Submitted to

Prof Manoj Das

THE LONDON
Submitted by Section C Group-9
Plabit Pattnaik (19A2HP426)
2012 Prabhat Sharma (19A1HP066)
Anubhav Das (19A2HP410)
Akash Sarkar (19A3HP622)

OLYMPIC GAMES Saguna Chopra (19A2HP409)

Shivani Singh (19A3HP657)
Summary:
The London 2012 Olympic Games faced numerous challenges, mainly spanning logistical
issues that needed to be resolved. The program coordination and planning faced a significant
criticism with the press and the members of the government opposition calling for the
cancellation of the event due to inadequate preparation. The substantial budgetary allocation
made for the project was meant to enable the event to yield the desired outcome. One of the
problems was the ticketing: the head of ticketing Paul Williamson faced a significant
challenge for coming up with policies used in the planning and distribution of the tickets
(Gourville & Bertini, 2011). The ticketing formed a considerable element in the game as it
provided an avenue for maximizing revenue collection. They aimed at maximizing the
attendance, filling the seats in the stadium with loyal fans, and also, to make all the tickets
available to all the fans in and around London. Olympic games from the perspective of the
situation analysis, issues requiring the address possible options the company could have
pursued, the evaluation of the options, and a conclusion to the entire processes.
Situational Analysis - Despite all the time and resources that were allocated for the London
2012 Olympic Games, various activities and processes experienced significant failures. As
noted in the afore paragraphs, different strategic and logistical issues affected the
management of the event resulting in poor performance in the critical areas. This situational
analysis presents the strengths, weaknesses, opportunities, and the threats that the London
Olympic 2012 faced. Studying these factors would present an extensive view of the situation
faced at the London 2012 Olympics, the flaws and mistakes, all the decisions and choices that
the management had to make things work in their favour.
Q1. What are the trade-offs Williamson faces?
A1. Trade-offs that Williamson faces are:
1.Pricing
The most important thing was to develop a pricing policy and sell 7.9 million tickets to
800,000 viewers per day, i.e. Maximizing attendance.
Prices depend on people's willingness to pay for the event. People were willing to pay
relatively more for sports such as gymnastics, swimming, ceremonies and athletics than other
sports.
Alas, there are two obstacles: the first is related to the global financial crisis in the world,
which may have a negative impact on ticket sales, and the second is that tickets will be sold
online for the first time and both the organizing committee and fans neither have any prior
experience of it in context of Olympic Games.
The trade-off is that in order to achieve the estimated revenue target from ticket sales, he has
to keep the price relatively higher which will be against their moto of “Everybody’s Games”.
2.Attendance
It doesn't end with selling tickets for the event. The main problem is "EMPTY PLACES", so
ticket buyers did not use the purchased tickets. Some of the reasons are:
 i. Many tickets which are purchased by sponsors, reserved for IOC VIPs and media
remain unused.
ii. People purchased tickets for day long event but left after one or two matches.
iii. People might buy low price ticket for souvenir purpose.
Also, knowledgeable crowd should watch the games otherwise they might cheer at the wrong
time as happened in Beijing Olympics. So, he will have trade-off with their moto “Everyone
games with a comparatively high price ticket so that right audience view the matches. Also,
he will have to closely monitor percentages of seats reserved for IOC VIPS and media
personnel so that those seats don’t remain vacant.
3. Perceptions
In order to make London Olympics “Everybody’s Games”, he wanted to engage local
citizens. The trade-off is that as per law of European Union, he cannot offer price discount
only to local citizens, but he has to offer the same to citizens of other European Union
nations. This will affect the revenue from ticket sales.
If he kept prices higher for popular sports and very low price for not so popular sports, he
might disrespect the unpopular sports. The trade-off is that if he doesn’t employ differential
pricing the it will affect estimated revenue from ticket sales.
LOGOC should not be held responsible for ticket resale. The trade-off is that even though
tickets are being sold in the first which will help them to achieve their estimated revenue
from ticket sales, but they have to punish the individual who are involved in resale which in
turn will affect their revenue.
In order to avoid these trade-offs, an effective pricing technique can be modelled:
In order to achieve their target of 650 million from ticket sales, they will have to employ
popular sports technique with differential pricing
No of tickets available=7,961,000. Target =$650 millions
Average ticket price=650M/7,961,000=$81.65/ticket
Case1: Top sports
Total revenue from top sports= 650 M * 40%=$260M
No of tickets available=1,246,000.
Pricing =260M/1,246,000=$208/ticket
Case 2: Other sports
Total revenue from other sports= 650 M* 60%=$390M
No of tickets available=7,961,000-1,246,000=6,715,000
Pricing=390M /6,715,000=$58/ticket.
Ticket price range: $58 to $208
Q2. How might LOGOC’s pricing strategy vary by sport?
A2. The pricing strategy may vary by sport, this is due to difference in popularity of each
sport in UK.
1. In Exhibit 9, we see different pricing tiers to set the prices for various sporting events.
2. According to this we can price the popular sports at a higher rate and less popular
sports at the optimal price to achieve the ticket sales revenue.
3. If you price the tickets too low for a popular event, you will likely miss an
opportunity to generate revenue.
4. If you price the tickets too high for a scarcely popular event, you cannot generate
enough ticket sales, which will eventually lead to empty seats and poor attendance for
an event.
5. Football contributes to total 10% revenue and is one of the most popular game.
Therefore, the ticket prices are kept high.
6. The demand for tickets of swimming, gymnastics, athletics and the ceremonies might
exceed the supply. The tickets will sell almost at any price. 40% of revenue is
expected from these sports.
7. According to Exhibit-6, 610,000 tickets were available for Aquatics, 345,000 for
Gymnastics and 756,000 for athletics in 2012 Games.
Q3 What would you recommend LOGOC do?
A3. Following are the points that LOCOG should consider:
• Keeping in mind that the London Olympics 2012 is billed as “Everybody’s Games”,
our pricing objective is to ensure that the tickets are affordable to average Londoners.
• Ticketing represents about 20% of the revenue generated by an Olympic Games
revenue, LOCOG can emphasize more on the other two sources of its revenue –
Domestic Sponsorship and Licensing.
• For high-on-demand popular sports like swimming and gymnastics as well as opening
and closing ceremonies, LOCOG can charge premium rates while on the basis of
popularity of other sports and demand extrapolation on the basis of bookings, they need
to charge appropriately for lesser appealing games.
• Owing to heavy demand of tickets, LOCOG has to ensure smooth delivery on their
online platforms to avoid the supply-demand gap of tickets leading to empty seats.
• Resale Platform should be made so that the buyers who are not able to make it to the
venue can resale their tickets to the ones who are interested and can make it to the
location.
• Other recommendations on public transportation, security and infrastructure are there
to ensure the smooth functioning of the event. Tie-ups with international air carriers to
encourage more audience from other corners of the world to make up for the sports that
attract less audience in UK and EU, like China, Japan and South Korea where Table
Tennis is very popular.