Introduction
The Wiggles company, a company that specializes in childhood entertainment has had great success both in their home and foreign markets. The company is located in Australia. It was founded by two musicians from the Cockroaches, a Sydney rock band. The group started to perform at children’s functions by working with characters such as Dorothy the Dinosaur. However, they saw a great opportunity to launch into the children’s entertainment industry when they saw the great interest and entertainment they generated.
It was the wisest decision they made. Today, the Wiggles is an international company that provides great family entertainment. It uses a variety of mediums such as the television, live concerts, CD’s, DVD’s and websites. In the international markets, the Wiggles export their merchandise to other countries. They also have foreign direct investments in the USA, UK, New Zealand, Ireland, Taiwan, and Canada. In 2001, the management revealed that they had plans to enter the South American market. In Australia, the company is the highest-paid entertainer in the industry (Ries 2006). They are doing very well in foreign markets. The company gets over 75% of its revenue from the overseas market.
For the company to reach where it is now, it had to apply several strategies in the global market. Facing intense competition in the children’s entertainment market, the company had to be innovative and offer something different from other companies to survive in the market. The company employed a business model focused on providing family entertainment which paid off. In foreign markets, one of the challenges is the different cultures and languages in different countries. The Wiggles faced the challenge adequately by offering customized products.
The company realized the value of having a strong market brand and they took adequate steps to strengthen their brand. They involved themselves in corporate social responsibility to generate great customer goodwill. Overall this was a company that noted its core strengths and strengthened itself to attain a sustainable competitive advantage at home and in the foreign markets.
What is unusual about the Wiggles Business Model? What past experiences did they rely on to identify a niche target market both in their home market and in the host market overseas?
The Wiggles used an unusual business model in the international market by incorporating rock and roll and targeting to provide family entertainment. The founding group members had been part of the rock group, the cockroaches. They used their music experiences in the concerts and provided tailor-made entertainment for the children. By using rock and roll, the founding members had identified one of their core strengths and took steps to strengthening it and using it in the market. The rock and roll aspect was great in that even the adults were interested in the Wiggles.
This worked to ensure that the Wiggles is not simply a children’s show but a program that could be enjoyed by the whole family. By looking at the external environment and doing a Swot analysis, the company saw the threats, opportunities, weaknesses, and strengths it faced. The company realized that in launching into the children’s entertainment industry, they had to equip themselves with specific knowledge and expertise on childhood psychology. Having entertained them in the birthday parties, they realized they needed to know what can hold their attention and interests in entertainment.
Besides incorporating rock and roll, the company used another unusual strategy. They had their staff undertake tertiary training in early childhood education. This would help them understand the children and enter into their world. By entering into their world, they would be able to know what kind of entertainment best suits the children. In involving itself in a certain market, the company has to ensure it gets all the relevant information on the market or the industry.
Another strategy that the company used based on past experiences was to continue providing the entertainment in children’s birthday parties and shopping centers. The Wiggles had already been performing as the supporting act for Dorothy the Dinosaur, but soon they realized that they had something going on. Both the children and the adults were highly receptive to their performances. As much as they delved into the television programs, CD’s and DVD’s production and sale of their music, they continue to entertain shopping centers and theme parks.
This makes the people identify with the group more even as they interact with them closer (Johnson, 2005). The group also interacts with the whole family, gaining the parent’s trust and goodwill. These parents will, therefore, encourage the children to watch the program translating to higher sales. It has a personal touch to it rather than the public seeing them as remote and just another program on the television. The founding members had performed in the family spots greatly when they had been the supporting act for Dorothy the dinosaur.
When Greg the yellow left the band, the Wiggles were able to successfully replace him because of the strength of their brand
What can you identify as core components of the Wiggles brand and how do you feel that these strengths can be sustained in the foreign markets?
In the expansion of brands globally, the company faces intense competition and diverse ethnic cultures. The brand operates in a very dynamic brand environment affected by legal, competitive, consumers, culture and the media forces (Gelder, 2002). The brand of a company is very important. The brand can be identified as a strategy for the company to differentiate itself from others. The brand is created by highlighting the different or distinct values that a product has. When the company is penetrating into international markets it needs to strengthen its brand (Johnson & Myatt, 2003). The company has to offer something unique and different. The consumers will definitely not pay a premium for just a typical product.
They will simply pay the costs of an ordinary item. However, they will pay extra for a product that has added values in addition to its core properties. Several things have contributed to the strengthening of the Wiggles Brand in the international markets. First of all, the brand is distinct in its use of rock and roll music pulling the parents as well as the children. The use of the business model of family participation went further to ensure brand recognition in the whole family. To ensure that the company is well known, the Wiggles set up play centers near the suburban areas in New South Wales and Texas. They wanted an area that was close to people’s home so that the parents do not leave their children to play but rather they join them. To increase brand awareness is that the company targeted the areas that the children usually play at.
The company opened two sections at the famous Dreamworld. In the future, the company intends to open several sections in major of the theme parks in the USA. The company has also strengthened its brand by choosing to involve themselves in helping the Australian farmers sell apples. By engaging in corporate social responsibility, the company fosters great customer goodwill and loyalty. The company with a great brand is able to deal with competitors effectively. Brand positioning is whereby the company where the management seeks for the company to have a valued and distinct place in the mind of the consumer. The brand positioning will be dependent on how the company is innovative and differentiates its product from the competitors. In positioning, the company organises itself in order to seek audiences with client and influence their thinking (Dolak, 2001).
The company therefore has to ensure that the communication between the company and its clients must be quality. It is about placing something into the mind of the customer that will make him think your product is good and always superior. The Wiggles Company has great and diverse mediums of communication with the public. They launched an online message board for the parents. The company realized that to attract the children, the parents of the kids must be fully on board. By creating a rapport with the parents, the company wins. The parents liked the idea of the message boards so much that in just two months, one of the fan clubs had over 46,000 parents. The company has embraced technology in its international business by using the message boards and online selling. The company explored different methods of distribution such as community activity and retail environments. They use DVDs, CD’s and television programs gaining a great audience with the public to advertise and affect their perception and preferences in childhood entertainment. Another aspect that strengthened the brand was their action to create formal management of the company by bringing in Michael Conway as the group’s general manager.
The Wiggles identified the brand as one of their core strengths and used it to create a successful business. The company promotes their brand in the way the business is divided into two segments, there is a segment that takes care of the development of the content while the other group handles the development of the brand. The company has realized the importance of the brand and has a dedicated team that takes care of the brand. There are also cultural forces that affect the brand (Townsend, Yeniyurt, & Talay, 2009). The Wiggles Company strengthened its brand in the international markets by customizing their products and offering programs in foreign languages causing the people to warm up to them and enjoy the program fully.
One of the key elements of the Wiggles brand is corporate social responsibility (CSR). How do the Wiggles demonstrate this CSR in their operations in markets at home and overseas?
The company chose to get involved in corporate social responsibility by helping the Australian farmers sell apples in their home area. The community ends up seeing that the company is socially responsible. The customers and the community have generally been known to respond positively and purchase a lot from the companies involved in CSR initiatives.
Another way that the company practices social responsibility is recruiting talent in the foreign market and sending them to Australia to train. The company would have simply hired Australians who would have worked in the foreign branches all over the world. Thirdly, the company practices social responsibility by employing young people, training and working with them. The Wiggles management never let an opportunity in demonstrating social responsibility escape them.
For example, when others were canceling their flights into the United States due to the terrorist attacks after the September 9/11 attacks, the group performed in front of over 65million Americans at the Macy’s Thanksgiving day parade in New York City. This went to promoting and strengthening their brand in the market as the people were so touched that the company had still chosen to travel to the country despite the security threats. This shows that the company is not concerned with only making money but also has the public good in mind. These ethical considerations are what gives a company sustainability in the market place (Donaldson, 2010)
The Wiggles is an organization with key intangible resources? Can you identify these resources and explain how they assist the firm in moving into new overseas markets?
The Wiggles Company has various intangible resources. First of all, they have a great reputation in the market place as they enforce family values and encourage family entertainment. The company is also socially responsible in that it builds family values. As the group risk and quality assurance officer states, the wiggles programs help to bridge the gap between the parents and the children. It creates and strengthens the family bonding and sharing. Secondly, they have invested in their staff in education. All their staff have undergone training in tertiary childhood education. They have a strong brand in the market. They have substitute wiggles performing in different countries showing that it is not about the four people that usually perform. If they were to all leave the company, the Wiggles Company would survive since it all about the brand and not specific people. This was clearly demonstrated when Greg Page left the group. The group may have suffered great losses but they did not. They were able to replace him. Another important intangible asset is the customer goodwill and loyalty that has been enforced by the company’s participation in corporate social responsibility. The benefits of CSR are long-term causing the business to have sustainability.
It might be expected that the Wiggles would confront wide variations in “psychic distance” (Cultural and business differences between the home country and foreign markets) as they market overseas. How does the concept of psychic distance relate to the Wiggles, and how do you feel that this kind of enterprise would be disadvantaged by widely different psychic distances?
The wiggles company chose to deal with the different cultural differences by customizing their product to a particular market. For the English speaking countries, they could produce the program in English but in foreign speaking countries there was a language barrier that had to overcome. They recruited local talent from foreign countries and trained them in the Wiggles business. They were, therefore, able to penetrate the market easily.
In dealing with the business differences the Wiggles company choose certain strategies to penetrate the market.
There are different ways in which a company may enter or expand into a foreign market. The company may choose to license. This is where a company permits another firm to use their skills in areas such as manufacturing or processing. The advantage is that there is little expense and involvement required from the parent company. It is a great method to use in the penetration of foreign markets as its capital is not tied in the foreign investment. The disadvantage is that the licensees can become competitors. There is also limited participation from the parent company.
Another market entry strategy into foreign markets is by the use of joint ventures. This is where two or more partners are owners of the business. The main advantage is that there is a sharing of knowledge, risks and financial obligations (Korey, 1986). The only drawback is that the company may lack full control over the company. There is ownership where the company owns 100% of the company. The way a company enters a market is between integrated and independent models (Anderson and Coughlan, 1987).
The integrated models enable faster market penetration and the flow of information on the country. The disadvantage is that the risks in working with others are high. The company may adversely affect the parent company’s reputation. Independent channels present great control and coordination difficulties though they require less costs, risks, and capital. For Wiggles, they chose to license out the manufacture of their products. There are certain risks associated with outsourcing services. As the Wiggles Company outsources the production of the DVD and the CD, it has addressed the issue by ensuring that the licensing companies have certain core strengths.
When a company chooses the wrong partners, their weaknesses and poor reputation may damage the Wiggles position in the market. For the manufacture of its CD and DVD, the company has licensed this work out to the Village Roadshow in Australia. The company has around 90 licensing partners in the USA, Australia, and New Zealand.
Using the licensing and customization approaches in all the overseas markets is advantageous to the company. If the company uses widely different approaches in dealing with psychic distances, it will prove to be difficult, costly and strength draining considering it is a company in the child entertainment industry.
Relate the Wiggles “product” to the issue of customization versus standardization in worldwide markets. Do you think this type of product lends itself to worldwide standardization?
The wiggles brand has had success as it customized itself to foreign markets. It has not chosen to offer a standard product in all their overseas markets. In the Hispanic markets, the Wiggles rather than singing in English chose to have substitute wiggles in the area who would sing in Spanish. In the strategic decision of customization versus standardization, the company recognizes that the national demand for a product depends on the structural elements in a country (Gaussens, Lecostey, and Shahbazi, 2009).
The company, therefore, chooses to segment the market nationally or culturally to provide customized products. Customization should be the preferred option for most companies as it encourages innovation and differentiation in order to satisfy the particular customer needs (Shaked & Sutton, 1987). The advantage of standardization is that it is cheaper since the same goods are sold in all the countries.
However, with customization the people identify more with the company and the brand strength is reinforced. There is a cost incurred in research and finding out what the market wants but at the same time the benefits are worth it (Piller, 2004),. The market response to a product that touches on their culture leads to increased sales and profits. For a while till 2000, the company was only performing in English speaking countries but soon they ventured into other countries. While in English speaking countries they could offer the same product, but in a foreign-speaking country, the company chooses to offer customized products. Another area where customized products have been offered is in the Taiwan country where there are Taiwanese speaking wiggles. It has been a great success and they have been performing for four years.
The way the Company has launched its product in different countries has also been different. For Wiggles, even though in Australia the product began with small gigs, the company choose to start with television broadcasting for the South American product so that they can test the market before they start doing the tours. Customization requires a lot of effort and costs. The Wiggles Company recruited staff from the Taiwanese markets and trained them in Australia in how the product is presented to the public. With standardization, the company would probably have to work with their Australian staff. The training costs would be lower.
There are challenges in customization. The company has found it hard to penetrate the South American market due to issues with translation. However, the rewards have been great once the company decided to be resilient and persist.
Conclusion
In assessing the Wiggles company, it is evident that in going global the company has to tackle certain issues. The company is operating in a dynamic, turbulent market where there are cultural, legal and competitive forces. The Wiggles Company used such strategies such as expansion of the global brand, market entry strategies, customization of their products to adapt to the different cultures in the world. They also realized the importance of corporate social responsibility and business ethics in the organization.
They advertised and created a great brand presence in the foreign markets. They linked themselves with the leading names in child entertainment such as Dreamworld so that they could have a great platform to mass advertise their product to the children and the parents. There is a lot that any business can learn from the Wiggles business model. The audience needs to participate in the program. The children participate through music and dance and love it.
It is important to include everyone in the use of the product the way the Wiggles attracted the parents. The seller of the product needs to have live contact with the customers the way the Wiggles maintained live performances despite the option of producing programs all the time(Johnson, 2005). They were not afraid of being different in the market. In fact, it was a core strength that gave them a competitive advantage when they incorporated rock and roll music in their product. This is a brand that is well known and the company will continue being successful in the industry as they have great business concepts. Surviving and thriving in international markets demands innovation and creativity of the kind the Wiggles have demonstrated.
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