1.Just now in her mid-twenties, Lady Gaga has taken the music world by storm with a unique blend of business savvy, interesting hair, and wardrobe choices, and a fabulous sound with a “spacey Euro vibe.” Gaga’s impact on the music world in the span of a year has been nothing short of phenomenal. Writing her own material, she’s sold more than 10 million albums. Her debut album generated four No.1 songs. She also topped the digital sales chart in 2009 with 15.3 million tracks sold, most on iTunes. What strategies has she used to navigate the turbulent industry and become a star?

One important component to her success is her savvy awareness of the power of digital media and her exceptional ability to exploit it. “Her persona is built for the online generation.” Even though much of Gaga’s audience has got her music online legally for free, “being embedded on the Web can pay dividends in exposure and the loyalty of fans.” Gaga keeps her Little Monsters engaged with personal musings and real-time thank-you. Another important aspect to Gaga’s success is what’s called in the music business the 360-degree deal. The major upheaval in the music industry over the last decade led major record companies to look for ways to replace declining revenues. In a 360-degree deal, a label invests more money upfront—on marketing, for example—but in return, gets a piece of merchandise sales, touring revenue, and other earnings artists usually kept for themselves. This arrangement has been wildly successful for Gaga. Finally, Gaga’s persona has been a calculated strategy. “Gaga’s allure is that of a misfit run amok in the system, a role that has helped her cut across disparate subcultures, including teens, finicky hipsters, and gays.” Her look isn’t considered shocking like it was said, for instance, when rockers Alice Cooper or Gene Simmons first appeared. It’s unique and keeps her audiences eager to see what her next image might be. Gaga is determined to not be a niche artist. However, her “now-trendy sound won’t last forever.” Her ability to remain a music industry mainstay will depend on her ability to evolve.

What competitive advantage do you think Lady Gaga is pursuing? How is she exploiting that competitive advantage?

Do you think Lady Gaga’s success is due to external or internal factors or both? Explain

2.

When two Domino’s Pizza employees filmed a gross prank in the kitchen of the restaurant in Conover, North Carolina, the company suddenly had a major public relations crisis on its hands. The video ended up posted on YouTube and other sites and showed a Domino’s employee preparing “sandwiches for delivery while putting cheese up his nose, nasal mucus on the sandwiches, and violating other health-code standards,” with another employee providing narration. By the next day, over a million disgusted people had viewed the video, and discussion about Domino’s had spread throughout Twitter and Google.

As Domino’s quickly realized, social media has the power to take tiny incidents and turn them into marketing crises. A company spokesperson said, “We got blindsided by two idiots with a video camera and an awful idea.” When the company first learned about the video, executives decided not to respond aggressively, hoping the controversy would quiet down. What they missed, though, was the “perpetual mushroom effect of viral sensations.” The chief marketing officer of a social media marketing firm said, “If you think it’s not going to spread, that’s when it gets bigger.” And as Domino’s discovered, it did. In just a matter of days, Domino’s reputation was damaged. Customers’ perception of its quality went from positive to negative. One brand expert said, “It’s graphic enough in the video, and it’s created enough of a stir, that it gives people a little pause.”

So, what happened to the two employees? Although they told Domino’s executives, they never actually delivered the tainted food, they were fired and charged with a felony. And Domino’s posted its own video featuring its top manager addressing the incident on YouTube not long after it occurred.