MANCHESTER UNITED CASE STUDY

Università degli Studi di Napoli Federico II

Corso di “International Marketing” Prof. Svend Hollensen - Luigi Cantone

A.A 2014/2015

A cura di:

• Alessia Nacar N27002392 • Carlo Cirillo N27002284 • Flavia Maresca N27002260 • Giacomo Aruta N27002159 • Maria Del Prete N27002185

History

• 1878 founded as Newton Health LYR Football Club;

• 1892 became limited company;

• 1902 changed its name to Manchester United;

• 1991 was floated on stock market;

Glazer takeover

02/03/030% 25% 50% 75% 100%

2,9%

total debt: £660 million

total amount paid: £790 million

% share

Refinancing

• Cut expenses; • 2010 Bond issue (£500 million); • 2012 IPO on New York Stock Exchange (£150

million):

Field Results VS Financial Results

2006 2008 2010 2012 2014

518424396367350327325315

243

2006 2008 2010 2012 2014

1

8

6

4

2

Ranking Revenue

Brand Value

0

225

450

675

900

2010 2011 2012 2013 2014

739837853

412

541

Rank 2 1 1 2 3

Goals

• Evaluate the international competitiveness;

• The role of alliances;

• Threats of being a global brand.

Evaluate the international competitiveness

National competitiveness The Porter diamond

Competition analysis Porter’s five forces

Firm Competitiveness

Network Analysis

Porter DiamondFirm

strategy -More

competitive team

Related and supporting industries -British Tv

Factor -History

-Infrastructure -Culture

Demand condition -EPL is the

biggest league

Chance -Loyal fans

Government -Financial FairPlay

-Regulatory development on

matches and stadiums (anti-hooligan law)

Porter’s five forces

Competitive rivality

-Other clubs competing for the same objectives

Threats of new entry -Club moving from a competitive

environment to another

Supplier power -Other clubs selling

players -Player’s agents

-Supplier of technical material and service

Customers -Fanclubs

-Merchandising buyers -Tv networks

-Sponsor

Threats of substitution -Other sports

-Other recreational activities

MAN UTD’s International Network

Matchday/Stadium CSR

Soccer school Commercial

International Tour Broadcasting

£108 million CAGR 0.2%£136 million

CAGR 7.4%

£189 million CAGR 20.8%

£88 million

£61 million

£107 million

Network Revenue Growth

£ 256m 2008 Revenue

£ 433m 2014 Revenue

SOURCE: 2014 investor presentation

SOURCE: 2014 investor presentation

Goals

• The role of alliances;

• Threats of being a global brand.

• Evaluate the international competitiveness;

MAN UTD’s entry mode decision

Export modes (externalization) low control, low risk, high flexibility

Intermediate modes shared control and risk, split ownership

Hierarchical modes (internalization) high control, high risk, low flexibility

INTERNAL FACTORS

Firm size +

International experience +

Product complexity -

DESIRED MODE

CHARACTERISTICS Risk propensity +

Control +

EXTERNAL FACTORS

Sociocultural distance -

Market size +

Intensity of competition -

MAN UTD’s network - alliances

Commercial

Sponsorship

Branded products

New Media & Mobile

2014 Commercial Revenues £189 million

CAGR = 34.2%

£163 million

£37 million£16 million

Sponsorship

GLOBAL REGIONAL

Chevrolet - Largest Sponsorship Deal

Shirt sponsorship 14/15

Starting at $70 million p.a.- $559 million total through 2021

Chevrolet - Largest Sponsorship DealAnnual Value of Shirt

Sponsorship (£ million)

0

13

25

38

50

2000/06 2006/10 2010/2014 2014/21

49,2

19,614,1

8

Sponsorship

GLOBAL REGIONAL

CSR and Cause Related MarketingFOOTBALL Provide football opportunities for school children

including children with physical or

mental disabilities

COMMUNITY COHESION

Engage some of the most hard to reach young people

in the community by delivering football coaching and a range of alternative

activity sessions

HEALTH Deliver a range of programmes to

improve the health and wellbeing of local

communities

CHARITIES The foundation

manages the Club’s charity partnership

with UNICEF

EDUCATION Partenership with schools to create community hubs;

deliver a range of educational programs to primary and secondary

schools, using Manchester United as a hook to

engage students

Manchester United for UNICEF

Manchester United has been working with Unicef since 1999 through the United for UNICEF partnership. The club has raised over £2.5 million for Unicef programmes, which has benefitted more than 2.2 million children worldwide. To date, the partnership is the longest collaboration between a football club and a global charity.

The annual United for UNICEF Gala Dinner, held at Old Trafford, and attended by all the first team players, is a highlight in the partnership calendar.   The most recent e v e n t i n  N o v e m b e r 2 0 1 4 r a i s e d  a r e c o r d -breaking £210,000.

Goals

• The role of alliances;

• Threats of being a global brand.

• Evaluate the international competitiveness;

Global Brand: Pros and Cons

PROS CONS

Reach more customersDifferences in the administrative

procedures and product placement can occur

Consistency in brand image Different regulatory standards

High profit margin International fans are less loyal than national fans

Lower costs Drop in success rate after last defeats

Tours to the sponsors’ country

Consistent building of iconic player

Which are the main consequences of the cons?

INCREASE OF THE RIVAL FANS IN THE SAME MARKET

CONSEQUENCES OF THE CONS

FEWER MERCHANDISING

REVENUES IN INTERNATIONAL

MARKET

LOWER BRAND VALUE &

AWARENESS