Ultimate Fighting Championship (Case 2)
The following is an environmental analysis on the mixed martial arts (MMA) fighting competion, Ultimate Fighting Championship (UFC). The parent company, Zuffa, LLC, since the UFC’s purchase, has been trying to legitimize UFC as a sanctioned sport and develop its international growth. The UFC has grown exceedingly in popularity since its founding in 1997. The first section of this report will cover an overview of trends in the segments of the general environment that are external to the company: political/legal, socio-cultural and global, economical, technological, and demographics. The second section will discuss how Under the UFC fits the aspects of Porters Five Forces. The final section will show the competitive and internal analysis along with success strategies. Political/Legal Segment
Mixed Martial Arts has been around since the very first Olympics in Athens, Greece. Over time its popularity grew and more people became interested in this sport. The UFC was the first MMA organization that tried to popularize this sport. The original founders of this organization choose marketing techniques that made many people to question the ethics of the sport. There were no time limits, no weight classes, no mandatory safety equipment, and very few rules. As a result, MMA was banned from the majority of U.S. states and the founders decided to sell the organization. The buyers and second owners of the UFC wanted to legitimize MMA as a sport. To do this, they asked states to regulate MMA and needed the government to create regulations and specific rules that fighters follow. Unified Rules and Other Important Regulations of Mixed Martial Arts were created. As of January 2011, MMA was regulated in almost every U.S. state with the exception of Connecticut, Vermont, and New York. Socio-Cultural and Global Segment
The socio-cultural aspect for the industry has to do with society’s attitude toward watching physical violence for entertainment. MMA has a very loyal fan base. The UFC has done much to turn its image around and further increase viewership. They made Dana White, a former amateur boxer, trainer, and creator of the sports marketing agency, Dana White Enterprises, the face of the organization and part of the UFC brand. White’s popularity and status benefited the UFC’s image. MMA has increased its international presence with events in Canada, Australia, the United Kingdom, and Germany to name a few. The MMA has also established television deals to bring the matches to various locations around the world. MMA competitions can now be viewed in Europe, Asia, Australia, South America, North America, and the Middle East. Economical Segment
Economic factors can have both a positive and negative effect on the MMA industry. Because Mixed Martial Arts is a luxury and not a necessity, economic growth and recessions is one thing to consider. Economic growth brings more consumer spending and consumers will be willing to spend more on tickets or PPV events. Economic recessions bring the exact opposite as consumers are willing to spend less on things that they do not need. Another thing to consider is the elasticity of demand. Since MMA events are not a necessity, consumers will not be willing to pay more when prices rise unless they are dedicated fans.
The MMA industry depends heavily on technology for success. Television is the primary outlet for this industry. Live events are transmitted on PPV (pay-per-view) so fans who cannot physically be there can still watch it on television. Reality television shows like The Ultimate Fighter and the UFC Countdown are broadcast on Spike TV so fans can get to know the fighters outside of the Octagon. This industry also releases video games so fans can portray their favorite fighters. The UFC launched a video game called “UFC Undisputed” in 2009 and 2010 to promote upcoming PPV events. MMA organizations and fighters...
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