Strategic Position Analysis And Product Diversification Essay For West Ham United.

You have been approached by West Ham United (sport management/marketing students

i) Analyses the strategic position of that organisation, using relevant analysis tools

ii) Analyses and evaluates the options for diversification of the organisation’s existing product portfolio

iii) Makes specific recommendations for the organisation based on this analysis

The report should include appropriate contemporary academic and practical business references (in the case of the latter, specific to your chosen organisation) and rely on the critical application.

This report aims to analyse the strategic management option of the organisation West Ham United. With the increasing football clubs in UK and the paralleling increasing supporters of football, West Ham United has to enhance its management strategically to be ahead of its competitors and gain a competitive advantage. The report sees the strategic position of the organisation relating it to the Bowman’s strategic Clock (Bell, Brooks and Markham, 2013). A VRIN analysis is done to evaluate the sustainable competitive advantage for the organisation. The frameworks like PESTLE and SWOT are used to analyse the business environment of the company. Finally the strategic recommendation with potency to develop the products is given to show that the organisation still has the capability to grow.

West Ham United is the highest in the English football club that is based in Upton Park, England, presently playing Premier League, which the highest division of the English Football. Due to the moderate results accomplished by West Ham United FC in the activities of football in the last years, it had not qualified in any competition in Europe (Borooah and Mangan, 2012). West Ham United was placed in top 7 in the Premier League clubs by Brandfinanace in the 50 most valuable brands of football in the world that demonstrates the popularity of the club at a global stage.

The following diagram will portray the highlights of 31^st May 2013 year end with the potency of development of the organisation, because the new contracts of sponsorships will fetch the additional funds whereas 99 year lease of the stadium will increment the capacity of the stadium by 54% that will give substantial added revenue from the matches and the season tickets (Burdsey and Gorman, 2014).

Figure 1: Highlights of 2012-2013, position of the organisation

The following table will show the position of the company financially:

 Table 1: Profit and Loss Account at the year end of 2012 and 2013

Present Strategy

The above table shows the position of the organization and the improvement in the financial terms due to the escalation from Championship to the Premier League at the season end of 2011-2012. The growth of profit before taxation and interest and the turnover growth from the table demonstrate the future prospect of the organisation with the possibility of probable investment since there is financial stability of the organisation (Burdsey and Gorman, 2014). The increase in the administrative was anticipated due to the promotion of the Premier League, it shows that the decrease in the expense with give a stable position to the club.

The organisation’s current strategy is given in the following table that shows the most expensive match tickets (day) and the most expensive season tickets for the FA Premier League Season 2013-2014.

 Table 2: Expensive Season and day tickets

The above table shows West Ham United uses the Bowman Clock currently and can be positioned given in the following figure.

Figure 2: Bowman’s Strategic Clock for West Ham United

 After studying the factor that West Ham has high match and high season tickets as compared to the other Premier League Club; also considering the aspect that the club owns the average rates for their official merchandise, West Ham’s present strategy can be positioned as High/Risky margin” on the Bowman’s Clock since the average outcomes implies a mediocre perceived value of the customers (Calligeris, Burgess and Lambert, 2015).

The basic necessities of West Ham are to be capable enough to compete in the market since the stores and the home stadium are the significant revenue sources. VRIN framework will show if the organisation is the source of the sustainable competitive edge. The following table will demonstrate the VRIN evaluation of the capabilities of the club

 Table 3: VRIN Analysis Framework

From the above VRIN Analysis it shows that the various capabilities that West Ham United possesses can give an important competitive edge. The capabilities like the Academy of Football, Olympic Stadium and the management experiences can help the West Ham United to overpower their competitors in both UK and international level.

The organisation West Ham United functions in the FA Premier League, the greatest and the highest division ranked in the English football. According to (Di Mascio and Bradley, 2013), the finance experts in football, the Premier League clubs have cumulated revenue of around £2.26bn in the years 2011-2012. Furthermore, it was estimated that there was a growth in the revenue to £2.6bn in the year 2012 and it will move to £2.9bn in the year 203-2014 for the first time. The following diagram will show the revenue generation for the Premier League Football clubs of the industry.

VRIN Evaluation of the Capabilities

Figure 3: Revenue sources of the Premier League Clubs

The PESTLE analysis of West Ham United is given below showing the analysis of the external industry in which it operates its business (Dr. SP Mathiraj and Jothi M, 2011). The following table demonstrates the critical issues in the industry and provides a better emphasis of the industry to construct a feasible strategy.

 Table 4: PESTLE Analysis

The most significant issues that will dictate the alterations within the industry are the taxes that are charged by the Government, regulations of Financial Fair Play and the escalating interest in West Ham United. The regulations will bridge the gap between the powerful clubs and the others that will give benefits to West Ham United which has less financial capability.

The following table will illustrate the various aspects of the industry in which West Ham United is operating.

 Table 5: Porter’s Five Forces Framework

SWOT Analysis will define the external and the internal environment of the organisation in regards to strengths, weakness, opportunity and threats of West Ham United and the industry that it executes its operations.

It is a recognised brand globally with an increment of awareness in US, Asia and the Australian markets. There is a presence of high quality in their merchandising. It is the future home stadium with the escalated capacity. The associated sponsors are Adidas, SBOBET or Alpari. There exists a huge support from the fans (Groot and Zoutenbier, 2014). There is stability in the financial position of WHU as compared to the competitors of the similar size.

There exists less awareness and popularity globally as compared to the other English clubs like the Liverpool or Manchester United (Pringle et al., 2013). There is low financial power as compared to the competitors like Chelsea FC or the Manchester City.

The targeting markets like Australia, Asia or the United States of America being the potential markets to target for increasing the brand equity (Millward, 2013). More advertisement will increment the brand equity in the international markets. There will be opportunities of ticket revenues after the move to the Olympic Stadium.

The acquisition of the other football clubs by the financially robust businessmen is a probable threat. The regulation of the new Financial Fair play and the following trends of the other clubs to target the global markets are potential threats (Jones, 2011).

The following table will give the strategic recommendation along with the development in the product

Product Diversification Recommendations

Table 5: Strategic Recommendation and Development of Product

Conclusion

The report shows the different aspects of West Ham United and the capabilities of the organisations. It aimed to make a growth in the industry with sustainable competitive advantage and brand equity. It is found after a detailed analysis that the company is in a comparatively better position as compared to the other clubs. The point that is emphasised here is that WHU has to increase it brand equity by strategic alliances so that it can generate more revenue. There is also an option for developing a product like rugby which the next popular sport after football.

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