The Events Industry in London - Case Study Example

Course: Tutor: Name: Date: The Events Industry in London Introduction Demand for certain practices and the benefits of the same practices have led to the development of the events industry. There have been increases in discretionary spending and leisure time which have led to the creation of more public events, entertainment and celebrations. Corporations and business companies have also found the benefit of using events which in most cases is to promote businesses, market products and create awareness or even build company reputations (Bowdin and Allen, 2006). Governments have also come to appreciate the importance of events and most are considering it an important industry to revenue contribution. The governments promote and support events as part of strategies for destination marketing, nation building and economic development. Such is the case with UK government (Bowdin and Allen, 2006). So many companies are involved in creation, organisation and management of events since they have become part of the society and have proved to be of importance to both those who participate in them, the companies/organisers and the revenue collectors. In the tourism industry for example, events play a major role apart from the arts and crafts and the historic sites that attract the tourists. Politicians also depend on events to pass information (Bowdin and Allen, 2006). Like any other business industry, the events industry is affected by external factors which are important if analyzed for business success. Companies in the event industry have to be aware of the risks in the business external environment in order to make profits and ensure good performance. Companies select frameworks of their choice to analyze the external environment. One such frame work is the PESTLE analysis framework. This paper will use this framework to analyze the events industry external environment and provide information based on the analysis on how the current trends will affect the future events industry. PESTLE Analysis Framework Political Factors The events industry in London receives demand from the local people a well as people from other countries depending on the events being held. In UK, events have become part of the government’s revenue collection, nation building and developments. The government supports events and appreciates the contribution of the industry (Bowdin and Allen, 2006). An example of a case is in 2005 which is four years back, but played an important role in the events industry market building and growth. UK exhibitions industry contributed ₤ 4.1 billion to the GDP and contributes ₤ 1bn per year (Friday’s Media Group, 2005). This industry also supported 137,000jobs and contributed other billions by supporting other sectors of the economy. This contribution and others from other event industries has made the industry receive support from the government. According to this report, there was a call for more support from the government to expand international trade by supporting the exhibitions industry which is part of the events industry. Supporting such kind of industries would increase the chances of London holding major global events (Friday’s Media Group, 2005). Economic Factors The economy of any country or region affects the businesses in that region. Economic status of London therefore affects the events industry. The City has not been left out in the current situation of recession. Recession is one major problem that affects most industries and businesses with reduced demand that in turn leads to reduced production and distribution. The events industry is currently suffering from low demand of events due to most consumer expenses being directed to basic needs (Federation of Small Businesses, 2009). Events industry depends on leisure activities apart from the educational, promotions and several others. When there is recession, consumer spending is reduced and leisure is not one of the basic needs that can be given priority when spending goes low. This means that the industry’s revenue from leisure activities is reduced. The current progress of the industry is not good but this may change in future when recession comes to an end. This however, will depend on the steps taken by individual companies to remain sustainable in the market (Federation of Small Businesses, 2009). Unemployment in the city can also affect the performance of the industry since the industry depends on people’s income (Berridge, 2007). This however is out of the industry’s control as there are other factors that cause unemployment. One contribution that the industry could make is job creation (Berridge, 2007) but this cannot happen easily with poor performance in the current global recession period (Federation of Small Businesses, 2009 ). Another issue that has hit the City’s economy is the death of pop legend Michael Jackson. The organisers of the 50 shows that were to be held in the O2 arena will suffer a very great loss. This however will change with most events being organised turning to paying tribute. At the time of his death, several events had been planned and this will act as a boost to the economy and the events industry during his memorial times (The Economic Times, 2009). Socio-cultural Factors The people or a community is very important when it comes to this industry. The events industry has so many types of events. These include: Educational events such as conventions, meetings, conferences, graduations and so many others not mentioned Commemorations which include civic events, memorials and others Promotions such as political rallies, product launches, fashion shows and conventions among so many others Celebrations such as parades, weddings, anniversaries, birthdays, fairs and so many others (The Event Planning Industry, 2009) Demographic changes might affect the events industry but this is most unlikely since the industry has events that considers all ages. The problem may arise when there are more people from a certain age group and less from another different age group causing low performance in companies dealing with events of the affected age group (Berridge, 2007). Planning and ensuring that events happen depend on the society. From the above list of events it is obvious that the social practices and the people’s culture determine the nature of the event hence its success. The community and cultures in London support this industry. London has developed, has a large population and hosts so many events of the world for example Olympics, annual golf day and many others. All these contribute to the social trend taken by the people who live in the City (Berridge, 2007). Current Social trends in London considering the above areas of events show the industry has a lot and will still have a lot of opportunities in the future. In education the current trends in London show increased number of educational institutions, from primary education institutions to colleges and even for special people like the handicapped. Globalization or the current direction taken by the world requires skills which can only be gained from educational institutions. New technology and changes in the world demand for increased training institutions. These create opportunities for the events industry. Celebrations have also become part of people’s culture in London. Celebrations such as birthdays, anniversaries and so many social events are on the increase. The City has several annual events such as trooping the colour which is an event that celebrates the Queen’s official birthday, New Year’s parade and Lord Mayor’s parade which is a celebration of the appointment of a new Lord Mayor of the City (Berridge, 2007). The current society believes in celebrations that call for events organisation. The class of people able to hire event organisers however is dependent on people’s income and the level of commitment. According to Berridge, most people who can afford organisation of event fees are middle class and first class who do not have the time to organise such events (2007). London is the fore most global city in UK and is ranked with major states like New York. It has been named the number one City of the world. These characteristics influence the capability and the chances of the City to hold global events (Berridge, 2007). Promotions also create opportunities for the industry. Political rallies will ever be there in London since campaigns have to be held by politicians and it is one of the major Cities in UK. Current trends taken by business management globally due to competition and new developments which also arise due to new technology create more opportunities for the events industry. More businesses companies in London fight to remain competitive in the market and more are created. With more business companies, and the potential to have more, the City provides the events industry with a lot of opportunities (Berridge, 2007). London has a good reputation when it comes to the events industry or the factors that attract events to the City. It is the home of headquarters for most top companies in the UK and companies in Europe. London is known for its influence in politics, entertainment, education, arts, media, culture and fashion. It is a tourist destination for both overseas and domestic tourists and it is an international center for fashion. All these make the City one of the global events industry choices for holding important global events (Berridge, 2007). The trend taken by its performance on global events is also another social factor that will enable the City’s events industry to grow. Technology The events industry has been revolutionized by technology. It has had technological developments with event organisers making use of current technology to organise events and reach the people from different areas of the City. New technology has improved communication in the organizing field of the events industry and has also helped simplify the administration. The current events industry organisers use technology to process data. Web based technologies are examples of new technological developments used by the industry companies and business men to manage the industry workflow. The full workflow of event organizing can be done online and this makes the cost of organizing events non astronomical making it affordable to every one (Slide share, 2009). Environment Companies are always threatened by lack of social responsibility. The events industry is not excluded. If companies in this industry can organise and manage their social responsibilities well so that they have good reputation in the society, then the threat of not getting customers, associates and investors is eliminated, but if this is not well managed and the industry ends up with a bad image of poor social responsibility, it may suffer the consequences mentioned. The events industry companies in London have also to abide by the environmental standards for example the ISO 14000 essentials (ISO, 2009) The event industry is always associated with the tendency to create waste. It should therefore consider strategies of ensuring environmental safety. Visit London has policies for effective environmental management system for London which assists the events industry in ensuring environmental safety and sustainability (Visit London.com, 2009). Legislation Government policies and legislations cannot be avoided by any company or business industry. These affect the events industry depending on the type of legislation the government imposes on the industry. Legislations that ban some events in London will affect the industry negatively while those that support the events will help improve the industry’s performance (Berridge, 2007). Conclusion Based on the above analysis, London proves to be a City that will be capable of holding major events of the world as well as its domestic events. The industry events have been affected by recession but its performance can improve with improvements in the global economy. Other factors such as political, environmental, socio-cultural, legislation and technology provide a lot of opportunities and very few threats for the industry. Based on more opportunities than threats for the events industry, the next five years can be prosperous. References Berridge, Graham, 2007, Events Design and Experience, Boston, Butterworth-Heinemann. Bowdin, G. A. J. and Allen, Johnny, 2006, Events Management, Ed. 2, London, UK, Elsevier. Federation of Small Businesses, 2009, The Recession and Economic Recovery, The Economic Downturn. http://www.fsb.org.uk/default.aspx?id=40&loc=london (11th August, 2009). Friday’s Media Group, 2005, New report reveals 137,000 jobs and £9.3 billion from UK exhibitions: Former minister Lord Tom King calls for Government action to expand international trade by supporting UK exhibitions. LONDON: 17 November 2005. industryhttp://www.eventsindustryalliance.com/files/economicimpactstudy_eis_press_release2.pdf (10th August, 2009). International Organisation for Standardization (ISO), 2009, ISO 14000 essentials, http://www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000/iso_14000_essentials.htm Slide share, 2009, Discover the Latest technology Revolutionizing the Events Industry, http://www.slideshare.net/simonyoung/PRESS-RELEASE-1008866 (10th August, 2009). The Economic Times, Jackson Death Hurts some Parts of London Economy 1 Jul 2009, Agencies. http://economictimes.indiatimes.com/News/News-By-Industry/ET-Cetera/Jackson-death-hurts-some-parts-of-London-economy/articleshow/4724112.cms (8th August, 2009). The Event Planning Industry, 2009, Chapter 1. http://www.entrepreneur.com/downloads/guides/1313_Event_Planning_ch1.pdf (9th August, 2009). Visit London.com, Our Environmental Policy. http://www.visitlondon.com/info/our-environmental-policy (10th August, 2009). Read More