Entrepreneurship Quiz 1 Study Guide“MAMMA MIA!” THE LITTLE SHOW THAT COULDCASE OVERVIEW- 1988- Poor Broadway review marked beginning of end of Chess- Think about- what OTHER factors contributed to failure?- How was she going to resurrect her career?- Convinced there was a musical to be created out of the ABBA songsOverview- Decade later, Craymer got approval of ABBA to plan a musical based around songs.- 2001- Craymer had Mamma Mia! In London, Toronto, and on tour in US- Decided to bring it to Broadway Fall 06- Anxious-flop would lose momentum of other productions - Advance Sales - $27 million prior to Oct 18- 2nd highest advance sale ever- Why was Mamma Mia such a great success and not Chess?- Was it due to ABBA or her?- Would it ever be on level with Les Miserables or Cats?Facts on the show to date- Was the Show successful on Broadway?- What was its return-on-investment?- What is the overall return-on-investment- by 2002?- How many productions are there?Answers- $27million in advance sales, 2nd highest - $10 million to produce & recouped all costs within 6 months- Show had grossed $400 million by the end of 2002- 5 concurrent productions in US, Canada and the UK, with 4 international versions licensed, 700 actors and staffMamma Mia- Where is it in the life cycle?- Which single goal is most important?- Who sets the tone for each production?Anatomy of an Entrepreneur- What skills does July Craymer possess that has enabled Mamma Mia to become so successful?- Was she good or just lucky?Skills- Determination-Pitched idea for 10 yrs. - Patience- Waited till proven on the road- Delegation-Outsourced key elements- Frugality – Craymer relied on word-of-mouth advertising instead of utilizing large marketing budgetShe’s good- Payroll- No real star. 5 lead actors and ensemble only.- Servicing Unmet Need- This is a cross between a musical and a concert, unlike other Broadway shows.- Diversification-Road shows cover multiple cities in the US and only stay in short time- Experience-Apply lessons from ChessShow Management- Why do some shows spend lots on advertising while others rely on word-of-mouth?- Compared with Hollywood, to what extent are theatrical “stars” in a production a draw to get people to come see it?Why is Mamma Mia so successful?- Is it just luck or what are the business factors that contributed?Success Factors- Definition of a blockbuster-theater production and soundtrack success- Audience Participation- Involved audience at the end of each production-3-song mega-mix at the end of each night.- Demographic Appeal-ABBA’s songs-young and old.- Songs have a lifespan outside of the Theater- life outside 4 walls of theater- Short stay in each city – guaranteeing seats in demand- Universal Appeal of the storyline-it’s a “feel good” showQuality of the show- Is it on the same level as classic shows like Cat’s, Les Miserables, Lion King?Pros- Gross receipts-sold-out shows like classics- Generates word of mouth advertising like classics- Classic songs- The Show is a home run-does it matter how it’s categorized?Epilogue- Continues to hit box-office records despite economic stagnation- Show signed 8-yr. Lease with Mandalay Bay Hotel in Las Vegas with “in kind” elaborate sets and permanent fixturesCase Study: A. Monroe Lock and Security Systems Summary - Ray Monroe started the locksmith company A. Monroe Lock and Security Systems (AMLSS) in the Boston area. His company targeted 3 local communities which combined had a population of close to 140,000. - Ray’s parents were entrepreneurs, after working for a security alarm business after college he decided he wanted to be his own boss - Upon starting his own business, he decided to cover all areas of security and locksmith other than alarm installations because he felt that the larger companies in the market already had a strangle hold on this product. - There was a lot of competition in the locksmith industry; many were small-operated business with 60 percent consisting of one owner and employee. - There were already well established family businesses that had been serving the community for generations and the number of small operators continued to grow dramatically. The Boston area had 160 locksmiths advertising and 37 in the 3 communities where AMLSS was concentrated. - Monroe worked out of the company van, he communicated on a cell phone and beeper, but once 5 pm rolled around he would refuse to take calls. - With numbers struggling, he decided to advertise in the yellow pages where many of his competitors did, and added the A to the business name in order to be at the top of the locksmith list. This turned into a 4,000-dollar profit but once again his numbers flattened as he struggled to find ways to increase business.- It was hard to separate himself from his competitors in the yellow pages advertising, as many of the ads were very similar. Monroe tried to think of other businesses to enter in order to establish a more routine life, and questioned hisdecision on entering the locksmith industry Problem/Solution - 1. Lack of Commitment to Success Entrepreneurial Mind-set○ Cognitive Adaptability ○ Learn from Failures Commitment of Resources○ Human Resources Merger  Acquisition (Horizontal Integration) Hiring and Training○ Financial Resources Personal Funding Debt Financing Equity Financing - 2. . Limited Hours of Operation Human Resources○ Merger ○ Acquisition (Horizontal Integration)○ Hiring and Training Market Analysis○ Weakness Levels of Service○ Charge Premium- 3. Limited Product Offerings Product Line Extension Market Analysis○ Weakness- 4. Inefficient Advertising Management of Expenses○ Spent $4,200○ Added Revenue ≈ $2,000 Word-of-Mouth Advertising Customer Referral Program- 5. Low Entry Barriers Differentiation Increase Switching Costs Contracts Compatibility Recommendations - To make a profit in a market that already has a lot of players, Monroe Lock and Security Systems needs to offer a service unique to others. - Research other companies to find out which of their strategies work best, such as 24 hour emergency service, securitysystem installation, and/or guarantees on product services; all of which were not services available by Monroe Lock and Security Systems. - Once Monroe Lock and Security Systems match their competitors, they can focus on setting themselves apart from the competition by either launching