Owing to its collection of inductees, The Alabama Music Hall of Fame (AMHF) is an important symbol of music in the state of Alabama, the US, and the rest of the world. Its objectives include promotion of the musical achievements of Alabamans, education and training of aspiring musicians, and participation in the socio-economic development of local communities (Alabama State Government, 2008).Over the recent past, the organization has experienced several challenges that almost led to its demise in 2011. The paper will discuss the current position of the institution and its recovery efforts
Description of the Business: Porters Five Forces Model
Competitive Rivalry between the Suppliers
Suppliers rivalry is measured in terms of numbers and competitors. According to Grundy (2006), an organization would be in a precarious business position if many competitors possess power arising from more attractive products and services. Equally, the business would be in a competitive position if the business offers of the relevant organization are better than those of the competitors. In context, there are no direct competitors, but diversification pursued by some Alabama-based art and cultural centers give better offers that drive existing and potential visitors away from the AMHF. The situation is aggravated by the geographical location of such facilities.
Threats of New Entrants
As mentioned in the preceding discussion, there are several entrants into the business which threaten the position of AMHF. Due to nature of the services offered by art and cultural institutions, there is extensive deregulation. The situation, couple with other factors, attracts more potential visitors of the AMHF.
Power of customers
Grundy (2006) explains that the power of customers rests in the luxury to switch from one product or service to another as motivated by factors such as quality and price. The cost of traveling to countryside cities such as Tuscumbia has had a huge implication on the turnover of visitors at the organization. In this case, customers can be considered to occupy a powerful position.
Threat of Substitute products
The modern tourist wants to be involved in other activities in addition to the primary offers of art and cultural institutions (Alabama State Tourism Department, 2015).Participation in local community initiatives appeals more to the modern tourists. These customer trends have been given prominence by other players in the industry.
The institution depends on donations and state grants to finance its activities. The mentioned parties have the power to grow or ground the operations of the complex.
Economic trends in the state vis-a-vis the AMHF. Economic trends such as budgets cuts due to reduced economic activity of the state deny the organization the resources it requires to sustain its business.
Market routes. Change of routes affects the profitability of the business as more customers lean towards other destinations that are more accessible and vibrant. As a result, revenue from ticket sales has declined.
Advertising and public awareness issues. An informed populace creates an enabling economic environment for potential and existing customers to bring revenue to the institution through frequent visits. Lack of awareness from the local communities contributed to the indebtedness of the AMHF as frequent visits by local had the potential to sustain the operations of the complex .Decline of attendance from the locals partly led to its closure in 2011(Howard, 2013).Conversely, awareness created by the Musicle Shoals documentary drew more attention from several musicians and Alabamian public (Martin, 2013).The new awareness has revived the institution as record-breaking attendance has been recorded in the recent years.
Funding, grants, and initiatives. Economic turn-down in the state affects the operations of the organization. As a state agency, its non-profit-making nature receives little attention as such position has created massive debts. The effect of such factors is that political policies determine the capability of the institution to render its services.
Management of the establishment. Board members and other administrative leaders are appointed through a state-sanctioned process (Alabama State Government, 2008).As such, management is more likely to embrace political policies in administration rather than those policies that would sustain long-term operations of the institution.
State-controlled administration. State-government control ensures that there are fewer management issues as well as successive problems. Such form of leadership guarantees business continuity and financial support. For instance, the institution reopened in 2013 after receiving a state grant for restructuring purposes.
Rich musical history of the state of Alabama. The state has produced legendary musicians such as William C Handy, Percy Sledge, the Blind Boys of Alabama, Hank Williams, the Commodores, and Lionel Richie, among others. The standing of the mentioned artists on the worlds music pyramid (especially in the development of blues and country music) allows the state to continue to host foreign and local tourists that generate revenues for art and cultural organizations in Alabama.
Location of the museum. The relative rural location of the facility presents accessibility challenges. The institution is located 60 miles away from the nearest Interstate highway, Interstate Highway 65(Howard, 2013).The location violates the first rule of retail business, and thus, discouraging tourists visiting the facility considering that other cultural centers are more accessible than the AMHF. Similarly, the location limits the organization from tapping on the tourist potential of other state cities such as Decatur, Birmingham, Montgomery and Florence, among others.
Tuscumbia is a small city, making it difficult to attract a considerable number of visitors. Its size denies the city revenues from one-time foreign tourists who often prefer big cities.
Lack of diversified sources of funding. The facility relies on state funding and revenues generated from ticket sales. For the facility to operate wholly on ticket sales, it requires an average of 35,000 visitors for each year. In 2012, the total number of people that checked into the facility was 12,500(Howard, 2013).This turn out is inadequate to provide adequate financial resources for conduct outreach activities and workshops that help to popularize the museums products. Also, state funding is not a reliable source of revenue as state spending cuts stall operations of the institution. Diversified sources of funds ensure that the business of the agency continues uninterrupted by the economic challenges of the state government.
State ownership. Its ownership is more likely to present administrative challenges as a result of political appointments. Some of these challenges may be as a result of inefficient use of resources and financial impropriety. Inefficient use of resources often leads to indebtedness and bankruptcy.
The level of awareness of the state population has been enhanced by the airing of the documentary Musicle Shoals. The awareness presents more information about the art and cultural products offered by the institution. As a result, the potential for more tourists visits has been created.
Increased attention from the state music celebrities. The status of such personalities in the Union would further publicize the institution to a wider audience. More awareness has the potential to attract more visitors. Also, concerts graced by the state music icons would attract fans from other regions, creating an opportunity to experience the art and cultural products at the facility.
Other state Halls of Fame. Although institutions such as the Alabama Healthcare Hall of Fame, the Alabama Sports Hall of Fame, and the Alabama Engineering Hall of Fame, among others, do not offer similar products but their diversification and location deny the AHF potential visitors.
Location. Tuscumbia has been found to be the reason for the low rates of visitors to the AMHF (Howard, 2013). Despite the intensified popularization efforts, the site remains a threat as it may not attract substantial numbers from and outside the country required to keep the organization afloat. For location reasons, the complex will continue to face relocation or sell-off threats.
Critical Success Factors for the Alabama Music Hall of Fame
Government funding. Enables the organization to carry out workshops and other outreach programs that popularize the art, memorabilia and musical affluence of AHF(Alabama State Tourism Department, 2015).Evidently, the success or failure of the agency depends on the increase or reduction of spending respectively.
Visitors. The budget of the organization is financed by the state and collections from ticket sales (Alabama State Government, 2008). The ticket sales revenue augments the budget deficits, enabling the organization to carry out workshops, concerts, training, and other activities that fall within its mandate.
Volunteers. AMF gets donations from well-wishers, current and former musicians (Martins, 2013; Watkins, 2015).According to Watkins, donations of music equipment enable the organization to carry out music training sessions, hold free concerts and other events that depict the museum as a leading tourist destination.
Organizational Strategy of Alabama Music Hall of Fame
The organization has a strategy geared towards restoring the museum to its lost status as a cultural and tourist destination (Alabama Hall of Fame, 2015).The strategy was adopted due to the financial problems that culminated in its closure in 2011.The board has been responsible for the formulation of the recovery strategy. This is done in collaboration with all stakeholders including local artists, local communities, government, and donors, among others.
Various changes have taken place since the reopening of the organization. These changes are part of the wider strategy to restore its competitiveness. According to Howard (2013), new administration personnel have been introduced to inject recovery ideas that would bring the institution back to profitability.
Since its reopening, the new team has reintroduced outreach programs and organized free concerts and events that aim to create awareness about the areas art and cultural affluence (Howard, 2013).The running of the documentary Musicle Shoals also drew the attention of the Union audience who have made contributions towards its refurbishment. Besides, the popularization campaigns are meant to sensitize state communities on the significant role they can play through domestic tourism.
The agency relationship of the museum with the state has been cited as one of the problems that led to its decline in 2011(Watkins, 2015).As part of the recovery strategy, Martin (2013) reports that privatization has been one the suggested as one of the solutions to the funding issues. The move is expected to engender financial autonomy of the institution, ensuring sustainability of its operations. Establishment of an endowment fund can be expected to happen to provide a financial shield when state resources are not forthcoming (Specker, 2014).
The change effort fits into the strategy of the organization in the sense that it seeks to create an optimal engagement between all the stakeholders in the implementation of the recovery plan. The study helps to understand the need for the board members, local communities, state government and donors need to be involved in the decision-making process. As Gesme and...
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