Marchant Museum of Art and History case analysis

Marshant Museum of Art and History

The main problem in the case of the Marshant Museum of Art and History is the fact that it has reported significant financial losses over the past three years, despite a long period of profitable or, at least, break even reporting.

Situation Analysis

In terms of strengths, there are several. One of the important ones is the support of local authorities. This can be immediately translated in financial figures, especially with the $28 million county bond which helped finance the new facility, with better access for the public and larger parking spaces. At the same time, the support was also given by the museum's benefactor and his family, who provided the land on which this was built (the museum director translated this strength as the museum being 'publicly mandated'). Another strength is the museum rather sizeable and diverse collection of works of art, which include varied timeframes, different continents and cultures etc. Finally, another strength is given by the increasing total museum attendance.

One of the obvious weaknesses, which directly affects the problem previously identified, is that the museum charges no entrance fee for the permanent exhibition and only a very small fee for the temporary exhibitions. Indeed, the museum is part of the life of the county and its citizens should be involved in some financial support for the museum. Not charging even a small fee for the permanent exhibition destabilizes the financial balance of the organization. Another weakness is given by the large level of fixed costs, including personnel costs.

The opportunities on the cultural scene are probably unlimited. The museum could be involved more and more in the artistic and cultural scene of the county, including by organizing different events, by providing itinerant presentations of some of its treasures in other parts of the country etc.

Threats mainly come from within in this case rather from the external environment, as they should. Visitors have showed, in a survey, their willingness to pay for an entrance and they seem to be fully supportive of the museum. There are no foreseeable competitors on this market.

Alternatives

1. Increase revenues by adding an entrance fee

The main advantages in this solution is that a survey has proven that the visitors would not be reticent to such an idea and would be willing to support the museum with a reasonable $1 entrance fee. At the same time, it would allow the museum to be more flexible and more interesting in the membership packages it offered its visitors: some higher priced ones could include free entrance, while others may still have the $1 fee, but other benefits.

The disadvantages are that even a $1 may not be approved by the Board of Trustee, given the museum's background and profile as a cultural unit that has always boasted itself as a museum that did not charge anything.

2. Reduce costs by personnel reductions

The advantage in this case is that such a measure would significantly reduce fixed costs, which carry an important burden on the current financial situation in the organization. The personnel costs have almost doubled from 2003 to 2004. At the same time, there is a feeling that there are some people on the organizational scheme of the museum that could be let go without affecting the activity of the museum.

The disadvantage of such a solution is that such a solution would only target this particular aspect of the organization's expenses and the overall saving in absolute value that could be made is only limited to that.

3. Increase revenues by growing the profile of the museum in the cultural community of the country.

This is a compounded solution that includes an increased involvement in other cultural events in the county, to a better diversification of the events that are held in the museum, a more proactive approach towards increasing the marketing activities of the museum, all these with the same goal: increase the cultural profile of the museum, make it more available to both its visitors and its potential members, as well as to the other potential entities and shareholders.

The main advantage is that this is a long-term plan and, thus, could prove more solid than any of the short-term solutions presented previously. It is a plan to expand the activity of the museum, transform it and diversify it to be more outreaching that it is in the present and, thus, to include a wider category of potential shareholders and supporters, as well as visitors and consumers.

The main disadvantage is that this is not really a one-point solution. It needs a very serious thinking and plan of action, with distinctive ideas and planning, as well as a reasonable timeframe to be achieved and initial resources to be put into it. There is also a certain probability to the chances of success and, in the case that it does not turn into a success, it will be even more burdensome on the organization's current financial situation.