Industry Analysis Model for the Arts, Entertainment and Recreation Industry
For the purpose of this report, the Arts, Entertainment and Recreation Industry is chosen, mainly because, almost everyone has something to do with this industry – either as a part of it, or as viewers. No matter what the economic, political or social scenario of the nation, the Arts, Entertainment and Recreation Industry is bound to have its patrons, and quite possibly even thrive. Even in the most depressed of times, it is obvious – people need their entertainment. The Arts, Entertainment and Recreation Industry mainly comprises of establishments that operate or provide services that are entertaining to their patrons on a cultural or recreational level. They are usually involved in all stages including production, promotions and participation of such activities. (Definition Arts, Entertainment and Recreation, 2011). This definition or perspective of the industry was supported by Benedict (2011) who stated practically any activity that occupies a person's leisure time, and gives him/her recreation are part of the arts, entertainment, and recreation industry. Not only this industry service or cater to the general public, it also provides employment and livelihood to a sizable population, with that proportion increasing year-by-year. This fact was validated in the official Canadian website, Service Canada (2012) which provided figures of how around 9 percent of the population are employed in the arts, entertainment and recreation sector.
This industry was selected because it will be very insightful as well as interesting to study the various shortfalls that this industry could have in times of negative economic, and political as well as social times. Let us take this industry through the Industry Analyses – PESTEL Analysis and Porter’s Five Forces Model to understand the stability of the Arts, Entertainment and Recreation Industry in Canada.
NAICS Industry Profile
The North American Industry Classification System helps to classify business establishments in North America – covering Mexico, Canada and the United States of America. Under this classification system, the Arts, Entertainment and Recreation industry has been given the code of 71 and broadly covers Performing Arts, Spectator Sports and Related Industries; Heritage Institutions; and Amusement, Gambling and Recreation Industries. (North American Industry Classification (NAICS) 2007, 2010). We have data available of the growth of the Arts, Entertainment and Recreation Industry from 2002 to 2011 that shows that the Gross Domestic Product went from $10.4 billion in 2002 to $11.2 billion in 2011. (“Gross Domestic Product (GDP) Arts, Entertainment and Recreation (NAICS 71).” 2012). Even taking into consideration economic factors such as inflation, it is fair to say that the industry is performing at a fairly constant rate. Throughout the 10-year period, there is no major growth or fall in the Gross Domestic Product of the industry. This helps reiterate the prior point that when it comes to the entertainment industry, there cannot be a large dip in demand even in bad economic scenarios. People have a psychological need to be entertained no matter what the economic scenario.
Political factors When it comes to political factors, governments of the respective country including Canada play mainly an overseeing role, without direct involvement in the affairs of the industry. Although, their policies and rules will dictate the functioning of the organizations in that sector, as it operates in the private sphere, there will be basic influence. This perspective was pointed out by Department of Canadian Heritage's Policy Research Group, which stated governments and its bodies expect the organizations in the industry “to conduct their affairs in a more open, transparent manner…