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Basis of Success in the Early Years

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Basis of success in the early years

In l5 years, the Ministry of Sound has grown from a start-up with an initial investment of Ð'Ј225,000 into a monolith worth nearly Ð'Ј150m. Britain’s original вЂ?super-club’ turned clubbing into a corporate enterprise and became the most recognisable and successful dance music brand in the world. Strategic position is concerned with identifying the impact on strategy of the external environment, an organization’s strategic capability (resources and competences) and the expectations and influence of stakeholders.

According to Porter’s Generic Strategies, �a firm positions itself by leveraging its strengths’. He has argued that low cost and differentiation are two basic strategies for creating value and attaining a competitive advantage in an industry.

The environment

Dance music had its origins in �acid house’, itself with its roots in the futuristic, electronic music of the gays clubs of Chicago and New York. Dance music was strongly associated with recreational drugs. The Ministry differentiated itself by having security professionals with no links to the local drugs gangs. This made it a safer and cleaner clubbing environment, which is a comparative advantage to other clubs. The Ministry was a rule-breaker by setting itself apart from other London nightclubs of the time with its location well away from London club land, and I believed that strategy drove down the cost in term of location. The initial cost saving might have been used to invest in better club facilities and sound equipment. From rule-breaker, the Ministry became a rule-maker by campaigning nationally against the use of drugs in youth venues. The drug-free environment and a highly-acclaimed sound system were features designed to attract an enthusiastic crowd of music lovers.

Strategic capability

The Ministry created new opportunities by stretching and exploiting capabilities. It initially set itself apart from other London nightclubs of the time with its location well away from London club land. James Palumbo was only 28 years old when he founded MoS. Being relatively young, he was a risk-taker by plunging into a dance culture that was still raw and far from respectable. He actually preferred classical music but he was aware of the trend in dance music. The Ministry was thus able to lead in the transformation of club culture from an underground movement associated with �acid house’ into a mainstream youth market activity. Its capability also enabled it to expand quickly through diversification into areas such as magazine, radio show and record-label.

Expectations & purposes

The Ministry was able to meet the expectations of customers by investing heavily in club facilities and sound equipment, as well as developing new super clubs fronted by �super-DJs’. These attributes, including a safe clubbing environment, differentiated the Ministry in some ways that customers were able to value it more. By meeting expectations of customers, I believed they were prepared to pay a premium price. Palumbo also hired a psychoanalyst for the purposes of coping with the gangland threats that followed his drugs crack-down. The Ministry’s success in the early years would also have met the expectations of other important stakeholders within the management.

What had gone wrong and why it did

Consumers’ demands are constantly ever changing. The intensity of competition, the borderless operations by globalization, these have put added pressures for businesses around the world to perform. Simply, there is no exception for the Ministry. The challenges of the new millennium faced by many companies are the diverse workplace and workforce; the emphasis of new knowledge and technology; the increase in multiple stakeholders; and the rising expectations of the consumers.

The environment

By early 2001, Ministry’s dance club became seen as little more than a shop front for its global merchandising because it simply became too well known to be considered a cool nightclub. The club seemed stuck somewhere in 1999 even though it had gone internationalized with new overseas clubs. The environment had changed; dance music on which MoS was based was going out of fashion. Dance clubs were closing or down-sizing, while live music audiences were fast growing.

Strategic drift was created when the Ministry’s strategies progressively failed to address its strategic position and performance deteriorated. Its established strategy had remained unchanged or changed incrementally, when the consumers’ preferences had shifted. Ministry of Sound did not adjust quickly enough to the new pressure of consumers’ expectations. Rather than aggressively altering its own strategies to make waves and drive change, it had been forced by external influences.

Strategic capability

Although the basis of how business work remain, life-cycle has become shorter. As the whole dance industry matured with the rise of more super clubs, the earlier strengths of Ministry had ceased to become relative strengths. Those forms of competitive advantages could not be sustained for any length of time and had eroded because earlier success drove competitors to duplicate the competitive advantages held by the Ministry. Other clubs were now equally capable of offering a safe environment and professionalism.

Those resources and competences of Ministry, which were “better than” competitors then, had become “same as” competitors. Other competence had become “worse than” competitors such as it was no longer cool to go Ministry’s dance club. The customers have more options now. The Ministry’s capability to pursue initiatives from diversification to internalization might not be feasible due to resource constraints, particularly of capital and managerial capabilities.

Expectations & purposes

Greiner’s Evolution and Revolution Model of business growth highlights the different crisis organisation will encounter. Palumbo is an entrepreneur but what is going to make Ministry business great again is a focused, long-term brand strategy. From Churchill and Lewis’s model of business growth, Palumbo was at



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