicates that label should: Mobile phones - ? Invest in new techno Favor’ble and improve sound quality • Invest in Digital Tenable technologies through innovation and quality Weak (monitor SE Asian dev) Figure 6. Ansoff Matrix Short term • Increase loyalty and value by developing a CRM approach Existing • Develop innovative new ways to markets engage, reach and delight cust. • Dev. new finance models to recruit and retain emerging bands • Go global New Long term markets • Recruit new bands to target new segments and spread risk • Widen service offering Digital (DRM) – Star Differentiate through innovation Existing products Market penetration strategy • Increase customer loyalty • Cross and up-sell • CRM • Innovation Market development strategy • Target different age groups • Dev. dist channels • International markets CD’s – Cash cow Differentiate ‘recycled’ packaging, new artwork and add on’s. Plan for exit. Vinyl - Dog Fulfil existing order and implement exit plan New products Product development strategy • Recruit new bands • Video clips, podcasts, interactive comics, video games with music • Merchandise Diversification strategy • Move into publishing, promoting • Offer recoding, production and distribution as consultancy services • Develop new financial model • Brand consultancy

Figure 7. Segmentation and Targeting Segmentation 10 -14 Analysis based on forecasts of market value and age profile of consumers (as %) from 1996 -2005. • Overall market is declining and although the digital explosion has boosted the industry, it has not offset drop in CD sales. Short term – 15 -24 Tweenies • Social network • Live online • Text addicts • Share info • Info = free • Fashionable • Trendy • Emotional • Innovators • Impulsive • Cash conscious • Environmental • Leisure time 25 -39 40+ Silver Surfers • Young at heart • Technophobs • Private • Sceptical • Art v entertainment • Quality • Value • Rational • Late majority • Wealthy • Good knowledge of this sector and key to short term earnings Long term – 40+ • E’literate and comfortable with sharing info through digital • Growing e’literacy but more acquired taste means • Develop research programme to understand this sector • More impulsive buyers and easier to target • Evolve a proposition for this sector through targeted A&R • Develop relationship to increase lifetime value • Increasing segment so key to sustainable growth (SVA) • Declining segment Differentiate • Innovation • New products and services to consumers • Reaching cust. via multiple comms channels • Develop interactive relationships (artists/cust) • Ethics • Mutually beneficial deals for artists • Stance against illegal piracy • Embrace non DRM tracks • Reduce carbon footprint • Environmentally friendly products • Plant a tree per co 2 emissions from travel and tours Figure 8. Positioning Figure 9. Branding Brand Evolution Personality Improve quality and access to music globally Values honesty, collaboration, winning, fun Emotional Reward artist and environmentally friendly Rational Benefits Functional benefits audio stimulation availability, format 1. Label as industry brand – A&R 2. Artist as consumer brand – Fans 15 -24 3. Artist as branded brand 4. Label as consumer brand – Cross sell 5. Label develop new brands for 40+ artists 6. Label as brand consultant - Diversify

Weaknesses Strengths • Generating profit • Core- Quality indie music • Successfully rebranded • Access to unique • Innovative brand name • Actual- Furze brand, • Tacit knowledge- Kid G identifying song codes • Difficult to get sleeve design, wed design, • Interactive website royalties sales channels, platforms • Global dist. (i. Tunes) available • Synchronisation - ads, • Difficult to break into charts films, games • Augmented- interactive • Create awareness • Operating at less than website, cartoon • Celebrity endorsements break even at present serialisation, comics • No bank loans • Radio presence designed, merchandise, Opportunities Threats games • Relationships with fans • Low barriers to entry Although the band have • Artists more powerful • Competition been successful in creating • Existing contacts • Lack of resource awareness through • Loss of control • Global reach of web innovative marketing, they • New financial models • Band falls out of have been unable to fashion generate a significant ROI. • Signing with label • Meteoric rise could Resource and expertise of a • Radio playlists create resource problem suitable label could propel • Digital platforms them onto bigger things • Gigs/concerts Figure 10. Product The Furze The Label - Consumer • Core- Portfolio of artists • Actual- Individual artist brands, style of music, image, various channels and formats, web design, sleeve design • Augmented- CRM, merchandise, interaction with fans, videos, blogs, games, ‘green’, fair to artists The Label - Industry • Core- Record, produce, distribute • Actual- Ability to convert lyrics into musical recordings. Quality of equipment, studios and dist network. • Augmented- Supporting artists, key account management, managing customers, promoting artist Figure 11. Price - + To create sustainable comp adv, and max. shareholder value, long term relationships must be cultivated. By moving customers up the value / loyalty ladder, comp and prices sensitivity declines. Loyal cust. will pay premium prices for innovative products and services so to progress cust. up the ladder, added value must be offered. With comp. and piracy intense at the lower level, margins are low and cost leadership strategies are unsustainable. Figure 12. Promotion Value Ladder Loyalty Ladder Customer Offering Partner Customise web page, personal messages, access to live podcasts, instant messaging, access to pro tools, exclusive competitions, DIY album Deliver Emotional Value Comp Advocate Offer more social, personal or psycho benefits (emails, news updates, exclusive offers, song previews, competitions) Quality Product / Service Supporter Provide methods for feedback and registr’n Customer Innovation Added Value High quality product Product meets requirement - + Client Improve CD offering (recycled packaging, videos), DRM free high quality single downloads Customer Music available in right format and channel Product knowledge Prospect Awareness Communications Strategy • Push • Pull • Target consumers • Comms focus on product/service • Goal – purchase (direct/indirect) Label Retailer • Profile Digital Consumer • Target channel intermediaries • Comms focus on product/service • Goal – dev. relationships and dist. channels • Raise awareness with stakeholders • Project image into industry

Figure 12. Promotion (cont) Low Involvement Decision Making Process Awareness Short Internal Attitude / Future Trial / Info Search Intentions Experimentation • Ads – low info, emotional appeal • Websites (artist • Product Usage • Free online sample / label) • Artist success • Retail store demo • Volunteer marketers • 3 rd Party Support • Packaging / web • Social • Peer 2 Peer web networking sites design • Viral marketing (artist / label) • Promos (added • Radio / press PR value) • Price • Opinion formers / leaders (celebs, shop) Benchmarking – The Furze In the first instance, the challenge for labels is to raise • Personal selling awareness of artists. The internet represents a cost effective opportunity for raising awareness through word of mouth. • Plugger Social networking sites are accessed by 150 m people and they have democratised A&R. • Concert / gigs / festivals However, this must be supported by press and media promotion to access the mass market. Label and artist sites must be kept updated and offer options for visitors to sample music before buying. Point of sale material is equally important online as it is in retail outlets. • Advertising • Own website, My. Space, You. Tube, i. Tunes • MTV (Kid G) When a purchase is made, efforts should be made to turn the • Radio customer into a client. By shaping attitude and developing relationships, future intentions can be influenced and long run • Direct Marketing behaviour can be shaped to generate profitability. Long-run Behaviour • Develop relationship • Music quality • Regular comms • Special promos • PR • Music press (NME, Kerrang) • Online fanzines (Kid G) • Celebrity endorsements • Sponsorship • Adverts, films and games • Sales Promotion • Online videos / song samples Figure 13. Place • Record stores still a key channel for full length CD’s • CD sales dropped 20%+ from peak in 1999/2000 • Internet, digital and concerts growing channels • Global portable player sales 120 m in 2006 (+43%) • Broadband household penetration rising (Europe) • Digital sales doubled to $2 bn in 2006 (globally) • 795 m single track downloads in 2006 (globally) • 3 sell 1 m music video and audio tracks a month • Digital format is environmentally friendlier Recommended digital formats: • Mastertone- extract from full length dig. sound recording looped for mob. Phones (com dist recording) (Fra, Esp) • Mobile singles (fastest growing format U. K, also It, Esp) • Online singles (UK -78% of all singles, Ger)

Figure 14. Mc. Kinsey 7 S’ Systems Develop e-capability, continual improvement, environmentally conscious Strategy Differentiate based on service propositions which encourage loyalty and long term profitability Innovative and socially responsible Skills Train / recruit innovative staff, empathetic Staff Embrace market led culture to capture info and satisfy needs profitably Style SOFT Flat, cross functional teams, empowerment Shared Values HARD Structure Achievement, motivation and winning The model shows how the various aspects of the business relate to each other and is a useful way to illustrate the way culture fits into the org. Soft – human resource issues Hard – process aspects When implementing strategies the label must focuses on BOTH hard and soft issues. Overcome resistance by: • Develop market orientation • Project management • Change management • Internal marketing Figure 15. Balanced Scorecard Financial Perspective • Return on Capital invstd • Differential pricing • Reliability of performance Customer Perspective • Awareness • Relationship • Satisfaction • Loyalty Internal Bus. Perspective • A&R -Invest £ 200 k per artist p/a • Marketing -commercially priced service • Recording/Producing offering • Procurement -sales forecast v actual • Distribution Innovation & Learning -Web hits • Technology -No. registered subscribers -Top 40 hit • Marketing -Purchase behaviour investment • Continuous improvement • Distribution -New artist recruitment -New products / services -Improve quality, pro-tools -Socially responsible -Trees for travel -No DRM, mastertone tracks -Strategic plans, CRM -Employee suggestions -Increase in digital sales Use balanced scorecard to clarify and update differentiation strategy based on innovation and ethics. Comm throughout org and conduct regular reviews. Figure 16. International Markets Country attractiveness/priority (%3 G subscribers) High Medium Compatibility/capability Mature U. K (14%) USA (8%) Mature Italy (24%) Spain (11%) Medium Mature Germany(9%) Australia (9%) France (8%) Canada Emerging Russia Eastern Europe Low Mature Japan (53%) South Korea (35%) Emerging China India Low Developing Countries Characteristics of Mature Markets: • High GDP, advanced economies, wealthy consumers • Higher propensity to listen to English language music • Established music industries with multinational orgs • Low rates of piracy (<10%) • High levels of hardware penetration, broadband access, etc Example – Germany • Largest Euro market for UK • 435, 000 airplays for 320 m audience • 3 G penetration – 9% • Digital sales- 39% online single, 25% online album, 20% mastertone, 5% mobile single Measure in terms of: Suitability - Cultural fit, Screening options and criteria Feasibility- Cash flow, Break-even, resource, capability and capacity Acceptability- Shareholder (esp artist), level of risk involved potential returns.