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Transcript of Man Chester United
MANCHESTER UNITEDTRYING TO ESTABLISH A
GLOBAL BRAND
Arup Ganguly -6Ashish Sharma-7Ashok Mathur-8Avinash Singh-9
Chander Shekhar-10
Case Background
• Manchester United a.k.a. (ManUtd) – Most famous and financially successful football clubs in the world
• Originally founded in 1878 as Newton Heath Y and LR Cricket and Football club
• Went bankrupt in 1902 and was reformed as ManUtd• Listed on LSE in 1991 with Market capitalization of $466
MM• 200 fan clubs – 151 in UK, 25 in Ireland, 24 in rest of the
world• 1999 tour to Australia and China helped raise the brand
profile even higher• Fan base of 50 million worldwide – 5 million in US, 30
million in Asia and 15 million in Europe
ManUtd’s recent successes
2002 2001 2000 1999 1998
FA Premier League
3rd Champions Champions Champions 2nd
FA Challenge Cup
4th round 4th round n/a Winners 5th round
European Champions League
Semi-final
Qtr-final Qtr-final Winners Qtr-final
Alliances and Tie-ups• Prior to Asian-Pacific tour, tie-up with Umbro – Sportswear
supplier and Australian Woolmark company• FA Premier League TV contracts for season 2001/02 for
£1.6 billion• MUTV – TV channel airing ManUtd 7 days a week• On line access to the club through www.manutd.com• Global sponsorship alliance –
– Four year sponsorship deal with Vodafone for £30 million– Appointed Japan Sports Vision as its master merchandising
licensee partner in Japan in a five year deal– Sponsorship alliance deal with Budweiser from 2002/03 season– £300 million over 13 years deal with Nike as sponsors for their
uniform and merchandising partner
Source of Revenue
Revenue 2002 –
£ MM
2001 –
£ MM
Gate Receipts and programme sales 56.3 51.8
Media (mainly TV) 51.9 31.2
Commercial (sponsorships) 26.5 27.4
Merchandising 11.4 19.2
Total Revenue 146.1 129.6
Launched two financial services products in 1998 – “Save and Support” savings account with Britannia and the club Master CardOpened stores in Singapore, Dublin, Kuala Lumpur and Cape Town in 2000Investment in two hotel projects – The Quality Hotel (25% stake) and Sleep In (31.4% stake)
Questions
1. Discuss and explain how the different alliances can increase the competitiveness of ManUtd
2. Which environmental factors are most important for ManUtd to monitor in the international environment (political, economic or socio-cultural factors)
3. What are the main threats to retaining ‘Manchester United’ as a global brand
Discuss and explain how the different alliances can increase the competitiveness of ManUtd
• Vodafone: Apart from traditional sponsorship, support in launch of first WAP-service to provide
• All latest club news, • Live match updates and • Other groundbreaking stories.
Delivering self-produced content to global audience through 3G wireless, the Internet and broadband TV thus giving a competitive edge to Manutd over other clubs by connecting more closely with its global fans
Contd…
• Japan Sports Vision (JSV) – Leading sports retailer with over 25 stores across Japan. Tie-up provides – – 2002 World Cup evoked huge interest in football in
Japan and the whole Asian area;– Excellent strategic move by association with JSV, a
leading sports retailer of Japan at the same time gave the competitive edge to ManUtd for their merchandise sale
– With a five-year deal with JSV which has over 25 stores across Japan, ManUtd ensured the recurring revenue through high thruput outlets of JSV
Contd…
Discuss and explain how the different alliances can increase the competitiveness of ManUtd
• Budweiser – World’s best selling beer, available in more than 80 countries-– Will have exclusive beer-pouring rights at club’s Old Trafford stadium, – Receive on-field, in-stadium and concourse signage,– Have right to use official marks and logos of the club in advertising,
promotions and packagingResulting in,– Association with Budweiser gives ManUtd a cutting edge advantage in
enhancing its brand image;– Direct and in-direct brand communication of ManUtd by usage of its
official marks and logos by Budweiser in its media campaign and packaging in more than 80 countries;
– Enter the elite club of Budweiser’s sporting association who was official beer of FIFA World Cups in 2002, 2006, Chelsea Football Club, Major League Soccer, NBA, Salt Lake City Olympic Winter Games
Contd…
Discuss and explain how the different alliances can increase the competitiveness of ManUtd
• Nike – Deal for 13 years with the arrangement – – ManUtd turning over uniform-replica merchandising business to Nike– Nike will pay royalty for the use of ManUtd’s brand, develop
merchandise and sell through its global networkResulting in,Win-win situation for both the brands wherein
ManUtd – Readily available global distribution network of NikeEarn royalty for use of its brandAssociation with Nike, a world leader in sportswear, enhancing its brand imageNike –Ready available 50 millions fans of ManUtd worldwide as customers Association with ManUtd, the most popular and successful soccer club, enhancing its brand image
Discuss and explain how the different alliances can increase the competitiveness of ManUtd
Which environmental factors are most important for ManUtd to monitor in the international environment (political, economic or socio-cultural
factors)
• Most important factors in descending order-– Socio-cultural – Awareness
and interest in Football critical for ManUtd to enter / expand in a particular market
– Political – Having players on board of different nationality, any turmoil in political relationship between UK and the respective country can hamper the association of the player of that country with the club
– Economic – Per Capita income and spend can also be decisive factor for ManUtd
Socio-Cultural
EconomicPolitical
At times more than one factor can be important for consideration, depending on the respective country
What are the main threats to retaining ‘Manchester United’ as a global brand
• Manutd derives its brand power from its football stars – – Retaining and extending the contracts with
star players – – Consistent performance on-field
• Consistency in the reputation of the brand with whom ManUtd has association
Current• Expected to hit gross turnover of £300
million for FY 2008, growth by 20%• Market capitalization at $2 billion• Asia tour scheduled from July 2009• Ready to enter India thru –
– Tie-up with Airtel for sponsorship deal– Seeking a licensing deal for a multi-city rollout
of upscale café bars in India– Association with AIFF to spot young talent
Current Issues
• AIG confirming non-renewal of sponsorship deal with ManUtd
• Retirement of three veterans – Ryan Giggs, Gary Neville and Paul Scholes
• Star performer Cristiano Ronaldo expressed his desire to join Real Madrid
• Insufficient finances into academics and junior football
SWOT Analysis
Strenghts:
Global recognition
Exceptional reputation
Ticket sales
Weakness:
Flourishing hence losing its origin
Opportunity:
Penetrating US market
Research based product development
Threat:
Star performers being taken away by rival clubs
THANK YOU!