This report will highlight the strengths and weaknesses of Manchester United Football Club (Manchester United) and suggest specific, detailed and feasible ways in which Manchester United could possibly change its operations/activities in ways that can benefit its short and longer terms operations.
2. Background Description
Manchester United Football Club competes in the English Premier League (United , 2018). Manchester United Football Club was established in 1878, originally named Newton Heath L&YR Football Club and has currently been operating for 140 years (United , 2018). Manchester United originally entered the English first division, in what was at the time, the highest football league in England, for the inception of the 1892-93 season (United , 2018). In 1902, Manchester United transformed their name from Newton Heath L&YR Football Club to what we now know as Manchester United Football Club (United , 2018). Manchester United won the first of their 20 English first division league Titles in 1908 with the last coming at the conclusion of the 2012/13 season, in the year 1910, Manchester United relocated to Old Trafford which is their current stadium and holds up to around 75,000 spectators. According to Forbes, Manchester United is valued at 3.689 billion dollars and is the most valuable football club in the world and the third most valuable sports organisation in the world (Badenhausen, 2017).
3. Sponsorship and Marketing activities
Manchester United operate and manage their business as a single reporting segment which is the operation of a professional sports team, furthermore, Manchester United review their revenue through three principal sectors, these three principal sectors include; Commercial, Broadcasting and Matchday (United , 2018).
Manchester United monetise their global brand within the Commercial revenue sector through: sponsorship, retail, merchandising, apparel & product licensing and mobile & content (United , 2018).
i. Sponsorship: Manchester United constructed their global brand and community of followers via marketing and sponsorship relationships with the most powerful regional and international companies from all over the world (United , 2018). To better influence the strength of Manchester United's brand, Manchester United developed a regional, global and product segmentation sponsorship strategy (United , 2018). Manchester United's sponsorship revenue was $297.4 million, $293.4 million, and $283.7 million for each of the years that ended as of the 30th June 2017, 2016, and 2015, respectively (United , 2018).
ii. Retail, Merchandising, Apparel & Product Licensing: Manchester United advertise and sell training and leisure wear, sports apparel and various types of clothing representing the Manchester United brand on a worldwide scale. Furthermore, Manchester United also sell numerous licensed products, that range from posters to cutlery, featuring the Manchester United trademarks and brand. The aforementioned products are dispensed through Manchester United branded e-commerce platforms and retail centers, as well as Manchester United's partners' wholesale distribution channels. Manchester United's retail, merchandising, apparel & product licensing revenue was $190.6 million, $178.3 million, and $57.9 million for each of the years that concluded as of the 30th of June 2017, 2016, and 2015, respectively (United , 2018).
iii. Mobile and Content: Due to the strength of Manchester United's brand and the quality of their content, Manchester United have formed mobile telecom partnerships in numerous countries. In addition, Manchester United market content directly to their followers through their website and associated mobile properties. Manchester United's mobile & content revenue was $16.8 million for the year ended 30 June 2017 (United , 2018).
Manchester United reap the rewards from the distribution of live football content immediately from the revenue they receive and indirectly via an expansion in worldwide publicity for Manchester United's commercial partners. Broadcasting revenue is stemmed from the global television rights connecting to the English Premier League, European competitions and other competitions. In addition, Manchester United's self-owned global television channel, MUTV, distributes Manchester United programming to around 60 territories and countries from around the world. Broadcasting revenue involving, in several instances, prize money acquired by Manchester United in respect of numerous competitions, will fluctuate from year to year as an outcome of unpredictability in the amount of obtainable prize money and the overall performance of Manchester United's first team in such competitions. Manchester United's broadcasting revenue was $355.7 million, $257.3 million, and $197.4 million for each of the years that came to a closure as of June 30, 2017, 2016, and 2015, respectively (United , 2018).
Old Trafford is one of the most iconic sports stadium in the world. It currently seats 75,643 and is the largest football club stadium in the UK. Manchester United have averaged over 99% of attendance capacity for their English Premier League games in every single season from the past 18 years. Matchday revenue will alter from year to year as an outcome of the number of home games played and the performance of Manchester United's first team in several competitions. Manchester United's matchday revenue was $204.5 million, $195.3 million and $166.0 million for each of the years that finished as of 30 June 2017, 2016, and 2015, respectively (United , 2018).
Manchester United's total revenue for the years that ended on the 30th of June 2017, 2016 and 2015 was $1.065 billion, $724.3 million and $794.0 million, respectively (United , 2018).
4. Organisational goals and objectives
Manchester United aim to increase their revenue and profitability by expanding their high growth businesses that leverage the Manchester United brand, global community and marketing infrastructure (United , 2018). The key goals and objectives that Manchester United try to achieve is expanding their portfolio of sponsors and to further develop their apparel (United , 2018).
a. Expansion of the portfolio of sponsors:
Manchester United are well-positioned to continue to secure sponsorships with leading brands. Manchester United have historically instilled an upbeat approach to identifying, securing and supporting sponsors. During the fiscal year of 2017 Manchester United revealed nine global sponsorship partnerships, one regional sponsorship partnership and two financial services and MUTV partnerships (United , 2018). Manchester United experienced a 4.6% compound annual growth rate in their sponsorship revenue from the 2015 fiscal year through to the fiscal year of 2017. Manchester United's historical expansion rates does not assure that they will achieve equivalent rates in the future. Furthermore, to increase Manchester United's global sponsorship portfolio, Manchester United are concentrated on segmenting bright prospects by product category and territory. As part of this strategy, Manchester United established an office in Hong Kong in August 2012, which has successfully accomplished several sponsorship contracts. This is in addition to Manchester United's London and Manchester offices (United , 2018).
b. Further development of apparel:
Currently, Manchester United have a 10-year agreement with Adidas with respect to their worldwide technical sponsorship and dual-branded licensing rights, which began on the 1st of August 2015 (United , 2018). The contract with Adidas doesn't involve the rights with respect to mono-branded licensing rights or the right to establish and operate Manchester United branded football schools, e-commerce retail channels and physical retail channels. These are business zones that were formerly controlled by Nike and the reversion of these rights to Manchester United delivers Manchester United with increased commercial opportunities and control. In the future, Manchester United plan to invest to expand their portfolio of product licensees to enhance the range of product offerings available to their followers. Additionally, Manchester United may possibly also try to find out how they segment the diverse components of this business. Manchester United may also increase their focus on developing these rights more proactively, alone or with other partners (United , 2018).
5. Recommendations for improvement
a. Sponsorship and Marketing
Manchester United can improve their broadcasting income as they still trail English Premier league rivals Manchester City Football Club and Arsenal Football Club in this compartment (Maguire, 2018). The broadcasting income for Manchester City Football Club and Arsenal Football Club for the 2016/17 season was $378.1 million and $369.0 million respectively, in comparison to Manchester United's $359.7 million (Maguire, 2018). The reason why Manchester United fell behind their rivals is due to their failure to qualify for the Elite European club competition, the Union of European Football Associations (UEFA) Champions League, whereas Manchester City Football Club and Arsenal Football club both qualified for the UEFA Champions League. Manchester United can improve their Broadcasting income by qualifying for the UEFA Champions League as it can increase broadcasting income by $73.7 million just by qualifying and could potentially increase to $165.9 million if Manchester United win the prestigious tournament (Maguire, 2018).
Due to the aforementioned reasons, the strengths and weaknesses of Manchester United Football Club have been discussed along with the suggested specific, detailed and feasible ways in which Manchester United can become successful in short and longer-term operations.
...(download the rest of the essay above)