Case_11_WWE_TN - Teaching Note: Case 11 World Wrestling...

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Teaching Note: Case 11 – World Wrestling Entertainment Case Objectives 1. To apply the concepts of innovation to a firm in the entertainment industry. 2. To examine how tangible and intangible resources are tied to a firm’s success. 3. To discuss the diversification issues of a growing family-run business. See the table below to determine where to use this case: Chapter Use Key Concepts Additional Readings or Exercises 3: Internal Analysis Resource-based view of the firm Watch videos at the WWE website (links embedded in this case) to set the stage 4: Intellectual Assets Intellectual and human capital; dynamic capabilities View the NOTE to visit WWE’s marketing website 6: Corporate- Level Strategy Corporate strategy; diversification; synergy; related and unrelated diversification; growth for growth’s sake View the case DCD and a video link of WWE’s 2009 shareholder’s meeting with 12: Managing Innovation Innovation; scope of innovation; entrepreneurial orientation See NOTE additional reading interview with Vince McMahon Case Synopsis Vince McMahon took 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 1999, shortly after going public, WWE launched a eightteam football league called the XFL. Unfortunately, the football venture did not prove successful and resulted in a $57 million loss for WWE. Since then, the company has been struggling to maintain its profitability. WWE 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 market for wrestling. But the lackluster financial results can also be attributed to the failure of WWE’s efforts to diversify away from wrestling. However, there are some indications that the firm is turning things around. Vince and Linda McMahon have explored new avenues of growth and turned pro wrestling into a perpetual traveling road show. WWE used the increased popularity to build up a stronger ad-supported Internet presence and the firm even expanded into feature film production with its wrestling superstars. During 2006, the firm staged over 40 live events outside the United States, helping to boost the worldwide revenues that the firm is able to generate from its merchandise. The question remains: can WWE identify opportunities for further diversification and expansion to maintain its current success?
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Teaching Plan This can be a fun case. While not all students have seen a WWE wrestling match, there is always at least one fan in a class. This person’s enthusiasm seems to energize the room. Although the focus is primarily on how to grow a business with an innovative business
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Case_11_WWE_TN - Teaching Note: Case 11 World Wrestling...

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