2012 London Olympic Games: Ticket Retailing Challenges

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Table of Contents

Introduction
Competitiveness analysis using Porter’s 5 forces model
SWOT Analysis
Facts surrounding the case
Key Issues
Alternative course of action
Recommendations

Introduction

Over the past 112 years, the Olympic Games are held after every four years. This analytical work discusses the 2012 London Olympic Games. It focuses on the analysis of the 2012 London Olympic Games case study. Specifically, the treatise reviews the current challenges with regards to ticketing, transportation, and economic impacts of the games. Among the business concepts reviewed include the SWOT and Porter’s five forces analyses among others.

Competitiveness analysis using Porter’s 5 forces model

Threat to market entry

In the UK, the London Organizing Committee for the Olympic Games magnitude together with that of the independent Olympic Committee are well established and would easily enjoy economies of scale. The London Organizing Committee for the Olympic Games’ activities has spread across the nation, opening numerous branches in all major blocks and centers expected to host the games.

Besides, the London Organizing Committee for the Olympic Games will serves as the only committee approved by the government to organize transportation and ticket retailing activities among others. Given its numerous capital arm of more than three billion dollars and reliable customer base, the London Organizing Committee for the Olympic Games has the capacity to offer affordable and reliable services to its customers.

Threat of substitutes

The Organizing Committee for the Olympic Games poses the greatest threat to the London Olympic Games existence and business performance. The Organizing Committee for the Olympic Games has been in the industry for longer period and is well established as it came into full operation in 2008 in preparation for the 2012 games.

Therefore, Organizing Committee for the Olympic Games has the ability to offer an alternative perfect substitute to customers. However, in order to remain relevant, the London Organizing Committee for the Olympic Games has established a unique market for its customer through tailored optometry ticketing services.

Power of suppliers

Suppliers in the London 2012 Olympic industry have more power owing to the existence of many activities. As a matter of fact, suppliers may instigate market demand and supply variances. The London Organizing Committee for the Olympic Games depends on the suppliers such as the private road contractors, ticketing agencies, and stadium construction companies. This leaves the suppliers with the power to dictate on proceedings in the games such as the ticketing prices.

Power of buyers

Reflectively, the amount of output in terms of turn over sales depends on the buyers’ purchasing power. The higher the purchasing power, the better the turnover in total sales realized over a definite period of time.

The Olympic Games performance in the UK depends highly on the sales of the ticketing for the four main types of events and the other events. In fact, the purchasing power determines profitability and probability of success of the London Olympic Games. Fortunately, the projections, in terms of tickets sales, for the main events are already attracting almost seventy percent of the revenues.

Rivalry

With many customers looking for good value for their money, quality in service delivery has remained the main basis upon which customers are making their final decision to purchase the tickets. All the players in the 2012 London Olympic Games are putting measures in place to ensure they attract more customers. Therefore, the size, in terms of space occupied by business premises, defines the temperature of competition. In line with this, the Olympic Park is projected to be the largest in the Eastern London.

SWOT Analysis

Strengths

The stable and management team comprising of the London Organizing Committee for the Olympic Games and several agencies are instrumental towards providing necessary support and guidance in provision of the 2012 London Olympic support services to customers and reviewing current operational strategies in line with the demands of their clients.

For instance, the management team introduced the electronic ticketing service in response to the demands of the clients. Besides, the good transport network, and sufficient amenities makes the 2012 Olympic Games very successful. In addition, the excellent organization of the security services proved to be one of the greatest strengths of the London Olympic Organization Committee.

Weaknesses

The games are only concentrated in the city of London, hence reducing the economic impact to a small region. This is counterproductive in terms of revenue generation since majority of its customers are from the London region. As a result of these weaknesses, the strategy to host Olympic Games in London has not been able to efficiently penetrate the small regions through any visible economic impact.

Opportunities

The 2012 London Olympic Games’ committee had an opportunity to expand its scope and ticket sales via the online ticketing strategy which was poorly implemented in 2008 Beijing Olympic. This opportunity will help in boosting the revenues and leadership position in the city of London. The online ticketing portal could be organized in such as a way that the sales of tickets are gradual to prevent the system from crashing.

Threats

Due to the scarcity of capital to invest in the multibillion 2012 London Olympic event, capital can only obtained from two major sources. The event may be financed by either public funds (by use of public funds-tax payers’ money) or private shares (contribution by private sources such Organizing Committee of Olympic Games-OCOG).

There have been various criticisms as to exclusive use of either source of financing and in the near future, Games will be financed either through completely public share or through a completely private share. Besides, the rising costs of the games may cause more severe protests by Olympic opponents, if they are exclusively funded by tax revenues.

Facts surrounding the case

The London Organizing Committee for the Olympic Games and the Organizing Committee of Olympic Games are the main players in the organization of these games. An estimated 7.9 million tickets are to be sold. 25% of the tickets are reserved for the UK residents with the other part of Europe buying 20% of the tickets.

The rest is reserved to people from across the globe. Approximately ten thousand dignitaries, sixty thousand security personnel, twenty thousand journalists, and almost one hundred thousand workers will make the event successful. The LOCOG’s budget is $3 billion. The total expenditure is $12 billion. Somehow, the committee must come up with the ideal strategy to make this game successful.

Key Issues

The key issues are how to distribute the tickets and maximize the ticket sales without having to favor one even more than the other. The committee must also source for the funds amidst public protest of excessive taxation. The ticketing committee must establish the most cost effective way of distributing the tickets and partner with the right retailing agencies. In addition, the committee has to explore the most cost effective strategy for providing transportation, accommodation, and security to more than two million attendees of the game.

Alternative course of action

The direct impacts relate to the cost and benefits which can be quantified and expressly attributed to the events. Direct spending comprised of capital improvement of the infrastructure, operating expenditures including construction for temporary facilities, legacy activities and other initiatives.

It also entail direct visitors spending including outlays by contractors, games organizers, vendors, sponsors, participants and tourists in preparation for the Olympic Games. For the 2012 Olympic Games, if firms decide to adopt the competition theory which exhibit both aggressive and cooperative behaviors then there are high chances that the event will be successful.

Recommendations

The main benefits that the Olympic Games offer to customers are the customized ticketing products and several seating option for every event. The customers should be treated to quick services and allowed to enjoy faster online ticket purchasing. These benefits should be aligned to the customers’ requirements such as affordable services, reliability, and professionalism in rescheduling events. Besides, the customers should be accorded individualized attention which meets their expectations through the ticketing agencies.

If the cooperative behavior is adopted, the firms offering support services to the games will work together towards the common goal and in the process, they will share the common costs. Cooperative behavior will enable the firm be profitable and relevant in the market. By being aggressive, they will be able to boost the bottom line of their firms at the end of the event.

Application of the cooperative strategy would enable the firms to be innovative and productive especially during the Olympic preparation period. On the contrary the effectiveness in implementation of this strategy may not be as smooth as it may seem to be. This is because firms operate in different industries and therefore, incur expenses of various kinds.

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