Section A Case Study MGT 3058Y Read the case carefully and answer following uestions!

MA"#$$A% The reign of the ueen of &o& The music industry is full of one hit wonders and brief careers. Pop stars that remain at the top for decades are very few; and even fewer can claim to be one of the wealthiest women in the world, running a highly successful business: this is Madonnas story of sustained competitive success. Described by illboard maga!ine as the smartest businesswoman in show business, Madonna "ouise #iccone began her music career in $%&' with the hit single ()oliday and in late *++$ en,oyed critical acclaim for her latest (Music. y *++$, Madonna had produced -$ single trac.s, $/ albums, had underta.en four world tours and had ma,or roles in five films. 0t is estimated that this twice married mother of two had a personal fortune over 1$'million. 2he owns #helsea 3irl ""#, a limited liability company and had one third of the record company, Maveric.. Maveric., formed in $%%*, has been a successful partnership between Madonna and 4arner ros whose roster includes Prodigy and 5lanis Morrisette. 0t has generated over 166- million in revenue since $%%*. Madonnas sta.e was estimated to be much more than 1'+ million in *+++. Madonna was also one of the first media icons to reali!e the power of the 0nternet and that she needed control of the madoona.com domain name, and she engaged in a court battle to secure it. ut it was her record brea.ing web cast deal with Microsoft in late 7ovember *+++ that was widely reported as a shining e8ample of her business acumen. y *++$, Madonna has sustained her reign as the (9ueen of pop over a seventeen:year period. 5long with many others, Phil ;uattro, the president of 4arner rothers, has argued that the foundation of her success is that: she always manages to land on the cusp of what we call contemporary music, every established artist faces the dilemma of maintaining their importance and relevance, Madonna never fails to be relevant. Madonnas chameleon li.e ability to change persona, change her music genre with it and yet still achieve ma,or record sales has been the hallmar. of her success. 2he has consistently inhabited and achieved success with one persona, thrown it off before it faded and created a new and e9ually profitable image. Madonnas early poppy style was aimed at young (wannable girls. The image that she portrayed through hits such as ()oliday and ("uc.y 2tar was pic.ed up by Macys, the <2:based department store. They produced a range of Madonna loo.:ali.e clothes that mothers were happy to purchase for their daughters. Madonna then underwent her first image change and in doing so, offered the first hint of the smart coo.ie behind the media image. 0n the video for her hit (Material 3irl, she deliberately mirrored the glamour:

based, se8ual pussycat image of Marilyn Monroe whilst simultaneously moc.ing both the growing materialism of the late eighties and the men fawning after her. Media analysts 2am and Diana =irschner commented that with this .ind of pac.aging, Madonna allowed the record companies to .eep hold of a saleable (Marilyn image for a new cohort of fans, but also allowed her original fan base of now growing:up winnable girls to ta.e the more critical message from the music. The theme of courting controversy but staying mar.etable enough has been recurrent throughout her career. Madonnas subse9uent image changes have been more dramatic. >irst she too. on the #atholic #hurch in her video ("i.e a Prayer where, as a red:dressed (sinner, she .issed a blac. saint easily interpreted as a ?esus figure. )er image had become increasingly se8ual whilst also holding on to a critical social theme: e.g her pointed illustration of white:only imagery in the #atholic #hurch. 5t this point in her career, Madonna too. full control of her image in the @A+ million deal with Time 4arner that created her record company, Maveric.. #hanging gear in $%%A, Madonna finally too. centre stage in the lead role in the film Bvita that she had chased for over five years. 2he beat other heavyweight contenders for the role, including Meryl 2treep and Blaine Page: both with more conventional credentials for the part than Madonna. Cet she achieved the image transition from erotica to saint:li.e persona of Bva Peron and won critical acclaim to boot. 5nother vote of confidence from the (establishment came from Ma8 >actor, who in $%%% signed her up to front their relaunch campaign that was crafted around a glamour theme. Procter and 3amble Downers of ma8 >actor ma.e:up range+ argued that they saw Madonna as (the closest thing the %+s has to an old style )ollywood starE.she is a real woman. 4ith many pre:release lea.s, Madonnas .eenly awaited album (Fay of "ight was released in $%%&. Fadio stations worldwide were desperate to get hold of the album being billed as her most successful musical voyage to date. 0n a smart move, Madonna had teamed up with techno pioneer 4illiam Grbit to write and produce the album. 0t was a huge success, ta.ing Madonna into the super:trendy techno sphere, not the natural environment for a pop star from the early &+s. Madonna too. up an (earth motherHspiritual image and spawned a trend for all things eastern in fashion and music. y *++$, her ne8t persona was unveiled with the release of her album (Music. )ere her style has moved on again to (acid roc.. 4ith her marriage to ritish movie director 3uy Fitchie, the ultimate (5merican pie had become a fully fledged rit babe. )er collaboration with rits such as comedian 5li 3, dress designer 2tella Mc#artney, her friendships with prominent rits such as 2tring and Trudie 2tyler as well s her 3uinness drin.ing, church:going, wee.end family car washing and settled lifestyle have endeared her to her new home nation. Throughout her seventeen year career, Madonna has therefore consistently changed image. 0ndeed, many commentators have argued that it is the ability to consistently change that is attractive in itself. 2he is not ,ust growing up with her fans and changing to

appeal to their life:stage changes, but also continually pic.ing up new generations of fans as s he goes: fans who wait to see what her ne8t incarnation will be. Colla'oration for success 0t would seem that, in part, cleverly chosen collaborators go some way to account for her currency. >or instance, her (Fay of "ight collaboration with musician and producer 4illiam Grbit gave her a direct line into the epicenter of the techno club scene. ringing new innovative artists such as 5lanis Morisette in $%%6 on to her Maveric. record label also allowed her to ta.e part in their sphere of artistic influence and freed off it. 0n addition, Madonna has collaborated in business to help her sustain her position in the music industry. >or instance, in $%%*, after much criticism for her controversial #atholic and erotic themes, she made the decision to reach out to protect her artistic control and created her record company, Maveric., alongside potential competitors 4arner ros. 0ndustry commentators note that whereas most musicians create their own record company to get more royalties, Madonna did it for control: a more profitable commodity in the long term. 5 big enough star to have a strong voice, Madonna was able to insist that Maveric. run its own operation independent of 4arner bros but still receive their considerable support. >or e8ample, when Madonna wanted to replace >reddy De Mann, her former manager and $6 per cent owner of Maveric., it was 4arner ros who underwrote the deal and allowed Madonna to appoint her preferred candidates. 0n amongst all the image changes, there is a part of Madonna that remains certain and predictable. There are messages from which she has never wavered throughout her whole career: control of se8uality, control of her own image, the independence of women and brea.ing established gender norms. 4hatever face she chooses to wear, it is certain that it will be her choice and she will decide when its time to change. Source: Extract from Exploring corporate strategy, Text and Cases, Gerry Johnson and Kevan Scholes. Students are expected to ma e use of relevant models and diagrams to support their ans!ers. ()*ST+#$S% DaI B8plain in detail the competitive strategy being followed by MadonnaJ K*+ mar.sL DbI 4hy has Madonna e8perienced sustained success over the past two decadesJ K$+ mar.sL DcI 4hat might threaten the sustainability of Madonnas successJ K$+ mar.sL

Section ,% 5nswer any two 9uestions. ;u*. Mergers and ac9uisitions are much used strategic options. 7o company can afford to ignore the strategic and competitive benefits of ac9uiring or merging with another company. KThompson, 2tric.land and 3ambleL #ritically analyse the above statement. K$- mar.sL ;u'. The higher a companys costs, the more competitively vulnerable it becomes. KThompson, 2tric.land and 3ambleL B8plain fully the different ways that companies can adopt to reduce their costs. K$mar.sL ;u/. 4hen strategies fail, it is often because of poor e8ecution M things that were supposed to get done slip through the crac.s. B8plain how you can ensure proper e8ecution of a strategy. K$- mar.sL