The of Samsung Group and Chelsea Football Club - Case Study Example

SOCIAL INCLUSION The case of Samsung Group and Chelsea Football Club by Student’s name Code+ course name Professor’s name University name City, State Date Introduction Social inclusion is a novel business practice that entails the use of social partnerships between a corporate firm and a social entity (Anderson & Narus 2000). The partnership, usually meant for mutual benefit, is a common practice in the world of sport where most big multinationals commit their funds to promote the well being of the sporting associations in return for marketing and brand image promotion. The partnerships, which are part of the social responsibility concept of a business, are strategic arrangements that the business concerns invest in with quite a number of objectives. The idea of social inclusion has been a topic for debate and controversy for a considerably long time. The proponents of the idea credit it for the role it plays in marketing a brand, the social responsibility it exhibits as well as the brand image it enhances (Ellram 2005). Social inclusion is associated with good will and positive brand image. When a company makes an effort to partner with a social concern such as a sporting organization, there are many benefits that come with the partnerships. Worth noting is the fact that the benefits are mutual as they are felt and experienced by both parties. This paper seeks to evaluate the concept of social inclusion in light of the Samsung-Chelsea partnership. Objectives of the paper The objectives of this paper revolve around establishing a clear understanding of the concept of social inclusion light of how the concept can be advantageous or challenging to the concerned parties. The first aim of the essay is to establish a clear description and understanding of the concept of social inclusions. This will entail the description f the principles and justifications behind the idea. The second objective is to establish a clear understanding of the firms that make up our case study. This means that the firms will be evaluated in terms of how well they perform in their specific sectors. The description of the firms will as well entail a clear understanding of the respective sectors and the main objectives of such sectors. The third objective of the paper is to link the objectives of the company to the overall aims of the sector. The fourth objective of the paper concerns itself with explaining the advantages and disadvantages of using the chosen sport, football, as vehicle for social inclusion. The last objective will concern itself with the provision of recommendations and potential improvements that can be embraced as a way making the relationship in question a better partnership. All these objectives, having been achieved, the reader will be in a position to understand the concept of social inclusion in the fields of telecommunication and sports. Definitions Social inclusion is a business practice that entails the participation of an organization in social affairs. The organization may participate in such social affairs as sport and entertainment in many ways, the most common being the sponsorship of one of the clubs in a particular sport (Lareau & Horvat 2004). Social inclusion is a strategy aimed at making a firm socially responsible and improving its corporate image. Working partnerships are relationships between two or more organizations aimed at achieving mutual benefits. The aspect of social inclusion becomes partnership when the two organizations concerned stand to gain from the partnership (Kruss 2006). Essentially, the major distinction between business partnerships and social inclusion arrangements is the fact that with social inclusion, the organization acting socially responsible does not have to work with one particular organization, and if it does, it does not stand to gain much. The working partnerships on the other hand are concerned with the relationship between an organization and a single entity in the particular social field. The case study organizations Chelsea Football Club The identified organizations for the sake of this study are Chelsea football club and Samsung Group. Chelsea, a UK based football club operates in the football sector. The club is among the top football clubs in the entire European continent having won the UEFA champions league last season, the club is celebrated as one of the best English clubs in Europe. Arguably the best performing in terms of fast growth, Chelsea has invested billions of dollars in the purchase and training of players. The club, which owns a large stadium at Stanford bride, owns quite a large number of assets and has billionaire Roman Abramovich as the major shareholder. The club, popularly referred to as the Blues, acquired this name from its close association with Samsung Mobile. The sector, in which Chelsea football club operates, football entertainment sector, is quite competitive. The sector of sport entertainment, especially the football aspect of the sports is quite involving as far as financial aspects are concerned. Arguably, football has the largest number of fans in the entire world. The most watched game across the continents is now highly commercialized. Gone are the days when football was purely for entertainment. The sector is currently more commercial than anything else in the entertainment industry. Much like the movies, football has been commercialized to the extent that talent and passion no longer do count (Kurtinaitiene 2005). What counts is the amount of money the club is willing to spend on training players and signing in new ones. The competition currently in the football sector is as stiff as any other business industry. The key objectives of the sector include: maximizing the wealth of the shareholders, gaining as much support as possible as well as emerging the top club in the field of sport and entertainment. The Samsung group Debatably the most prominent manufacturers of quality electronics, Samsung Mobile has its headquarters in Seoul, South Korea. The company, which was named the biggest mobile phone and electronic seller globally, has achieved a great breakthrough in the field of telecommunication technology (Michell 2010). The company deals in the production of mobile phones, electronics such as televisions, as well as computer technology such as laptop computers. Known for its unique software design, Samsung is the greatest competitor to such traditional giants as Nokia and Sony. The technology adopted by the Samsung group can only be compared with that of Apple Computers. Arguably, Samsung is the most profitable company in the telecommunications industry. The major objectives of the telecommunication industry revolve around innovation and business success. The major aim of the Samsung group, much like most of its competitors, is to maximize the wealth of the shareholders (Kim et al 2004). The group is a business and like any other going concern, the group concerns itself with the maximization of profits and consequently the shareholders’ wealth. Another key aim of the company is to be socially responsible through engaging in such social activities as sports and general social welfare. The company as well aims at achieving high quality technology. The level of technology that the company endeavors to be associated with is high class technology that should give it an edge over the competitors. For this reason, the company has widely invested in continuous improvement. The relationship between the two organizations The relationship between Chelsea football club and Samsung group is a voluntary cross-sectional contract that has a number of features (Kim et al 2008). The contract is renewable after every five years. The contract is in such a way that the club should use the Samsung brand name as their symbol. This means that the Samsung group is the provider and designer of the clothes worn by the Chelsea players during the games. The Chelsea football club based in England has come to be referred to as The Blues. This is because the clothes they wear are blue in color following the theme of the Samsung group. The group has been working with Chelsea for well over a decade and the group has recently renewed its contract with Chelsea. Social inclusion issues and characteristics of the Chelsea-Samsung relationship The most notable characteristic of the relationship between Chelsea and Samsung is the fact that, it is meant for mutual benefit. The two organizations benefit from one another in the sense that they create some kind of euphoria in the market. Rationally, the success of one organization has positive impacts on the performance of the other (Lee et al 2007). For instance, the fact that the club has been a good performer lately has greatly impacted on the sales of the Samsung products. Typically, the relationship must yield some gains for both parties. In this relationship for instance, Chelsea gains in the sense that it gets associated with novel technology. It may not be easily noticeable, but the impact on the sales of Samsung that is associated with such a prominent player as Didier Drogba’s advert is overwhelming. Another characteristic of the relationship is the fact that it is long term in nature and can be renewed where there is mutual agreement to that effect (Lubell et al 2002). The fact that the relationship extends for five years after every renewal period, means that the relationship is strategic in nature. This relationship is associated with social responsibility and can be termed as a way of giving back to society. By engaging in such sports as football, Samsung is said to have acted as a socially responsible firm, given the fact that football is a game that is loved by many people in the world. such social inclusion decision have been described by gurus in the world of business as ways of killing two birds using one stone. In other words, through engaging in social inclusion, a firm markets itself, whilst acting responsibly. Arguably, the most important feature of the social inclusion relationship is both Samsung and Chelsea are best performing organizations in their respective sectors. As such, people tend to think of the relationship between the two as being an A-1 relationship. They form what has been referred to as the winning tag. The decision to settle on Chelsea as the best club to sponsor was based on the presumption that the best performing club was likely to have many global fans. Research indicates that the fans of a team are likely to be so closely affiliated to the products of the sponsoring organization. Thus, Samsung considered Chelsea as being a favorite among many fans. The assumption therefore was that such fans would later associate themselves with Samsung. As such, the market for the Samsung products would widen. Arguably, the fact that Chelsea players, who are idols to many people, appear in the Samsung adverts is a great motivation to the buyers of the Samsung products. A typical fan will associate a Samsung product with such legendry players as Didier Drogba. Social inclusion is a way of reaching out to many. This means that by encouraging and participating in social inclusion, it is likely to reach out to many people (Matten & Moon 2005). The explanation is simple. Such a team as Chelsea is made up of people from various backgrounds. Such backgrounds may include the social classes such as the black people, the white races and so on. Since the team is a multi-cultural setting may mean that the organization’s products are capable of being accepted by all cultures. Through using such figures as Drogba in Samsung adverts, the products have found a wide market in Africa. Social inclusion is a cost sharing strategy. The inclusion of an organization, in the strategy of another, means that the goods done by either firm is linked to the corporate image of the two (Portney 2005). The most appropriate explanation can be the concept of social responsibility. Where a social entity such as a football team is associated with a business concern, all the social responsibilities executed by the business firm is connected to the social entity. Similarly, the socially responsible behavior of the social entity is associated with the business concern. As such, the two won’t have to invest in socially upright behavior in the same areas as that would amount to duplication of effort. This way, resources are saved. In simpler terms, all credits that accrue to Samsung Corporation can as well be associated with the success of the club. This same way, all achievements of the club is in one way or another linked to the corporation. Benefits of social inclusion as a general concept Social inclusion has many effects – both direct and indirect – on the firm’s performance and position on the global market. Most of the impacts of being associated with social participation of a business concern are positive and may place an organization a notch higher in the market (Warschauer 2004). The choice of social partner is a very important aspect as the performance of such an entity is compared and directly linked to the performance of the business corporation. For instance, if a company chooses to participate in social activities, it would add no value to the organization to work with a poorly performing team. The point here is, if an organization is in partnership with a strong social partner, just like Samsung is with Chelsea, the sales and market share of the mobile business organization is likely to be good. The second merit of working with social inclusion is that it is a way of marketing the product. Using an appropriate social event can impact positively on the organization. For example using football can enable an organization to reach many people that constitute a wide market. The decision to use such a game as football, as part of the social inclusion program is one of the ways in which an organization can access cultural diversities. This is because social events are international in outlook and can help an organization establish an international client base (Simmons 2000). Unlike optimized marketing, social inclusion is a better way of achieving continual improvement in the market share. The third merit of social inclusion is that it is an element of corporate social responsibility. Arguably, social responsibility is one of the most effective novel ways of improving the corporate image of an organization (Zeitlin et al 2005). In other words, giving back to the society through participating in social affairs and events is a very effective way of improving the name and image of the company. Essentially, social inclusion is a type of social responsibility that is made through contractual agreements. As much as critics have argued that corporate social responsibility is not in line with the shareholders’ wealth maximization objective, there is sufficient evidence that it has long-term effects on the same. A socially responsible firm is likely to gain the acceptability in the market and society at large (Whaley 2003). As such, their sales are likely to be big. This implies high turnover. High turnover is associated with high revenue and net income to the organization. Such income is considered an increase in the wealth of the shareholders. Challenges of social inclusion Much like corporate social responsibility, social inclusion can be a serious cost to the organization. This is especially so when the organization spends heavily of the social inclusion efforts with no direct reward (Shin & Jeong 2001). It would be more of a cost than a benefit to a firm if such a firm was to spend billions on sponsoring a social entity that does not have a positive impact on the development of the firm and the performance in the market. Assuming a company was to sponsor a cricket team, what would be the benefits to the firm? First, cricket is not such a popular game and second, the game is not global in outlook. This is to say that the social partnership in this case will be a one way benefit since clearly, the organization will not benefit at all. In this case, the social inclusion arrangement becomes a burden to the organization. Advantages of using sport as a social inclusion strategy There are many advantages that accrue to an organization using football as a social inclusion vehicle. One such advantage is that through sport, one can reach the target market (Desbordes 2012). The different sports in the social world can be associated with different age brackets and social classes. Football for example can be associated with the youth and generally it is linked to men. As such, the company intending to use football as a social inclusion vehicle can perfectly capture the male and youthful population. Similarly, a firm seeking to reach the old and affluent population can use such sport as golf. In other words, sport as a social inclusion vehicle can be used in reaching the target market. The second advantage of using sport as a social inclusion vehicle is the fact that sport is an international thing (Maguire et al 2002). It is observed in practically all countries, sport is an integral part of social life. As such, engaging in social inclusion is equal to going to the grassroots level and interacting with the people directly. This works positively for the firm as it reaches people from all corners of the world. Disadvantages of using sport as social inclusion vehicle Sport may not be the best social inclusion vehicle since it may not be appealing to all people. There are people that are less concerned about sport to the extent that they do not know which corporation is partnering with which team or sporting club (Warschauer 2004). It becomes difficult therefore for such people to feel the impact of a corporation partnering with a social sporting club. Another disadvantage of using sport as a social inclusion vehicle is the fact that it can be a costly affair (McCarthy et al 2000). Considering the fact that sponsoring a sporting club can cost millions in terms of funding the garments and maintaining the stadiums, the social partnership can be a serious sunken cost. Sunken costs are those costs that are not associated with any corresponding revenue. Improvement suggestions In the Chelsea-Samsung relationship, I would make various recommendations. The key recommendations that can be made in regard to this particular relationship revolve around the duration of the contract, as well as, the issue of diversity. I would therefore recommend that the relationship be designed in such a way that a third party is included. This may bring about diversity in the partnership if the third party is brought in from a different sector such as a different sport, for instance, basketball or cricket. This way, the Samsung group would reach a wider market. The second recommendation I would make is that the relationship renewal period be shortened. This may mean that the contract period be reduced to two years. This is because, this way, the negative effects of the volatility of the sport will not affect the organizations. Football is one unpredictable sport and the performance of Chelsea could drop at any time. The long contract period may hinder the Samsung group from withdrawing their support for Chelsea. Conclusion In conclusion, it is rather obvious that social inclusion is a critical novel concept in business that helps a firm effect its marketing and social responsibility objectives. Arguably, social responsibility is the most effective way of improving the organization’s corporate image. As such, social inclusion is a likely way of enhancing the corporate image of the organization. Additionally, social inclusion can enable an organization participate in social entrepreneurship. Among the key merits of the concept is the fact that social inclusion can enable an organization reach its target market. Using sport as a social inclusion vehicle can be both advantageous and discouraging. This is because it can enhance global marketing and be costly to the organization at the same time. Primarily, social inclusion is the most appropriate way of engaging in profitable corporate social responsibility. Reference list Anderson, J. C., & Narus, J. A. 2000. A model of distributor firm and manufacturer firm working partnerships. the Journal of Marketing, 42-58. Desbordes, M. 2012. Marketing and Football. Routledge. Michell, T. 2010. 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