Stub Hub - the Next Chapter in Marketing Towards Increased Revenue

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Stub Hub - The Next Chapter In Marketing Towards Increased Revenue February 20, 2012


Table of Contents
StubHub’s History5
Environment Analysis6
The General Environment6
The Industry Environment7
The Competitor Environment8
Business Problem11
Strategy Formulation12
Action Plan and Strategy14
Conclusion16
Bibliography17


List of Figures
Figure 1: The General Environment: STEEP Analysis5
Figure 2: Porter’s Five Forces Model7
Figure 3: 3 I’s 2004 Competitor Radar Screen8
Figure 4: Strategy Evaluation12
Figure 5: Action Plan15


StubHub’s History

StubHub was founded in 2000 by Eric Baker and Jeff Fluhr, two Stanford Business School students. Baker identified a gap in the current market when it came to secondary ticket sales, due to a personal experience in which he had difficulties purchasing tickets to an event. StubHub was formed in an effort to increase the transparency of ticket availability and pricing, and to interconnect buyers and sellers.

StubHub entered the secondary ticket market at a time when seemingly no other major competitors existed. Outside of their service offering, there were three alternatives for selling tickets in the secondary markets: sell your tickets to a local broker, scalp tickets outside the venue or place a classified advertisement. StubHub established itself as a differentiator by capitalizing on the weaknesses in the other three alternatives. They offered a safe and secure mechanism to completing sales transactions – credit card information was maintained within each user account and the identity of the buyer and seller was never revealed. They provided an efficient means of completing the transaction by integrating with FedEx. StubHub guaranteed against fraud and late delivery by charging the seller’s credit card if fraudulent and ensuring a seat to the event in case the tickets were delayed. StubHub also provided flexibility and ease of use to customers through the website with features such as a venue map to give a better understanding where seats were located.

Because of StubHub’s ability to provide its services in a different manner than what existed within the market, they experienced $4 million dollars of growth in their first four years. It was at this point in 2004, that StubHub needed to determine a strategy to reach the masses and mature their offering.  

Environment Analysis

StubHub must closely analyze and monitor all aspects of their external environment in order to maintain a competitive advantage against competitors. By understanding the conditions within the general, industry and competitor environments, StubHub is able to develop strategic actions and implement them as needs arise.

The General Environment

While firms cannot directly control the segments within the general environment, it is important that StubHub understands each segment and its implication on their strategies going forward. Figure 1 – The General Environment: STEEP Analysis shows the dimensions within broader society that influence the secondary ticketing market and the competitors within it. Figure 1 – The General Environment: STEEP Analysis

STEEP Segments Elements

Sociocultural Environment
Age range
Gender specific
Geographic distribution patterns
Income distribution
Shopping trends

Technological Environment
Information technology continues to become cheaper and have more practical applications. •Availability of internet
Telecommunications technology and networks increasingly provide fast transmission of all sources of data.

Economic Trends
Customers value security and ease of use over lowest absolute price

Environmental Trends
Internet ticket sales

Political/Legal Environment
Ticket resale laws are conditional across states
Extent of regulation/deregulation

The sociocultural elements help StubHub understand what segments of consumers they currently reach in terms of...
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