Harvard Case - The Globalization of Manchester City Football Group
"The Globalization of Manchester City Football Group" Harvard business case study is written by Maria P. Roche, Tiona Zuzul, Exequiel Hernandez, Amy Klopfenstein. It deals with the challenges in the field of Strategy. The case study is 25 page(s) long and it was first published on : Nov 8, 2022
At Fern Fort University, we recommend that Manchester City Football Group (MCFG) continue its aggressive globalization strategy, focusing on strategic acquisitions, organic growth, and leveraging its existing assets to build a global football empire. This strategy should be underpinned by a strong focus on innovation, technology, and data analytics to enhance fan engagement, player development, and commercial operations.
2. Background
The case study 'The Globalization of Manchester City Football Group' details the rapid expansion of MCFG, a football club based in Manchester, England, into a global sports and entertainment powerhouse. The group's strategy involves acquiring and developing football clubs in key markets like the United States, Australia, and Japan, while simultaneously leveraging its brand and resources to expand into new revenue streams like media, merchandise, and youth academies.
The main protagonists of the case study are Khaldoon Al Mubarak, the Chairman of MCFG, and Ferran Soriano, the CEO, who have spearheaded the group's ambitious globalization strategy.
3. Analysis of the Case Study
Strategic Analysis:
- SWOT Analysis:
- Strengths: Strong brand, global fan base, financial resources, innovative approach, strong leadership, access to talent, and a focus on data analytics.
- Weaknesses: Dependence on a single sport, potential cultural and regulatory challenges in new markets, and a lack of experience in some areas like media production.
- Opportunities: Expanding into new markets, developing new revenue streams, leveraging technology to enhance fan engagement, and establishing a global youth academy network.
- Threats: Competition from other global sports organizations, economic downturns, and changes in fan preferences.
- Porter's Five Forces:
- Threat of New Entrants: Moderate, due to high capital investment and strong existing players.
- Bargaining Power of Buyers: Moderate, as fans have multiple options for entertainment.
- Bargaining Power of Suppliers: Moderate, with players and coaches having leverage.
- Threat of Substitutes: High, as fans have alternatives in other sports and entertainment forms.
- Competitive Rivalry: High, with established clubs like Real Madrid, Barcelona, and Bayern Munich.
- Value Chain Analysis:
- MCFG's value chain is characterized by strong vertical integration, from player development to media production and distribution. This allows them to control key elements of their business and generate value across the entire chain.
- Business Model Innovation:
- MCFG has innovated its business model by diversifying revenue streams, leveraging technology for fan engagement, and creating a global network of clubs and academies. This allows them to capture value beyond traditional football operations.
Financial Analysis:
- MCFG's financial performance has been strong, driven by revenue growth from broadcasting rights, sponsorship deals, and merchandise sales. The group has also made strategic investments in infrastructure and technology, which will likely drive future growth.
Marketing Analysis:
- MCFG has successfully leveraged its brand and marketing efforts to build a global fan base. The group uses a variety of channels, including social media, digital platforms, and traditional media, to reach fans worldwide.
Operational Analysis:
- MCFG has implemented a data-driven approach to player development, scouting, and match analysis. The group also invests heavily in technology and infrastructure to improve efficiency and enhance fan experience.
4. Recommendations
1. Continue Global Expansion: MCFG should continue its aggressive globalization strategy by acquiring clubs in key emerging markets, particularly in Asia and South America. This will allow them to tap into new fan bases and generate additional revenue streams.
2. Leverage Technology and Data Analytics: MCFG should invest heavily in technology and data analytics to enhance fan engagement, improve player performance, and optimize commercial operations. This includes developing innovative digital platforms, utilizing AI and machine learning for scouting and training, and leveraging data to personalize fan experiences.
3. Diversify Revenue Streams: MCFG should continue to diversify its revenue streams beyond traditional football operations. This includes expanding into areas like esports, media production, and merchandise sales.
4. Build a Global Youth Academy Network: MCFG should establish a global network of youth academies to identify and develop talent from around the world. This will not only strengthen the group's player pipeline but also create a global community of young fans.
5. Foster a Strong Corporate Culture: MCFG should maintain a strong corporate culture that emphasizes innovation, collaboration, and a commitment to excellence. This will attract and retain top talent, drive innovation, and ensure long-term success.
5. Basis of Recommendations
1. Core Competencies and Consistency with Mission: The recommendations align with MCFG's core competencies in football operations, brand management, and technology. They also support the group's mission to become a global leader in sports and entertainment.
2. External Customers and Internal Clients: The recommendations are focused on enhancing fan engagement, improving player performance, and optimizing commercial operations, all of which benefit both external customers and internal clients.
3. Competitors: The recommendations are designed to help MCFG stay ahead of its competitors by leveraging technology, expanding into new markets, and diversifying revenue streams.
4. Attractiveness: The recommendations are expected to generate significant financial returns through increased revenue, improved efficiency, and enhanced brand value.
6. Conclusion
MCFG's globalization strategy has been highly successful, but the group needs to continue innovating and adapting to stay ahead of the curve. By leveraging technology, expanding into new markets, and diversifying its revenue streams, MCFG can solidify its position as a global leader in sports and entertainment.
7. Discussion
Alternatives:
- Focus on Organic Growth: MCFG could focus on organic growth within its existing markets instead of acquiring new clubs. However, this would limit its potential for rapid expansion and global reach.
- Slow Down Globalization: MCFG could slow down its globalization strategy and focus on consolidating its existing assets. However, this would risk losing momentum and competitive advantage in the rapidly evolving global sports landscape.
Risks and Key Assumptions:
- Economic Downturn: A global economic downturn could impact MCFG's revenue streams and ability to invest in new markets.
- Regulatory Challenges: MCFG may face regulatory challenges in new markets, particularly related to ownership structures and foreign investment.
- Cultural Differences: MCFG needs to be sensitive to cultural differences in new markets to avoid alienating fans and stakeholders.
Options Grid:
Option | Advantages | Disadvantages |
---|---|---|
Continue Global Expansion | Rapid growth, global reach, new revenue streams | High investment, regulatory challenges, cultural differences |
Focus on Organic Growth | Lower risk, focus on core markets | Slower growth, limited global reach |
Slow Down Globalization | Consolidation of existing assets, reduced risk | Loss of momentum, competitive disadvantage |
8. Next Steps
- Develop a detailed global expansion plan: This plan should outline target markets, acquisition strategies, and investment requirements.
- Invest in technology and data analytics: MCFG should allocate resources to develop innovative digital platforms, utilize AI and machine learning, and implement data-driven decision-making processes.
- Establish a global youth academy network: MCFG should identify potential locations for new academies and develop a comprehensive training program.
- Monitor market trends and competitor activity: MCFG should continuously monitor market trends and competitor activity to ensure its strategy remains relevant and competitive.
By taking these steps, MCFG can continue its journey to becoming a truly global sports and entertainment powerhouse.
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Case Description
This case describes the efforts of City Football Group (CFG) to purchase Esporte Clube Bahia (Bahia), a Brazilian professional soccer club. CFG's strategy was to acquire under-performing clubs worldwide, invest money in high-profile players, and improve the teams' performances. The company also aimed to develop young players on its lower-tier teams and then funnel them to Manchester City, its highest-performing team, once they matured. CFG instructed the teams to follow a similar style of play and, in some cases, changed teams' jerseys and names to conform to CFG's brand. Purchasing Bahia presented the opportunity to gain a foothold in Brazilian soccer, an under-monetized market poised for rapid growth. Yet Bahia was a mid-tier team with no star players. It was also unclear whether Bahia's fans and players would meld with CFG's culture and expectations. At the conclusion of the case, CFG CEO Ferran Soriano discovers that the price for Bahia is significantly higher than reports had initially indicated. Is the club worth the price?
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