Operations in the international music festival event industry are highly complicated due to involving a large number of participants, venues, managers, and visitors. Unlike companies responsible for small events, the international industry has to predict and try to avoid the risks associated not only with the artists but also with transportation, ticket selling, weather conditions, and many other factors. The analysis based on the PESTLE system and Porter’s five forces will enable the assessment of the business environment and potential profitability of the international music festival event industry.
The PESTLE analysis incorporates political, economic, socio-cultural, technological, legal, and ecological environments. This tool is helpful in the evaluation of a business (Perera, 2017). Regarding the festival event industry, the political environment involves the political stability of the countries from which artists and concert visitors come, as well as the monetary and foreign trade policies (Perera, 2017). The economic environment presupposes commercial regulations within and between countries. The socio-cultural dimension deals with the culture, tradition, and religion of different countries. Hence, if an international event is arranged on the date of some important religious holiday in one of the countries participating, it can pose a threat to the venue’s success. The technological environment presupposes favorable technical arrangements and accessibility to the necessary equipment, especially that connected with sound and video effects.
The legal environment has to do with regulations and guidelines, which the event’s managers must get acquainted with and conform to if they want to avoid complications. Finally, the ecological environment includes requirements concerning sustainability and eco-friendliness of the event. The music festivals must pursue such an aim if they do not wish to be sued by governmental or non-governmental organizations, volunteers, and activists of various natural movements.
Porter’s five forces tool allows identifying the strengths and weaknesses of the industry (Perera, 2020) and contains the following elements:
- competitive rivalry (rather high in the selected industry);
- supplier power (due to intense competition in the industry, it is easy to become the victim of bankruptcy) (Simon et al., 2017);
- buyer power (not too dangerous since visitors cannot regulate the market and cannot arrange large-scale events by themselves, hence, they have to agree to whatever they are offered);
- the threat of substitution (rather low);
- the threat of new entry (moderate to high).
Reference List
Perera, R. (2017) The PESTLE analysis. Avissawella: Nerdynaut.
Perera, R. (2020) Understanding Porter’s five forces analysis. Avissawella: Nerdynaut.
Simon, A., et al. (2017) ‘Towards an adapted MHP strategic capabilities model for moderating challenges to quality music festival management’, International Journal of Event and Festival Management, 8(2), pp. 151-171. Web.