- •Fc manchester united strategy: strive for survival
- •Introduction
- •1. Football club as a business
- •1.1. Industry background
- •1.1.1. Sports perspective
- •1.1.2. Business perspective
- •1.1.3. Integration of sports and business
- •1.2. Brief history of mu
- •1.3. Recent events
- •1.3.1. Glazers debt
- •1.3.2. Ipo prospects
- •1.3.3. Financial fair play
- •1.3.4. Increased competition
- •2. Football as a business market
- •2.1. Brief history of football commercialization
- •2.2. Costs for football clubs
- •2.3. Sources of revenue
- •2.4. Competition structure
- •2.5. Strategic maps of competition
- •3. Fc mu current situation
- •3.1. Fc mu Structure
- •1. First Team
- •2. Reserves
- •3. The Academy
- •3.2. Financial Performance of the Club
- •3.3. Strategy of the Club
- •4. Strategy analysis
- •4.1. Meso-level – Porter 5 forces analysis
- •4.2. Macro level – pestel Analysis
- •4.3. Swot-Analysis
- •4.4. Implications & Findings
- •Conclusions and Recommendations
1.1.3. Integration of sports and business
“Grow a club” policy – when the main idea is to invest great amount of money into the club, which is not so popular in the local market, which is not so big and well-developed. The cases of that are Anzi in Russia or Corinthians in Brazil. Those projects can be represented as “cash cows”, due to BCG matrix, because club growth overcomes local football market growth.
Another idea is to invest huge amount of money in the club, not so popular and successful, but doing this in the very evolved market – Chelsea or Manchester City cases. Such businesses are easily becoming “stars”, but this can ruin the whole fundamental ideas of sport, making it nothing more than business. That’s why projects like financial fare policy are going to be implemented.
Responsible management is 3rd type of strategy. In 1994, Preston was brought by the Baxi Partnership — a major employer in Preston and the country’s largest employee owned manufacturing company — who wanted to put something back into the community. Although this is the usual spiel given by companies looking to take over clubs, this time it was generally meant. Not that the club is run as a charity — it is run to make a profit, but for a purpose — for the club. The club was floated on the Alternative Investment Market, but not for Baxi to cash in on its shares, but to raise money for the club.
1.2. Brief history of mu
Manchester United Football Club is an English professional football club based on Old Trafford, Greater Manchester, which plays in the Premier League. Founded as Newton Heath LYR Football Club in 1878, the club changed its name to Manchester United in 1902 and moved to Old Trafford in 1910.
The basis of United’s business success and position as a global brand is rooted in the club’s history, both triumphal and tragic. Manchester United like many provincial English football clubs initially represented the locality its name suggested. One of the few converts to European as well as English competition, United started to represent the country abroad in the mid-1950s. In 1958 a plane crash in Munich resulted in death and injury to many of the club’s (and country’s) best players.
This could have broken the club but instead United showed determination to compete at the very highest level of domestic and international football with loaned players, youngsters and crash survivors. In so doing they attracted admirers far and wide so becoming one of the first to boast support beyond their area (even outside England). In addition successive United teams seemed to contain exciting flair players that helped to build a brand.
Ten years after the Munich air disaster, in 1968, under the management of Matt Busby, Manchester United was the first English football club to win the European Cup. Actually, the core strength of Manchester United's global brand is often attributed to Matt Busby's rebuilding of the team and subsequent success following the Munich air disaster, which drew worldwide acclaim.1
United has won the most titles in English football, with 53 domestic trophies, comprising a record 19 league titles, a record 11 FA Cups,2 four League Cups and 19 FA Charity/Community Shields. The club has also been successful globally, winning seven international titles: three European Cups, one UEFA Cup Winners' Cup, one UEFA Super Cup, one Intercontinental Cup and one FIFA Club World Cup. In 1998-99 there was an unprecedented feat for an English club – Manchester United won a "Treble" of the Premier League, the FA Cup and the UEFA Champions League.
Manchester United is one of the wealthiest and most widely supported football teams in the world.3 As of July 2011, the club is number one in Forbes magazine's annual ranking of the world's 50 most valuable sports teams, valued at $1.86 billion.4 After being floated on the London Stock Exchange in 1991, the club was purchased by Malcolm Glazer in May 2005 in a deal valuing the club at almost £800 million.5
Because higher league placement results in a greater share of television rights, success on the field generates greater income for the club. Since the inception of the Premier League, Manchester United has received the largest share of the revenue generated from the BSkyB broadcasting deal.6 Manchester United has also consistently enjoyed the highest commercial income of any English club; in 2005–06, the club's commercial arm generated £51 million, compared to £42.5 million at Chelsea, £39.3 million at Liverpool, £34 million at Arsenal and £27.9 million at Newcastle United. A key sponsorship relationship is with sportswear company Nike, who manage the club's merchandising operation as part of a £303 million 13-year partnership established in 2002.7 Through Manchester United Finance and the club's membership scheme, One United, those with an affinity for the club can purchase a range of branded goods and services. Additionally, Manchester United-branded media services – such as the club's dedicated television channel, MUTV – have allowed the club to expand its fan base to those beyond the reach of its Old Trafford stadium.8