Question

World Wrestling Entertainment (WWE) announced in January 2017, that its WWE Network was planning to crown its first ever WWE United Kingdom Champion. This push to cater to local markets was one way WWE was trying to deal with worldwide competition from other mixed martial arts disciplines such as the Ultimate Fighting Championships. Even given the growth in other markets, the consensus was that WWE didn’t have much to worry about in the short run.

Vince had taken over a small wrestling business from his father and built it into a large national business. For years, the firm managed to show consistent growth by attracting more and more fans. In an effort to diversify, shortly after going public in 1999, WWE launched an eight-team football league called the XFL. Unfortunately, the football venture did not prove successful and resulted in a $57 million loss for WWE. Subsequently, WWE had struggled with its efforts to build new wrestling stars; the attendance at its live shows began to drop off, and advertising revenues declined as well. In part, this may have resulted from a saturation of the wrestling market, but the lackluster financial results might also have been attributed to the failure of WWE’s efforts to diversify away from wrestling.

In the years since that misstep, CEO Vince explored new avenues of growth and turned pro wrestling into a perpetual traveling road show. WWE used wrestling’s increased popularity to build up a stronger ad-supported Internet presence, where content can be watched 24/7, and the firm even expanded into feature film production with its wrestling superstars. The firm also staged over 330 live events a year, and by 2014 had produced almost 70 live shows outside the United States, helping to boost the worldwide revenues that the firm was able to generate from its merchandise. In 2015 WWE celebrated the popularity of its online video channel success, attracting over one million subscribers to its original WWE Network programming.

Regarding competition, the firm has had to face a challenge from mixed martial arts (MMA), the combat sport that combines kickboxing and grappling. Because of its similarity to wrestling, this new sport might pull away some of WWE’s fans. The question remained: could WWE identify opportunities for further diversification and expansion to maintain its current success?  

Read the entire case.

3 questions;

1. What innovation strategies did Vince use to grow World Wrestling Entertainment?

2. What resources does WWE have and how valuable are they (answer in context of Resource-Based View of the Firm from Chapter 3)?

3. What should be done to expand or grow the business?

Answer 1

Answer 1 – Vince used following innovation strategies to grow World Wrestling Entertainment -

· Vince gone for national larger audience by challenging the existing regional structure of industry.

· Vince sold matches as entertainment rather than contests.

· Vince adopted aggressive expansion techniques to grow WWE.

Answer 2 – WWE has following kinds of resources –

· High cash flow

· Rights to characters

· Script writers

· Wrestlers with acting capabilities

· Skills for developing characters and stories

They are very much valuable as they have strong brand name and good relationships with various big networks.

Answer 3 – In order to expand or grow the business, there must be increase in the road shows. To get more content for video and movie channels there must in increase in the number of shows.