SWOT Analysis on Manchester United - Report Example

SWOT ANALYSIS ON MANCHESTER UNITED By: + Football has become a sport that is watched by a mammoth of crowd worldwide especially the English football. Unlike in the past when only some parts of South America and Europe seemed to be the ones interested in this sport, continents like Asia, Africa and Australia have all shown ardency in the game. One of the most successful clubs in the world is England’s Manchester United Football Club (MUFC) with fans from almost every corner of the world following the team. Interestingly, football is not just a sport anymore; it is a business incorporating the same strategies as others. This paper seeks to analyse the SWOT analysis of Manchester United. Furthermore, the paper will seek to clarify the notion held and propagated by many that a team’s performance on the pitch seldom affects its revenues. The outline of this paper has the first part dealing with presenting this argument followed by analysis of the same. Then, evidence fronted by both the opponents and the proponents of this notion will be scrutinized in without bias. From the onset, this paper asserts that a team’s performance on the pitch is critical, and it has direct influence on the SWOT outlook. Argument As stated above, there are some people with a view that a team’s, in this case Manchester United’s, performance is unrelated to its business revenues. To validate this argument, (Szymanski, 1998) reveals that football clubs, more so MUFC, normally invests in other ventures. Since these investments are not related to football, the profit will still flow in irrespective of the team’s pitch performance. While this assertion is true, it lacks clear understanding of the source of that money. First, clubs get their revenues from the fans that flock the stadium, sale of merchandise and most importantly, their level of competitiveness. For instance, clubs participating in the Champions league have more monetary gains than those that are not. Additionally, the stage to which a club gets, again, determines the amount of money it gets (UEFA, 2014). In order for the fans to buy tickets for their clubs, the team’s performance eon the pitch has to be impressive. This is evidenced by the occurrence in 2012/13 English Premier League (EPL) season when Arsenal’s performance deteriorated, and a section of fans threatened to boycott the matches. In order to quell the unrest which could have been catastrophic to the business, the arsenal management responded by signing a Real Madrid player, Mesut Ozil as Cleland and Dixon (2014) refutes. Still, this argument of pitch performance being irrelevant to overall financial outlook of a club is rendered invalid by observing other smaller clubs playing the EPL. It is, sadly, noted that smaller clubs have to sell some of their rising stars in order to remain afloat because of the fan base and lack of involvement in the top-flight football. Therefore, a team’s pitch performance is vitally important, and firmly intertwined with its financial capabilities. MUFC SWOT analysis In fact, conducting a SWOT analysis for MUFC will show that this notion is indeed invalid. One of the major strengths of MUFC is the brand name, which has seen many fans around the globe subscribe to its services. Szymanski (1998) equated MUFC with Coca-Cola implying that the club’s success is evident despite competing in an overcrowded field. Further, it is asserted that the reason for this success is the fans’ preferences of the brand name in comparison to the rivals. In essence, it means that the many fans following Manchester united by buying its services do so because of this brand name. The brand name has been a result of the performance eon the pitch, not other revenues. In other words, had MUFC been performing poorly, the fans would hardly be supporting, hence a plummeting of income. Secondly, MUFC has an excellent marketing strategy that entails global presence, sponsorship with various companies and connecting with fans around the world. In a bid to ensure that the brand continue around the world, MUFC has listed Audi, AON, Chevrolet, Turkish airlines, Sharp and others as some of the sponsors . Normally, this helps in spreading the club’s brand name in various parts of the world. Worldwide, the club has 333 million fans with 190 coming from Asia meaning the club’s popularity is indisputable (Schwartz, 2014). As a result of these two strengths, a third one is evident in the case of MUFC where revenues collected are connected to the strengths above. First, there is the role of fans where 29% of the club’s revenue is collected from the ticket sales. These include the European and domestic matches; a further 44% comes from the media and broadcasting. Concisely, commercials and sponsorship account for the remaining 27% of the club’s income (BBC, 2014). A critical analysis of these strengths underlines the earlier assertion that a team’s performance will definitely affect the club’s finances. Notwithstanding these strengths, MUFC has some weaknesses one of which is putting emphasis on the profit without involvement of key stakeholders. It was reported that the club had produced credit cards and jerseys without seeking an opinion from their faithful. While the club’s decisions do not need an approval from the fans, consultation would have been imperative since the products will then be sold to the same group. Secondly, failure in player buying when a transfer window opens has proved detrimental recently. That is not to say the club does not but players; it either buys too expensively or buys players without a proven record. Recently, the club brought it Monaco’s Radamel Falcao who was not fully fit, and this is proving to be counterproductive for the club. Furthermore, two years ago, the club released Pogba to Juventus whose performance currently is top class. In essence, the weakness at MUFC is lack of informed decision when it comes to the issue of players Opportunities First, MUFC could seize the rising opportunities in the US, China and India where football is starting to flourish. Recently, MUFC’s major rival, Manchester city acquired rights to own a new football club, New York City Football, that will start playing in the American’s Major League Soccer (MLS). Because of the passion that Americans have started to exhibit towards soccer, MUFC could seize this opportunity. Expanding its Asian supremacy would also increase both its revenue and brand name as it currently leads in terms of fan base in the continent. Threats MUFC threats include the saturation of the market in the UK with other clubs buying players every season. As noted above, MUFC’s performance on the pitch is important to its revenues, but this is facing threats from other clubs. In the past, the club faced competition from one team, Arsenal, but this has since changed with other clubs like Chelsea, Liverpool and Manchester city investing heavily in the game. The situation is not bad at home alone; the European competition has also seen other teams taking the game more seriously and investing tenaciously. In addition to this, the club’s academy has not shown any strong indication that its players will be strong enough to compete in the future. Apart from Adnan Januzaj who has been prolific on several occasions, there is a threat to the club’s future competitiveness Justification In order to help in strategic marketing decision-making, several steps need to be taken at MUFC. Firs it is imperative to have a clear understanding of what strategic marketing entails in order to make an informed decision. According to Leleur (2012), this process entails the planning and execution of conception, promotion, pricing and distribution of goods, ideas or services. Currently, success in the business world is evident to those to who have the capability to build an outstanding brand, create a fervent demand, and promote the sales with vigour whilst ensuring consumers remain loyal to the company. In the case of MUFC, the brand is already created but distribution and pricing falls short of convincing clients. As noted earlier, the company, like other football clubs, seldom involves the fans who are vital to the business. This approach is detrimental as it could potentially hinder the very important aspect of distribution. If the fans do not embrace a service the club introduces, it could prove to be very hard to sell elsewhere. For success to become a reality in any organisation, teamwork for all the involved parties is crucial as Baines and Fill (2015) states. Distribution of services in the case of MUFC is well organized as it has made it possible for its fans to watch its matches wherever they are. Usually, this is possible through TVs and websites where the fans can also buy the merchandise. Within the marketing strategy exists two vital sections: Decision-Making Unit (DMU) and Decision-Making process (DMP). In the DMU, three categories of people are important, and ought to be the focus of the decision made by the top management. These include the buyer or user meaning the person or groups of people who will end up with the product. Before a product or a service is developed, this group need to be analysed, and the need for the service identified (Leleur, 2012). The second category entails the influencers who are individuals, analysts or groups of people whose opinions will greatly influence the sale of the product or service. The influencers may not directly determine the volumes of the sales a company shall make but they can significantly influence the perceptions buyers have (Leleur, 2012). Concerning MUFC, the influencers are the fans who frequent the stadium every week hence their input is needed. Because it is not realistic to consult the entire fraternity, the club could engage them online. The third category involves the decision-makers whose mandate is to first analyse the user’s need, influencer’s opinion before proceeding to make strategic decision. Even though many times these are viewed as the people who influence the products, their success is dependent on how well they engage the other categories of people by a way of investigating (Leleur, 2012). At MUFC, this seems to be lacking in some areas, and this could be pernicious to the business in the future. However, if this observed and corrected on time, it could benefit the club as it has been proved imperative to the success of any organisation. In the DMP, the first step is about identifying the problem followed by seeking the solutions for the same. Valuation of proposals comes third and selection of the most convincing solution follows. Once a need has been met, a review of performance is imperative where if the product does not perform well, it is rectified. Often, the last stage of the DMP will highly depend on if opinions were sought at the problem identification stage (Leleur, 2012). Some of the products –like the credit cards and other merchandise- MUFC produces are often a result of the club’s sole invention. That is to say, the fans’ opinion is not sought, which explains the reason the credit cards did not do well. Therefore, if the strategic marketing is going to change at MUFC, adhere of the DMU and DMP principles is needed. In conclusion, MUFC has real possibilities of thriving in this field despite the ever-increasing competition. As is the case with every other business, a brand is vitally important; since MUFC has this, it is appropriate to state its success could improve. Besides priding itself for a global brand, the club’s opportunities are ample but only beneficial if seized. The US market has offered an opportunity the club could take. However, strategic management at MUFC ought to be conscious of a number of things including the importance of various stakeholders. In this case, the fans are important, and any product developed for their consumption ought to be subjected to the DMU and DMP process. Then, when buying and selling of players becomes inevitable, the club’s management needs to remember that its performance on the pitch is joined with its financial trends. 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