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YG Entertainment: Inside the Korean Pop Music Factory (A)
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Reference: IVEY-9B16M009-E
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Year: 2015
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Number of pages: 18
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Geographic Setting: Korea
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Publication Date: Feb 4, 2016
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Fecha de edición: Mar 24, 2016
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Source: Ivey Business School (Canada)
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Type of Document: Case
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Industry Setting: Arts, Entertainment, Sports and Recreation;
Description
YG Entertainment (YG) is the second largest entertainment company in the South Korean pop music (K-pop) industry, and has experienced rapid growth while maintaining a profit margin of over two times the average profitability of top U.S. record labels. The case examines how YG and other K-pop entertainment companies have developed a unique system to produce a competitive advantage in an industry that typically experiences high failure rates and substantial uncertainty regarding the success of artists. The, founder and chairman of YG, must decide the company's next steps for growth, and whether Japan, China, or the United States will be the most promising for YG's future success. The song Gangnam Style was created by YG artist PSY. Also see case supplement 9B16M010.
Learning Objective
There are two main objectives of the case: ·To guide students through YG’s innovative business model in an industry characterized by significant demand uncertainty and high rates of failure. Students will analyze and understand whether or not the model offers a stable competitive advantage, and how it effectively reduces uncertainty and failure in the music production business. ·To discuss how successful international expansion occurs in cultural industries such as pop music.