Problems Ticketmaster was facing
Ticketmaster is known to be one of the leading ticket-service provider with a market share of approximately $1.399 million of revenue generated through selling of primary ticketing and ticket resale services. Ticketmaster operates in a very competitive environment since most of the competitors strives to dominate the market. In order to access the most popular venues and generate the high financial stability, Ticketmaster acquired Front Line which is a booking agent and an artist management company(Knopper, 2010). Although the objectives was to dominate the entire value chain of ticketing industry, it was difficult to achieve this considering that Ticketmaster operates in 20 global market. The company distributes tickets through three outlets: 19 globally call centers, 6,700 retail outlets and online site. These conditions complicate the strategies of the company. For instance, Ticketmaster has built good reputation over a long period of time and by charging steep prices would still generate the revenue due to high demand of tickets. Considering this as business model, Ticketmaster relied on high pricing and catering wider audience to generate revenues.
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However, the global recession complicated this business model since this strategy was established with the perception that entertainment industry was recession-proof. In fact the industry was hit hard because during the recession consumers significantly cut back the purchase of tickets for leisure activities, hence reducing the sales of tickets by 15 %. In addition, Ticketmaster was struggling to fight negative public relations created by the media which included artist boycotts(Alan, & Barak, 2009). As a result, thousands of local customers avoided purchasing tickets from the company and major venues refused to do business with the company. Furthermore, the Ticketmaster was faced with high competition from sport event and cinema.
Processes for generating alternatives
TheNathan Hubbard used two processes to generate alternatives: Creation of Live Analytics and the establishment of the team to gather information and related opportunities regarding 200 million customers as well as the 26 million visitors that visits Ticketmaster website monthly, something he considered the company has ignored to explore for a very long period of time.Some of the alternatives that were available for Mr. Hubbard include the innovation to allow customers to choose their seats and the ability to purchase tickets on iTunes and introduction of tickets for non-traditional venues such as parks(Glazer, 2011). The major uncertainty that faced Mr. Hubbard the outcome after eliminating the unpopular service fees such as $2.50 meant for printing one’s own ticket. The move also scared the venue owners and promoters because they feared that the announcement would deter customers from purchasing the tickets.
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Selection of desirable alternative
Mr. Hubbard identified desirable alternative by redirecting the Ticketmaster to transforming from inflexible transaction machine, rigid and infamously opaque company to a more transparent and e-commerce fan-centered company. The move allowed the company listen to the needs and demands of the customers and respond to their concern adequately(Salter, 2011). Through the use of social media, the company listened to the needs of the customers through sharing and gathering feedbacks. Mr. Hubbard used rational type of decision making. This is a commonest type of decision making which involves considerable thinking and reasoning by the decision maker in order to arrive at optimal choice. The analysis indicated that Mr. Hubbard made the decision progressively starting from identifying the problem and the opportunities to the selection of the preferred alternatives.
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Effectiveness of decisions made
Analysis indicated that the decisions made by Mr. Hubbard helped Ticketmaster company to increase revenues generated. After implementing the decision and merging with Live Nation, the revenue in the third-quarter increased by 10 % to about $2 billion as compared to the same period previous year(Alan, & Barak, 2009). The increase in revenue was largely driven by sponsorship divisions and Live Nation’s ticketing. It should be noted that Ticketmaster largely contributed to this growth of revenue through the sale of 36 million tickets which generated $2.1 billion. Out of the total revenue generated, $82.1 million was in adjusted operating income, which represented a 51 % increase for the year.
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