N290 - The Sport and Event Business Environment

MAIN BODY

Analysis of the market structure

Music festivals in UK attract roughly about 14 million people from all across the world along with most popular artists who perform in these festivals. Galstonbury is one of the most popular music festivals in UK which help in generating huge income in UK. European music festivals play an important role in economic development in UK, generating job opportunities for people, bringing people belonging to different communities and tastes together which is helpful in building integrity and harmony etc.

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From the above graph it can be interpreted that the market size of European music festivals is increasing with each year along with the increasing revenue which is generated through these festivals. Thus the market structure of European music festivals in growing and expanding. Also the scope of this industry is large which means that the number of music festivals will increase in the coming years which is beneficial for all the businesses working in this industry. Also as the number of businesses will increase the competition among them will also increase which will be beneficial for customers as the prices of attending these festivals will be favourable to their budget.

European music festivals can help in generating large income for Europe with over £1.27 billion generated in 2016. 44% of the tourists visiting UK say that European music festivals are the best part of attraction with about 55,000 UK music concerts and festivals that are hosted every year. The leading companies which are working in this sector are LN-Gaiety Holidays Ltd, Festival Republic, MAMA Group etc. who organises many concerts in UK and help in generating large revenue for the country (Anderton, 2018).

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Overview of global business environment

With an increase in the spending pattern of people on leisure activities there has been a growth in music festivals and thereby the businesses in this industry have also expanded globally. European music festivals have been increasing with the increase in expenditure by customers which help in attracting many businesses to this industry. In the global market the business is affected by certain external factors such as:

• Inflation: Due to the increase in inflation rates in global market there has been an increase in the rates of European music festival as the supplies that are to be arranged during these events have become expensive. Also with the involvement of highly advanced technology in these events the ticket prices have increased which can affect the sales of businesses involved in this industry (Dilkes-Frayne, 2016).
• Exchange rates: With Brexit, the UK currency will become weak in the global market which will create a negative impact on the European festival events industry as the prices of events will rise. This can affect the sales of businesses of this industry and can lead to a downfall in the number of events.
• Interest rates: Interest rates also affect the businesses in European music events as if the interest rates are low they can take easy loans from banks to conduct the events and vice versa. This affects sales of these events as the price of their tickets fluctuates with changing interest rates (Ragsdell and Clayton, 2016).

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Economic diagrams

Economic diagrams are economic charts which represent macro-economical or business economical processes. These charts consist of two components on the x and y axis which help in depicting the relation between the two components.

Supply and demand in economics defines the relationship between the availability of products and services in market to the number of customers who wish to purchase them. This model help in determination of prices of music festivals based on supply and demand of a particular event in market. Equilibrium-price is the point where supply matches top the demand in market so that appropriate price can be decided based on the graph. As the demand in market for music festivals is increasing along with the increase in their supply the price of these festivals depend on their equilibrium-price so that more people can be attracted by these events which will help in earning high revenue in this industry (Hughes And et. al., 2017).

With the increase in trend of live music festivals for leisure and entertainment the industry is growing at a high rate thereby contributing towards revenue generation for country. In UK there are many music festivals that are being held each year which can help in increasing profits for all the businesses in this industry. It can be said that the business environment for this industry is favourable which can help in increasing the demand of music concerts in the coming years. The economic diagrams represent an increase inn the revenue and profits in this industry which can help in the expansion of this industry and also the businesses that are linked to this industry can increase.

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CONCLUSION

From the above report, it can be concluded that business environment of event industry is favourable which can help in the growth and development of businesses related to this industry. This can help in increasing country revenue and also increasing the living standard of people by increasing employment opportunities in market.

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