Olympic Games is one of the world’s most profitable and popular events. It generates billions of dollars for a hosting economy and International Olympic Committee (Gourville & Bertini, 2011). Also, it has an enormous social effect, as it attracts attention from various regions of the world and influences lives of regular citizens by improving infrastructure and creating new public goods. In this essay, I will discuss the complexity of London 2012 Olympic Games’ pricing strategy, faced by Paul Williamson.
Two primary goals behind the Olympic Games are revenues and social value. They do not go well together: since higher prices mean larger profits, but they do not result in increased social value.
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"London 2012 Olympic Games".
Paul Williamson faced a dilemma: to have additional 50 million USD with 70 percent attendance or have 50 million USD less, but have 90 percent attendance. As he puts it himself, “When the 2012 Games are over, we will not have gotten everything about ticketing right. We accept that. But, given that we know we are going to be wrong, what do we have to be ‘least wrong’?” (Gourville & Bertini, 2011, p.11).
In my opinion, this event should be focused on delivering social value. Thus, certain traits like equality and affordability should be at its core. It will not cease to bring profits – as pointed out by the case study (Gourville & Bertini, 2011), significant fractions of revenues come from broadcasting and legal issues, which will still be present. Also, the project, which results in approximately 3 billion USD should not be concerned with additional 50 million USD if they come at social value’s expense. Social value should be an objective rule of a thumb, which does not change depending on the organization’s perspective, manager’s position or other subjective factors.
In conclusion, I enjoyed working on this assignment, as it introduced me to a real, complex pricing issue and made me think about the ways to solve it.
- Gourville, J., & Bertini, M. (2011). The London 2012 Olympic Games. Harvard Business School.
