Football is a highly popular sport in the UK and Europe. Millions of people in the UK, Europe and other parts of the world are avid football fans. The football industry is also a major income earner. The 12 highest earning football clubs in descending order are Manchester United, Juventus, AC Milan, Real Madrid, Bayern Munich, Inter Milan, Liverpool, Arsenal, New Castle, Chelsea, Roma and Bor Dormund. Manchester United tops the list of these football clubs as the richest and most popular in the world. To understand how Manchester United has accumulated such immense wealth, it is important to understand that it is run not only as a football team, but also as a business. Its fan-base boasts of over 60 million devoted fans worldwide. The club owns the Old Trafford grounds; therefore, it has a solid asset base. One of its main sources of income is gate receipts. It is also listed in the Stock Exchange. The other source of income for this club is sponsorship funds from companies such as Nike and Vodafone. In addition to this, the club offers financial services such as; branded savings accounts and credit card facilities. It does this through partnership with Brittania Building Society and MBNA International bank. (Andrews, 2004). Manchester United is involved in the following industries; football, merchandising, catering, media, hotel, finance, mobile, travel services and magazines.
Manchester United has also used its brand image to it advantage. It is easy to recognize its colors; red and white and its logo is also easily identifiable. This has made it possible for the club to venture into various other ventures, through their fans knowledge of the Man-U brand image.
The most significant strength of the Manchester United club is the brand-consciousness of its fans worldwide. Manchester United has used its brand image to it advantage. It is easy to recognize its colors; red and white and its logo is also easily identifiable. This has made it possible for the club to venture into various other businesses, through their fans knowledge of the Manchester United brand image. The club’s other strength is its reputation as the best football team in the world. This has been achieved by selecting a team of the most talented and skillful football players internationally. They buy these players from other football clubs and offer them higher remuneration. Because of their fame as the best football club, it is able to rely on the sale of match tickets as a steady source of revenue. All its games have sold-out in the past.
The third strength is that it is highly attractive to sponsors; the team is sponsored by companies I the U.S.A., South Africa, Asia, South Africa and Europe. This sponsorship is a major revenue source, and is enhanced by the growing successes of the club. Manchester United reaps handsomely from its organizational effectiveness. (Hamil, 2001).This comes as a result of getting the best talent for the job. For instance, it only hires the best players, the best coaches and the best business executives for the top jobs.
One of the weaknesses of the club is its inconsistent performance. Sometimes the football team seems to be doing extremely well, and other times they lose in crucial matches that make them fail to win the premier league title. This is a disappointment to the various shareholders of the Company. Another weakness of the club is its over-diversification. The company has slowly replaced its core product of being a football club with other activities; hence, it has diverted its more of its attention into generating revenues and profits than winning football matches.
Manchester united has various opportunities that can enhance its growth both as a company and as a football team. Firstly, the expansion of Old Trafford from a 67,000-seater stadium into perhaps an 80,000-seater stadium would bring higher revenues from ticket sales. Secondly, the football club can use the English Super League as an opportunity to win over more fans, sponsorships and stockholders. They can do this by avoiding complacency and putting their best game forward in order to win the title. The other major opportunity that Manchester united has is penetration into the North American market. They can do this by marketing themselves more aggressively in the U.S
The threats faced by Manchester United are firstly, the frequent transfer of players to other clubs and also from other clubs. This has the potential to reduce the team’s fan base if the new players cannot match up to the skills of the old players. The other threat faced by the club is its competitors. The football team faces constant competition from teams like Chelsea FC and Arsenal; it has to ensure that it does not lose any of its matches to its competitors. (Hamil, 2001). The other threat of the company is that it has to pay huge salaries to its players in order to retain them. This might have a negative impact on the financial standing of the club, especially if the players demand a rise in their salaries.
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