Value analysis of an Event planning company

1. Value Creation Project
Shai Zamir
Dan Saguy

2. Executive Summary
Benefit Group was incorporated in 2000 by Shlomi Dauber who also serves as the company’s CEO. Its’
headquarters employs 40 employees on a regular basis and hundreds more in changing positions according
to the company’s projects.
The company is located and operates in Israel as a production company for branding, event planning and
“below the line” (BTL) product promotions. It offers it’s clients a spectrum of strategic services to support
their product and brand.
The company’s main frame of work is producing commercial events for its’ clients. It produces around 30
events per year of different scales (small, medium and large scale events) and is considered a small
boutique event company.
The company’s benefits :
• Creative concepts and ideas that will deliver the right message, according to the client and project at hand.
• Professional event management to reduce mistakes in the execution process
Clients include Bank Hapoalim, Nirlat, Migdal insurance agency, IBM, Visa CAL.

3. The Corporate
Event Planning Arena
The event planning business is a highly competitive arena (a red ocean arena), with numerous players that
compete against each other. There are approximately 200 players in the market with 20 major players.
There are also two gorillas operating (Target market and Promarket) who hold around 60% of the market.
They use their personal connections to push the small companies out of the competition and and
advantage of size to reduce prices.
Entrance into the arena is characterized by low entrance barriers (no regulations, low initial costs).
Therefore every year many newly incorporated companies enter the arena, while many others shut down.
One of the significant factors in the arena is the business relations with suppliers. Since every event
(product) produced requires different needs- the production companies rely on outsourcing for the different
elements required (venue, lighting, music, catering). Thus, Benefit, as well as most of the competitors in the
arena are characterized by horizontal integration.
Another important factor in the value creation of the arena is seasonality. The events tend to occur in two
major periods- around the summer: June-August , when many employee events are held; and in the winter:
November to December, when many companies are left with marketing budgets that they must spend by
the end of the fiscal year (there will be a low R2).
Year 2011 was characterized by a social megatrend (middle class protest) which had a damaging effect on
all the marketing industry, not withstanding the event planning arena.

4. The Arena
Safety regulations and
authorizations required by
law for certain events (for
example: police and mada)
Competitors
Benefit Eyal
Faza Target market Promarket
Group Naor
Suppliers
Venues Lighting and Catering
Screens
Sound Equipment Flowers
rental
Clients
Bank Nirlat Migdal Visa CAl
Hapoalim
Consumers

5. Event-Factor-Review
Event Factors
Outcome Description Strengths Weaknesses
Success Winning a big client in • Strong Creativity *A small
the arena (bank team player in a
hapoalim) •Strong Budgeting and giants’ market
supplier negotiation
Exceeding revenue • Strong marketing * The
targets • Decreasing costs company is
not a major
player in the
arena
Developing a successful • Strong technical skills * Going into
facebook campaign • Ability to recognize unfamiliar
new platform territory to
opportunities create value

6. Event-Factor-Review
Event Factors
Outcome Description Strengths Weaknesses
Failure Losing a big client * Providing •Downgrade of quality of
(Migdal) satisfaction to the events
client in terms of •Poor communication with
cost clients
•High rate of employees
turnover
•The planning process is too
long
Inability to preserve *dynamic work * No organized data base for
a constant arsenal of with wide range of suppliers/ clients
suppliers suppliers
The company’s *ability to reach •High rate of employees
reputation is the cheapest turnover
decreasing suppliers in the •Downgrade of quality of
arena events
• Planning process too long.
Bad time management

7. Core-Competencies-Tree-CCT
Owner value created
Developing a successful Exceeding
Facebook campaign revenue targets
Winning a big client in
the arena
Strong building and Decreasing
supplier negotiations costs
Strong Creativity Team Strong Marketing Ability to recognize new
platform opportunities
Core competencies

8. Current-Reality-Tree-CRT
Firm’s market value is insufficient
Company’s reputation is
decreasing
Downgrade of
quality of events
Losing a big client Poor communication
with clients
Planning process is too Inability to preserve a
long constant arsenal of suppliers
Small player in a giants market High rate of employees turnover No organised data base
Root Problems

9. Process of event producing
Primary concerns
• Budgeting
• Creative process and concept building for the
event
• Coordination and negotiation with suppliers
• Communication with the client
• Administrative management
• Bureaucratic and logistic preparations

10. Benefit’s Event Brief
Producing First communication with the client
process
Negotiations Creative team
with suppliers builds a concept
21 days 7 days
Client approving the proposal
Client disapproves
7 days
Contracting suppliers P&L calculations
Bureaucratic 7 days 7 days
preparations
1 month Adjustments and
synchronization Hiring staff
process 7days
1 month
Overview with the client Building the site Day of event
7 days of the event
2 days

11. Maturity Level
•Is the process defined? Yes
•The employees and the staff are well aware of the process method and their role in the
Level 1 process
•As-Is status – Is there any process of measuring goals & performance? Not enough
• the company sets goals in terms of revenue and number of clients, but not for efficiency, quality of events and client conservation
Level 2
•Defined – Is there any follow-up regarding mishaps? No.
• No organized methodology for recording mishaps, no follow up after flaws or delaying factors.
Level 3
• Process Improvement? Yes
• Debriefing exists after each event but is not efficient, because information was not recorded during the process.
Level 4
•Optimizing – Did we get there? No.
•Even though the company is aware of delays and mishaps in the process, the process improvemevt process is inefficient. There is
Level 5 defined role in the company for measurement and evaluation
Maturity Level
2 out of 5

12. 6 Value drivers
Financial:
 Throughput = Profits from events. The company has a
policy to lower costs and resources, so waste is minor.
 Operating Expenses: Costs of labor and General
administrative costs. Small player in a giant’s market. The
company does not have high expenditures such as
advertising and other.

13. 6 Value drivers
Competitive:
 Lead Time= The time of event production. from first communication with the
client, to the day of the event. There is no wait time for a new project (because the
company has strong marketing and creative), but the production process takes too
long (3 months while most of the industry is 2 months). The company can get more
projects by reducing negotiating time with suppliers. This is bottleneck in the
process, By contracting a more quality long term supplier, we may reduce waste
time in the bottleneck by 50% (and also increase increase costs, but waste time
 Due-Date-Performance- Since the event has a due date that is fixed, the company
must deliver on due date no matter what ( assumingly no waste but The
performance is sometimes low quality as a consequence- explained below in
qulaity)

14. 6 Value drivers
Functional:
 Inventory: Raw materials= the human resources, concepts, company’s
experience , marketing and operating teams. Work-In-Process=
production process. Finished Goods= the events produced.
 Quality= measured by client feedback, mishaps and flaws in the event,
and mostly by number of returning clients. Since poor time
management has an effect on quality of work- this effects returning
clients therefore there is waste in the process which we asesed as
approximately 20% (1 out of 5 clients). By improving the time
management we can provide better results.

15. 6 Value drivers
The main challenge:
Improve lead time by lowering the negotiating time with suppliers (a
bottleneck in the process) and creating long term relations with quality
suppliers. This is how we will add maximum value.

16. Control Chart
Days of negotiations with suppliers
35
30
25
20
15
10
5
0
The average is 21 days while the benchmark in the industry is 12.
room for improvement: 9 days =43% improvement

17. Pareto Analysis
100 100
97
90 91
84
80
70
65
60
50
45
40
30
20
10
0
High rate of Low client's Finding the cheapest Losing suppliers to Contracting process No organised data
employee turnover willingness to pay suppliers on the bigger rivals with new suppliers base
market

18. Ishikawa (fishbone)
Terms of Recruiting
Long hours employment process
Low wages
No defined process
Poor training
Long hours
Inexperienced Interview not
workers professional
Long hours
High rate of
Turnover Reduce
Low reputation Workforce
CEO is also the Seasonality Marketing
owner of the Crisis
company No feedback Working for a
small company
Not enough
social events
Employees External Factors
ambition

19. Action Table
What? Who? Ease of Value Classification Letter
accomplish on
ment chart
Outsourcing VP of High Low Quick Win A
the human
recruitment resources
process
Creating a Manager of High Low Quick Win B
data base events
for suppliers
Long term Legal Low High Oyster C
contracts department
Training Manager of High Low Quick Win D
program for events
new
employees

20. Action Table
What? Who? Ease of Value Classification Letter
accomplish on
ment chart
Establishing Marketing High High Pearl E
a fixed Manager
pricelist
Raising VP of High Low Quick Win F
workers human
motivation resources

21. Ease Value Table
High Oyster
Pearl
C E
B
Value D
Quick Wins F
Expected White
Low Elephant
A
Difficult Easy
80% 20%
Ease to Implement

22. Threats
1) Losing to the gorillas in the market- highly
competitive market and reduction of small rivals.
2) Social megatrend- the recent protests in Israel had
an enormous effect on the event market which is
considered to be a normal good (luxury).
3) Substitute good threat- increasing number of
companies trips instead of events.

23. Shield Hedge Prevent
Social
Gorrilas Megatrend
Substitute trips
with events

24. Shield Hedge
Capture Engage
Social Megatrend
Shield: Can’t shield from a megatrend but can reduce damage.
Hedge: Requiring cancellation fees, advance payment
Capture: Identify the potential threat of the protest in it’s earlier stages.
Examine the effects on other arenas that are close in nature.
Engage:
Reduce of work force, reduce marketing expenditures. Diversifying line of
products (private events, government events, students). Entering new arenas
(the company went into facebook campaigns and online marketing).