Sport and Management - Business Plan Example

Sport and Business Management Business Plan Executive Summary The new sports organisation is a profit making organisation which aims to provide the community with baseball and softball sporting activities not just for the children but also for adults. The sports organisation aims to offer central an indoor location for the members to learn and practice their softball and baseball skills. Some of the facility provided by the company will include pitching areas, meeting areas, team skill areas, rest and equipment area. In addition the company will offer specialised group coaching clinics along with one-on-one trainings and further encourage the people to join the club. The baseball and softball programs have gained immense recognition over the past few years and hence people are willing to take active past in this kind of sports. With further growth in the organised sports sector, parents are willing to provide advantage over other children in sporting activities. Baseball and softball skills are highly popular and thus advance training skills are required for participating in these activities which further provides opportunity for the new company. The new company currently faces moderate competition as there are not many sports club which provides training in baseball and softball skills. However baseball and softball leagues are present all over UK and are suitable for all age groups. In the first year of its operation the company allotted 7500 pounds for the budget and is expected to break even by third year. By the end of five year it is estimated that the company will make profit of 8400 pounds. Contents Executive Summary 2 Contents 3 Introduction 4 Business Vision 4 External Analysis 4 PEST Analysis 5 Industry Analysis 7 Internal Analysis 9 SWOT Analysis 9 Financial Application 10 Reference 13 Bibliography 14 Introduction BSUK (Baseball Softball UK) is the development agency in the UK and provides service to the governing bodies of sports with an aim to develop and increase the participation level of the people along with achievements and skill in UK sports. It has been learned that there has been an increase in number of teams in baseball and softball with about 34% since 2009. BSUK has reached its four year target and in the process to reach “satisfaction target” (Active Devon, n.d). The long term vision of BSUK is that the sports should be played in every park across the country and more adult teams should be formed. Under the umbrella of BSUK, both softball and baseball have exceeded the expectation with respect to participation growth, retention of players, increased viability and achievements, successful developmental programs and increase in competition. In the year 2008, BSUK was awarded £2.7 million from Sports England and was based on Whole Sport Plan which was submitted by BSUK after consulting with the members from both the sports (West Yorkshire Sport, 2011). Business Vision The business vision for the sports organisation is to get recognized as world leader in providing its members with high quality of baseball and softball skills. In addition, vision of the sports club is to create vibrant, progressive and healthy sports club which thrives to provide base ball and softball playing opportunities. External Analysis External environment of the organization tends to include both industry factors as well as general environmental factors. The process in relation to external analysis entails analysis of political factors, economical factors, social factors and technological factors along with environmental and legal factor. Secondly is the industry analysis which is undertaken in order to understand the competiveness and attractiveness of the industry which helps in determining the opportunities and threats of the firm (Henry, 2008, p.51). PEST Analysis PEST analysis is a tool which is used to scan the general environment. With the help of PEST, organization is able to detect as well as monitor the weak signals so that they are able to recognize the fractures which shape the environment. PEST is used to detect the threat mainly in the external environment which will finally find its way into competitive environment (Gregory, 2000, p.49). Political factors: Political Factors forms part of macro environment and are constantly changing and aims to present the new opportunities as well as the threats which has the potential to impact the success of the organization (Johnson, 2008, p. 65). The Government has ensured to provide a healthy nation and fight the health issues. The government has taken up initiate to join the sports organization, both by children and adults in order to stay fit. The government has ensured a healthier nation by promoting sports club and fighting health issues such as drinking, smoking and also obesity. The government and other developmental agency like BSUK have been promoting the baseball and softball and expect that the game should be played in each park and more adults should take part on it. The development agency in UK for baseball and softball has been taking initiative and investing in such sports and aims to make it a popular sport in years to come. The government have identified baseball and softball as development sports and focuses on helping the people to stay associated with them and thus develop active lifestyles (Sports England, 2004). Economic Factors: The economic factor also plays an import role in analysing the external factor. Analysing the economic condition of UK, it can be said that with the recent financial turmoil there has been drop in the average salary during the phase and it has led the people to cut on their discretionary spending which includes recreational and physical activities as the individuals tends to have less disposable income. Since sports and other recreational activities are considered to be luxury expanses thus the willingness to spend will be less among the individuals. According to reports, families in Britain will have 1000 pounds lesser money to spend by 2013 (The Telegraph, 2010). In the current scenario, the GDP of UK is expected to increase by 1.7% in 2013 as compared to the previous years. Consumer spending is expected to rise faster than the overall GDP in 2012 but slower than 2013 GDP. However recovery in the UK has been stalled due to Eurozone crises and has in return weakened consumers and business confidence. Thus it can be said that the economic conditions remains to be bumpy but is expected to improve in years to come (PWC, 2012). Social Factors: Social factors take into consideration various elements such as demographics, disposable income, spending habits. The total population in UK is estimated to be about 63,047,162 in July 2012 out of which 30.3% belongs within the age group of 0 to 24 years, about 42% in the age group of 25 to 54 years and about 28.5% population above the age group 55 years (CIA, 2013). Seeing the growth of population in all age group mainly the young and adults within the age of 54, the sports club can initiate the two sports activities allowing the people to join and become active and improve their lifestyles. But at the same time the disposable income also plays a vital role as with low disposable income people will not be able to participate as the recreational and sports activities are considered as luxury spending. However with slightly better economic growth and condition it can be expected the disposable income to grow and people might start spending in sports activities. Technological factors: Modern technologies are now used by every sports club and most of them are planning to use modern technologies in the near future. With rise of revolutionised home fitness equipment, consumers are making the most of it. Equipment like Nintendo Wii Fit, exercise DVDs and hand held weights are used by individuals to make themselves fit and active (Independent, 2010). In addition most of the organisations are also making use of online technology and making it comfortable for the consumers to enrol themselves online and become member of a particular sports club. Most of the fitness centre offer its consumers the opportunities to join or renew their memberships online, make class bookings as well as setting up direct bookings (Mintel, 2009). New advanced software is also making the fitness centres to monitor the membership and frequency of their attendance of their members allowing them to assert in advance. Industry Analysis In order to analyse the industry, Porter’s five forces has been taken into consideration. The five forces together determine the profitability of the industry as they tend to increase the price, cost along with the investment required in the industry. The strength associated with each of the five competitive forces is a function of industry structure. The five force framework allows firm to analyse the complexity and pinpoint the factors which are critical for the industry. The five forces include bargaining power of consumers, suppliers, threat of substitutes, new entrant and rivalry among the firms (Analoui & Karami, 2003, p.81). Bargaining power of customer: The bargaining power of customer can be said to be high because with time many sports club/company have come up introducing various number of sports. Consumers have the choice to choose organisations which has better facility, equipments, and training facilities with relation to softball and baseball skills. Bargaining power of supplier: The supplier power remains to be moderate as sports club depends to certain extend in the suppliers for new equipment and other necessary items which are highly recommendable for the success of the company. Threat of substitutes: With improved and advanced technology, the threat of substitute is high. Individuals are more likely to work out and prefer to stay fit through equipments such as Nintendo Wii Fit, exercise DVDs and hand held weights posing a huge threat for the sports club. With limited time frame individuals prefer working out indoors rather than joining a sports club. Threat of new entrant: Threat of new entrant is also moderate to high as not much cost is involved in setting up a club and can be done at a minimal amount. But if the club incorporates new equipment, it might cost the club and result in moderate threat of new entrant. But at the same time, the sports club can generate revenue from its membership fees. Rivalry: The rivalry among the sports organisations can be categorised from moderate to high as there are various sports club situated all over UK and each of the club providing with the best assistance for its members and making the competition tough. Internal Analysis Internal analysis talks about the organisation and the tool used to analyse the internal factors of the organisation is through SWOT analysis. SWOT refers to the strength, weakness, opportunities associated with the organization and threats if any (Griffin, 2011, p.88). SWOT Analysis Strength: The sports company plans to introduce baseball and softball skills. As per analysis the developmental agency of baseball and softball, BSUK is putting on all the efforts to generate awareness about the sports and people are willing to take part and incorporate softball and baseball skills. In addition, people are now getting more conscious about their health and these sports club can benefit them to a very large certain extend. Weakness: The sports organisation might face certain weakness. As the organisation is new it might take some time to generate awareness about the club and the services provided. Lack of trained staff might prevent the organisation to develop in areas that may have potential significant outcome for the sports. In addition lack of investment and high level of coaching are another set of weakness for the club. Opportunities: Baseball and softball skills have been viewed as new sporting activities and there has been unexpected growth rate serving a great opportunity for the new organisation to introduce baseball and softball training skills and develop a league allowing the new and potential members to join the club and avail all the services. In addition, one of the objectives of BSUK is to raise funds and help the organisation and improve the performance as well. Threats: Threats might result with fall in economy the low disposable income. Low disposable income tends to affect an individual as a result he might restrict from sending on recreational or sport activities as they are considered to be luxury items among the people in UK. Threats also arise from other competitors in the market which has already made their presence and thus make it tough for the new club to achieve the required awareness. Financial Application This section of the paper focuses on the estimated five year budget for the new service to be introduced by the sports organisation for activities such as Baseball and Softball. The first year budget is estimated to be 7500 pounds. Based on it the next following years will be calculated. In the second year, it is expected that the revenue of the club is likely to increase with the rise in the number of new member; the estimated budget is as follows, Aspect Details Total per year (all values in pounds) Marketing Expenses Printing of Brochures – 250 pounds Design of Brochures – 50 pounds 300 Capital Expenditure Maintenance of club and purchase of required accessories for baseball and softball 1200 Revenue/Sales 600 pounds per month in the form of member fees 7000 Net Profit/loss (+) 5500 During the third year, it is likely that new Sports Club’s revenue would increase further while its expense would remain almost the same as that of the previous year. Based on this assumption, the expected budget for the third year is a follows, Aspect Details Total per year (all values in pounds) Marketing Expenses Printing of Brochures – 250 pounds Design of Brochures – 50 pounds 300 Capital Expenditure Maintenance of club and purchase of required accessories 1200 Revenue 750 pounds per month in the form of member fees 9000 Net Profit/loss (+) 7500 In the third year, the sports club s estimated to break even and thus gaining neither profit not loss. From the fourth year onwards it is expected that the sports club will start making up profit and induce in all the relevant necessary activities. The fourth & fifth year budget is as follows, Aspect Details Total per year (all values in pounds) Marketing Expenses Printing of Brochures – 150 pounds Design of Brochures – 50 pounds 200 Capital Expenditure Maintenance of club and purchase of required accessories 1000 Revenue 775 pounds per month in the form of member fees 9300 Net Profit/loss (+) 8100 Budget for the fifth year, Aspect Details Total per year (all values in pounds) Marketing Expenses Printing of Brochures – 150 pounds Design of Brochures – 50 pounds 200 Capital Expenditure Maintenance of club and purchase of required accessories 1000 Revenue 800 pounds per month in the form of member fees 9600 Net Profit/loss (+) 8400 Therefore it is assumed that the sports club dealing in baseball and softball is expected to make profit and in the five years budget plan it can be seen that as years passes by the club is assumed to make profit as the economy will be stable and the disposable income of the individuals will also increase leading to increase in involvement in sports and recreational activities. 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