Harvard Case - AudienceView
"AudienceView" Harvard business case study is written by Tevya Rosenberg. It deals with the challenges in the field of Finance. The case study is 23 page(s) long and it was first published on : Mar 13, 2007
At Fern Fort University, we recommend AudienceView pursue a strategic growth strategy focused on expanding its market share in the emerging markets of international ticketing and venue management. This strategy involves leveraging AudienceView's existing technology and analytics capabilities to develop customized solutions tailored to the specific needs of these markets. This approach will require strategic partnerships with local players, international finance expertise, and a robust risk management framework to navigate the complexities of these new markets.
2. Background
AudienceView is a leading provider of ticketing and venue management software, serving a diverse range of clients in North America. The company faces a critical juncture, needing to expand beyond its existing market to achieve sustainable growth. The case study highlights the challenges and opportunities associated with entering the international market, specifically focusing on the potential of the emerging markets.
The main protagonists are:
- Mark Fowlie: CEO of AudienceView, tasked with navigating the company's growth strategy and making key decisions about international expansion.
- AudienceView's management team: Responsible for evaluating the feasibility of international expansion and developing a comprehensive plan for execution.
- Potential international partners: Key stakeholders in the success of AudienceView's international strategy, offering local knowledge and market access.
3. Analysis of the Case Study
Strategic Framework: We utilize the Porter's Five Forces framework to analyze the competitive landscape and identify key factors influencing AudienceView's strategic decisions:
- Threat of New Entrants: Moderate. The ticketing and venue management software industry is relatively mature, but new entrants with innovative solutions could pose a threat.
- Bargaining Power of Buyers: Moderate. Clients have some bargaining power due to the availability of alternative solutions, but AudienceView's strong brand and established reputation mitigate this.
- Bargaining Power of Suppliers: Low. AudienceView relies on a diverse range of suppliers, limiting their bargaining power.
- Threat of Substitutes: Moderate. Alternative solutions, such as online ticketing platforms, could pose a threat, especially in emerging markets.
- Competitive Rivalry: High. The industry is characterized by intense competition among established players, requiring AudienceView to constantly innovate and differentiate.
Financial Analysis:
- Financial Statements: AudienceView's financial statements show consistent profitability and strong cash flow generation. This provides a solid foundation for international expansion.
- Capital Budgeting: The case study highlights the significant capital investment required for international expansion. AudienceView needs to carefully assess the potential return on investment (ROI) and ensure the financial viability of this strategy.
- Risk Assessment: Expanding into emerging markets presents unique risks, including political instability, economic volatility, and currency fluctuations. AudienceView needs to develop a comprehensive risk management plan to mitigate these challenges.
4. Recommendations
- Target Specific Emerging Markets: AudienceView should focus on emerging markets with high growth potential, strong infrastructure, and a favorable regulatory environment. This could include countries like India, China, Brazil, or South Africa.
- Develop Customized Solutions: AudienceView should tailor its software solutions to meet the specific needs of each target market, considering local languages, cultural preferences, and payment systems.
- Strategic Partnerships: Form strategic partnerships with local players, such as ticketing companies, venue operators, and technology providers. These partnerships will provide access to local expertise, market insights, and distribution channels.
- International Finance Expertise: Recruit or hire individuals with expertise in international finance to manage foreign currency exposure, navigate local tax regulations, and secure financing for international operations.
- Robust Risk Management Framework: Develop a comprehensive risk management framework to address potential challenges, including political instability, economic volatility, and currency fluctuations. This framework should include contingency plans and mitigation strategies.
- Phased Approach: Implement a phased approach to international expansion, starting with a pilot project in a single market before scaling up to other countries. This allows for learning and adaptation.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: AudienceView's core competencies in technology and analytics align well with the needs of emerging markets. This strategy is consistent with the company's mission to provide innovative and reliable ticketing and venue management solutions.
- External Customers and Internal Clients: The strategy addresses the needs of both external customers (venue operators, event organizers) and internal clients (AudienceView's employees) by offering growth opportunities and career advancement paths.
- Competitors: The strategy aims to differentiate AudienceView from its competitors by offering customized solutions and leveraging local partnerships to gain a competitive advantage.
- Attractiveness ' Quantitative Measures: The potential ROI and profitability of international expansion are attractive, considering the high growth potential of emerging markets. AudienceView needs to conduct thorough financial modeling and analysis to quantify the expected returns and ensure the financial viability of this strategy.
6. Conclusion
By pursuing a strategic growth strategy focused on emerging markets, AudienceView can capitalize on the significant opportunities presented by these rapidly developing economies. This strategy requires a careful balance of innovation, local partnerships, and risk management to ensure long-term success.
7. Discussion
Other Alternatives:
- Mergers and Acquisitions: AudienceView could consider acquiring existing ticketing and venue management companies in emerging markets. However, this approach carries significant financial and integration risks.
- Organic Growth: AudienceView could focus on organic growth within its existing markets. However, this strategy may not be sufficient to achieve the desired growth targets and could lead to stagnation.
Risks and Key Assumptions:
- Political Instability: Political instability in emerging markets could disrupt operations and impact profitability.
- Economic Volatility: Economic fluctuations could negatively impact demand for ticketing and venue management services.
- Currency Fluctuations: Fluctuations in exchange rates could impact profitability and cash flow.
8. Next Steps
- Market Research: Conduct thorough market research to identify the most promising emerging markets.
- Financial Modeling: Develop comprehensive financial models to assess the financial viability of international expansion.
- Partner Identification: Identify and evaluate potential partners in target markets.
- Pilot Project: Implement a pilot project in a single market to test the feasibility and effectiveness of the strategy.
- Scaling Up: Based on the success of the pilot project, gradually scale up operations to other emerging markets.
This strategic approach, coupled with careful execution and continuous monitoring, will enable AudienceView to achieve sustainable growth and establish itself as a global leader in the ticketing and venue management industry.
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Case Description
A vice-president of Ventures West, a leading Canadian venture capital firm, must decide what due diligence to conduct in order to recommend an investment in AudienceView, a company that provides software and services for the sports and entertainment ticketing markets. While the case is focused on due diligence, there is sufficient information to allow for a full venture capital investment analysis, including valuation and deal terms.
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