Companies of all sizes need to develop a corporate strategy. You can imagine how complex such strategies get when the organization is a media and sport conglomerate like AEG. AEG is a subsidiary of the privately managed Anschutz Company. You probably haven’t heard of either AEG or the Anschutz Company, so you might be surprised to learn that they own such famous sporting arenas as the Los Angeles Staples Center and Toyota Sports Center;
they serve as sport and entertainment booking agent for the Forum; and they own the Los Angeles Lakers (NBA), the Los Angeles Kings (NHL), the now defunct Los Angeles Riptide (Major League Lacrosse), and three Major League Soccer franchises. These are only a few of the 100 businesses owned by the Anschutz Company. All told, AEG owns 33 sport teams and 11 venues all around the world.
AEG’s strategic plan focused on a growth strategy of developing a sport and entertainment empire. Its goal was a seamless distribution of sport and entertainment to as many markets across the United States as possible. An obvious focus was a concentrated strategy around Los Angeles. In comparison, AEG diversified to smaller arenas such as the XL Center in Hartford, Connecticut. The Connecticut Development Authority selected a local property owner, Northland Investment Corporation, and AEG to operate the aging civic center. AEG was to supply sport and entertainment content for 6 years starting in 2007.
AEG has also fulfilled the strategic goal of being a global player in the sport and entertainment industry. It developed incredible venues in both London and Berlin. The O2 in London was billed as a leisure and hospitality experience of a kind never before known in the United Kingdom. The centerpiece of the O2 is Europe’s finest indoor music and sport venue—used for the 2012 Olympic events held in London. The complex is located near the Thames River and includes retail shops, restaurants, and music clubs.
To find current information about AEG Worldwide, visit www.aegworldwide.com. Be sure to check the Employment link to review current job openings. For more information specifically about O2 World, visit www.theo2.co.uk.

Case Questions
Select the best alternative for the following questions. Be able to explain your answers.
1. AEG does not have a competitive advantage over its competitors.

a. true

b. false.
2. AEG’s move into the sport and entertainment industry shows its turnaround strategy.

a. true

b. false.
3. The information in this case refers primarily to

a. strategic planning

b. operational planning.
4. Of the five competitive forces that AEG faces, the strongest is

a. competitive rivalry

b. threat of substitute products

c. potential new entrants

d. power of suppliers

e. power of buyers.
5. AEG’s global grand strategy is

a. growth

b. stability

c. turnaround and retrenchment

d. combination.

6. AEG’s corporate growth strategy is

a. concentration

b. forward integration

c. backward integration

d. related diversification

e. unrelated diversification.
7. AEG’s business-level adaptive strategy is

a. prospecting

b. defending

c. analyzing.
8. AEG’s primary competitive strategy is

a. differentiation

b. cost leadership

c. focus.
9. Los Angeles Lakers games have been sold out for many years. Because of this, the Lakers have experienced little attendance growth at their games. At what stage of the product life cycle is this team currently placed?

a. introduction

b. growth

c. maturity

d. decline.
10. Conduct an industry and competitive situation analysis for AEG using the five-forces competitive analysis. Use figure 4.3 on page 97 as an example.
11. Conduct a SWOT analysis for AEG.
12. Write some possible goals and objectives for AEG.

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2. Potential development of substitute products and services "Brown shoes," sandals, and boots are all products that, marketed properly, can replace sneakers. However, they pose no real threat because buyers still prefer special athletic footwear for various activities. 4. Bargaining power of suppliers Nike has a great deal of power over the Asian factories that manufacture its sneakers. 1. Rivalry among competing firms Nike, Reebok, Adidas, Fila, and others face strong competition in style, price, and image. 5. Bargaining power of buyers Consumers of footwear have a great deal of power because they can switch manufacturers for numerous reasons. 3. Potential entry of new competitors The athletic footwear industry is a large, mature industry. However, newer competitors, such as AND1, have been able to successfully enter the basketball footwear and apparel industry. FIGURE 4.3 Nike's five-forces competitive analysis.