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Selected Case

published: 28 Aug 2017

  • Topic: Strategy
  • Industry: Classical Music Industry
  • Region: Global

Abstract:
For several decades, the classical music industry has been in decline with demand down, costs up and profits shrinking as many orchestras struggle for survival. Against this backdrop, André Rieu and his Johann Strauss Orchestra stand apart. Instead of competing like all the other orchestras, André Rieu has reconstructed market boundaries between classical music and pop concerts, creating a blue ocean of vast new demand. Rieu and his orchestra have stayed on the Billboard Top 25 Tours list for nearly 2 decades, right alongside the likes of Bruce Springsteen and Justin Bieber. His CDs and DVDs have sold more than 40 million copies versus 10,000 copies for a top classical music CD.
This case reviews the competitive practice of the classical music industry and illustrates how Andre Rieu gained insight into unlocking new demand by looking to noncustomers of classical concerts, and how he reconstructed industry boundaries and created new market space, making the competition irrelevant. The case comes with a teaching note that reviews major concepts and frameworks of competitive strategy and blue ocean strategy in the context of the case and provides answers to the questions for class discussions.

Pedagogical Objectives:
The teaching of this case aims to
1) Identify the characteristics and limits of competitive strategic practice in the context of analyzing the conditions of the classical music industry
2) Demonstrate how André Rieu created a blue ocean of new demand in a declining industry through reconstructing market boundaries
3) Highlight the important role of noncustomer insights in enabling new demand creation
4) Drive home the key principle of blue ocean strategy – value innovation, which requires the simultaneous pursuit of differentiation and low cost
5) Review major concepts, frameworks and tools of blue ocean strategy in the course of analyzing André Rieu’s strategic move.

Keywords:
Classical Music Industry, Declining Industry, Entertainment, New Market Space, Market Creation, Blue Ocean Strategy, Value Innovation, Noncustomers, Demand Creation, Market Reconstruction, Red Ocean Strategy, Competitive Benchmarking, Differentiation, Live Performance

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