What mistakes did Palumbo make when planning his business in the beginning?
Palumbo made three major mistakes during the inception of his business. The first mistake was the positioning of the business. The sector that Palumbo chose to enter had many negative associations. For instance, the dance culture and futuristic music played in the club came from gay clubs in Chicago and New York. This meant that the business started operations with reputational baggage acquired from the association of its music with gay clubs. The second mistake was the choice of a business name. The name is too ambiguous. For a casual observer, it is difficult to know that this name does not refer to a government or a Christian ministry, but a business. Palumbo should have spent more time thinking about the business name to make it easy to brand the business. The third mistake that Palumbo made was developing a business based on a fad. While the company has survived for more than a decade, its revenues have dropped as soon as the trend of music it promoted became obsolete.
What external forces affected his business in the beginning?
The main external forces that affected the Ministry of Music during its inception were trends in the use of recreational drugs, security concerns, and the expansion of the music industry. When Palumbo opened the Ministry of Music, the use of recreational drugs was on the increase. The drugs had become a part of the dance culture in the UK. Ecstasy became very popular at the time, and its use was widespread among club-going youths. The demand for recreational drugs led to the emergence of drug gangs. The second force that affected the Ministry of Music was insecurity. The main source of insecurity was drug-related violence. The third force that affected the Ministry of Music was the stage of development of the music industry. There was a growing demand for futuristic music and club life, which enabled the Ministry of Music to grow very rapidly.
How did his vision of Leadership and Management help overcome his difficulties?
Palumbo’s vision of leadership and management helped him to overcome the difficulties he faced during inception in several ways. First, he decided to ensure that his club would not condone the use of illegal drugs. To enforce this decision, he overhauled his security team to exclude all people who were involved in drug distribution. He made this decision when he realized the income from the drugs sold by the security staff in his club was larger than the income the club made from entrance fees. Secondly, Palumbo’s resolve to create a drug-free club made him an influential contributor towards the process of mainstreaming clubs as social places. In other words, he made clubs respectable and worthy of status as proper businesses. His vision in regards to music led to the emergence of DJs who play other people’s music. This trend is still in force.
What would you do now with the company, with all the problems of the market and popularity they have faced?
In strategic terms, the business needs to reposition itself to survive. The music industry is changing because of the disruptive changes in information technology systems. The business needs to reexamine its business model in light of all the changes that are affecting how people access music. For instance, the business needs to take note of the impact of social media in marketing, and in determining consumption trends. Delivery systems need to change to take advantage of new markets. Geographical segmentation is not sufficient when determining markets today. The business needs to take into account the aggregate markets made accessible by the internet. The strong brand name of the business is an asset that the business can use to grow.