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Alltel Pavilion Case Study Exhibit 1

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Institution

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Alltel Pavilion Case Study Exhibit 1

Question 1

Alltel Pavilion Company has developed a competitive strategy in order to surpass their

rivals and reach their target of 5% annual growth. This is accomplished by making sure their

video and acoustics are better than those of their rivals are. There are no terrible seats in the

Pavilion because of the way it is built. The Pavilion's physical features and staff are stunning,

and both are necessary for operations to run effectively. SFX Entertainment also owns Cellar

Door Inc. and Clear Channel Communications, the owners of Pavilion. The two businesses that

SFX owns are essential to organizing concerts In order to boost profits; Alltel Pavilion has also

developed a plan that involves cutting costs as much as feasible. Due to the rising expense of

performing artists, The Pavilion has revised its budget and cut non-artist costs. In order to have

the greatest marketing techniques compared to their competitors, the organization has also

conducted market research.

The fact that Alltel Pavilion is the exclusive provider of outdoor performance venues in

its service area gives it a competitive advantage. The business must continue to spend money on

marketing in order to draw customers to the Pavilion in the future. In order to support the

acquisition companies' smooth operations and ability to maintain lower costs, the corporation is

essential to maintain positive relationships with them.

Question 2

Breakeven point
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(Selling Price* Unit Sold) = (Variable Cost*Unit Sold) + Fixed Costs

S represents the number of unit sold

(34.61*1.2543S) = (1.74*S) + 276,792

Then, 43.41S=1.74S+276,792

43.41S-1.74S = 276,792

41.67S = 276,792

S= 276,792/41.67

= 6,642.48

= 6,643

Tickets

T represents the number of tickets

41.67T = 276,792 + 30,000*5/3

41.67T=276,792+50,000

41.67T= 326,792

Then T= 326,792/41.67

= 7,842.38

= 7,842 tickets

Question 3
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A represents the average ticket price

{(A + 2.91 + 1.96 + 13.09 - 3.05) x 7,000} + {10.04 x 0.25 x 7,000} = (263, 245 - 160, 635) +

200,000

(A+14.91)*7,000+17,570= 302,610

7,000A+104,370+17,570=302,610

7000A = 302,610-104,370-17,570

7000A=180,670

Thus A=180,670/7,000

25.81 Dollars

Question 4

Maximum Fixed Fee

45,000/ (1-0.4) = 75,000

F represents the fixed fee

Then, 102,610 + F + 75,000 = 37.03 x 6,000 + (10.04 x 0.25 x 6,000)

=177,610+F= 222,180+15,060=

=177,610+F = 237,240

F = 237,240-177,610

= 59,630

Maximum Fixed Fee

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20,000*1/4 = 5,000

M represents the Maximum Fixed Fee

= 102,610 + M + 75,000 = 37.03 x 15,000 + (10.04 x 5,000)

= 177,610+M= 555,450 + 50,200

=177,610+M = 605,650

M= 605,650-177,610

Maximum Fixed Fee = 428,040

Maximum per Capita Fee

K represents Capita Fee

180,000/ (1- .4) = 300,000

20,000 x 2.5% = 500

Thus Paid tickets = 20,000-500 =19,500

= 102,610 + 300,000 = (37.03 - K) x 19,500 + (10.04 x 500)

=402,610= 722,085 -19,500K +5,020

=402610 = 727,105 -19500K

= 19,500K = 722,105-402610

= 19,500K= 324,495 K

K = 324,495/19,500
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Maximum per Capita Fee = 16.64

Question 5

The operating advantage and CVP Analysis contribute by assisting the company in

understanding the impact that changes in the number of ticket holders and comparable ticket

holders would have on its operating costs. When comparing the projected revenues and expenses

from per-person performances to the losses of the fixed charge for all concerts that are poorly

attended in their records.