Lady Gaga Harvard Case Solution & Analysis

LADY GAGA

Solution 1

After the Kanye West decision of having a break from the music industry; Troy Carter who is the manager of Lady Gaga is in serious dilemma with his team members. He came across three possible options with different financial aspects. Option number 1 is recommended because it has some handsome financial returns. Although, it is a fact that these financial aspects may create some hurdle but the manager, Troy Carter was sure about the fan following of the Lady Gaga and he stated that audience likes her song but now the time has come to appear in front of the massive crowd; therefore, this option should be adopted.

Solution 2

Option 1 Analysis

In option 1, they can plan 25 concerts in the tour with an average capacity of $16,000-$20,000 audience. The ticket price will be around $100-150$. The major issues are that the startup cost is already paid by the West’s team, which is around $12 million; which needs to be reimbursed by the team of Gaga.

Concerts

Audiences

Ticket cost

Revenue

25

$20,000

$150

$75,000,000

This option looks feasible from financial perspective if they go for the 25 concerts but this will create a huge financial gamble at this stage. Moreover, they have to reimburse the initial expenditures of around $12 million as well; which can be covered from the expected revenue of $75 million.

At this stage, such a high level tour may create some issues because Lady Gaga is in-experienced and handling such a massive tour in a single trip may create any issue or controversy as well. But at this stage, this option is recommended because it can give them a tremendous boost across the globe. Moreover, the team of Gaga is confident about its popularity and it is sure that people actually want to see Lady Gaga on the stage.

Option 2 Analysis

In option 2, they have a choice of doing concerts at small level and to adopt smaller venues. These venues must have a capacity of around 6000-8000 audience. The ticket price will be around $60-$100, which makes the manager little worried

Concerts

Audiences

Ticket cost

Revenue

25

$8,000

$100

$20,000,000

By going for this option they are suffering a lot in terms of the financial perspectives. Their total expected revenue will be $20 million, which is comparatively quite low from option1 . Moreover, they need to pay an additional cost of $2 million, which is ahead of $4 million that they have already paid. Furthermore, this option is giving them a very low audience exposure that may not suit Lady Gaga. Since, expenses are high and net profit may not reach the possible expectations as in option 1; so this option is not recommended.

Option 3 Analysis

Option 3 presents the idea of cancelling the tour to avoid bearing any further cost. At this stage, Lady Gaga wants the market exposure so she must perform the concerts and engage with the audience as much as possible. Since, they have already spent an amount of $4 million so this amount will be lost. This option will not create a financial loss only but it will also hurt the brand image of Lady Gaga at this stage.

Lady Gaga Case Solution

Solution 3

Being the concert promoters, working with Lady Gaga on the option 1 will be a massive opportunity for Live Nation. Live Nation’s core responsibility is to arrange all the facilities that are required for a concert, which includes the venue booking, arranging hotels, transportation and etc. Since option 1 contains the 25 concerts with massive public presence, so this directly benefits the Live Nation and WME because of enormous ticket selling, which will increase their share in terms of money. Option 2 is financially un-feasible for Live Nation and WME because it has very low presence of audience with low ticket cost, which is not suitable for these companies.

Solution 4

Lady Gaga was born in New York in 1986, and passed her childhood in Manhattan’s West Side. She has been a music lover since beginning and started playing the piano at around the age of 4 years. She had learned many music types, which includes the piano singing and classical singing. In 2003, she was admitted in the New York University that enhanced her skills in an optimistic manner. After a year, she deliberately left the school and start focusing on music on a full time basis. By the same time, she introduced her stage name, Lady Gaga. US famous producer, Mr. Herbert gave her a chance as he is also known for promoting new talent. Lady Gaga was a primary artist, who had a contract to Herbert’s new label for which he signed an impressive deal with the world famous Universal studio in turn. Actually, the main idea was to work together with the both Interscope and Universal on .........................

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