What growth strategy does Live Nation appear to be using?

What competitive
advantage do you think Live Nation has?

It appears as though Live Nation may be using two kinds of growth strategies;
Concentration, which focuses in its primary line of business (in this case the music
industry), and “increasing the number of products and services offered or markets
served in that primary business”(Robbins & Coulter, 2009), and horizontal integration
by combining with competitors. In 2009, Live Nation announced they were merging with
ticketmaster to “expand into a complimentary business” (Rapino, 2009).

With the concentration growth strategy, Rapino is able to offer many products such as
concert tickets, merchandise, videos, and albums when other companies only offer one
or a couple of these products. Using the horizontal integration growth strategy Rapino is
able to eliminate competition and keep profit inside the company.

“The key to Live Nation’s growth strategy is the ability to connect to those millions of
people who attend shows every year” (Robbins & Coulter, 2009). By keeping a database
that includes contact information for every fan (or client) that Live Nation has ever had,
Live Nation is able to “connect” fans to their artists with greater ease. By strengthening
the artist to fan connection, the purchase of merchandise and tickets is easier and helps
Live Nation to keep growing and profiting.

How might SWOT analysis be useful to Mike Rapino?

A SWOT analysis is an analysis of the organization’s strengths, weaknesses,

opportunities, and threats (Robbins and Coulter, 2009). The SWOT analysis would be
very useful to Mike Rapino. He would be able to identify what his mission, goals, and
strategies are for the current company. Mike currently states Live Nation is the “future
of the business”. His current strategy is to connect the artists to the fans. He is not
satisfied with just this strategy. Mike is now starting to focus on creating a new strategy.
He wants to create a one-stop operation that would handle all the musical needs of the
artist (Robbins and Coulter, 2009).

In a SWOT analysis Mike would be able to see the external and internal factors that
would affect the corporation. An external analysis would examine the trends and
changes in the environment. He would then list his opportunities the organization could
exploit and threats that must be counteracted against (Robbins and Coulter, 2009). An
internal analysis would show information about the organizations resources and
capabilities. Resources are the assets and capabilities are the skills and abilities needed
in doing work activities (Robbins and Coulter, 2009). This would show the organizations
strengths and weaknesses.

After conducting the SWOT analysis, Mike would be able to formulate an appropriate
strategy and then properly implement it into Live Nation. Lastly, he would need to
evaluate the strategy to see how effective it has been to reaching the goals.

What goals is the company pursuing?

Live Nation Entertainment Inc. is currently pursuing the following goals; continued focus
on improving profitability of existing core live music operations, development of deeper
relationships with touring artist centered on the live music event, direct relationship
with music fans through ticketing and be the leading online live music destination
website through www.livenation.com, selectively expand and increase promoter
presence to include top music markers and pop centers around the world, build live
music business and ancillary services in major markets, develop strategic sponsorship
programs, and its long-term goal ultimately is to increase stock holder value.

What strategies is it using?

Live Nation Entertainment Inc. is utilizing multiple strategies to ensure that it will reach
these goals such as, the corporate strategy as well as the integration of the growth
strategy which is a result of the corporate strategy that defines the business in regards
to what the organizations wants to be involved in as a business and where the
organization intends to expand those sectors of its business where as, Live Nation has
focused in expansion in North American music, International music and Ticketing
Coulter & Robbins (2009) p.167.

Live Nation has also implemented the vertical integration where it owns and operates
the ticket sales for concerts being promoted via Live Nation which reduces time
associated with the process of developing what is essential to the operation of a concert
and horizontal integration strategy where the corporation has combined with multiple
other entities which assist in its operation such as, stadiums, theatres, etc. The
corporation also, practices through related diversification where it operates multiple
venues, clubs, festival sites etc.

Live Nation utilizes the competitive advantage which is based on the Five Forces Model
that provides the organization with the ability to distinguish itself within the industry.
The corporation offers a multitude of services that reduces the amount of time spend
focusing on certain aspects of concert preparation that accommodates the artist for
whom services are provided to, provide tickets through venues and online that reduce
cost and excess time necessary to obtain information in regards to concerts which
assists in providing the ability for fans to attend the concerts at a reasonable rate which
increases sales as well as stockholder interest.

Do its strategies appear to be helping it reach these goals?

According to Live Nation's Entertainment Inc. annual report (2009) the company
promoted 2,000 artists globally where there were 22,000 concerts in 42 countries in
2009, promoted or produced 4,400 live music events internationally in 2009, over 52
million fans in attendance and 70 million online visitors. Financially the company
produced 1.5 billion (36.7% total revenue) in International Music, $74 million (1.8% total
revenue) in ticket sales 12.6 million through all ticket sales, 2.5 million in venue Boxes
and $5 million in other areas of interest the company has acquired. The company has
total assets of $2,341,759, Long Term Debt of $740,069, Redeemable Preferred Stock
$40,000 and Shareholder's Equity of $625,317. Not to mention as of February 01, 2010
LMC Events, LLC wholly subsidiary of Liberty Media, filed a Tender Offer Statement on
Schedule TO of the Schedule TO, with the SEC to purchase $34,200,00 shares of
common stock at $12 net per share in cash or the Tender Offer (Morningstar, 2009).
This is one organization with one after another story of success that if in fact the
strategic plan is continued to be followed success stories will continue to be a primary
focus for individuals whom are passionate about the music industry and all areas that it
is composed of.

What do you think of Rapino’s strategic direction for Live Nation?

We feel that Rapino’s strategic direction for Live Nation is on the right track to being
very successful. Since 2005, the company created a separate business and became the
world’s largest events and live music promoter. This means that their business presence
is well known and highly respected on a domestic and international level.

Live Nation has a growth strategy that has attracted the biggest entertainment stars.
They offer all the services needed by entertainers and can include all the services into
one contract. This all-in one style of various services can benefit from this and not have
to search for individual companies to handle different business opportunities. For an
everyday life situation, this could be just like going to get car insurance and eventually
get offered life insurance, home owners insurance, financial consulting, and many more
services from the same company. People love good service, convenience, and saving
money. Live Nation has strategically figured out how to give their clients everything that
they need to continue to be successful. Most importantly, they keep the entertainers
connected to the fans through concerts, products, record sales, videos, and the
Internet.

If an entertainer does business with Live Nation, we feel that an entertainer will be
reassured that the company will definitely be trying to provide the best services
possible and maximize their earnings. When other entertainers witness these new
strategic services, they will be attracted to the company as well. Rapino’s strategic
direction also demonstrates innovative strategies that no other companies are offering
at the time. Live Nation wants to operate your tour, sell your albums, sell your
merchandise, run your website, produce videos, and even combine with their customers
to create new marketable concepts (Robbins and Coulter, 2009).

As a manager and business owner, Rapino has evolved as a leader in the industry of
entertainment. We feel that his strategic concepts will continue to grow and work. Live
Nation has enhanced the business need for connecting the entertainers and their fans.
Live Nation has raised the bar for its competitors to re-evaluate their strategic direction
of business. Their new direction of strategic management will create more jobs
domestically and internationally. We have learned that new directions in organizational
strategies will help your business progress and become a leader in your business
industry. It is also important to always focus on enhancing your business services
involving E-business, innovation, global business, and customer service to maximize
your business opportunities.

References