- Identifying and understanding the strategic customer
- Identifying Key competitors
Madonna cleverly, marketed herself in a way that she appealed to a wide audience. She appealed to young girls because of the music and she maintained her original fan base by moving with the times and demonstrating a strong, independent character. She understood the critical success factors.
In 1996 Madonna evolved her strategic direction further by penetrating new markets and therefore a new customer base (Ansoff’s Matrix) when she played the lead role in the film Evita. She managed to shake off the ‘Erotica’ image and pull off the saint-like persona of Eva Peron. This change in image resulted in Max Factor signing her up to front its relaunch campaign that was styled around a glamour theme. Their reason for signing Madonna was that she ‘was the closest thing to an old-style Hollywood Star… she is a real woman’. We see this diversification again when Madonna published her children’s books ‘The English Roses’ in 2003. She isn’t afraid to break the mould and she is unpredictable.
More recently we have seen Madonna collaborate with GAP during an ad campaign which we see Madonna dancing with Missy Elliot to a remix of her 80’s track ‘Get into the Groove’. Here Madonna appeals to her original fan base and their children. Patrons of GAP clothing could also purchase the re-released CD and a copy of Madonna’s book which were promoted in GAP stores. This cross marketing was seen again with Dolce & Gabbana by using her album in its men’s fashion shows.
Madonna’s competitive strategy is based on differentiation and collaboration across complimentary market segments.
2. Sustaining Competitive Advantage
Madonna has the core competences of a good singer and dancer as well as her own record label. Having her own record label means that she has the physical resources that give her the freedom to develop her image how she wants. She has the financial resources to fund her own ventures, be that as a recording artist or a book writer. Her unique resource is intangible; her name. She is, to all extent and purposes the brand. Her popularity over the years has put her in the fortunate position of being able to collaborate with other, sometimes younger, top names in the industry, thus keeping her popular with the younger audience as well as with her original fan base. This also gives the opportunity to learn new skills and more modern approaches.
The music industry is hypercompetitive and in order to survive in this rapidly changing environment there is a need to adapt quickly. Madonna’s core competences have been difficult to imitate because they are complex. It isn’t just because she is a good singer. It is more how the package is put together and marketed. She is flexible and innovative. In order for Madonna to sustain competitive advantage she has reinvented herself time and again. There has been several paradox of change starting a new ‘Sigmoid Curve’. She cannibalises the bases of her success. Also, there is a cultural history of being daring. Her audience may be waiting to see what she will do next. She is unpredictable.
She has always managed to be ahead of environmental change ‘always managing to land on the cusp of what we call ‘contemporary music’ according to Phil Quattro, the President of Warner Brothers. She has never been afraid to re-invent herself and change her music genre.
After twenty years in the industry Madonna will have a great deal of organisational knowledge. It is her tacit knowledge that has made her hard to imitate. She would appear to have a good understanding of her environment and what the customer wants. Some would say that she has achieved EVR congruence. Her organisational values and resources are inline with the environment in which she operates. She delivers what the customer wants, that’s why they buy.
It could be argued that over her twenty year career she has achieved a proprietary position in the industry and therefore achieved strategic lock-in. This proprietary position has presented the opportunity to collaborate with artists like Missy Elliott and Britney Spears.
3. Threat to sustainability
It is possible that Madonna could, in the future, go through a period of strategic drift. If she believes that she has achieved alignment with the environment her strategy may only change incrementally. The theme of courting controversy but staying marketable enough has been toned down in her later years. It can only be toned down so much before it is no longer present. Another possible threat to her sustainability is her strategy of re-inventing her image. Madonna may experiment with a theme which doesn’t work or she could reach a point in her life when she not longer appeals to a younger audience and she needs to concentrate on her older fan base. Her core competences could become her core rigidities. Either of these could mean a loss of alignment with the environment and loss of image. The organisations values and resources may not be in sync with environment.
Madonna may under estimate her competitors. The music industry is extremely innovative with new artists appearing on the scene all the time. Other artists, such as Lady Gaga could use a position of strategic drift to take the proprietary position in the industry.
It is due to her image and long standing reputation in the industry that she has been able to collaborate with young, perhaps more modern, artist’s and therefore keep her appeal to a younger target audience. If she were to lose her image perhaps younger, up and coming talent wouldn’t be so keen to work with her.
According to Bowman’s Strategy Clock options six, seven and eight are likely to fail;
- Option 6 – Increased price/standard product
- Option 7 – Increased price/low value
- Option 8 – low value/standard price
Should the quality of the products fall or the price out weight the quality of the product customers won’t buy. This would be particularly relevant to the children’s books on sale or concern tickets. But it is also relevant to the quality of the music she produces or any films she may star in.
We have seen in 2003 with the release of Madonna’s ‘American Life’ album that she withdrew her militaristic image and video due to the Gulf war. This coincided with the publication of her children’s book ‘The English Roses’. Historically Madonna has been controversial and known which audience she was targeting. This time she was reported to be going soft and was reliant on her existing fan base. Whilst this strategy may have proved successful for the marketing of the book, the album was her lowest-selling. The image she portrays for one element of her business may be detrimental to another.
Reference;
Exploring Corporate Strategy, Johnson, Scholes and Whittington (2008)
