Not many people could expect that Hong Kong national football team could beat Japan national team and got their first gold medal in East Asia Game 2009. The amazing result not only stole the spotlight from public but also made The Hong Kong Government rethink about the development of local football market. A marketing research company was invited by government to analysis the environment of local football market and recommended some of the strategy for enhancing the building of the market. It was expected that the rank of the Hong Kong football will rise to the top in Asia within 10 years. For the football development proposal, not many people showed optimistic attitude, because of a lot of difficulties which all local football clubs can not ignore.
Now, it will be explained how the political, economic and social factors challenge the development of local football club by an analysis of local football market using PEST model. Also, a legendary of local football club - South China Athletic Association Football Club (SCFC) will be as example for explaining their strategy against such factors.
PEST analysis stands for Political, Economic, Social and Technology analysis. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operation. As the technological factor have not brought a high threat to the local football market, the factor will not be mentioned in the following analysis.
For a developing football market, the role of Government is essential. It is because the amount of investment liked the facilities, the youth development and the subsidy of operation cost in football club are very huge. Few business investors would have incentive to take the responsibility when the size of market is still very small. Thus, only the government can take the responsibility in creating an environment and attract football investor. J league is a successful representative. However, obviously, the support from Hong Kong government is far from enough.
In Hong Kong, only the football club in B and C division can gain subsidy from the government, when the club raises to A division, the subsidy will be cut immediately. Although the subsidy is just 300 thousands a year in maximum, the cut of subsidy still bring not less football club in a financial difficulty. For instance, Eastern Football Team, a traditional local football club, decided to downgrade to C division due to the financial difficulty during 2008/2009.
Furthermore, the support of youth development from government is not sufficient. Since 1997, football is no longer in the list of elite sport of Hong Kong Sports Institute (HKSI). As a result, the funding is obviously insufficient compared with other sports. According to the figures in 2009-2010 from Leisure and Cultural Services Department, the youth development funding to the item of football is HKD 139 a people compared with squash which is HKD 352 a people. In the total 58 of sport item in HKSI, the amount of funding in football is 55 th. It seems that government does not emphasize on the development of local football at all. Thus, compared with 60’s to 80’s, there are few youth potential footballs player can be found nowadays,
In Hong Kong, political factor is seems the core factor which affect the football market. However, we still should not underestimate the factor of economy. Since 2008, the financial tsunami has flow the global economy. Hong Kong, as an international city, was apparently not avoidable. Thus, there is no wonder the football market is also affected.
Generally, the main income of a football club is come from three sources – the sale of football ticket, the business sponsor and the sales of promotional football item. Some of world football club liked Manchester United can generate over than 3 Billion a year from those sources.
In Hong Kong, the situation is a little bit...