Business strength assessment is an internal look at the environment within the event agency and essentially assesses the compatibility of the event agencies internal systems with the external environment and aspirations as a company. We have therefore listed the following parameters on which basis to judge the business strengths.
Geographic Coverage:
Offices in most important metros plus international tie-ups are major strengths when it comes to dealing with large clients who desire multi-city coverage.
Logistics (current systems) Local tie-ups with freelancers for execution along with strong networking give very good logistics support for any event. There are no long-term tie-ups and exclusivity involved in most event agencies in terms of appointing preferred suppliers.
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Change in market share:
By doing a 3-year historical trend analysis or just by using available data, one can assess whether the market share is declining, stationary or increasing and in what proportion.
Selling power:
Most often, this factor is greatly energized by a few influential contacts in the right places. In the events industry, a personal rapport with clients needs to be established given the involvement required once commitments have been made. This is precisely also why established agencies have a better selling power.
To maintain price competitiveness, it is essential to assess the overheads in the corporate set up of the events agency. It is essential to understand that greater competition will reduce price competitiveness due to price wars.
To what extent new event concepts or variations are introduced as part of the business plans to stimulate clients also plays an important role in determining the business strengths of an event agency.
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A company that seldom introduces new variations is begging for trouble. Since categories of events will always remain the same with the same old production value and only the creative concept may vary, it is essential to build a pool of ideas and maintain it judiciously.
The greater the ease of event differentiation of one agency against the competition, the stronger will be the agency. This is a very important parameter since it is in the creative realm that the event has to be different. This can sometimes be a very difficult proposition. That’s why most event agencies are into niche markets.
Freelancers can know concepts and source suppliers to execute the same event that a big agency executes at a much lower price to the client. Thus, though differentiation is possible, it is a very short-term strength and if one may say so, a one-time strength. Event concepts can be easily copied.
Sourcing structure of an event firm also determines its strengths as greater in-house assets imply greater investments and over longer periods, increased costs. Therefore, good relations with suppliers are definitely business strength.
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One of the major factors involved in assessing business strengths understands the compatibility of various issues and their resolution for instance:
The extent to which the agencies’ systems satisfy needs of the events. When an event agency moves from a proprietorship to corporate set up, systems need to be modernized and streamlined drastically to fit into the corporate culture and make the best of the pros and cons of the system.
Relation of events to other divisions within a company, if events are not the sole business of the firm, also needs an essential compatibility check.
Corporate strategy should provide for enough importance to events when events are not the only business of the firm. In fact total creative solution offers along with events would boost the entire firm and hence should be part of the strategy.
Drawing power:
New concepts help draw new customers from competition as well as absolutely new clients. For established event agencies, the name itself aids in the early stages of marketing an event to client. After that it is a purely commercial and performance oriented relation with the clients.
To map the business strengths of the events agency against the overall attractiveness of the market for specific event categories we make use of a questionnaire. A sample questionnaire and method used for the number crunching for the events category artistic expressions is given in Appendix B. Figure 9.2 below shows the result graphically.
Conclusions that can be drawn for A2Z Events based on the Business Potential Assessment Matrix prepared in 1998 give us an idea of the high business strengths of A2Z as a company and that it operates in a large and attractive market to invest. In three years, A2Z Events will decline in business strength and there will be a slight decrease in market attractiveness due to increased competition from others (mostly freelancers).
There will be a pronounced effect on the prices and profit margins will drop. To tide over this storm, A2Z should invest enough in events to maintain it client market. Clients should be moved on to new concepts for events to maintain or increase market for the firm as a whole. In anticipation of greater struggle, A2Z should concentrate entire effort on maintaining its strengths. To ensure maintenance of its superiority, it should also emphasize profitability by raising productivity.
The clarity that is thus obtained from the above analysis help in devising the strategic moves that the events company should make. In the next section we discuss operational level studies that are a part of the development of strategic plans. Problems that are prevailing and the opportunities that go a-begging need to be understood thoroughly for any strategic plan to succeed.