SWOT Analysis Manchester United

2059 words (8 pages) Essay in Marketing

21/07/17 Marketing Reference this

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Introduction

The football industry in United Kingdom is booming and outwardly been successful in the past years. The research and strategic planing will be based on the case of Manchester United, one of the most famous and successful football clubs in the country. Due to this, the data acquired from the official website will be used as the basis and the analytical tool in examining the capacity of the company.The basic study on this report is based on Manchester United FC’s internal and external environment factor.

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Critical Success Factor

The main aspects of Critical Success Factors is based on 5 key sources there are understanding the industry, good competitive strategy and industry position, understanding the environment factors and good managerial position. Due to these 5 key the company should be success in its industry. MU is very success club in Barclay Premier league and the report is about the analysis why MU has success in its football industry.

Porter Five Forces Competitive Analysis

Suppliers – The major component of a football club is the football team itself. The football team is made up of a variety of players with different skills, for example defenders, midfielders, attackers and the goalkeeper. These players are purchased from other clubs in the UK and around the world. The major problem here is that a club pays unreasonable sums of money for a player who is currently under contract with another club. Players can allow their contracts to pass and transfer free to another club but since they receive a proportion of the transfer fee, and so does the owning club, it is not really in their interests to do so. Thus, many clubs try to nurture their own talent by training young hopefuls and carefully talent scouting at other clubs. MU has its own academic to train for their potential and younger player to join their club there as well.

Buyers – Freely includes sponsors and television companies who provide the club with the revenue to purchase quality players. Football clubs try to tie in sponsors with long-term contracts and must ensure that the sponsor they pick has a similar consumer profile to the one that they have. There should be overlap between the supporter profile and the consumers that the sponsor wishes to communicate with. Buyers also include the football match attendees. These break down into occasional supporters, season ticket holders and frequent supporters. It is important that a club try to build on the loyalty of their supporters by providing more loyal fans with an enhanced package of benefits, for example season ticket holders get cheaper tickets and a discount on merchandise.

Entry barriers – Popular football clubs require large stadia. These are extensive and expensive service scapes both to develop and maintain. The cost of acquiring strong new players is also considerable. The ownership of football clubs is also regulated and media owners are not allowed to own more than a 10% share in any football club in the UK. The cost of setting up a football club is prohibitive and it seems that only the wealthiest of entrepreneurs and entertainers can afford the luxury of being a chief executive of a popular football club. The entry barriers could be lowered by purchasing land and building a stadium in a relatively cheap region, however, this strategy is often not viable because fans support their local or regional club and so the location becomes particularly important.

Substitutes – perhaps the closest substitute to watching a match live (revenue goes directly to club) is to watch the highlights or the full match on TV (revenue goes to television company and indirectly a proportion goes to the club). Where a club has a large fan base spread out over a disparate geographical region, the club might wish to offer its own TV station or Internet or mobile match news services.

Competitive rivalry – Other clubs represent the closest rivals and usually a fan’s loyalty to a particular club is intense. However, the author believes it is a myth that fans will never change loyalty to another club. They often do, particularly when they move to another region of the country or they cannot get in at their current club because of lack of space, prohibitive prices, and so on. The football game is also organised so that clubs need to beat each other in order to advance up the league tables. This generates a fierce loyalty amongst fans and a rivalry that is part of the enjoyment of football spectatorship. Reinforcement of this loyalty and the management of fans’ hopes and expectations is of paramount importance to a football club.

Internal and External Environment Factor Analysis (SWOT analysis)

(S)trengths

The main strength of Manchester United is their brand awareness, Manchester United is outstandingly recognized worldwide, and if advertised as the general team with international sponsors. As a result, implies that any merchandise that they locate in the market, with the team name and emblem will be straight away recognized by their fans which could get there to a million.

Besides that, Manchester United is having the great fan loyalty, ticket sales is also considered as strength for Manchester United, as there is a big waiting list for passes for every match, and with the new expanded arena, the income of ticket sales is bound to increase over the coming years. However, this is not the sole source of income for Manchester United and products are still required to be taken into account as the major part of total revenue by its retail store. The loyalty of the fans also is the main edge of the Manchester United against competitors, and this is due to the strong reputation of the Manchester United. Moreover, the company is also performance strong marketing effort towards their supporters by sending their prospect and loyal supporters their newsletters regarding the different activities and events in the company. Manchester United similarly possesses great distribution channels with various retail stores worldwide. This will be very helpful when introducing their new products. As these familiar connections are previously prepared, Manchester United have to guarantee that they are employing these channels to the full capability, and that these links for transmission can be engaged to feedback data in addition to flow out of the products.

(W)eaknesses

The main weakness that has been defined based on their website is their products and product variety. It is obvious that they have launched a lot of different products at many different occasions. There is an issue although whether the fans were consulted in this context. It looks like that MU has introduced a broad diversity of products from jerseys to Credit Cards. MU has been recommended that the club has merely exploited the more obvious income channels, and thus money-wise it would be more precious to perform more research in this field. The club obviously requires looking into their existing product collection and from this, they will be capable of situating their products, employing instruments like the Boston Matrix, and it will let the club to know which of their products are booming in the market. It is noticeable that even though the present products are selling well, this is a field where there will continually be a space for development, to suit their fans prerequisites in a profitable manner for the club.

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Another weakness for Manchester United is that currently, the club has been so thriving, and it is now working on such a massive level, there is a upsetting estimation that the club has now lost its origins, and it is no longer concerned with the game of football, but all about their profit or income. Unnecessary outlooks such as this can have a negative effect on the fans. Even though as long as Manchester United carries on performing well, this may not bring about too much worry for the club, as it has worldwide support; nevertheless, it is still required to be taken into account.

(O)pportunities

The main opportunity for Manchester United at the moment is the penetration to the American market. There is an opportunity in the proximate future to structure the coalition with one of the world’s most well-off team in sports, the New York Yankees. This will signal enormous merchandise channels in America, and provide Manchester United the lead over all other Football teams in the American context, presenting their product to a new market. Even though there is a superior height of risk concerned in tendering their products over to the US, then entering the existing market, by reason of the coalition with the Yankees, this danger is condensed.

(T)hreats

Manchester United is in a exceptionally firm site, as they have no direct dangers from any players in the industry. The most important threats that must be measured by the company are the growth or development of their competitors. This can occur if one of their rivals or new entrants had determined and figured out that the use of their Internet for their processes will result to competitive advantage. Due to this, there is a huge breach connecting Manchester United and the following strongest competitor. However, there are a number of dangers to Manchester United that has to be taken into account. Another threat to Manchester United at present is the Change of leadership in the team. Manchester United is required to promise that this will not affect the sales of its merchandise. Another less direct threat to Manchester United is lacking finances put into academies and junior football, from where potential players would initiate. However, Manchester United has used up in a football academy to train potential football players.

Resources and Competences

Threshold Resources

Manchester United has a variety of Threshold Resources. Such as their stadium Old Trafford which can have around 75000 spectator to be seating in. Mu also have a huge worldwide of retail stores and Megastore to sell their product such as cloth, shoe, equipment and other which is related to the Red Devil or MU. Besides that, MU owns the Red Café where their fans and customer can be enjoy food, matches and face-to-face showing wall with MU’s non-stop action. MU has variety of staff line such as first team for matches, academic, coaching staff and ticketing as well. Besides that, MU financial is stable and the strong sponsor AIG on of the biggest insurance company of the world.

Unique Resources

MU owns a Museum which is show the greatest football club history of MU’s. MU is managed by its manager Alex Ferguson for 24 years and he is the most successful manager of British football industry. Besides that, MU also has a range of value players such as Ryan Giggs, RIO Ferdinand, and Wayne Rooney and so on. Other than that, the product of MU is Unique as well like MU jersey, sport shoe and others. The strong fans club also 1 of their unique resource as well.

Threshold Competences

The Old Stafford stadium is the biggest stadium among all football clubs in UK. Therefore, there are more spectators can be sitting in and the revenue is higher than other football club. Besides that, the Museum is also unique for its club there is only showing of MU history and it can be an advertising method to attract more fan and consumers to purchase in. Besides that, it is not a advertising that MU paying for, instead the consumers will pay for a tour for it. Beside that, the Wider network of distributor of its retail store and megastore than others.

Conclusion

Manchester United is in a very competitive spot at present, nonetheless they require to be cautious that they are not getting self-satisfied and that they are focusing on the market, and the requirements of their clients and followers. By implementing the research into their markets, it will allow them to build up products for the clients, which will bring about sustained

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