Colombo - 14345558

Types of
Fans
Fans for the
player
Fans for the
club
Fans of the
game
Expectations
Affordability
Concern over business
practices
Interaction across the
globe
Richer fan experience
Accessibility and mobile
interface
7%
8%
20%
65%
Regularly
Occasionally
Have done
but not in last
12 months
Have never
done
0
200
400
600
800
1000
1200
1400
1600
Matchday
million
Broadcasting
million
Commercial
million
2011
2012
External Analysis
Table 1: PESTEL
Fan Analysis





External Environment Analysis

Local Environment Issues

International Environment Issues

Implication to LFC

Impact
Political/Legal Politically stable
New Rules and Regulations in FA on balancing the
books
Stadium construction regulations
Transfer policies
Interested in foreign direct investment in
emerging nations
Bureaucracy is high
LFC might need to somehow stop spending more than
they earn in order to sustain in seasons
International countries support great brands that enhance
livelihoods through CSR
Intl- Positive
Local- negative
Economy UK Disposable Income Low
Potential of triple dip recession
Emerging nations e.g. China, Indonesia
and Africa
Middle class rising with rising disposable
income
Local market is under pressure Disposable income
decreasing leading decrease revenue
international markets show great potential for growth of
LFC and Brand associations
Intl- Positive
Local- Negative
Socio-Cultural Fans are loyal to football clubs buffering sales
A strong traditional culture in soccer
Interested in western trends and sports
and soccer fans globally are rising e.g.
China 60 million, Thailand 14 million,
Indonesia 60 million
Fans have strong loyalty to the club sustaining the brand
however this might not last long if LFC keeps on losing
matches
New geographic segments emerging aid in growth
Intl- Positive
Local- Positive
Technological Increase in use of Apps and Multi-functional
devices e.g. smart phones and tablets
Technology to increase user experience in
traditional soccer stadiums
Increase in technological advancements
and social networks
Globalizing through technology
Increase in tablet and smart phone use
Technological advancements open new opportunities to
engage fans and increase loyalty.
Increase brand awareness globally through social
networks and bring international fans closer to the clubs
Intl- Positive
Local- Positive
Environmental Eco friendly consumers are rising
Increase in efficient control system for power e.g.
lighting of stadiums
Need to develop eco friendly alternative systems to satisfy
key stakeholders.
Increase in cost in short term but long term efficiency is
created saving costs
Intl- Positive
Local- Positive
Figure 3: Football Match attendance
frequency
Figure 1: Fan type
Figure 2: Fan Expectations
Figure 4: Industry Revenue 2011/2012
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Table 2: Porters five force analysis
Table 3: Competitor Analysis VS LFV
Football Club Total Profits % of Traditional Revenue
from Total revenue
Rev per Ticket
/Attendance
Current Focus
Liverpool (-) 41 Million Match Day 22.4%
Broadcasting 35.5%
Commercial 42.1%
New Media 0%
900/45555 Increase Seating Capacity to 60000 & Large
commercial sponsorship deals with untapped brand
value.
Manchester United 101 Million Match Day 33.2%
Broadcasting 36%
Commercial 29.3%
New Media 1.5%
1425/76212 Sponsorship deals in American Market and Focus on
sponsorships from international brands
Arsenal 34 Million Match Day 41%
Broadcasting 38.8%
Commercial 20.3%
New Media 0%
1543/60355 Commercial growth centred in Asia
Chelsea (-) 49 Million Match Day 30.1%
Broadcasting 44.7%
Commercial 25.2%
New Media 0%
1605/42055 Securing a site for the construction of 60000 capacity
stadium.

Five Force Analysis (Porter)
Industry Forces Description Degree of influence by industry forces Impact on industry profitability
Threat of New Entrants Entry barriers such as large capital investments discourage new
entrants
Few new entrants due to recession
Low- New entrants coming to the football industry
is low.
Doesnt effect Doesnt hinder industry profitability
due to limited new entrants coming in
Threat of Substitutes Substitutes such as Music festivals and other sports, e.g.
Cricket, Basketball, American football, Baseball well
established in some international markets
High-Although the largest spectator sport
substitutes take up free time of consumers which is
limited
Effects profitability negatively - Industry
attractiveness reduces, consumers find other interest
in different sports and entertainment
Bargaining power of
suppliers
Sponsors mainly have a moderate bargaining power since the
game is big and fans love the game They want to be associated
with the industry giving leverage to clubs
Moderate - Sponsor are willing to spend on football
due to large reach and fan base internationally.
However individual clubs need to attract sponsors
effectively.
Effects profitability positively - Sponsorship deals
very lucrative and sponsors pump millions of pounds
to the industry.
Bargaining power of
customers
Customers are currently demanding better experiences at
lower prices
Loyal fan base keeps industry running during recession
High- Fan loyalty runs the industry even during
recession. Bargaining power is very high
Effects profitability positively - Currently due to less
disposable income there has been difficulties to the
industry. Loyal Fans drive profitability
Industry Rivalry Competition between club on and off the field
Competitions for talented players increase player wages
High- Competitive rivalry between top clubs and
nation very high
Effects profitability negatively- Strong rivalry and
demand by clubs for talent increase costs
Insight: The Industry is a mature industry but with huge growth potential in emerging markets such as China and India, Industry Rivalry and demand for players is decreasing profitability by taking more of the
revenue. It is an industry where the top clubs in FA, and UEFA drive the industry. The football world cup may provide a opportunity to reach globally driving industry profitability up
Colombo - 14345558
Internal Analysis












Core competency Evidence Future Challenges
International business development Global Fan base / Global Sponsorships / Greatest percentage of web traffic
from India (58%) and South Africa/ Growing fan base in Thailand and
Indonesia
Maintaining the equilibrium between the domestic
and international fans.
Player recruitment Key player recruitments in the past such as Albert Stubbins in 1946 and Ian
St. John in 1961
Increasing wages of players and staff, rising cost of
player recruitment and high industry rivalry.
Brand building and Sports marketing International sponsorships by global companies / Regional sponsorships
(Honda in Thailand)/Leverage on brand name
Manage the behavioural changes of fans
Social Media activities 12 Million fans on Face book / 1.5 million followers on Twitter Facilitating interaction through these channels and
maximising revenue.
Table 5: Core competencies
FSG Stability
Vast Experience in the sports and
media industry
Resources (Financial and non
financial)
LRMR Marketing expertise
Successful recruitment opportunities
LFC Brand Brand Recognition around the world with a
deep heritage.
Partnerships Global partnerships and sponsors which
enhances the presence
Digital Know
How
Vast knowledge, presence and interaction
in new media activities
Fan Insights First hand data regarding fans
Table 4: Competitive Advantage
Figure 5: Ashridge Mission model
Strategy
-Improving player
performance & strategic
player investment
-Young player
development
-Improving fan experience
and interactions with the
club
-Leveraging the clubs
global following to deliver
revenue growth.
-Strategic partnerships
Purpose
To maintain quality on and off the
pitch through strategic investments
Values
-Collectivism
-Respect 4 all
-Goals 4 All
-Equality
-Anti tolerance
policies against any
form of
discrimination

Standards & Behaviour
-Having an equal opportunity policy to keep
staff informed, of matters that affect growth of
the business.
-Having CSR initiatives to use the power of
clubs equity to create positive change in
communities.
MISSIO
N
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Table 6: Financial Analysis
2012 2011
GP Margin 10% 12% GP margins have reduced.
However the cost of sales are
lower compared to the turnover
NP Margin -22% -25% Admin expenses have risen
drastically. Therefore a net loss is
incurred year on year.
Admin Expense as a% of
sales
111% 137% Growth in Admin expenses shows
a higher % as opposed to revenue
growth.
Quick Ratio 0.47 0.32 It is unable to meet its liabilities
through the current assets.
Debt to Equity Ratio 95% 48% Low financial Leverage.

LFC VS FSG








Figure 7: LFC VS FSG Analysis
Education Respect 4 All- Disability awareness sessions
Truth 4 Youth Deliver social messages
Health LFC Action for Health Community health and lifestyle initiatives
Social
Inclusion
Tactics 4 Families- Supporting positive family relationships
Goals 4 All
Physical
activity
Football Camps
Goals 4 Girls Aimed at young women
Table 7: CSR Initiatives of LFC
Figure 8: Value Proposition
0
50000
100000
150000
200000
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
Turnover vs Wages
Turnover Wages
Figure 6: Turnover VS Wages

Possitive Factors
Brand strength
Fans aroung the world
Possitive Factors
Financial capabilities (3 billion
equity interest)
Marketing and branding expertise
Networks
Negative Factors
Financial implications
Underperformance of the team
Players
Negative Factors
No experience in the football
industry.
LFC vs FSG

Core
World class
football
Expected
Presence in leading league
tournaments
Trophies
Performance through star
players
Heritage
Augmented
Entertainment
Champions
Star Players
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Table 10: Risk Analysis
Impact
High Medium Low
P
r
o
b
a
b
i
l
i
t
y

H
i
g
h

Match day attendances falling.
Credit from financial institutions to football clubs for expansion.
UK regulators stalling stadium developments
Financial fair play model being introduced in the Premier League similar to
UEFA
Financial fair play (FFP) regulations coming into effect..
Sanctions on non-compliant teams of the FFP.
Not being able to carry out the player acquisition (100Mil),
stadium development (150Mil) & International business
development (50Mil)

M
e
d
i
u
m

Continuous poor performance on field reducing player options through
acquiring for LFC.
LFC deviating from its Vision and Mission due to a lack of strategic clarity.
LFC going bankrupt due to liquidity and cash flow.
Wage control of players
Player transfer market
Good players at LFC moving to other lucrative clubs due to LFCs
current position.

Low FSG not willing to bear the losses and selling the club off.

Table 8: Stakeholder
Analysis
Stakeholder Power Interest Expectations
Local Fans High High Superior on-field performance, good match day experience, prudent management of
the club ensuring longevity
International Fans Low High Superior on-field performance, overall good brand experience
Sponsors/Partners Low High Generate more brand visibility through partnering with Liverpool, positive brand
affiliation
Shareholders High High Economic success/ Return on Investment
Players Medium High adequate wages, good training facilities, medical plans if injured
Governing Bodies High Medium
to Low
Fair play, adherence to rules and regulations, maintenance of financial and safety
standards
Constructed Source
Dimension Characteristics Evidence Dimension Characteristics Evidence
Physique The Colour Red
& Liver Bird
Affectionately referred to as the Reds and
uses red as the player outfit colours.


Personality Established, Traditional,
compassionate, family
oriented
Founded in 1892 and is one of the oldest clubs in the league &
comprises a rich heritage liked to the Liverpool city
E
x
t
e
r
n
a
l

Relationship Strong bond with
fans; especially
local fans
-Have the highest merchandise sales amongst
top clubs showing, loyalty of local and
international fans and brand love.
-Large fan base on social media networks
Culture A strong sense of
community, togetherness
and family values

-Comprehensive CSR program which has wan the community mark
-Associate with the iconic football anthem You will never walk
alone and uses it in the logo

I
n
t
e
r
n
a
l

Reflection Always to-gather,
never give up
The Hillsborough disaster, brought a lot of
LFC fans to gather
Self Image Successful Regarded as the most successful English club of all time
Constructed Receiver
Table 9: Brand Analysis
Key Issues
-LFC has been excluded from the UEFA Champions
league resulting in lost revenue streams and falling
brand equity.
-Regulatory standards affecting the financial
constraints of LFC
-Plans to grow top line revenue with financial
constraints
-International growth has been deprived due to
lack of financial strength (Franchising)

Colombo - 14345558
Table 11: TOWS
Opportunities Threats
-Popularity of Association Football is growing globally
-The Premiere league has the highest revenues of any league in the world
-New devices such as tablets and social media opening up new revenue
streams and helping to connect with the global audience more meaningfully
(Appendix 8 & page 16)
-The demand for sports sponsorships are growing & more & more brands
want a share of the pie.(Appendix 4).
-New Financial fair play regulations by UEFA to be adopted by Premier
league
- High ticket prices causing some fans trading watching matches on TV
instead of the stadium
-Recession causing lower disposable incomes in UK
- Competitor clubs ahead in innovation (Chelsea stadium with led lights,
arsenal ipad match program, Manchester city twitter integration)
S
t
r
e
n
g
t
h
s

-An Iconic football club brand replete with history and
tradition.
-Regarded as the most successful football club in the
premier league.
-Strong presence in China and South East Asia
-The worlds most globally active sports brand on
social media
- Proven Track record of Owners and Partners in sport
marketing (FSG & LRMR, Warrior Sports )
-Loyal fan base which spends on merchandising
-The only club in UK to have full access to their own
wifi network

Strength to meet Opportunities Strategies
-Leverage Brand Equity & Successful history to attract more fans in Existing
markets
-Utilize strong presence in social media to generate higher match day and
merchandise revenues from the current fan base
-Negotiate better sponsorship deals with the expertise of FSM
-Increasing replica kit revenues through expertise of warrior sports
-Higher match day revenues by enabling sponsors to do real time marketing
through wifi network
Strengths to Defend threats

-High brand loyalty among Liverpool fans will drive match attendance.

-Growth opportunities in merchandise sales outside of UK especially in
Asia where LFC is strong and income levels are rising

-As the only club in UK to have access to their own WIFI network data,
Liverpool can be the first to launch new product targeting sponsors
W
e
a
k
n
e
s
s
e
s

-Weak Financial position with net losses in 2010/2011
and 2011/2012
- Low match day revenues compared competitors
- Poor on field position resulting in non qualification to
champions league and lower proportion of league
revenue
- Lower TV broadcasting revenues
Minimize weaknesses and to maximize opportunities
-New types of sponsorships available through the use of new technologies
which will help boost revenue.
-Tap new markets such as the Middle East which has a high level of interest
in the British leagues
-Ability to use new media to televise home games not covered by major
broadcasters
Weaknesses not to Expose Threats

-Ability to use funds of FSG in the form of capital infusion to negates some
of the losses.
-USE FSG funds to acquire new players if needed to secure top league
positions
-Loan players to another club to earn extra revenue

References
Analysis & Decision Case Study
Campbell (The Ashridge Mission model)
Kapferer (Brand Prism)
Philip Kotler (1986), Megamarketing, Harvard Business Review. (March- April 1986)
Analysis and Decision CIM course book