Strategic analysis of Liverpool FC

Thèmes abordés

LIVERPOOL FC, PESTEL, SWOT, PORTE 5 FORCES, VALUE CHAIN, CRITICAL SUCCESS FACTORS

Résumé du document

This assignment is to provide a strategic analysis of the football club Liverpool FC within the business environment of the English Premier League. Liverpool FC is historically seen as the most successful football club within the Premier League, having won 18 League titles, seven FA Cups and the European Cup five times (now: Champions League) (Liverpool FC, 2009). However, they have failed to win the League title since the season of 1989/90. In terms of revenue it is the fourth largest club of the Premier League (Deloitte, 2009).

The English Premier League is the highest league of the English football league system. It consists of 20 members and is connected to the next lower league through a system of promotions and relegations. Although all 20 members theoretically form part of the same league, there is a significant gap in terms of revenue as well as sportive success between the
four most successful clubs and the remaining 16 (further description given in Task A – Five
Forces – Competitive Rivalry) Thus, they have to be regarded as two different industries,with the clubs Manchester United, Arsenal FC, Chelsea FC and Liverpool FC forming an oligopolistic industry at the top and the remaining 16 clubs gathering in a balanced, competitive environment below. Due to this division, all industry related analyses in this
assignment are focused on the “Top Four Oligopoly”. These analyses, namely PESTEL, Porter's Five Forces Analysis, form the first part of this assignment together with an examination of the "Critical Success Factors". Part B focuses on the company Liverpool FC
itself, analyzing its resource capabilities as well as its sustainable competitive advantage. The report ends with a critical breakdown of the strategic direction of Liverpool FC in its industry.

Extraits

[...] Figure 10: Stadium capacity 14 Further facilities are for example the training grounds and the youth academy. Liverpool's training facilities at Melwood are described to be “some of the best facilities in Europe” (This is Anfield, 2009). Its youth academy has brought out a number of exceptional players such as Michael Owen, Steven Gerrard, Jamie Carragher and Robbie Fowler and can hence be regarded as being outstanding (Liverweb, 2009) Source: Deloitte Physical capabilities The most important indicator for a club's physical capabilities is the utilization of its most important resource, its stadium. [...]

[...] Thus, financial success can also be seen as a key driver of sportive accomplishments. As the focus of this assignment is the financial aspect, however, the correlation is defined this way round at this point. Table Critical Success Factors 2.4 Opportunities and Threats Table 2 summarizes the opportunities and threats that evolve out of the external factors affecting the Top Four industry. Opportunities Private investors setting free high amounts of capital Internet broadcasts as alternative to TV networks Growing interest in the Premier League in other countries5 Threats Economic development as a brake to growth Legal restrictions planned by UEFA, FIFA and FA Growing supplier power Competitive rivalry as internal threat Table Opportunities and Threats 2.5 Summary of Part A The PESTEL analysis has shown that economic developments play a major role for the future of the Premier League, as it is considerably capital intensive and thus dependent on money supply, interest rates and exchange rates. [...]

[...] Hence, the two options considering a new product cannot be taken into consideration at all. The remaining opportunities are market penetration/consolidation and market development. These are to be assessed singularily. Market penetration This option would imply taking efforts to grow in the existing industry, hence striving for more success within the Premier League. For Liverpool, the weakest competitor in this industry, this would only be feasible with high investments in stadium and staff, thus covering the two key success factors which can be pursued monetarily. [...]

[...] Wikimedia Foundation, Inc., 2009c. Carlo Ancelotti. [Online] (Updated 13 November 2009) Available at: http://en.wikipedia.org/wiki/Carlo_Ancelotti [Accessed 13 November 2009]. Wikimedia Foundation, Inc., 2009d. Alex Ferguson. [Online] (Updated 13 November 2009) Available at: http://en.wikipedia.org/wiki/Alex_Ferguson [Accessed 13 November 2009] Wikimedia Foundation, Inc., 2009e. Liverpool F.C. [...]

[...] Table 1 names these critical success factors for the Top Four industry. Critical success factor Loyal supporter base Comment A loyal supporter base is highly important to every club, as they have direct influence on matchday revenues and indirect influence on money paid by sponsors Source: Deloitte High quality and capacity stadium As matchday revenues account to more than a third of overall revenues (see Appendix capacity of the stadium can be a significant competitive advantage in the long run. [...]