human
Provide an essay for this summary: The purpose of this report is to examine the Wall Street Journal's article "StubHub Acquisition Puts Co-founder Back in Charge" and assess the business strategy of StubHub. The article discusses how Eric Baker was a pioneer in creating an efficient way to buy tickets online and how he founded StubHub in 2000. In 2006, he launched Viagogo in Europe after quitting StubHorns' management. In 2007, the American company was sold to eBay,
assistant
#StubHub Acquisition Puts Co-founder Back in Charge Essay (Article)
Article Report
The purpose of this report is to examine the Wall Street Journal’s article “StubHub Acquisition Puts Co-Founder Back in Charge” and assess the business strategy of StubHub. According to the article, Eric Baker was a pioneer in creating an efficient way to buy tickets online (Steele, 2019). In 2000, he co-founded an American-based ticket retailer company StubHub, and in 2006 he launched Viagogo in Europe after quitting StubHubs’s management. In 2007, the American company was sold to eBay, and in more than a decade, it is being sold back to Viagogo. Both companies’ co-founders long planned on this deal and managed to buy his brainchild back with far-reaching intentions in mind.
StubHub managed to leave the parent-subsidiary relationship with eBay to create an equity alliance with Viagogo. The friendly acquisition will contribute to both companies’ value creation strategy (Loukianova et al., 2017). American and European-based companies are going to combine to be able to sell globally, which makes an economically promising strategic alliance, on condition that Viagogo takes measures to make their business more transparent. European ticket seller specializes in the distribution of tickets for sports matches, while StubHub offers tickets for a broader range of events, including concerts, theater, and comedy. The consolidation is going to provide a better differentiation advantage in the long perspective (Cohen & Lee, 2019). Therefore, acquisition and product-market diversification are the corporate strategies chosen by StubHub management.
StubHub is a company that competes rather a on differentiation than on costs. Accordingly, several steps need to be taken to conduct the value chain analysis. It is necessary to identify StubHub’s value-creating activities that contribute the most to their customers’ value. As it was a pioneer in reselling tickets, its main strength is in the extensive database that allows for achieving an economy of scale in the industry of ticket selling for live events. The significant value for the customer is that StubHub is a platform where a customer can purchase a ticket for an event that has already been sold out. The company ensures that the ticket is legitimate; otherwise, it refunds the buyer. Another value provided to customers in handling the payment transaction, ensuring that it does not break down.
As for vertical integration and its two types, it should be considered through the prism of upcoming consolidation. Eric Baker set the goal to distribute globally: “We want fans to be able to get to any event, anywhere, anytime” (Steele, 2019). The orientation towards sales and satisfaction of customers’ needs indicates the forward vertical integration rather than the backward integration that implies focusing on design and manufacturing stages. The forward vertical integration is supposed to improve the quality of service, facilitate planning procedures, and investments in specialized assets of the consolidated company (King & Walker, 2014). However, the new consolidated company, which is to become a powerful force in the booming industry of ticket selling, might perform a backward integration by rebranding and developing a new design and brand name.
Overall, StubHub is implementing a complex business strategy in all three dimensions. It provides vertical forward integration by expanding its sales and facilitating customer service. Alongside this, the company is going to expand the variety of services by consolidating two ticket retailers and, simultaneously, extend the geographic scope of its work by combining American and European businesses. In this case, the acquisition, as a corporative strategy, proves beneficial for both parties.