Tuesday, June 19, 2012

UFC (Ultimate Fighting Championship): Blue Ocean Strategy Success

The Ultimate Fighting Championship (UFC) was created in the early 1990’s as a medium to display multiple forms of martial arts and identify the most effective fighting style in a real life fight.  Mainstream exposure eluded the company due to the violent and “no-rules” nature of the sport; and as exposure languished, so did profits.  The company struggled to gain television exposure and found itself competing with professional wrestling, which is staged fighting, and traditional fighting programming such as boxing, amateur wrestling, or martial arts tournaments.

However, by the mid 2000s, the UFC came under new management who wanted to change the strategic course of the company.  Management saw the opportunity to rebrand itself from a sport to a sports entertainment organization.  It installed a new set of rules - eliminating hair pulling, head-butting, groin strikes and other dangerous strikes from the matches.  The UFC also developed a reality television program called “The Ultimate Fighter” which injected drama into the sport.

The UFC now finds itself competing in a Blue Ocean Market.  The company has given consumers a third option for sport-fighting entertainment.  The UFC blends the athleticism of boxing and mixed martial arts, the production value and character creation of professional wrestling, and the drama of reality television into one unique product. 

The results have been very visible.  The UFC has now become a billion dollar empire that reaps profits from television, merchandise, and live events.  It has grown organically and through acquisitions and is quickly becoming as profitable as professional wrestling.  By 2009, it was estimated that the UFC had captured 90% market share of mixed-martial arts entertainment.  The UFC was able to create an uncontested innovative market space and invented demand by blending elements of existing markets.

Though the UFC is successful, it remains a company with negative perceptions due to the violence of the sport.  Will these negative perceptions hinder the growth of the sport?  Or can the UFC discover a way to market the sport similar to that of boxing?  Boxing is a violent sport that is accepted in the mainstream culture of our country.  Can the UFC follow a similar model?

Miller, Matthew. Ultimate Cash Machine. <http://www.forbes.com/forbes/2008/0505/080.html>

Roling, Leland. The UFC's Ambitious Global Expansion Plans Could Reap Huge Benefits and Revenues. <http://www.bloodyelbow.com/2010/6/3/1499271/the-ufcs-ambitious-global>

UFC History. <http://www.completemartialarts.com/whoswho/ufc/ufchistory.htm>

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