SWOT Analysis

Discuss about the Product & Pricing Strategies.

The study is based on the analysis of a core problem which is raised for Hanson productions for the production of its new musical play. They want to produce a musical play in Broadway theatre known as Detroits 1967. This is a historical play and now Hanson production is focusing on this play to be implemented successfully in this reputed theatre as well. It is seen that Hanson Production is established in the mid period of 1950s by a husband and wife team. Hanson Productions had earned acclamation for its Broadway shows (Nagle, Hogan & Zale, 2016). The goal of this company is to establish and prosper the arts in New York City. The first production of Hanson Production was Cat on a Hot Tin Roof which has been played in an audience of say 50 people and most of them are the friends and the relatives of the cast. The company has got its first major success in the period of 1970s, the script was very good established by Hanson production (Rhine & Murnin, 2018). After that it has become one of the most reputed and traditional production Company operating in New York City for so many years now. They have started to commission new works or plays. They had contributed hugely in the economy of the country by generating huge revenue and profitability from their musical plays and other shows they arrange it.

The core problem statement for Hanson Productions could be the poor management of budget for its new musical play to be organized at Broadway Theatres. The factors which contribute to this core problem statement provide the scope of improvement by Hanson Production for the successful implementation of the musical play Detroits 1967. The first factor could be the production of the large scale and large size musical play of having around 20 cast. It is difficult for the management to prepare a solid and fixed budget for this type of huge scale musical play for Hanson Productions (McGrath, 2012). The next could be the finalization of the show is not yet to done with the crews required for the launching of this musical play. The inappropriate marketing materials which were used earlier have not been successful and now it will require innovative marketing materials which should require high capital investment in marketing for this upcoming musical play by Hanson Productions (Hinterhuber & Liozu, 2012). The budget was not prepared properly for the costumes and it is again not finalized still for this upcoming play as well. The funds were not arranged properly and Shen need to arrange it from the other areas. The next could be the high ticket prices for the musical play to be launched in the market by Hanson Productions. This could reduce the high revenue generation as the sales will be declined. The revenue expectations have been huge as compared with the revenue in Broadway and the other three theatres which are in the list of launching this musical play after eight weeks time.

Problem Statement

There are various assumptions to be made by the management of Hanson Productions in order to launch this upcoming musical play in 8 weeks time. The assumption is that the smaller theater saves money for them. The venue selection should be on the preferences of the audience and the seat capacity. The ticket discounts on the first six months after the launch should be low. The ticket prices should be matched up with the overall sales and revenue generation of the company. There is the need of termination agreement to be made by Hanson Productions with the theatres that have less rental fee based on the gross ticket sales. The ticket prices needs to be set at a fixed rate and there should not be any kind of frequent changes to be done which may develop negative publicity (Baker, 2014).

The analysis of each of the strategic alternatives are explained below

Seating capacity- It is seen that the seating capacity for St. James theatre is 1623 so there is strong link between the revenue generation and the seating capacity. So this is turned out to be the best theatre for production. The audience as well the cast will be attracted with medium capacity.

Organizing Ticket prices- It is seen that for a musical play the price code is divided in three categories. From the information provided on average ticket prices, this musical play will be targeting the baby boomers so the rice code to be set is the code B.

Production Costs- It is important that for a musical play the production cost is always huge which restricts the cost for Hanson Productions to implement innovation in their musical plays. The production costs for a musical play in Broadway is $5,703,056 which is considerably huge.

Operation Costs- The operation costs for the Broadway theaters in playing a musical will be $414338 and this is also a huge amount to be invested in operating it. So the operating costs needs to be reduced.

Capital required- The total capital required for the study will be $13,081,672. The budget for St James theatre weekly one is $ 623,298. The capital is not appropriate for getting revenues against this estimated budget.

From the overall financial information, it is observed that the financial impact of the revenue is negative. The financial impact on the profitability is positive.

It is seen that Shen has been fixing the average price of $ 79.10. So according to this ticket price the overall average weekly sales of $ 19164.80. The weekly budget for St James theatre is $ 623,298. The operation cost is higher than the average weekly sales of this theatre. So the profitability and revenue is not feasible. So the decision for selection of this theatre is not feasible for Hanson Production.

Key Assumptions Evaluated

Conclusion

From the study it is evident that the play is only 8 weeks to be launched and now the management could not be able to have the selection of the venue where the musical play will be organized. It is concluded that the play should be organized properly so that wide audience will be attracted. There is the integration of different culture of people took place. The company has the opportunity of generating high profitability and revenues from this play yet to be launched. This will help in understanding of the customer expectations. It concludes that the management of tourist crowd requires high budget. The high prices for the tickets as the theaters running in New York City are quite expensive for the customers to have the plays to be introduced. The high competition from the other theatres and production companies as well the subject matter to be presented in front of the audience can be high threat for the revenue generation of Hanson Productions.

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