S.W.O.T.

Analysis For
Manchester
United FC
BES La Salle Kristian
December 2008 Dobrev
S.W.O.T. Analysis For Manchester United FC
Introduction

The Premier League is booming and has arguably developed to being the best, hardest, and
most watched league in the world. This brought about the interest of this analysis, based on
the case of Manchester United FC; probably the world’s foremost sporting brand and most
famous football club.

Strengths

› Global brand
› Manager + Team
› Ticket revenue
› Attractive to sponsors + media

One of Manchester United’s major strengths is their global brand, which is exceptionally
recognized around the world. This gives them the advantage that every type of merchandise
with their name and logo on is being identified by some 333 million fans and followers
worldwide (Mirror, 2008), which is roughly one in every twenty earthlings…
Apart from their brand consciousness, Manchester United has a powerful asset which no
other team has: their manager. Sir Alex Ferguson has been managing the club for over 22
years now, winning 30 trophies – making him the most successful manager in British history
(manutd.com). Such consistency allows Manchester United to make better decisions for
both short- and long-term goals. This can be seen in the solid team they have and the
different projects they have accomplished in the past years, the expansion of Old Trafford
being one of them.
Because of their great fan base and high average attendance (premierleague.com), ticket
revenues can be considered as strength, proven by the 30% increase in match day revenue
due to the expansion of the stadium, and by the long waiting list for season tickets
(manutd.com).
All these factors help attract huge media and sponsorship contracts worth millions of
pounds, respectively £ 61.5m and £ 56m in the 2006/2007 season (manutd.com).
This has consequently made them the world’s most valuable team in the world worth $ 1.8
billion (forbes.com) and, in some way, has even made them immune to the current financial
downturn, proven by the recent signing with Hublot (eufootball.biz) and the announcement
that AIG will remain Manchester United’s sponsor while not renewing their other
sponsorship relationships (eufootball.biz).

Weaknesses

› Hostile takeover (angry fans + debt)

› Profit-oriented

It took just over 2 years from Malcolm Glazer’s first stock purchase till the point where he
obtained 75% of the shares and thus had the right to delist the club off the London Stock
Exchange (news.bbc.co.uk). This hostile takeover caused two major issues: huge resistance
from the fans and a £ 667m debt (sportbusiness.com). The fans’ resistance was expressed in
different ways; there were demonstrations with banners on match days with people being
arrested, some supporters stopped buying merchandise and products of sponsors
(news.bbc.uk), and others created a new club: FC United of Manchester (bbc.co.uk). On the
other hand, Manchester United still has that massive debt which the Glazer family loaded
on to the club when they bought it in 2005. As opposed to the interest-free loan to Chelsea
by Abramovich, Manchester United’s interest payments amounted to a staggering £ 81m
last year (guardian.co.uk).
Although performing well on the pitch, some fans believe that the club has lost its origins,
hence only interested in profits (increased ticket prices) rather than the actual game of
football. Even though having global support, this outlook can have a harmful effect on fans.

Opportunities

› Upcoming markets
› Website
Manchester United has recently announced that it is looking to expand into India. A logical
decision since it’s the world’s second fastest-growing economy after China
(timesonline.co.uk), with a population of over 1 billion, and an increasing middle class
resulting from the economic boom. Despite cricket being the main sport in India, it should
be given serious consideration, as some 20 million out of the club’s estimated 333 million
fans and followers live in India, of which at least 10 million are said to be ‘core’ fans
(timesonline.co.uk).
Another opportunity is the fact that traffic on Manchester United’s website is currently
trebling every two years (sportbusiness.com). This figure is expected to increase due to the
launch of Chinese, Japanese and Korean versions of the website. This means that three of
their biggest fan bases (timesonline.co.uk) can now follow their favourite team in their own
language. Consequently, those fans will consume more of the club’s goods and can attract
new fans who perhaps do not speak English.

Threats

› Competitors
› Salaries
› MUST

Although Manchester United can find itself in firm state, it should bear in mind other big
teams, mainly Chelsea, Arsenal and Liverpool, and since recently Manchester City has
profiled itself as a possible threat for the coming decade, having been bought over by
Middle Eastern investors. These teams have had similar success on pitch, and have similar
purchasing power on the transfer market. For United this could mean they will not always
be able to buy the players they want.
Another major threat is the possible salary cap the Football Association wants to implement
(guardian.co.uk). This could turn out in a negative way for Manchester United as star players
would more likely go to other competitions such as the Spanish or Italian league, where they
could continue earning their big money.
Ever since Malcolm Glazer started his takeover, there has been serious opposition from
Shareholders United, currently known as the Manchester United Supporters Trust (MUST).
The group has lodged official papers with the Office of Fair Trading (OFT) claiming United
have ‘breached its statutory and legal obligations to season ticket holders’
(sportbusiness.com). Such continuous tensions between the fans and the management
could have a negative effect on the club and the players.

Conclusion

Manchester United can find itself in a very competitive spot at present, however they
should remain cautious and not changing focus from the game to the money too much.
Instead, they should try to meet the requirements of their clients and followers, which will
be reflected in sustainable support from the fans and success on the pitch.


References

› http://www.mirror.co.uk/sport/football/2008/01/08/man-utd-s-333m-fans-89520-
20278453 / [Retrieved on 30th November 2008]
› http://www.manutd.com/default.sps?pagegid={A92398BD-4211-402B-B90A-
BF0DE2924904} / [Retrieved on 30th November 2008]
› http://www.manutd.com/default.sps?pagegid=%7BC7DF7CEC-3BC3-4859-A3FD-
FE4AAD215DD8%7D&newsid=522489&page=1 / [Retrieved on 30th November 2008]
› http://www.manutd.com/default.sps?pagegid={C7DF7CEC-3BC3-4859-A3FD-
FE4AAD215DD8}&newsid=522489&page=1 / [Retrieved on 30th November 2008]
› http://www.forbes.com/lists/2008/34/biz_soccer08_Soccer-Team-
Valuations_Rank.html / [Retrieved on 30th November 2008]
› http://www.eufootball.biz/Sponsorship/6301-
manchester_united_commercial_hublot.html / [Retrieved on 30th November 2008]
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