Introduction
World Wrestling Entertainment, (WWE) is a public global company. It deals in professional wrestling. Apart from this, the company obtains revenue from product licensing, films and music production. It is the leading professional wrestling organization in the world. It has over 200 million global followers.
The WWE shows appear in 30 languages. The shows reach viewers in 145 countries. In addition, the company offers viewers with a variety of products. These include SmackDown and Raw. The company also offers “Extreme Championship Wrestling” (Black, 2011). These shows mostly attract male viewers. They also feature popular wrestlers like Stone Cold, The Rock and the Undertaker.
The company faced a crisis in 2009. It signed a deal with a leading company in the entertainment industry. The company, WGN America, was to air WWE superstars. It also signed another deal with a leading sports and entertainment company. It signed a circulation deal with Euro-sport.
This was to distribute WWE shows twice a week in Europe. Euro-sport had to broadcast “WWE Vintage” collection and “This Week in WWE” to European countries. The deals aimed at enabling the company to recover from the slumps it faced in 2001 and 2005. The deals were to increase the number of advertisers and enable the company achieve high revenue returns (Fried, Shapiro & DeSchriver, 2008).
However, the company failed to attain this objective. The football league failed and many viewers turned to watching reality television shows. The company has invented new methods for rebuilding its fan base. This paper discusses the problems facing the company. In addition, it examines the strategies and alternatives that the company can adopt to become more competitive.
The Problem
The world wrestling entertainment used a potent mix in the 1990s. This enabled it to claim millions of fans worldwide. Shaved, scantily clad, pierced and pumped up wrestlers attracted many viewers. The WWE shows attracted viewers of all ages. These were mostly males aged between 12 and 34 years.
Many advertisers of different products target this segment of the market. The large number of viewers enabled the company to raise high revenues (Phadtare, 2011). However, the number of viewers of WWE shows has been dwindling since the year 2001. A combination of factors resulted in the reduction in the number of viewers.
After only one season, the football league failed in 2001. Additionally, the number of viewers declined with the rise of reality TV shows. The shows became popular in 2000. Shows like the Survivor and Fear Factor were broadcast daily and became addictive to WWE show viewers. Indicatively, the change in logo from WWF to WWE had negative impacts. A decline in revenues marked the overall result of these challenges.
The company faces a challenge in improving its competitive edge. In order to attract viewers, it has to find effective strategies. This also applies to improving its revenue. The company seeks to be a leader in the industry worldwide. Attainment of competitive advantage will enable the firm to experience sustained growth in a competitive environment (Dess, Lumpkin & Eisner, 2012).
This might allow the organization to comply with flexibilities eminent within the general market. WWE must adopt management strategies that enable effective operations within the market.
The Analysis
WWE has observed various approaches to attain an adequate performance. The company strives to attain notable strategic issues. These include improvement of revenues, competitiveness and increase in the fan base. In 2005, the company’s total revenue was $366,430,000. This improved gradually over the years. In 2008, the total revenue for the company was $526,460,000. This shows an increase of 30 percent in revenue over the four-year period.
The company began rebuilding its fan base in 2005. The increase in the number of fans resulted in an increase in revenue earned in the subsequent years. Live shows, the internet and television programs helped to increase the fan base. In 2006, the company used $400,100,000 in televised entertainment and consumer products.
This also included internet sales and films. However, in 2008, it used $526,500,000. This enabled it TO increase the fan base and revenues. The company considered the external and internal environments in designing this strategy (Black, 2011). The external environments, such as reality TV shows are highly considered. It also used its resources adequately. It signed deals to sell DVDs and toys. These initiatives improved the revenue base of the company.
WWE developed effective performance by improving on the notable strengths and potential factors. There was an eminent analysis of weaknesses, opportunities and threats. The company has the creativity. It is innovative enough to develop programs and products that capture many viewers (Phadtare, 2011).
The development of scripts that are whacky and story oriented also gives the company more strength. The company identified weaknesses that affected performance and adopted effective solutions. The change in the name from WWF to WWE is one such weakness. The company used vigorous marketing to overcome this challenge. Despite the change in name, the company managed to perform profitably. The gross profit continued to increase gradually from $153,140,000 in 2005 to $214,670,000 in 2008.
It also identified novel opportunities in the industry. It launched a football league, XFL. This was to increase its competitive advantage (Fried, Shapiro & DeSchriver, 2008). However, the football league failed after one season. It has adopted the use of live shows around the globe. This enabled it to increase international revenue to $120 millions in 2007 from $45 million in 2002. In addition, the launch of WWE 24/7 assisted the company to increase the number of fans.
Further, the company has recognized the contribution that digital media and the internet makes to business performance. The company adopted an e-commerce platform. This attracts approximately 16 million fans monthly. Lastly, it started producing movies to increase its revenue. It has already produced movies such as “The Marine” and “The Condemned.” The company has also identified its basic threats. It has tackled competitors such as WCW.
Alternatives
The application of various social networking sites might help in the marketing strategies. Social networking sites such as Twitter have become popular since 2003. Companies in various industries have used the sites to market products and services. The company can use these sites to market its television programs.
Additionally, these can also market live shows and the wrestlers. The company is able to increase the number of its fans. Consequently, there might be increases in revenue (Black, 2011). It is important to increase the number of fans and raise more revenue.
The company may adopt a dynamic business approach. This enables it to sustain a high level of competitive advantage. The business environment is ever flexible. The dynamic approach enables the company to deal with these transformations. WWE can also develop its dynamic competencies.
It is also vital for the company to adequately allocate and manage its resources. The processes enable the company to follow a given path of competence. Dynamic capabilities of the company may also depict its competency to be innovative (Sanchez & Heene, 2010). The company may hire management consultants to assist in positive transformation. The outsourcing of experienced professionals ensures higher performance rates.
Recommendations
WWE MUST adopt strategic management practices. The method ensures adjustment to changes in the business environment. Moreover, it enhances optimal resource use. The strategy is more likely to increase innovation. The approach considers all business aspects. It involves the use of knowledge management techniques.
Knowledge management employs repetition and experimentation of different techniques to enable efficiency in processes (Phadtare, 2011). There is need for an adoption of appropriate and transformational leadership. Transformational leadership enables the company to make strategic alliances.
Conclusions
WWE is a leading global company that deals in professional wrestling. It has experienced a considerable decline in the number of fans and revenues over the past years. The company adopted various strategies to revive its performance. These include the development of scripts.
These strategies enabled the company to improve its revenues. However, there is eminent space for considerable improvement. For instance, it might be beneficial to use social networks and apply strategic approach in business operations. The company might also outsource qualified and expert personnel for its operations. Strategic collaborations with potential corporations and other competitors may also help. The company must recognize the significance of exploiting information technology.
References
Black, J. (2011). The ultimate guide to WWE. New York, NY: Grosset & Dunlap.
Dess, G., Lumpkin, T. & Eisner, A. (2012). Strategic Management: Creating Competitive Advantages. New York, NY: McGraw-Hill/Irwin.
Fried, G., Shapiro, S. J. & DeSchriver, T. D. (2008). Sport finance. Champaign, IL: Human Kinetics.
Phadtare, M. T. (2011). Strategic management: Concepts and cases. New Delhi, India: PHI Learning.
Sanchez, R. & Heene, A. (2010). Enhancing competences for competitive advantage. Bingley, UK: Emerald Group.