II. Main Cultural products 7. Cultural Events

Section 7.8: Possible Risks and Concerns

Risks that may arise during organization process of the event may be determined by creating an analysis about impacts of internal and external environment.

PEST Analysis deals with Political, Economical, Social and Technological aspects of environment that might cause risks:

1. Political aspect – the state is regulating bussines in all fields. State rules also impacts production of cultural events - in our case the order of ticket and alcohol selling is regulated, also organization of security and public WC during event. If any of the rules are changing during the period of event planning, unforeseen expenses or activities may arise.
2. Economic aspect – the economic situation in any territory influences the purchasing power of locals, during a decline in economics it may occur that ticket prices are being set too high, turning inaccessible to customers.
3. Social aspect – The impact of various opinions of different institutions may alter the attitude of target market towards the product. If the product is contradicting local traditions and value sistem, its implementation is very difficult. In our case there are no such risks, because celebration of Līgo is Latvian national value. There is a possibility of this kind of risk if trying to sell this product (event) to an international public, because then cultural preconceptions and traditions of other nationality need to be overcome.
4. Technological aspect – technology that is functioning in the society may be used for the event, but there is a risk of technologies break-down, for example, if during the event the system of bank cards fails, or cash-registers stop working or mobile phones and walkey-talkeys aren’t usable anymore, - threat to the event appears. In case of “ Rakši” this was an actual risk, as in the event place there is a is low area of mobile reception. Owners of the company have decided to invest in building a new antenna in the territory, in order to avoid this risk in future.
5. An event may be influenced by meteorological aspects – in case of rain the event would be less active and attractive, as people would have to use raincoats and umbrellas which would decrease visibility and the possibility to join activities.
6. Event planning is influenced also by competition, creating risks. Other entrepreneurs and also public sector create similar products, affecting the choice of the target market.

The other way to analyse risks is to make the SWOT analysis where Strenghts, Weaknesses, Opportunities and Threats of the company are pointed out. Strengths and weaknesses in financial, personal, technological and physical aspects of the company are also being analyzed. Threats may be caused by incompetence or lack of any resource.

In our case, the strength of event organizers lies in their previous experience in event organization on a smaller scale, employee professionalism, right choice of co-workers and ability to attract sponsors, territorial layout and the product (event) diversity.

The weakness lies in the lack of experience in organizing impressive advertizing campaign, insufficient territory for car parking and tent area, inability to sell tickets in advance by themselves (this can be prevented by putting a possibility to buy ticket online in “Rakši” web page).

Possibilities – by attracting popular bands to play in the event, host of event and giving information about the Zoo, as well as using the right channels of advertising, visitors may be attracted, also sponsors and supporters interesed.

Threats – failure in attracting sponsors, lack of visitors, weather.

Conditions of Force Majeure (higher force – in French) must be specially highlighted, such article is mentioned in every contract. In case of these conditions both parties are free from liability. These are extreme cases that can’t be foreseen and prevented, conditions that are associated with existence of invincible force. They are called “Gods acts” – natural and meteorological catastrophies – floods, earthquakes, volcano eruptions, fires, hurricanes, as well as war, revolution, revolt, terrorist activities, militar invasion, blockage, embargo, strike.

Questions

Enviromental damage risks