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Manchester United Essay

We aim to increase our revenue and profitability by expanding our high growth businesses that leverage our global community and marketing infrastructure. The key elements of our strategy are: Expand our portfolio of global and regional sponsors: We are well positioned to continue to secure sponsorships with leading brands. Over the last few years, we have implemented a proactive approach to identifying, securing and supporting sponsors. In addition, we are focused on expanding a regional sponsorship model, segmenting new opportunities by product category and territory. As part of this strategy, we have opened an office in Asia and are in the process of opening an office in North America. These are in addition to our London and Manchester offices. Further develop our retail, merchandising, apparel & product licensing business: We will focus on growing this business on a global basis by increasing our product range and improving distribution through further development of our wholesale, retail and e-commerce channels.

Manchester United branded retail locations have opened in Singapore, Macau, India and Thailand, and we plan to expand our global retail footprint over the next several years. In addition, we will also invest to expand our portfolio of product licensees to enhance the range of product offerings available to our followers. Exploit new media & mobile opportunities: The rapid shift of media consumption towards internet, mobile and social media platforms presents us with multiple growth opportunities and new revenue streams. Our digital media platforms, such as mobile sites, applications and social media, are expected to become one of the primary methods by which we engage and transact with our followers around the world. In addition to developing our own digital properties, we intend to leverage third party media platforms and other social media as a means of further engaging with our followers and creating a source of traffic for our digital media assets. Our new media & mobile offerings are in the early stages of development and present opportunities for future growth. Enhance the reach and distribution of our broadcasting rights: The value of live sports programming has grown dramatically in recent years due to changes in how television content is distributed and consumed.

Specifically, television consumption has become more fragmented and audiences for traditional scheduled television programming have declined as consumer choice increased with the emergence of multi-channel television, the development of technologies such as the digital video recorder and the emergence of digital viewing on the internet and mobile devices. The unpredictable outcomes of live sports ensures that individuals consume sports programming in real time and in full, resulting in higher audiences and increased interest from television broadcasters and advertisers. We are well positioned to benefit from the increased value and the growth in distribution associated with the Premier League, the Champions League and other competitions.

Furthermore, MUTV, our global broadcasting platform, delivers Manchester United programming to 54 countries around the world. We plan to expand the distribution of MUTV by improving the quality of its content and its production capabilities. Diversify revenue and improve margins: We aim to increase the revenue and operating margins of our business as we further expand into our high growth commercial businesses, including sponsorship, retail, merchandising, licensing and new media & mobile. By increasing the emphasis on our commercial businesses, we will further diversify our revenue, enabling us to generate improved profitability. The five forces model of Michael Porter looks like the following if applied to Mu Ltd.: SUPPLIER POWER

High diversity of suppliers
Volume is important to supplier
MU differentiates of inputs
Inputs have a high impact on costs and differentiation
Switching costs of firms in the industry are low
There is a low Presence of substitute inputs
There is quite an easy access to inputs
The is a government policy promoting quite free entry in case certain registration type of requirements are fulfilled There is economies of scale
High capital requirements
There are strong brand identity in the succer sector of the sports industry Switching costs are high
Easy access to distribution
Low expected retaliation
Low switching costs
Buyers are not highly inclined to substitute
Price-performance, to a certain level, has no influence on the preffered team Trade-off of substitutes

High exit barriers
Low industry concentration
High fixed costs/High value added
Low industry growth
Low product differences
Low switching costs
High brand identity
High diversity of rivals

Bargaining leverage is neither high, neither low
Buyer volume upon successful times are high
Buyer information can be considered high
Brand identity is strong
Price sensitivity is not extremely high
Product differentiation is very high
Buyer concentration vs. industry is low
Many substitutes are available
Source: http://www.quickmba.com/strategy/porter.shtml
Key Performance Indicators (KPI)
The other, as mentioned before, is the KPI, or key performance indicators. As the Affiliated League Club lists, the KPI of a sports klubs must be the following( p.3,http://nemjfa.homestead.com/BUSINESSPLAN.pdf ): Sound business plan

Stable administration, close communication between all levels of Club Management High quality coaches at both senior and underage levels
High profile and acceptance within the community
Strong Club presence in schools, both primary and secondary
Sound oval management, high standard of club facilities
Sound financial management, expenses kept in line with income base Development of Juniors, particularly local based players

Manchester United Ltd. is a very professional company, and is in possession of these characteristics. It actually needs so, if it wants to achieve its declared goal, „to be the most successful teem in football” (http://ir.manutd.com/manutd/about/bustrat/). As to the last part of the question, identifying internal and external factors, please refer back to the Porter’s Five Forces Model above Major cost categories of the company, the drivers behind these costs, and the internal and external factors that influence costs the most There are three major cost categories, those related to the operation and development of the corporate Manchester United, the costs related to the operation and development of the sporting club, and other, related costs. The corporate costs include such costs as dept and maintance costs, and costs related to the commercial activities of the company. Examples of club related cost include the compensation of the players and staff, and purchase of new players and stuff. The other costs include, for instance infrastructural costs, such as the maintance and development cost of the stadium of MU, the „Old Trafford”. The drivers of the costs of Manchester United, and the internal and external factors that influence the cost structure and levels of these cost in all the three major categories can be observed in the second part of question 1, in the Porter’s Five Forces Model. What companies are comparable companies

Other English football club corporations like Chelsea and Arsenal of London, Everton, and Liverpool. Companies operating football clubs are very dinstinct from companies of other industries, and the larger football clubs are probably very similar to each other in how they conduct their business, all having some income sources, tickets, clothing, that are the same. Method most appropriate to assess the value of the company, advantages and disadvantages of the relative and the DCF methods. If we are looking at the performance of the company, probably the profitability is the measure that should be used, because it measures the efficientcy of the financial performance of the company. DCF Method:

As DCF analysis is based on the assumptions of the CAPM, it is an analytically correct valuation method. In contrast to the Comparable Companies analysis, volatile market conditions do not have an impact on the results. DCF therefore is often used as an additional point of reference. Since the discount rate is usually derived from the WACC, the DCF takes account of the relative riskiness of the projected cash flow. Accounting rules do not influence this approach, as valuation is based on projected cash flow. growth period period of stable growth. Multiples appropriate for the comparison of the company with other comparative companies, what financial and non-financial measures should be a basis of compari Probably the best multiple to measure the success of a club is the games won to the sum of tied and lost games.

This is important, because the more games a club can win, the more the corporate club can achieve in its merchadising, and the more sponsors it will be able to attract. This multiple would be considered to be a non-funancial measure. A financial measure applicable to football corporations would be profitability if the company, as it, though with limmitations, measures how efficiently the club is operating. Another financial measure would be the revenues per players in a complete season. Shortcomings:

Since the terminal value often represents more than 50% of the entire DCF value it is therefore highly sensitive to the underlying assumptions, especially regarding the growth component in the terminal value and the discount rate. Using historical stock returns when estimating the beta depends heavily on the choice of the index. For volatile companies the beta is very high, resulting in a relatively high discount rate and a low net present value of cash flows. Estimating a “correct” value by applying the DCF approach therefore depends to a large extend on the expertise and industry knowledge of the person doing the valuation. Moreover, the DCF approach neither considers different management options nor future investment opportunities. It only works if cash flows are subject to little uncertainty and the company is managed by a static management team. It does not capture the “true” value if there are large initial losses, highly volatile earnings or immense initial growth rates.” (WEITZEL, GELLINGS, BEIMBORN and KÖNIG, 2003, IS Valuation Methods- Insights from Capital Markets Theory and Practice –, p.5-6.) Relative method:

As the comparable companies method is based on public information, market moods and perceptions are reflected, since it measures the relative and not the intrinsic value. Relative valuation is based upon fewer assumptions and can be conducted faster than DCF valuation. Shortcomings:

The simplicity of valuation by multiples is its deficiency [Benninga/Sarig 1997, 305]. Since no value determinants are analyzed, it is important to carefully select comparable firms. Also, outside variables like mergers and acquisitions in the respective sector can influence stock prices. Figures often fail to capture intangible assets, like quality of management. Hence, CC based valuation should provide a valuable “sanity check” to assure the validity of a DCF analysis, but it should not be the only valuation method used [Benninga/Sarig 1997, 305].” (WEITZEL, GELLINGS, BEIMBORN and KÖNIG, 2003, IS Valuation Methods- Insights from Capital Markets Theory and Practice –, p.7-8.) Limitations of applying the relative and the DCF methods to the evaluation of the company, what can be done to overcome this problem There are a number of limitations of applying the relative and the DCF methods to the evaluation of the company.

For instance, purchasing new players and coaches cost a lot of money; it is not rare that that amount of money reaches one million euros. As it was seen in the above summary of the disadvantages of the DCF method. A possible solution to this problem, though not very humane, the cost of these players and coaches could be depreciated over the time frame of the contract involved, just as it is done in the case of new infrastructural expenditures. In the case of the Relative method, the problem is that the progression of the team in the national, that is in the Premier League, and in the international cups and championships, were much different both in the near past and will probably be in the future also. This increases the risk of the cyclicality of the business. This cyclicality can be much different in the case of the different corporate clubs, which makes the incomes and thus other results of the companies very difficult to compare. Links for more information

Porter five forces analysis – Wikipedia, the free encyclopedia Porter’s five forces is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial Organization (IO) economics to derive five forces that determi Performance indicator – Wikipedia, the free encyclopedia

A performance indicator or key performance indicator (KPI) is a measure of performance. Such measures are commonly used to help an organization define and evaluate how successful it is, typically in terms of making progress towards its long-term Manchester United Official Web Site

The official site with news, transfer rumours, online ticket sales, live match commentary, video highlights, player profiles, mobile content, wallpapers and more. Manchester united Manchester United (ManU) is one of the leading football clubs in the world. ManU has won many titles in the football competition making the club to be the most successful football club in the world. The success of this club is contributed by the good management of Sir Alex Ferguson who has been the manager since 1986 when Ron Atkinson left (Official website, ManU). Introduction

The football industry in UK has become popular because of the first successes in the industry, an attribute that made it a viable business. The main aim of this report is to analyze the SWOT and PEST analysis of Manchester United. From this analysis, it will be possible to identify both the internal and external strengths of the company. SWOT analysis

SWOT analysis can be used to know the success factors of ManU as well as to identify the strategies to be overcome the club’s weaknesses. Moreover, SWOT analyses will enable the company to identify the opportunities to improve performance. SWOT analysis of Manchester United is presented below: Strengths

The key strength of Manchester United is its well recognized brand all over the world. ManU has achieved such good brand name by heavy advertisement through the internet, TV and magazines (Andrews, 2004). This massive advertisement has made the club to get various sponsors. This means that whenever the company raises any merchandise in the market, indicating their name and symbol, it will be identified by its funs all over the world. Strength of the club is the presence of a big fan base which has improved the financial stability of the club. This big fan base has made a very high purchase figure whenever the tickets are being sold. Furthermore, Manchester United has various distribution channels which enable it to deliver new products introduced into the market. Furthermore, these channels can be used by the Manchester United to obtained feedback from the market concerning their products and performances. Weaknesses

From the website of the company, it shows that the major weakness is the products and product variety. It is evident that the company has been introducing many diverse products at different occasions. All these diverse products have been introduced from the jersey to credit cards indicating that the company has exploited the available sources of income within the company. This action needs to be researched as soon as possible so as to help the company to situate and analyze it products, adopt the use of effective instruments such as the Boston Matrix which will help the company to identify that the products are doing well in the market. Lastly, the club has been so affluent, and it is still operating on such a high level, there is a worrying within the management of the company that it will loose its origin, which has a diverse concentration of the club from football to the proceeds. Such moves might have a great effect to its fans because the fans come from all over the world. Opportunities

Penetration of the Manchester United to the American market has been one of the major opportunities to the company. The company will in future structure its club by entering into coalition with the New York Yankees. The New York Yankees is one of the well-off teams in the world. This will assist the company by ensuring that exclusive distribution channels are established in the United States of America. Through this the company will be in a position to enter and present their products in a new market. Furthermore, the Manchester United will be in a position to lead all the football clubs in the America, though there will be superior height of risks concerned. The managers believe that by entering a coalition with the Yankees, this threat will be reduced (CNN, 2010). Threats

Manchester United operates under a great threat in this field because other big teams like Manchester City and Arsenal which are currently improving in their performances. These and other teams have become very big competitors to the club. Furthermore, the Manchester United FC has been facing internal threats to the team. There is a frequent change of leadership in the company making the club to be disunited. Nonetheless, this will affect the sale of merchandise. Lastly, the club is lacking enough finances for financing academies and junior football, so that they can train the best footballers to ensure smooth succession in the future. PEST Analysis of the Manchester United

The club’s decision has been affected by macro-environmental factors such as the changes in taxes, new laws, demographic changes and the changes in government policy. The managers of Manchester United can classify these as the political, economical, social and technological factors. Political factors

This comprises of the laws which govern the issues affecting the activities of the club. Currently the team is undergoing a problem of paying out its debts which amount to $1.5 billion, a figure which was misappropriated by the greedy owners. The fans of Manchester United from England are preparing to join their efforts to force legislators to consider pro-football legislation in parliament which will aim at fighting the total arrears which has not being paid because of corrupt owners who misuse the funds of the club. Such an action has exploited the loyalties of fans of Manchester United. Economical factors

The club has boosted the economy through employment opportunities which have been created to the players and the officials. The positive effect of Manchester United FC is felt globally because they employ the best players
globally. Secondly, this soccer club has been a catalyst in the regional development because of the positive financial flows which are generated by the supporters of the team across the world. Lastly, the club has a positive influence on the economy because its officials are thrown from all over the world. These officials spend an average of 15 � on basic needs such as food, drinks etc. in a single match. If the supporters are from foreign countries they bring in foreign currencies which will eventually boosts the Balance of Payments in the country Technology

Technology has contributed positively to the foot ball games since the players are capable of playing at night due to the availability of electricity. Furthermore, technology has facilitated various people from different parts of the world to watch football irregardless of there locations. Technology has facilitated fans of the club to obtain information from the internet concerning the performances of the company. This has benefited those Manchester United fans to get updates incase they had missed to watch the game. Social

Manchester United just like any other football team has united many people especially the funs of football. People have interacted all over the world because of football. People from different age groups normally watch football because it is either their favorite game or because they want to watch just for leisure. Football has become part of the society in the current world, everybody in the world talks of football, either English Premier League or the world cup championships. This is very important since it has affected the society in a positive way i.e. it can create employment in the region. For example, the world cup will be in South Africa this year. The South African government will collect a lot of revue in terms of taxation, sales of tickets and any other taxable stuff. This will have close relationship with the social cultural factors though indirectly (Masterman, 2009). Manchester United has contributed a lot in the context of the social cultural factors as it employs players from different parts of the world. They normal select stars from different leagues and employ them. From a research done by Masterman, Manchester is the leading club in the payment package they offer to its employees. Business strategy

The team has carried research concerning their product development in the market. This is very important as it will help the team to improve their performance in their product in the present market before strategizing on how to enter the new market. Conclusion

Manchester United is the leading team in the football industry and to maintain this position, they have to focus on the market and the needs of its clients and followers. The company has further improved on their product through carrying research; these improvements have brought success in the club and improve the support of the team. The board of directors has also done their best by employing the best players to represent the club. This will make the team to perform well in the field whenever they have a game. Furthermore, these directors ensure that the discipline is well maintained in the company because the fans and its competitors are closely watching what is going on in the company. Bibliography

Andrews, D. L. (2004) Manchester United: a thematic study. Routledge: UK. Barthold, D. 2009. The Business of European Football. GRIN Verlag, (3). Pp 36-38 Masterman, G. 2009. Strategic Sports Event Management: Olympic Edition Hospitality, Leisureand Tourism Series. Butterworth-Heinemann, (2). Pp 65-67 Manchester United. 2008. The Official Manchester United Annual 2009 Official Manchester
The Manchester United Football Club is one of the most popular football clubs in the world. This English football club has its base at Old Trafford Stadium, which is located in Trafford, Greater Manchester. Manchester United is the founder member of 1992 Premier League. Being the second most successful team in the entire history of English football, Manchester United Football Club has over 330 million fans globally. The club has been participating in the top division English football since 1938. The Manchester United Football Club is also popular by its nickname, “The Red Devils”. In November 1986 when Alex Ferguson became the manager of the Club, Manchester United reached to the peak of success and won 20 major titles.

The Manchester United Football Club has won the Premier League and First Division 17 times and is trailing behind Liverpool by just one title. Manchester United became the first English Football Club to win the European Cup in 1968. The Club has the record of winning maximum number of FA Cup titles. From late 90’s until date, Manchester United remains one of the richest football clubs with a total value of £897 million. In 1998-99, Manchester United became the first ever and the only club to win the Treble. In the year 2000, the club became a founding member for the G-14 group. This is a group of the Big European football clubs. In the year 2005, American businessperson Malcolm Glazer took a controlling interest in Manchester United. With the Red Football Ltd as the investment vehicle, Malcolm took 75% control of the club and the club was de-listed from the Stock Exchange. Initially the jersey of Manchester United was yellow and green in color but in 1902, the club changed it to red jerseys with white shorts and black socks. Manchester United has sponsorship deals with various companies.

AIG, Nike, Audi, Budweiser, Betfred, Xfm Manchester are some of the sponsors for the club. The Manchester United football club has its own football ground at Sir Matt Busby Way, Old Trafford, Greater Manchester, England. The stadium opened on 19 February 1910 and the total capacity of the stadium is 76,212. It is a difficult job to determine the greatest rival of Manchester United Football Club. According to some people, Liverpool is the biggest rival of Manchester. Leeds, Manchester City and Arsenal are also the other known rivals of the Club. So far, the Club has bagged 3 European Cup/ UEFA Champions League, 1 UEFA Cup Winner’s Cup and 1 European Super Cup. Manchester United Football Club has also won 1 Intercontinental Cup/ World Cup Championship. Facts:

· 5% of the world population is the supporters of Manchester United Football Club. · The Club has won 10 Premier leagues, 7 First division leagues and 2 Second division leagues. · Manchester United won 11 FA Cups, 2 League cups and 16 FA Charity/Community Shield.

In the next few articles, let us understand about the sports team’s brand-building strategies. The most common strategy followed by most of the teams is: Sponsorship with other global brands Being associated with other international brand names lends global presence to brands as they go worldwide. If we talk about the most richest soccer club, Manchester United, they have 44 official sponsors associated with the club. One of the biggest tie up then in the year 2002 was Manchester United’s tie up with Nike. Both Manchester United and Nike gained in global stature after the announcement of their global tie-in 2002.

Now such is the case that Nike has to discuss a £303 million kit supply deal with Manchester United and they might well have to anyhow shell out this huge sum of cash if they want to maintain their association with Manchester United. One month from now, this strategically important meeting will be talking place and the American sport wear company will have to come up with an enormous sum to satisfy the club’s owners. The ‘Swoosh’ logo has adorned some of the greatest teams and players in the history of the game, including Manchester United legends Eric Cantona, Ruud van Nistelrooy and Cristiano Ronaldo. Of the current squad, Wayne Rooney, Javier Hernandez, the Da Silva twins, Chris Smalling, Patrice Evra, Paul Scholes and Rio Ferdinand all wear Nike boots along with the standard kits. In recent years, Manchester United has formed commercial alliances with a number of global players in other industries: Vodafone, Pepsi, DHL and Aon were all added to the club’s sponsorship list.

Under these arrangements, the club gains from sponsors’ international reputations and sponsors gain from their association with a such big sports brand. And Manchester United is talking full advantage of this to reach out to new segment of soccer fans and in turn helping in strengthening its brand equity. In July, United announced a staggering £357 million deal with General Motors for the Chevrolet logo to be worn on their shirts for seven seasons from 2014. Chevrolet’s eight-year partnership with Manchester United kicked off this summer with a series of friendly matches, bringing the world’s favourite football team to their fans in South Africa, Europe and China. The support for, and commitment to Manchester United and its passionate fans worldwide will go far beyond the pre-season games as General Motors look to join the fans in celebrating all that is beautiful about the game. One of the biggest logistics company which is present in 220 countries and territories worldwide has tied up United in 2011.

DHL were made responsible to undertake a range of logistics services on behalf of Manchester United for three years. Just like DHL, Manchester United stands for passion, teamwork and can-do spirit. And it’s those same characteristics that have enabled both DHL and Manchester United to remain at the top of their game and thus join together and build its brand. The last two deals done recently by Manchester United were with the two sponsors from China (Wahaha, a soft drinks manufacturer and China Construction Bank (CCB). Both have tied up for a three year deal. CCB will hold the exclusive rights to produce the official Manchester United branded credit card in Mainland China. Wahaha has been the largest beverage producer in China for the past 11 years and will be the club’s first official soft drinks partner in the country. This is just one of the many strategic decision taken by this 135-year-old soccer club from Britain. In the coming article, I would write about Manchester United’s Asian Strategy, mainly highlighting its entry into the Indian market.

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