Market Strategy of Russian Basketball Clubs and NBA

2833 words (11 pages) Essay

1st Jan 1970 Marketing Reference this

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This research project evaluates marketing strategies of basketball clubs in Russia and NBA. The income and success of a sport club depend directly on its performance and its marketing campaign. The project aims to investigate and evaluate the differences between marketing in Russian and American basketball clubs. This topic is chosen because of my personal interest in sport in general and basketball in particular.

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Firstly, the marketing of Russian basketball clubs (with particular reference to CSKA Moscow) will be critically appraised. Secondly, the marketing of NBA will be evaluated. Subsequently, the marketing campaigns of basketball clubs in Russia and NBA will be compared and contrasted. In conclusion, the ways in which Russian basketball clubs can improve their income will be evaluated, some suggestions will be recommended.

Chapter 1: Introduction

This research project evaluates marketing strategies of basketball clubs in Russia and National Basketball Association. The income and success of a sport club depend directly on its performance and its marketing campaign.

As D. Shank (2009) states, sport marketing is ‘the specific application of marketing principles and processes to sports products and to the marketing of nonsports products through association with sport.’ Sport marketing is very complicated and develops quickly. One needs to realize both the sports sphere and the particular application of marketing rules and processes to sports environment to gain success in sports marketing.

This topic is chosen because of my personal interest in sport in general and in basketball in particular. I want more people in my country to be attracted to basketball. I believe that past marketing experience of NBA can help Russian basketball clubs reach a higher level.

This research project will first critically appraise the marketing of Russian basketball clubs (with particular reference to CSKA Moscow). Secondly, the marketing of NBA will be evaluated. Subsequently, the marketing campaigns of basketball clubs in Russia and NBA will be compared and contrasted. In conclusion, the ways in which Russian basketball clubs can improve their income will be evaluated, some suggestions will be recommended.

Chapter 2: Literature Review

According to Shank (2009) nowadays sport has become one of the most essential and worldwide parts in our society. Income that sports industry produces a year is valued as over $200 billion dollars . Sport is the universally growing industry. Shank(2009) continues:

“As the spotlight on international sports marketing discusses, the NBA is a premier example of a powerful global sports organization that continues to grow in emerging markets.”

As Mullin, Hardy and Sutton(2000) claim, sport business has a specific nature, which appears in four fields: sport product, sport market, sport finance and sport promotion. According to Shank (2009) there are three main components of sports industry: consumers of sport, the sport products that they buy and the providers of the sports product. So we have to examine the way basketball clubs cope with these three elements and how it affects their income and success.

Chapter 3: Methodology

My dissertation is a literature based research project that means most of the material for my research was found in the LJMU libraries and in web sources.

The objectives of this research project are to compare and contrast marketing strategies of NBA and Russian basketball clubs in general and CSKA Moscow in particular, to evaluate the differences and then to suggest some recommendations for Russian basketball clubs. I am interested in sports and this research will be a useful experience for me, because my first degree is Public Relations within sports and physical culture, and PR and marketing are strongly connected.

To make my research more valid and reliable I analysed the interviews of some basketball managers from USA and Russia who are working in this field nowadays and speaking about marketing situation, income, customers, advertisement and promotion and other different ways of earning money. I found these interviews on the official web-site of CSKA Moscow basketball club, official blog of Andrei Kirilenko (Russian basketball player from Utah Jazz) and some business web-sites, such as www.allbusiness.com. and www.bizmology.com. Nobody can know the situation better than people who are working inside. After that some recommendations for Russian clubs how to attract more people to basketball matches, to make more profit using the customers, fans basketball players and sponsors will be suggested. It is very important to evaluate the NBA experience and to follow it as much as possible in nowadays world situation.

Unfortunately there are some difficulties in collecting information and we have a time limitation that is why future research in this area would be more representative and reliable if I have more time and more sources to analyze.

Chapter 4: Findings and Analysis

Marketing of Russian basketball clubs

Maxim Sadovnikov, marketing director of CSKA Moscow in his blog on the official web site claims that main problem of club marketing is the possibility of selling all season tickets. It is very hard to attract people to basketball matches. It was sold only 885 season tickets during season 2009/10, while during previous season 2008/09 they managed to sell 1230 tickets, so the sales level dropped by 28%. 345 people realized that they do not want to come anymore. So it is extremely important to understand the reasons of such decline.

Firstly there is stereotype that CSKA tickets are too expensive. But the price politics was formatted gradually, step by step, season by season. All the data and statistics have been analyzed and after everything was calculated some cost changes were applied.

The demand causes the supply-this is the main business strategy, Sadovnikov continues. Year by year the sales team raised the cost, but this has no influence on number of buyers. But due to financial crisis they decided not to raise price for 10-15% but to leave it at the same level. This decision hardly helped them, sales continued to fall. Even such PR-actions like 2 tickets for the price of one and additional discounts for tickets on Top-16 and play offs of Euro league championship did not help.

Secondly some people assume that CSKA does not use enough advertisement to attract a person that is why only small number of people is aware of basketball games. The statistics for 2 last seasons can also be analyzed and we will see that in 2007/08 less advertisement has been done, but they managed to sale more tickets. It is strange, but it is true. Last season CSKA had powerful advertising campaign, using city billboards, new informational partners, new media opportunities etc. also last year sms-sending was invented and groups and pages in different social networks (vkontakte.ru, face book, twitter, YouTube). But this had no positive influence and result.

Now the reasons of such decline will be evaluated. First of all, the main reason is that from the beginning of last season no basketball can be watched on free channels, people had to pay money to buy satellite dish and also pay monthly to the TV provider. Many people could not afford it. But this was the decision of Euro League so the club had no influence on it. Actually, if we look at the NBA experience we will see, that it was a good, reasonable decision, but Russia is not USA. The quality of translations became much higher, but it did not attract people. Lack of basketball on free TV did not make people buy satellites, pay and watch basketball translations of higher level; it made them to forget about basketball.

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Next issue it media coverage. Football in Russia is much more popular than basketball, so sometimes one can feel disappointed about their favorite kind of sport. Sadovnikov assumes, during all the season on the match-day you can find hardly a line about Euro League home match in Russian most popular sports newspapers ‘Sport-Express’ and ‘Sovetskiy Sport’. They write about basketball only after some games. And if CSKA Moscow as the most popular basketball club in Russia can claim to receive half of the page in the newspaper, what can we say about other clubs that are not so popular?

Last thing to be discussed is the difference between Russian championship and Euro League championship. These two tournaments have completely different quality level, attractive level and as a result interest level. 3 teams from Russia have the ability to play in Europe. Such issues as interest of Russian citizen to everything international, patriotical feelings, famous brands (like ‘Barcelona’, ‘Real’); unpredictability of the results and the lack of domination of one team can cause demand. What does Russian championship offer? We have got one premier team CSKA, which is the best in Russia for 7 years already and some others that try to beat CSKA but is not successful in it and other teams. Obviously the weakness of Russian championship causes decline in people’s interest to basketball.

NBA basketball clubs’ marketing

According to ‘The Game: NBA Marketing Mantra: Think Global, Act Local’ article in Brand week (2005) ‘the NBA is putting on a full-court press to bring its product to fans and consumers worldwide.’ People can see NBA matches in 215 countries and areas, 164 international translations in 43 different languages will reach more than 3.1 billion of spectators. Heidi Ueberroth, the responsible for NBA development and marketing gave the interview to this journal, where he explained that the main goal of NBA Marketing is continuous keeping of people’s interest. NBA Marketing has 10 offices with employees, who are continuously working on developing and growing basketball by interacting with leagues, federations, basketball clubs and ministries on a range of basketball programmes. During the summer break NBA players take part in 4 Basketball without Borders events where they were training teenagers how to play basketball, explaining the importance of teamwork and social norms. NBA has more than 20 partners in about 80 markets, e.g. Coca-Cola promotes NBA in more than 60 countries all over the world and NBA Europe Live and sport brands such as Nike, Adidas and Reebok.

According to Andrei Kirilenko (best Russian basketball player, now plays for NBA Utah-Jazz) NBA is an extra profitable business, lead by professionals. USA market and the popularity of basketball are the reason of NBA success. Moreover, the Americans admire shows, especially TV-shows. Consequently, every American citizen has cable television with 150 American channels. Basketball audience consists not only of men, but also of women, children and elders. The base of NBA is show, beauty of the game.

Kirilenko claims, almost every American basketball club makes profit while none of European basketball clubs does. Firstly, NBA earnings are made by annual ticket sales, e.g. Utah-Jazz can seat 20 000 spectaculars and has sell out every year. Prices are from 15 to 600 USD. Secondly, broadcast sales to cable TV, usually two channels – local and federal. Subsequently, team merchandise sales: T-shirts, caps, jackets, balls, calendars with team logos and players’ names, e.g. Kirilenko’s T-shirt costs 25-85 USD. Then, sponsors and advertisement. Company’s logos are placed on the stadium and printed production, advertisement announcements during the game. Last year, Utah stadium, that was named Delta Airlines (sponsor name), signed another contract and war renamed to Energy Solutions Arena for 3 millions USD. In conclusion, eat and drinks during the game sales. Prices are higher than in restaurants and make about 100 000 USD after one game.

Chapter 5: Conclusion

This research project has discussed features of marketing of Russian and American basketball clubs and then has suggested some recommendations for Russian basketball clubs how to earn more profit. The analysis shows that some changes in Russian basketball are required to increase people’s interest to sport. The department, directly responsible for Russian championship commercial sales should be invented. This should help to attract audience to basketball arenas and increase supporters’ interest of Russian basketball clubs; consequently it could help clubs increase their earnings.

Chapter 6. Recommendations.

If we do not want to face slow, but certain decrease in Russian basketball popularity, we need cardinal changes. As we can see, teams results and victories are not able to raise people’s interest, so it is necessary to increase people’s interest to Russian championship in other ways.

Firstly, we can have an independent department of Russian Basketball Federation that will be responsible for Russian championship. Nowadays Russian Basketball Federation has many areas to work in-development of junior, students, men, women basketball, national teams, so it is difficult to be effective in every area. We need a professional team that can make Russian championship work properly and that will be responsible only for that.

Secondly, this organization has to be well structured and contain advertisement and PR-departments, commercial sales department (tickets and merchandise), department, responsible for work sponsors. PR-department should deal with extensive media coverage of games and different events, PR-activities with Russian basketball stars and other things to inform spectators of development and activity of Russian league. Commercial department should be responsible for every team merchandise production; this can increase number of orders for every kind of goods and can cause economy. It is also necessary to follow and evaluate ticket sales of every team; this can help critically appraise work that has been done to increase interest of league brand. As for sponsors, league should have possibility to create sponsor packages that can attract companies that work not only in particular town, but also that make business all over Russia.

Separate department should be responsible for Internet translations of games. People should have an opportunity to watch all games of favorite team, that is why official web-site where people can see all information about teams, events, match highlights, analytical articles, players and managers blogs etc, should be created.

Chapter 6: Reflections on Learning

At the beginning of the course I thought it would be extremely difficult, almost impossible for me to do a research project. I have had the experience of making big reports, but in my country they do not pay much attention to such things like proper references, good literature review, avoiding plagiarism, paraphrasing without copying. So after my first class of research study skills I felt like I could not cope with all these things because I do not have enough knowledge and skills. Lesson by lesson, class by class we started to learn what the structure of the research project should be, how to state research objectives and questions, how to avoid plagiarism, how to paraphrase, quote, summarize ideas so step by step I started to become confident that if I work hard every day I will manage to write research of a good quality.

By the middle of the course I suppose I have improved my research skills a lot and have learnt more academic language. Now I know, how to do the research, I know how to evaluate the sources, which books and websites are better to use, which parts of the text to select. I have got two books about sports marketing but I know, I need more sourses to make my research project more reliable and valid. In my research I do a lot of paraphrasing and our classes help me a lot in this.

I have always been a responsible person, that is why it is easy for me to manage my time and to keep deadlines, I understand how important it is for my PMP and it will help me a lot during my MBA.

During the next part of the course I hope to improve my oral skills and learn how to give a good presentation on my work, because at the university we need not only to write, we have to be able to present our work the best way and to be qualified speakers.

This research project has certainly helped me a lot to improve my academic English writing skills, evaluative writing, using other peoples’ work without plagiarising, critical thinking, making good references and bibliography. I have become more self-confident and I feel that I am ready for an MBA now.

This research project evaluates marketing strategies of basketball clubs in Russia and NBA. The income and success of a sport club depend directly on its performance and its marketing campaign. The project aims to investigate and evaluate the differences between marketing in Russian and American basketball clubs. This topic is chosen because of my personal interest in sport in general and basketball in particular.

Firstly, the marketing of Russian basketball clubs (with particular reference to CSKA Moscow) will be critically appraised. Secondly, the marketing of NBA will be evaluated. Subsequently, the marketing campaigns of basketball clubs in Russia and NBA will be compared and contrasted. In conclusion, the ways in which Russian basketball clubs can improve their income will be evaluated, some suggestions will be recommended.

Chapter 1: Introduction

This research project evaluates marketing strategies of basketball clubs in Russia and National Basketball Association. The income and success of a sport club depend directly on its performance and its marketing campaign.

As D. Shank (2009) states, sport marketing is ‘the specific application of marketing principles and processes to sports products and to the marketing of nonsports products through association with sport.’ Sport marketing is very complicated and develops quickly. One needs to realize both the sports sphere and the particular application of marketing rules and processes to sports environment to gain success in sports marketing.

This topic is chosen because of my personal interest in sport in general and in basketball in particular. I want more people in my country to be attracted to basketball. I believe that past marketing experience of NBA can help Russian basketball clubs reach a higher level.

This research project will first critically appraise the marketing of Russian basketball clubs (with particular reference to CSKA Moscow). Secondly, the marketing of NBA will be evaluated. Subsequently, the marketing campaigns of basketball clubs in Russia and NBA will be compared and contrasted. In conclusion, the ways in which Russian basketball clubs can improve their income will be evaluated, some suggestions will be recommended.

Chapter 2: Literature Review

According to Shank (2009) nowadays sport has become one of the most essential and worldwide parts in our society. Income that sports industry produces a year is valued as over $200 billion dollars . Sport is the universally growing industry. Shank(2009) continues:

“As the spotlight on international sports marketing discusses, the NBA is a premier example of a powerful global sports organization that continues to grow in emerging markets.”

As Mullin, Hardy and Sutton(2000) claim, sport business has a specific nature, which appears in four fields: sport product, sport market, sport finance and sport promotion. According to Shank (2009) there are three main components of sports industry: consumers of sport, the sport products that they buy and the providers of the sports product. So we have to examine the way basketball clubs cope with these three elements and how it affects their income and success.

Chapter 3: Methodology

My dissertation is a literature based research project that means most of the material for my research was found in the LJMU libraries and in web sources.

The objectives of this research project are to compare and contrast marketing strategies of NBA and Russian basketball clubs in general and CSKA Moscow in particular, to evaluate the differences and then to suggest some recommendations for Russian basketball clubs. I am interested in sports and this research will be a useful experience for me, because my first degree is Public Relations within sports and physical culture, and PR and marketing are strongly connected.

To make my research more valid and reliable I analysed the interviews of some basketball managers from USA and Russia who are working in this field nowadays and speaking about marketing situation, income, customers, advertisement and promotion and other different ways of earning money. I found these interviews on the official web-site of CSKA Moscow basketball club, official blog of Andrei Kirilenko (Russian basketball player from Utah Jazz) and some business web-sites, such as www.allbusiness.com. and www.bizmology.com. Nobody can know the situation better than people who are working inside. After that some recommendations for Russian clubs how to attract more people to basketball matches, to make more profit using the customers, fans basketball players and sponsors will be suggested. It is very important to evaluate the NBA experience and to follow it as much as possible in nowadays world situation.

Unfortunately there are some difficulties in collecting information and we have a time limitation that is why future research in this area would be more representative and reliable if I have more time and more sources to analyze.

Chapter 4: Findings and Analysis

Marketing of Russian basketball clubs

Maxim Sadovnikov, marketing director of CSKA Moscow in his blog on the official web site claims that main problem of club marketing is the possibility of selling all season tickets. It is very hard to attract people to basketball matches. It was sold only 885 season tickets during season 2009/10, while during previous season 2008/09 they managed to sell 1230 tickets, so the sales level dropped by 28%. 345 people realized that they do not want to come anymore. So it is extremely important to understand the reasons of such decline.

Firstly there is stereotype that CSKA tickets are too expensive. But the price politics was formatted gradually, step by step, season by season. All the data and statistics have been analyzed and after everything was calculated some cost changes were applied.

The demand causes the supply-this is the main business strategy, Sadovnikov continues. Year by year the sales team raised the cost, but this has no influence on number of buyers. But due to financial crisis they decided not to raise price for 10-15% but to leave it at the same level. This decision hardly helped them, sales continued to fall. Even such PR-actions like 2 tickets for the price of one and additional discounts for tickets on Top-16 and play offs of Euro league championship did not help.

Secondly some people assume that CSKA does not use enough advertisement to attract a person that is why only small number of people is aware of basketball games. The statistics for 2 last seasons can also be analyzed and we will see that in 2007/08 less advertisement has been done, but they managed to sale more tickets. It is strange, but it is true. Last season CSKA had powerful advertising campaign, using city billboards, new informational partners, new media opportunities etc. also last year sms-sending was invented and groups and pages in different social networks (vkontakte.ru, face book, twitter, YouTube). But this had no positive influence and result.

Now the reasons of such decline will be evaluated. First of all, the main reason is that from the beginning of last season no basketball can be watched on free channels, people had to pay money to buy satellite dish and also pay monthly to the TV provider. Many people could not afford it. But this was the decision of Euro League so the club had no influence on it. Actually, if we look at the NBA experience we will see, that it was a good, reasonable decision, but Russia is not USA. The quality of translations became much higher, but it did not attract people. Lack of basketball on free TV did not make people buy satellites, pay and watch basketball translations of higher level; it made them to forget about basketball.

Next issue it media coverage. Football in Russia is much more popular than basketball, so sometimes one can feel disappointed about their favorite kind of sport. Sadovnikov assumes, during all the season on the match-day you can find hardly a line about Euro League home match in Russian most popular sports newspapers ‘Sport-Express’ and ‘Sovetskiy Sport’. They write about basketball only after some games. And if CSKA Moscow as the most popular basketball club in Russia can claim to receive half of the page in the newspaper, what can we say about other clubs that are not so popular?

Last thing to be discussed is the difference between Russian championship and Euro League championship. These two tournaments have completely different quality level, attractive level and as a result interest level. 3 teams from Russia have the ability to play in Europe. Such issues as interest of Russian citizen to everything international, patriotical feelings, famous brands (like ‘Barcelona’, ‘Real’); unpredictability of the results and the lack of domination of one team can cause demand. What does Russian championship offer? We have got one premier team CSKA, which is the best in Russia for 7 years already and some others that try to beat CSKA but is not successful in it and other teams. Obviously the weakness of Russian championship causes decline in people’s interest to basketball.

NBA basketball clubs’ marketing

According to ‘The Game: NBA Marketing Mantra: Think Global, Act Local’ article in Brand week (2005) ‘the NBA is putting on a full-court press to bring its product to fans and consumers worldwide.’ People can see NBA matches in 215 countries and areas, 164 international translations in 43 different languages will reach more than 3.1 billion of spectators. Heidi Ueberroth, the responsible for NBA development and marketing gave the interview to this journal, where he explained that the main goal of NBA Marketing is continuous keeping of people’s interest. NBA Marketing has 10 offices with employees, who are continuously working on developing and growing basketball by interacting with leagues, federations, basketball clubs and ministries on a range of basketball programmes. During the summer break NBA players take part in 4 Basketball without Borders events where they were training teenagers how to play basketball, explaining the importance of teamwork and social norms. NBA has more than 20 partners in about 80 markets, e.g. Coca-Cola promotes NBA in more than 60 countries all over the world and NBA Europe Live and sport brands such as Nike, Adidas and Reebok.

According to Andrei Kirilenko (best Russian basketball player, now plays for NBA Utah-Jazz) NBA is an extra profitable business, lead by professionals. USA market and the popularity of basketball are the reason of NBA success. Moreover, the Americans admire shows, especially TV-shows. Consequently, every American citizen has cable television with 150 American channels. Basketball audience consists not only of men, but also of women, children and elders. The base of NBA is show, beauty of the game.

Kirilenko claims, almost every American basketball club makes profit while none of European basketball clubs does. Firstly, NBA earnings are made by annual ticket sales, e.g. Utah-Jazz can seat 20 000 spectaculars and has sell out every year. Prices are from 15 to 600 USD. Secondly, broadcast sales to cable TV, usually two channels – local and federal. Subsequently, team merchandise sales: T-shirts, caps, jackets, balls, calendars with team logos and players’ names, e.g. Kirilenko’s T-shirt costs 25-85 USD. Then, sponsors and advertisement. Company’s logos are placed on the stadium and printed production, advertisement announcements during the game. Last year, Utah stadium, that was named Delta Airlines (sponsor name), signed another contract and war renamed to Energy Solutions Arena for 3 millions USD. In conclusion, eat and drinks during the game sales. Prices are higher than in restaurants and make about 100 000 USD after one game.

Chapter 5: Conclusion

This research project has discussed features of marketing of Russian and American basketball clubs and then has suggested some recommendations for Russian basketball clubs how to earn more profit. The analysis shows that some changes in Russian basketball are required to increase people’s interest to sport. The department, directly responsible for Russian championship commercial sales should be invented. This should help to attract audience to basketball arenas and increase supporters’ interest of Russian basketball clubs; consequently it could help clubs increase their earnings.

Chapter 6. Recommendations.

If we do not want to face slow, but certain decrease in Russian basketball popularity, we need cardinal changes. As we can see, teams results and victories are not able to raise people’s interest, so it is necessary to increase people’s interest to Russian championship in other ways.

Firstly, we can have an independent department of Russian Basketball Federation that will be responsible for Russian championship. Nowadays Russian Basketball Federation has many areas to work in-development of junior, students, men, women basketball, national teams, so it is difficult to be effective in every area. We need a professional team that can make Russian championship work properly and that will be responsible only for that.

Secondly, this organization has to be well structured and contain advertisement and PR-departments, commercial sales department (tickets and merchandise), department, responsible for work sponsors. PR-department should deal with extensive media coverage of games and different events, PR-activities with Russian basketball stars and other things to inform spectators of development and activity of Russian league. Commercial department should be responsible for every team merchandise production; this can increase number of orders for every kind of goods and can cause economy. It is also necessary to follow and evaluate ticket sales of every team; this can help critically appraise work that has been done to increase interest of league brand. As for sponsors, league should have possibility to create sponsor packages that can attract companies that work not only in particular town, but also that make business all over Russia.

Separate department should be responsible for Internet translations of games. People should have an opportunity to watch all games of favorite team, that is why official web-site where people can see all information about teams, events, match highlights, analytical articles, players and managers blogs etc, should be created.

Chapter 6: Reflections on Learning

At the beginning of the course I thought it would be extremely difficult, almost impossible for me to do a research project. I have had the experience of making big reports, but in my country they do not pay much attention to such things like proper references, good literature review, avoiding plagiarism, paraphrasing without copying. So after my first class of research study skills I felt like I could not cope with all these things because I do not have enough knowledge and skills. Lesson by lesson, class by class we started to learn what the structure of the research project should be, how to state research objectives and questions, how to avoid plagiarism, how to paraphrase, quote, summarize ideas so step by step I started to become confident that if I work hard every day I will manage to write research of a good quality.

By the middle of the course I suppose I have improved my research skills a lot and have learnt more academic language. Now I know, how to do the research, I know how to evaluate the sources, which books and websites are better to use, which parts of the text to select. I have got two books about sports marketing but I know, I need more sourses to make my research project more reliable and valid. In my research I do a lot of paraphrasing and our classes help me a lot in this.

I have always been a responsible person, that is why it is easy for me to manage my time and to keep deadlines, I understand how important it is for my PMP and it will help me a lot during my MBA.

During the next part of the course I hope to improve my oral skills and learn how to give a good presentation on my work, because at the university we need not only to write, we have to be able to present our work the best way and to be qualified speakers.

This research project has certainly helped me a lot to improve my academic English writing skills, evaluative writing, using other peoples’ work without plagiarising, critical thinking, making good references and bibliography. I have become more self-confident and I feel that I am ready for an MBA now.

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