Case Study Assignment 1

ÖREBRO UNIVERSITY SCHOOL OF BUSINESS Business Administration, Global Marketing Autumn 2016 Case Study Assignment Johan Kask

Case Study Assignment Manchester United: Still Trying to Establish a Global Brand

Roumi, Saman – 951011

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Question 1 How do you evaluate the international competitiveness of ManUtd after the takeover of Malcolm Glazer? __________________________________________________________________________________ On May 2005 Malcolm Glazer took over Manchester United Ltd. by buying 98% in stake for 1.4 billion dollars. The club tried to extend its international competitiveness after the Glazer’s incorporation in several ways, in order to make it more than just a soccer team, to make it a global brand. Using Porter’s diamond model, we can see that basically all the interlinked factors for competitive advantages enhanced after Glazer. The first factor of strengthening the firm’s strategy of creating a more competitive team was successful, and was shown through the fact that the team won the English Premier League title for three consecutive years. This opened up greater opportunities for a brighter reputation of Manchester United, since the matches are broadcasted over most of the world. This also strengthened the demand conditions in the diamond model; having the EPL become a bigger and more internationally competitive league by having a team that is also rewarding outside of their home country (shown by their strong performance in international competitions, such as UEFA Champions League). Aforementioned also creates a stronger fan base, which in turn creates scattering loyal fans, thus increasing several different factors, amongst others the industry of British television. By having a greater interest for Manchester United, more individuals will watch the games via British media, and thus increasing their assets, at the same time as EPL gained more viewers and making it an even bigger league. Moreover, this generates memberships, merchandise revenue and much more, in foreign markets, and therefore increasing the advancement of the Manchester United brand and profit. From the perspective of Porter’s five forces, there hasn’t been a strong change in threats of substitution or threats of new entry, for Manchester United after Glazer’s takeover. One can even say that it is the other way around, since they became an even bigger club since they got a bigger international brand after their successful run in 2007-2009. While other clubs competing for the same objectives, both in the English Premier League and globally, Manchester United’s international competitiveness did not fall behind, and thus kept the competitive rivalry. Though the power of customers has decreased, since many things were not exactly in the favor of the customers, like the increase of match ticket price, the club did not lose many fans, but increased its base in account of the success of Manchester United now had become a luxurious club and hence also a marketing brand. Since Manchester United have a higher perceived value to the customers after the takeover of Malcolm Glazer, they have a competitive 2

advantage in the market that is hard to gain by other measures. These are all factors that improve the international competitiveness of the club, since the different activities generate different kind of profits, which helps the club in building a stronger team which can compete better and gain an even greater image and profit in international standards. Manchester United’s international competitiveness have also received a boost by the different sponsorships, for example the one with Nike. The thirteen years-deal with Nike has generated over 527 million dollars, and these kind of sponsorships help the club with being more well-known around the world when people associate different brands with Manchester United. They give a more international image with affirms the popularity and presence of the club on an international standard.

Question 2 Discuss and explain how the different alliances can increase the competitiveness of ManUtd. __________________________________________________________________________________ The competitiveness of Manchester United can increase as a result of various alliances. Sponsorship is one of the most important factors in the network of Manchester United. The club used to have Vodafone as collaborative sponsor of the team jerseys. It generated £36 million, but the alliance ended in 2005 during the negotiations of Glazer’s takeover. Instead, they developed a new alliance with AIG as a new collaboration with the AIG logo visible on the team’s jerseys. This allows both parties to take advantages creating positive publicity and enhancing their image. The fact that AIG is an American insurance company helps the opportunity to advance the American market and generate more fans for Manchester United. This is mainly because the American population can easier associate the team with a well-known concept in their home-country, and therefore breakdown the “outsider barrier”. The deal was for four years until 2010, and supposedly generated $14,1 million per year. The latest kit-sponsorship came with the collaboration of the British company Aon. This enables the fact of enhancing the two brands on a more local level and thus reinforcing the roots of the club with the fans. Together with other partners that the club has, for example the telecommunication alliances, the companies play a central role in the perfecting and rarefication of the Manchester United brand. Foremost using branded products and customized offerings, both parties benefit from the reputations of each other. There are other activities as well that are coming out of the alliances, like tours in the sponsor’s county that can increase the competitiveness of the club.

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Question 3 What are the main threats to retain ‘Manchester United’ as a global brand? __________________________________________________________________________________ Maintaining the status of a well-known global brand can be difficult, and there are a couple of threats that could undermine that status. Drop in success rate, the fact that many international fans might be less loyal to the club than local fans, differences from product placement or administrative errors that could occur, are all main factors that pose as potential threats to Manchester United’s global brand. These can all lead towards the lower brand awareness, that could erode the global brand status and essentially lower the value of the club’s brand. This could also lead to the threat of having rival fans in the same market and less merchandising profit from other countries than England, that will say from the international market. And with less profit, it would be even more difficult to sustain the view of a global brand. Even different regulatory standards and the lack of a strong CSR concept can diminish the global brand of Manchester United.

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