Case Study: Madonna: Still the reigning queen of pop?

Iintruduction

Referring to the case study on page 251, (Exploring Corporate Strategy, Johnson,
Scholes and Whittington) this report attempts to answer the following three
questions;

1. Describe and explain the strategy being followed by Madonna in terms of the
explanation of competitive strategy given in Chapter 6.
2. Why has she experienced sustained success over the past two decades?
3. What might threaten the sustainability of her success?
1. Competitive Strategy
Madonna began her music career in 1983 and is still the reigning queen of pop in 2011.
Her success can be broken down into three strategic business units; music, films and
childrens books.
Madonna has always known which audience she is targeting. Her initial style was
targeted at young wannabe girls. This was given credibility by Macys store producing a
Madonna look-alike clothing range. A year later Madonna changed her image which
allowed her to develop the current market as well as penetrate new areas. (Ansoffs
Matrix) This time she was targeting a more grown up audience.

Madonnas strategy is based on differentiation. She is more than just a singer, she is
an image. Her product is better than her competitors. It stands out above the rest as
superior. This strategy of differentiation is pursued by courting controversy but staying
marketable enough. This was demonstrated in the 1989 video Like a Prayer where, as
a red-dressed sinner, she kissed a black saint.
At this time Madonna struck a deal with Time-Warner that created her record company
Maverick worth 33m. This allowed her to take full control of her image.

The success of the differentiation approach is likely to be dependent on two key

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 (Ansoffs 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
childrens books The English Roses in 2003. She isnt 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 80s 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 Madonnas book
which were promoted in GAP stores. This cross marketing was seen again with Dolce &
Gabbana by using her album in its mens fashion shows.
Madonnas 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. Madonnas core competences have been
difficult to imitate because they are complex. It isnt 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, thats 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
doesnt 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, artists and therefore keep her
appeal to a younger target audience. If she were to lose her image perhaps younger, up
and coming talent wouldnt be so keen to work with her.
According to Bowmans 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 wont buy. This would be particularly relevant to the childrens 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 Madonnas American Life album that she
withdrew her militaristic image and video due to the Gulf war. This coincided with the
publication of her childrens 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)