JYDC (Jozi Youth Dance Company) is a platform to showcase up-and-coming dancers. Dancers perform on a professional stage and are exposed to many different professional choreographers. Currently, JYDC has a company for kids, and young adults, who pay a fee after having made the cast, and the final aim is to produce a professional show. The owner is considering opening a dance company for adults working and getting paid as a full-time job. This investigation will assess and recommend the implementation of this decision for the long-term success of JYDC.
Ansoff’s matrix for growth: Analyze entering a new market and product as an option for growth. Ansoff’s options for growth consider 2 variables market and product. This matrix will display the options for JYDC and discuss the risk of diversification.
Break-Even Analysis: Compare and determine when JYDC will be profitable when opening the new company vs. currently. A break-even analysis will determine what quantity of products JYDC needs to sell (when paying dancers – cost) to be profitable. Compared to how many products they sell for the current youth company (do not pay dancers).
Target market (audience type, demographics): Identity which market to enter, thus what market segment to target. An evaluation of the target market. Importance of customer’s need vs. the new product being offered
Firstly, an Interview with a JYDC spokesperson to ask about profit, costs, and target audience. Also, a short Interview with a past Youth Company teacher. Moreover, contact Roodepoort theatre (where big productions happen in Johannesburg- including JYDCs previous shows) to determine theatre rental fees. Finally, survey to adult dancers and future adult dancers.
Secondary research includes databases and posts on South African dance studios or companies. For guidance, Business Management Guide.
| Difficulties | Solutions |
|---|---|
| Financial data - Not given enough access to all the financial accounts of the company. | Determine only what is needed for a Break - Even analysis and ask the owner for this information in a conscience manner. |
| Surveys and convenience sampling - Due to time and cost constraints, the surveys are sent out by convenience sampling. Convenience can lead to bias and not very accurate results. | Many survey responses will be collected to increase different characteristics (individuals) within an audience. Also, to access a wider range of population of concern. |
| Surveys - Can be more general than specific | Add 1 or 2 open-ended questions to get more specific insight and responses about the business and its product. |
| Confidentiality issue | Establish information to be shared and which not to be shared beforehand. |
| Limited access all costs of a show | Include the most crucial costs to compare in Break Even Analysis |
Figure 1 - Table On Anticipated Difficulties
I would like to thank JYDC for sharing information with me about the business. I would also like to thank the South African Dance industry for further information, as well as for inspiring this investigation.
Jozi Youth Dance Company (JYDC) is a dance studio and company in Johannesburg, South Africa. Since last year the owner has been contemplating the idea of opening a new South African Dance company for young adults/adults who can take this as a professional job. This investigation aims to assess and recommend the implementation of this decision for the long- term success and profit of JYDC. Primary research was the main method of research: An Interview with a JYDC spokesperson was carried out to ask about profit and target audience. Also, Interviews with past Company teachers. Finally, a survey was sent to local dancers. The investigation found that JYDC needs to develop a new product in a new market – diversification - and if successful long term, it can be rewarding. The survey found that dancers care about diversity and salary. Market research needs to be carried out to implement diversification correctly in accordance with consumer needs. Finally, it appeared that JYDC's opening a new company would result in a considerable increase in profitability. This investigation focused on company productions, and it did not consider other factors of cost and revenue that can affect a company due to factors in the external environment.
Jozi Youth Dance Company (JYDC) is a dance studio and company owned and directed by Jayd. Since 2013 Jayd opened a company for young dancers who would train additionally to their regular dance classes, to put on a professional show. The company aims to train professional dancers and showcase these dancers, along with South African choreographers. Currently, their priority is the company show and studio, both income forms, as the students/cast pay a monthly fee. Since last year the owner has been contemplating the idea of opening a new South African Dance company for young adults/adults who can take this as a professional job.1 This investigation researches various aspects and stakeholders to assess the risk and/or benefits of entering this new market and audience. The business tools utilized in this report include an Ansoff Matrix to discuss diversification, target market discussion to evaluate the audience, and a break-even analysis of the current vs. possible profit to analyze the benefit of the decision.
Firstly, an Interview with a JYDC spokesperson who obtained information from director Jayd. The interview happened over text messages. The interview obtained information about the audience of the adult company as well as information about the profit and cost of the current company. While the data was clear and useful, it was limited due to confidentiality and timing issues. Second, a simple question was asked to a past Youth Company teacher to find out the salary per class. Also, an email conversation with Roodepoort Theatre (where JYCD shows are held) revealed the prices of renting the theatre.
Finally, to include an external stakeholder and target audience, a survey was sent out to 11 local dancers between the ages of 16-32. The survey included multiple-choice and open- ended questions about what dancers looked for in a paying adult company in the context of South Africa. The survey was convenience sampling, which can lead to less reliable results. Some respondents have participated in the Youth company, although some have not. The survey included 11 diverse dancers with experience in the South African Industry. The information from the Roodepoort theatre via email showed theatre rental fees, which is a fixed cost. Secondary research includes social media posts from JYDC. The information from JYDC, the teacher, and Roodepoort Theatre was used to determine variable costs, fixed costs, and revenue info. to complete and compare two break-even analyses – one for the current company and one for the possible paying company. The survey was used to discuss the target audience and the needs and wants of the dancers, useful when assessing entering a new market. An Ansoff Matrix will illustrate and discuss JYDC's idea of entering a new market and audience. Ansoff Matrix displays options for growth, while the risk is measured reward or success is not directly assessed.
The survey revealed that most dancers between the ages 16 - 32 (72.7%) are interested in joining an adult company as a job. Followed by 18% having said maybe. Moreover, there seemed to be a division between part-time and full-time jobs. 55% mentioned they would prefer a part-time job in a dance company. From the pie chart, it can observe that the majority (54.5%) of dancers would accept a minimum of 20,000 - 30,000 ZAR per month as a salary. Followed by 27% accepting R10,000 - 20,000 and finally, a minority having said R40,000 +. The survey also included open-ended questions, which will be discussed more in detail later.
The email received states: “The main theatre seats 328, the rental fee is R10, 542.97 Incl Vat for maximum 8 hours.” The rental also includes “sound, lights, technicians, stage hands, fly men, foyer staff, cleaners, parking, and security.”. It is important to note that company shows usually happen 4-8 times in the span of 1 or 2 weeks.
Current company show
Fixed Costs -
Variable Costs-
Revenue -
Potential Adult company show -
Fixed Costs -
Variable Costs -
Revenue -
An Ansoff Matrix is a strategic tool to help a business decide upon strategies for growth. In the case of JYDC, it is a useful tool in classifying the 4 options for growth and evaluating the risk of diversification if a new company is opened. The strategy for growth of a new adult company is diversification. It involves offering a new product which is a more professional, paying job as a company dancer to adult dancers who have more time and experience. So essentially JYDCs choice of opening a new adult company is selling a new service to a new audience. As shown by the color gradient of the graph, diversification is the strategy with the greatest risk. Exploring a new audience and market means stepping out of JYDCS comfort zone and moving away from main competencies. The matrix says in diversification there's often little scope for using existing expertise. However, In the case of JYDC it is important to note it is not so much new products and audience as it is product and market development. The company already has experience with the dance industry in South Africa. So, while diversification is the riskiest option, it is also the most rewarding for growth. This matrix does not consider competition and more details of market research and product development to capture a more detailed scope of the marketplace.
As mentioned in the Ansoff Matrix diversification requires market research. The results from the survey demonstrated different potential customer preferences within the target audience.
So, JYDC needs to consider the changing consumer preferences and adjust its marketing strategies accordingly. It is important to consider that this survey is convenience sampling and can lead to more inaccurate results. Furthermore, the small survey size makes It harder to generalize/apply the conclusions to the wider target market population. Marketing approaches need to be adjusted to the needs of the consumer and implement findings in the 4Ps. This means, for instance, adjusting the salary of dancers by adjusting the price of the product. Further qualitative research, like the survey performed, is needed as its nature is on questions about more personal and emotional connections to the product.
Current company -
An adult company show would have a Break-even point when TR=TC. At 320 tickets, JYDC breaks even and starts making a profit. The Margin of safety is 4,928. The projected profit at 5,248 tickets is R1,297,957.
A break-even analysis shows when a business starts making profit after considering total costs. When assessing JYDC’s profitability measuring profit and losses at different levels of sales for a potential company vs a current is very useful. The Break-even analysis of the current company showed a BEQ of 300 and the ‘new’ company showed a BEQ of 320. While this may appear a small difference, it is important to consider for the current company it is 300 tickets out of the anticipated 2,624. On the other hand, the 320 tickets of the new company are out of 5,248 anticipated. So the current company has to sell 11.4% of its expected tickets to break even, while the new company has to sell 6.1% of its total expected tickets to break even. The percentage difference is 5.3% which is significant. In both cases, the break-even quantity is relatively low; hence, the margin of safety (MS) is large. The MS for the current company was 2,324, and for the new company it was 4,928. The estimated profit for the new company was higher than the current company (R971,829 higher). Meaning JYDC adult company show would be much more profitable than the current company. Nevertheless, there is a key factor to consider that could not be represented by the break-even analysis. In the current company, the dancers pay a season fee of R6,900; since there are 45 dancers, that would total R310,500. This is an additional profit that comes from the company members. This would mean a revenue of R835,300, higher than the revenue from the show alone. Nevertheless, this revenue is used for other additional costs at the studio, and thus no definite conclusion can be made about the precise difference in profitability. Although It can be said that in any case, an adult company would generate more revenue (R1,836,800). The break-even analysis has limitations that must be considered. Firstly, the TC and TR lines are straight. This suggests that as ticket quantity increases or decreases, the FC and VC lines remain the same. JYDC spokesperson explained that for group bookings, the ticket price was R150, not R200. This shows that in order to sell higher amounts of tickets, the firm reduced prices, and this has an inverse impact on revenue and profitability. Furthermore, JYDC will most probably experience economies and diseconomies of scale in their costs, and this will suggest a non-linear relationship.
In conclusion, the Ansoff Matrix has a growth mindset and can help JYDC focus on developing its market and audience through diversification. Although highly risky the shareholder has experience in the South African dance industry and long term, it can be rewarding. The product and audience need to be developed according to market research which leads to the next point. JYDC shareholders need to invest in market research. As seen through the survey, dancers have specific needs and preferences when it comes to a job in a company. This research needs to occur at an early stage for the strategy of growth to be implemented in congruence with consumer needs. Although it was a small sample the survey found that salary and inclusion are motivators that can be modified to suit the needs of the dancers. Finally, the break-even analyses determined that an adult company show would be much more profitable and have a higher safety margin than the current show. Although the break-even graph is a good representation of BEQ it is only a partially accurate representation of the cost and revenue trends and changes that JYDC undergoes. It is important to consider for example that the stakeholders like teachers might want a higher salary for a professional company, this would increase the cost and change profitability predictions. Or more variable costs outside the show costs (e.g. studio rent, taxes) need to be considered to determine the profit of JYDC as a whole and not only the company shows.
A position map can determine the gap of the product within the market. Furthermore, a more detailed profit and loss and balance sheet analysis would reveal specific costs and revenue, including assets, liabilities, debt, and tax.
Advertisement for Savour Dance Production. Instagram, 25 May 2022, www.instagram.com/p/Cd-RSX-gGeF/?hl=en. Accessed 22 Nov. 2022.
Ho, Sadie. Instant messenger interview. 18 Nov. 2022.
Moloi, Rhulani. Instant messenger interview. 16 Nov. 2022.
Sara Cardona. Survey. 30 Oct. 2022.
Swart, Elsabe. Telephone interview with the author. 10 Nov. 2022.
Xaba, Innocent. E-mail interview with the author. 16 Nov. 2022.
Hello,
My name is Sara Cardona. I am a dancer and student. I am doing a business investigation on the dance industry in South Africa. I need to know approximately how much it costs to rent the theatre for a show. I need this information as soon as possible.
Please note this information will only be used for educational purposes and won't be disseminated outside my educational institution.
Kind regards,
Sara Cardona
Good Day,
Thank you for the email.
The main theatre seats 328, the rental fee is R 10,542.97 Incl Vat for maximum 8 hours, it includes sound, lights, technicians, stage hands, fly men, foyer staff, cleaners, parking, and security. The basement theatre seats 85, rental fee is R 5,426.00 Incl Vat for maximum 8 hours, it includes sound, lights, technicians, stage hands fly men, foyer staff, cleaners, parking and security.
Regards,
Innocent Xaba
Q - How much did you get paid per class at the company in 2022?
A - I got paid R400 for 1 hour, and a class was usually 2 hours.
Q - How many dancers were in the company this last season?
A - 45
Q - Approximately how much were your costumes per season?
A - R1,500
Dance Production of the Year!!!!!!!!!! Some of SA’s best choreographers, shows in Johannesburg and touring to Makhanda, National Arts Festival! Book your tickets now! https://www.roodepoorttheatre.com/jozi-youth-dance-company-present-savour/
Savour
[Johannesburg, May 2022] JOZI Youth Dance Company (JYDC), brings you “Savour” their 8th annual production, on 23 -26 June 2022 at the Roodepoort Theatre and 28 June - 2 July 2022 at The National Arts Festival in Makhanda.
JOZI Youth Dance Company is a one of its kind, platform for young dancers, exposing them to professional choreographers and dancers. They gain invaluable experience, performing to sold out audiences, preparing them for the cut-throat, professional dance industry. The company is compared to professional companies and delivers work of a professional standard.
This is JYDC’s 8th season and promises to be their best yet. We invite you to come and watch ultimate indulgence and relevance in JOZI Youth Dance Company’s enthralling season in June/July 2022. A celebration of the return of theatre, dance and inspiring pieces and messages that send hope to the world that is currently in distress. Highlighting issues such as the effects of the pandemic, the war in Ukraine and people’s mental health. Truly honest, entertaining, and versatile pieces. Appropriate for all ages.
SAVOUR, the largest and most spectacular of shows produced by JYDC is guaranteed to set the stage on fire. “This year, we have the most magnificent lineup of choreographers, inspiring pieces from the minds and hearts of award-winning choreographers. Each piece bringing its own distinct personality and thoughts of each choreographer to the stage” said Swart. Choreographers include Thami Tshabalala, Jayd, Mario Gaglione, Tumelo Lekana, Michael Fullard, Bailey Snyman, Almar Kanda, Tamzin Stone and two company members chosen to create a work, Sadie Ho and Lisa Smith. This year we also have professional dancer from Brazil and Joburg Ballet, Gabriel Fernandes Da Silva performing as a guest with the company.
Current show -
VC per unit: Total VC ÷ Expected unit sales
TR - Ticket Sales: R200 X 8 shows X 328 seats=R524,800
Contribution Margin: Price – VC per unit
Profit - TR – TC
BEQ - FC ÷ CM
Margin of Safety: Expected unit sales – BEQ
Adult company show -
VC per unit: Total VC ÷ Expected unit sales
TR : Ticket Sales: R350 X 16 shows X 328 seats=R1,836,800
Contribution Margin: Price – VC per unit
Profit: TR – TC
BEQ - FC ÷ CM
The margin of Safety - Expected unit sales – BEQ