Search for an essay or resource:

Essay: Liverpool football club (PESTLE, Porter’s, SWOT)

Essay details:

Text preview of this essay:

This page of the essay has 3,197 words. Download the full version above.

Liverpool football club was founded in 1892, playing in the top tier of English football known as the Premier League. Currently competing in the UEFA champions league, FA cup and league cup. The club has won 18 league titles, 8 league cups, 7 FA cups, 15 Community Shields, 3 UEFA super cups and 5 European cups the most out of the other English clubs. Liverpool plays at their home ground of Anfield and have done since the birth of the club. Bill Shankly must be the main success down to Liverpool from when he took charge in 1959 to 1974 taking them from the English second division to European champions in 1973. Bill Shankly is believed to be the success story behind Liverpool football club of how they got to where they are today. (Liverpool FC, 2018)

Pestle analysis

Political

• National factors- government-set pricing caps following average ticket price for English football clubs rising by twice the rate of the Consumer Price Index (CPI) since 2011. (BBC Sport., 2014a)

• Global factor- EU, US Trade talks cut tariffs and regulatory barriers to trade between the US and EU countries. Decision coming 2015/2016 (Padmanabhan, 2014)

Economical

• National factors – Interest rates set to stay a record low of 0.5%. (Stewart, 2015)

• Inflation rates at a 12 year low. (BBC, 2015a)

• Global factor- Emerging markets: China and India (International Monetary Fund, 2014)

• Currency rates: Pound is weak against the dollar (Finacial Times., 2014)

Social

• Global factors- As the economy improves so will consumers demand greater engagement (‘Liverpool Football Club Level 6 Strategic Marketing Case Study’, 2014)

• Visit Britain reported 750,000 visitors to Britain in 2010 for a premier league match spending around £600m (MMU, 2014)

• National factors- All mobile networks now cover 4G connectivity. (Lunn, 2018)

• Digital viewing of matches increasing (Davies, 2014)

• Global factors- Spend on the mobile has over taken desktop (The Guardian, 2014)

Legal

• Regional factors- Data regulations: Privacy and Electronic Communications Policy 2003& Data Protection Act 1998

• National factors- If new labour law on club ownership goes ahead (clubs to have supports on every board) Football trust would need to become ‘industrial and Provident Societies’ and would be required to meet certain governance standards. (Dan Roan, 2014) (Slater, 2014)

• Global factors- UEFA Financial Fair Play (FFP) Rules (UEFA, 2018)

• ‘video streaming leads way in paid online media’ (Davies, 2014)

Environmental

• Global factors- Climate change ever rising

• Regional factors- Local Planning permission

Porters 5 forces

Threat of substitutions

• Growing trend of fan’s trading down match attendances to watching on television. (MMU, 2014)

• ‘Growing numbers of supporters taking advantage of illegal streams via overseas providers’ (Mullock, 2015)

• Viewing on mobile catching up with TV, during the world cup; Traditional tv viewing more fragmented: 14% of 20-24-year olds watched online compared to 21% that watched on TV (Davies, 2014) 55% of households now have access to a tablet. (Davies, 2014)

The threat of new entrants

• The influx of foreign investors could accelerate lower clubs up the league table as seen with Manchester city (Smith, 2013)

• The likelihood of a new league is low therefore a set number of clubs operating at one time.

• High barriers to entry such as players need to be at a high enough level to stay in the league. Stadiums need to meet certain expectations e.g. capacity size needs to be minimum 4000 seats with ability to 5000 for standing, Floodlights, goal-line technology. (EFL, 2018)

Rivalry amongst existing firms

• One of the main sources of revenue for the club comes from broadcasting (MMU, 2014) this is the most competitive revenue stream, which relies on the success of the team on the pitch.

• To improve success on the field better players will need to be purchased but with a limited number of top players and limited time to buy players because of only 2 transfer windows a year, this creates market pressure that inflates players wages as club’s bid against each other. (Fisher, et al., 2015)

Determinants of supply power

• Determinants of power are high as agents control players commercial and marketing activities (Neville, 2013)

• Determinants of power are low due to supplier demand outstripping club. (Fisher, et al., 2015)

• Suppliers aspire for association with clubs, therefore demand is inelastic.

Determinants of buyer power

• Determinants could rise if individual fans become a collective e.g. Spirit of Shankly group (BBC Sport., 2014a)

• Low switching cost counter balanced by obdurate emotional loyalty. (Fisher, et al., 2015)

• Limited stadium capacity, fan base, equating to price inelasticity. (Fisher, et al., 2015)

Organisational/cultural structures

Most people look at Liverpool FC as just a football club which to many fans that can come across as correct but looking into the club from a business view you start to realise Liverpool FC can be an organisation as described by (Beech & Chadwich 2013). Organisation is defined as “a deliberate arrangement of people to achieve a particular end”. This runs throughout the whole football club as the players, staff, fans, coaches, manager, and owners all want the same thing is for Liverpool to succeed on the pitch such as winning trophies and qualifying for the champions league. The weather this is from a sporting perspective or a business perspective, fans will want the team to do well because it’s the club they love, and support was as the owners will want the team to do well to make money for the club as a business. Liverpool FC uses a cultural system “Cultural systems exercise an indirect form of control, because of not requiring direct supervision: it becomes a matter of willing conformity or self- control by employees.” (Johnson, et al., n.d.) The owners of Liverpool Football Club will not know all the staff personally who work to help the club. Meaning staff will need to show self-control because they may not have a boss to answer too but will have certain expectations to meet for themselves e.g. the kitchen staff may not be known by many players or higher up members of the club but play a very important role making sure they turn up on time to have the food ready for the players also making sure the food is cooked right for the players. “Cultural conformity may be attempted by the selection of appropriate staff in the first place. Employers look to find people who will ‘fit’.” (Johnson, et al., n.d.) Employees behaviour may be controlled once they are at work. For example, when starting you may have induction and mentoring programmes put in place. Chatman and Cha (2003) suggest that a “good culture” should be: Strategically relevant, it needs to be strong in order that people care about what is important. Must have an intrinsic ability to adapt to change. Liverpool Football Club do meet some of these points because they have shown how they can adapt to change when Bill Shankly took over he made some massive changes in the team leading to the majority of the players been sold so he can have a new style and philosophy of how Liverpool should be run to become a successful club which was backed by the owners and fans of Liverpool. The reign of Shankly’s change to the club really hit a high in 1973 when the club won their first European championship. (Hunter, 2018) This has now lead to the culture surrounded by Liverpool today with such a high expectation from fans to produce constant success across all levels from youth team to the first team. The culture of the club also understands what is important with the owners paying out money for the top players as well as building a new stand for increased seating in the stadium. (THIS IS ANFIELD, 2018)

SWOT analysis

Strengths

Club heritage and UK Brand- Establishes in 1892, LFC has a rich football history and heritage, UK’s 4th largest club, with an an iconic stadium and loyal fans going back generations. (MMU, 2014). Historic English football brand with global appeal, providing value for potential sponsors and partnerships.

Global Appeal (fans)- global club 580+ million fans globally (Kent, 2014), officially words most attractive football brand on social networks currently with 24,462,000 Facebook fans in 90+ countries, and 200+ international supporter groups. Liverpool website available in 22 languages with country specific sites. (McLaren, 2013)

Fenway Sports Group Ownership- Competent, experienced and financially stable, previous experiences and success in; sports marketing, asset maximisation, stadium regeneration, contra branding fertilisation, strategic management and investment, international business development (MMU, 2014). FSG offers fantastic commercial and broadcasting links in US markets amongst others, via their affiliated businesses.

Stadium- Anfield stadiums is a key part to LFC history and heritage. Planning permission for 13,500 seated stadium expansions finally granted. Final match day capacity of 59,000, potentially contributing an additional £31.7m in match day revenues (Bascombe, 2014). Utilise FSG experience of historic ground into the modern digital stadium, FSG development of Fenway park increased revenues.

Opportunities

Players and strategic investment- invest and develop the first team to improve on pitch performance, to win competitions and gain prize money. The possibility of additional revenue streams through player sponsorship and licencing rights for headline players. Long-term strategy to develop youth team academy/ youth scouts, insights of discovering and developing youth talent. To then play for the team or sell. (Fisher, et al., 2015)

Reached champions league final in 2018 and have qualified for past two champions league competitions in past two years. Success on the pitch in recent years has allowed the club to bring in bigger players such as Salah, Van Dijk.

Stadium expansion can bring in more revenue to the club e.g. more tickets will be sold, more food and beverages will be bought before the game. High demand for season tickets from fans will go down with the need for seats to be taken when new stand is complete.
Global fans and markets- explore and realise cashable international markets/ fans using FSG connections and experience (MMU, 2014). Explore possibilities of international, sponsorships, partnerships and co-branding. Develop LFC international merchandise business. Facilitate international fans to drive engagement and accessibility, both physically and digitally.
(Fisher, et al., 2015)

Commercial opportunities- Create/develop commercial ventures including regional and international sponsorships and partnerships, international markets, co-branding. Consider additional commercial revenue streams (e.g. regional sponsorship/ partnership etc,). (Fisher, et al., 2015)

Broadcasting Opportunities – Develop LFC TV service globally. Investigate independent broadcasting or invest in new programming. Improve accessibility to this service in global markets. (Fisher, et al., 2015)

Fan Experience / Increase Revenue per ticket sold– Develop match day experience encouraging time spend at stadium and fan engagement to increase spend of attending fans. Increase indicatives to encourage fans to stay longer and use the stadium facilities (WIFI, fan square, fan zone, accessibility to concession and betting stalls, and providing entertainment to engage fans. (Fisher, et al., 2015)

Weaknesses

First Team success – diminishing on-pitch performance, as results of injuries, selling key players and lack of strategic investment. No success in recent years (BPL never won, FA Cup winners05-06, UEFA winners 04-05) resulting in poor club attractiveness for potential players (MMU, 2014) No competitive advantage of Low-cost leadership or low-quality players.
Finances – poor financial health, lack of money coming through commercial, match day and broadcast business (Markham, 2014). Issues include wages as a % of profit against competitors. The football market is highly volatile dependent on team performance and brand. Poor financial health has resulted in the development of threats (e.g.) FFP investigation) (BBC, 2014)Lack of vision/ strategy- Lacking strategic clarity, with no apparent mission or vision for the business. Missing strategic opportunities of leveraging CRM data, building engagement and improved value for fans (MMU, 2014).

Disgruntled fans – Anfield’s capacity/utilization rate makes tickets difficult to acquire, fans are also protesting over rising ticket prices (Oct 2014) (Andrew, 2014). Further floundering team performance is resulting in fan disenchantment.
The loss of Gerrard leaving the academy system could impact the number of young players desire to play for Liverpool or sign a scholarship as limited first team opportunity for youngest due to the high demand to play the strongest squad.
Demand for winning trophies by the players resulting in loss of top players over recent years such as Luis Suarez to Barcelona, Raheem Sterling to Manchester city and Phillipe Coutinho to Barcelona.

Threats

Financial fair play- UEFA have confirmed they are investigating LFC (BBC Sport, 2014c), for losses in excess of £34.4m over two seasons. Implications include; fines, point deductions, withholding winnings, and player transfer restrictions (UEFA., 2010). This could also cause reputation damage.

Competition/ other clubs- Financial volatility, Barclays Premier League (BPL) is the world’s most 2nd most competitive league, with prize money and competition qualification reliant on success (DiBella M.F., 2013). Treats of more attractive/ successful teams headhunting player talent.

Implications of poor performance- Top players want to play for winning teams, but clubs will face difficulty acquiring top talent without success on the pitch. This can lose fan interest with continuous mediocre performances more so in the global perspective because fans from outside the City of your hometown can be said to be glory hunters who support teams who have success and lose interest quickly when failing to win trophies.

The threat of substitutes- Fans trading down or becoming disengaged with LFC (MMU, 2014), trading down to follow LFC on TV, digital, and online coverage of LFC rather than at the stadium. The threat can be limited by improved performance on pitch performance, access channels.

Conclusion

To summarise my findings, it is clear to see Liverpool is a massive club with a global success and fan base with over 580 million fans worldwide which shows a clear popularity of the club allowing for numerous marketing benefits such as club kit been sold to a much wider market compared to other clubs e.g. Everton who will be more focused on establishing a brand throughout Europe by achieving Champions League qualification before been able to reach the global market. This gives Liverpool automatically a competitive advantage over most clubs in building revenue. It is clear to see that the fans of Liverpool are in high demand for success because of the club’s failure to win a trophy in recent years. Fans are worried if they can’t achieve this soon they will continue to lose their top players and not be able to become the driving force they used to be of the late 90s. The high-ticket prices have also lead fans to lean towards staying at home and watching the game rather than attending leading to a loss of money for the club. It is clear to see that for Liverpool to sustain a global brand and the title of a top club they need to have success on the pitch my recommendation would be for the owners to focus on attaining top players whether that is by increasing player wages or guaranteeing them success within a reasonable timescale, to achieve this the club will also have to use methods similar to Manchester city in the rise to success when targeting the top players they would overpay over the odds-on prices and wages making players want to join and clubs wanting to sell up.

References

Andrew, J. (2014). ‘Liverpool fans to continue protest over high ticket prices despite owner John Henry making contract’ The Daily mail. Retrieved october 25, 2018, from http.//www.dailymail.co.uk/sport/football/article-2859189/Liverpool-fans-continue-protest-high-ticket-prices-despite-owner-John-Henry-making-contract.html.
Bascombe, C. (2014). ‘Liverpool FC news: Anfield stadium consruction begins with 115m interest-free loan from FSG.’ T he telegraph. Retrieved october 30, 2018, from http://www.telegraph.co.uk/sport/football/teams/liverpool/11273448/Liverpool-FC-news-anfield-stadium-construction-begins-with-115m-interest-free-loan-from-FSG.html.
BBC. (2015a). UK interest rates held at 0.5% by Bank of England . Retrieved from http://www.bbc.co.uk/news/business-30726535
BBC Sport. (2014c). ‘Liverpool under UEFA Finacial Fair Play investigation’ BBC News. Retrieved october 27, 2018, from http://www.bbc.co.uk/sport/0/football/29356406
BBC Sport. (2014a). Liverpool: Anfield protest against prices during Hull City game. Retrieved october 23, 2018, from http://www.bbc.co.uk/sport/0/football/29775393
BBC, S. (2014). ‘Liverpool under UEFA Financial Fair Play investigation.’BBC News. Retrieved october 30, 2018, from http://www.bbc.co.uk/sport/0/football/29356406
Dan Roan, M. S. (2014). Labour proposes greater ownership power for football fans. Retrieved october 25, 2018, from https://www.bbc.co.uk/sport/football/29652317
Davies, P. (2014). Digital Trends Winter – UK – December 2014- Executive Summary. Retrieved october 29, 2018, from http://store.mintel.com/digital-trends-winter-uk-december-2014
Davies, P. (2014). Spectator Sports. Retrieved october 20, 2018, from http://store.mintel.com/spectators-sports-uk-april-2014
DiBella M.F. (2013). Statistically Ranking the World’s Top 20 Football Leagues. Retrieved october 30, 2018, from http:\\bleacherreport.com/articles/1458287-ranking-the-top-20-world-football-leagues-statitically.
EFL. (2018). Appendix 1 – Membership Criteria (Regulation 8). Retrieved october 30, 2018, from https://www.efl.com/-more/governance/efl-rules–regulations/appendix-1—membership-criteria-regulation-8/
Finacial Times. (2014). Currencies. Retrieved october 29, 2018, from http://markets.ft.com/research/Markets/Currencies
Fisher, E., Ellis, C., & Hymers, A. J. (2015). LFC Case Study. Retrieved october 30, 2018, from https://www.slideshare.net/AlasdairJoeHymers/lfc-case-study?from_action=save
Hunter, S. (2018). How Bill Shankly changed the team. Retrieved october 30, 2018, from https://www.liverpoolfc.com/news/first-team/144273-how-bill-shankly-changed-the-team
International Monetary Fund. (2014). WORLD ECONOMIC OUTLOOK(WEO)UPDATE An Uneven Global Recovery Continues. Retrieved october 29, 2018, from http;//www.imf.org/external/pubs/ft/weo/2014/update/02/
Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regner, P. (n.d.). Exploring Strategy (Eleventh ed.). Pearson.
Kent, D. (2014). ‘Liverpool claim they have a worldwide fan base 580m people…just as well they are looking to increase Anfield’s capacity. Retrieved october 30, 2018, from http://www.dailymail.co.uk/uk/sport/football/article-2792400/liverpool-claim-worldwide-fan-base-580m-people-just-looking-increase-anfield-s-capacity.html.
Liverpool FC. (2018). Liverpool FC. Retrieved october 31, 2018, from https://www.liverpoolfc.com/history
‘Liverpool Football Club Level 6 Strategic Marketing Case Study’ (2014).
Lunn, E. (2018). Can i get 4G in my area? Retrieved october 29, 2018, from https://www.cable.co.uk/guides/can-i-get-4g-in-my-area/
Markham, C. (2014). ‘Liverpool finacial results: Reds post £50m loss. but insist club is moving in right direction.’. Retrieved october 30, 2018, from http://www.independent.co.uk/sport/football/premier-league/liverpool-financial-results-reds-post-50m-loss-but-insist-club-is-moving-in-right-direction-9167721.html.
McLaren. (2013). ‘LiverpoolsnFC’s Winning online presence’ The UK sports Network. Retrieved october 30, 2018, from http://www.theuksportsnetwork.com/liverpool-fcs-winning-online-presence
MMU. (2014). ‘Liverpool Football Club Level 6 Strategic Marketng Case Study’. MMU Business School.
Mullock, S. (2015). Premier League set for TV revolution with EVERY GAME available for streaming under £4billion new deal. . Retrieved october 27, 2018, from http://www.mirror.co.uk/sport/football/news/premier-league-set-tv-revolution-4956046
Neville, G. (2013). Football needs to act now. The game is sleepwalking towards a crisis over agents. Retrieved october 24, 2018, from http://www.dailymail.co.uk/sport/football/article-2279744/football-sleepwalking-crisis-agents-it-act-Gary-Neville.html
Padmanabhan. (2014). TTIP: The EU-US trade deal explained. Retrieved from http://www.bbc.co.uk/news/uk-politics-30493297
Slater, M. (2014). Labour proposes greater ownership powers for football fans. Retrieved october 25, 2018, from https://www.bbc.co.uk/sport/football/29652317
Smith, A. (2013). Wealthy foreign investors in premier league clubs want more value for their buck. Retrieved october 28, 2018, from http://www.telegraph.co.uk/sport/football/teams/cardiff-city/10540074/wealthy-foreign-investors-in-premier-league-clubs-want-more-value-for-their-buck.html
Stewart, H. (2015). Interest rate delay and living standard rise good news for George Osborne. Retrieved from http://www.guardian.com/business/2015/jan21/interest-rate-living-standard-george-osborne-economics
The Guardian. (2014). Online shopping on mobiles overtakes desktop for first time. Retrieved october 19, 2018, from http://www.theguardian.com/business/2014/sep/02/online-shopping-mobiles-overtakes-desktop
THIS IS ANFIELD. (2018). Exclusive: Liverpool FC to announce Anfield Road extension plans later this year. Retrieved october 30, 2018, from https://www.thisisanfield.com/2018/02/liverpool-fc-announce-anfield-road-extension-plans-later-year/
UEFA. (2018). Financial Fair Play. Retrieved october 24, 2018, from https://www.uefa.com/insideuefa/protecting-the-game/club-licensing-and-financial-fair-play/index.html
UEFA. (2010). FFP Regulations. Retrieved october 30, 2018, from http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/50/09/12/1500912_DOWNLOAD.pdf.

2018-10-31-1541003624

About Essay Sauce

Essay Sauce is the free student essay website for college and university students. We've got thousands of real essay examples for you to use as inspiration for your own work, all free to access and download.

...(download the rest of the essay above)

About this essay:

If you use part of this page in your own work, you need to provide a citation, as follows:

Essay Sauce, Liverpool football club (PESTLE, Porter’s, SWOT). Available from:<https://www.essaysauce.com/business-essays/liverpool-football-club-pestle-porters-swot/> [Accessed 30-11-21].

These Business essays have been submitted to us by students in order to help you with your studies.

* This essay may have been previously published on Essay.uk.com at an earlier date.

Review this essay:

Please note that the above text is only a preview of this essay.

Name
Email
Rating
Review Content

Latest reviews: