Real Madrid - the Business

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  • Topic: Real Madrid C.F., La Liga, Madrid
  • Pages : 8 (2951 words )
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  • Published : May 1, 2007
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Real Madrid - The Business
1. Analyze Real Madrid's business strategy using the value chain and competitive forces models. Why has the team been so successful? Value chain analysis: [1]
Primary activities:
Operations - Here we can consider all the activities related with the team, including played games. We can think about a game as a performance, which the team sells among other things. Every time the team enters the pitch, Real Madrid is producing a product that sells. Marketing and Commercialization - Clearly this is where Real Madrid focuses its activity. We can refer the way the club takes advantage of the player's image to promote itself and make money. The Real Madrid name is treated as valuable brand such as Coca-Cola for instance. Real Madrid offer's its products in its own stores and makes it possible to distribute its products over other distribution channels like the web. Service - In this topic I consider important to refer all the service provided to the members of the club. Being a member has some benefits, like having access to tickets at a low price. The web-site has a section dedicated to the "socios". In these primary activities I don't consider the inbound or outbound logistics, since it seems that it doesn't apply to this kind of organization. Support Activities:

Administration and Management – We can point out here the structure of the organization, and the executive staff composed by experienced managers. A good management team is a key element to achieve success. The internal organization reflects the club needs and every team knows exactly what it is expected to do. Human- Resources – I would refer here the policy of professionalize the management team, but also very important the existence of internal mechanisms that evaluate employee performance making it possible to reward and recognize the good work. This system suffered some changes to be more transparent and fair, so the employee motivation can increase. Motivated employees are a success factor. Technology – In this topic, we can refer how Real Madrid is using the new technologies to promote its image and brand. I'm speaking about the web-site for instance. We also can refer how an advanced MIS is supporting the internal activity, by making it possible to integrate all the different systems that are incompatible otherwise. Procurement – I think we can refer here how Real Madrid buys its main actives: the players. The club bases its decisions in some marketing factors when it comes to superstar signing, and tries to unveil as soon as they can if a young player can one day be part of the main team. We can also analyze Real Madrid strategy with Porter's five forces model. [2] While it is difficult to a club reach the level of Real Madrid, it is not complete impossible. I would refer here a known case study of a new entrant, an English premiere league club: Chelsea FC. Under new management the club has been growing both as a team and a business. Many changes were also implemented including an image revamp, but Chelsea FC success is based in good sport results. Although Chelsea is not a competitor of Real Madrid or Manchester United yet, it is growing and is starting to compete specially with Manchester United that plays in the same league. Mentioning suppliers, we can think about the power that the producers of sports equipment or travel agencies (to manage regular club flights) have when it comes to bargain a price for the service. I think that this power is not very high, and so this force is not the first menace to the clubs success. When it comes to customers, if we consider two types of customers such as members and fans and institutional clients such as the sponsors (if we see sponsors has client of the club's image), this force is one to pay attention for. As a whole fans have great power in the clubs life because they provide the club with resources. Also the sponsors can have a word, when it comes to provide the team with large...
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