PEST AND INDUSTRY ANALYSIS: ARSENAL FOOTBALL CLUB

The Gunners

SNAPSHOT:
Arsenal Football Club
English Premier League Football Club based in London, England One of the most successful clubs in English Football, having won 13 first division and premier league titles and 10 FA cups Arsenal's parent company, Arsenal Holdings plc, operates as a nonquoted public limited company Only 62,217 shares in Arsenal have been issued and are not traded on a public Exchange such as FTSE. In April 2010, business magazine Forbes ranked Arsenal as the third most valuable football team in the world Directors with significant investment in the club include Stan Kroenke,Danny Fiszman,Peter Hill wood Lady-Brace well Smith and Alisha Usmanov Thierry Henry is the club's top goalscorer with 226 goals in all competitions between 1999 and 2007, having surpassed Its the only club with most consecutive seasons spent in the top flight (84 as of 201011 The longest run of unbeaten League matches (49 between May 2003 and October 2004

PEST ANALYSIS
Political Factors
Stringent Employment Laws amongst players (Work Permits) Consumer protection (Setting of price caps by the government) Emphasis on Environmental protection (Noise pollution) Adherence to effective safety standards (Threats arising from terrorism) Imposition of high taxes by the government (wages)

PEST ANALYSIS
Economic Factors
Shift of economic climate (transition from recession to recovery) High concentration of people in the Capital (London) High immigration rates of foreigners, especially Asians and Africans Low inflation rates which affords people high spending power Production rates are higher due to the increase in the number of

jobs

PEST ANALYSIS
Social Factors
High diversification rates, which promotes passion for the games People are characterized to be workaholic, which stimulates national economy High Preference on leisure (Peoples lifestyle is Sports Nut) Soccer has inspired adults, young adults and even the aged Improved living standards due to reasonable pay

PEST ANALYSIS
Technological Factors
Increase in E-commerce (Online shopping) Improvement in match day experience for fans with integrated IT management Use of Buffalo technology to protect data Utilization of PROZONE3 for match day analysis.

PEST ANALYSIS
Factor Trend Evaluation Impact (1=low; 5=high)
5 5 5 3 2

Rank in terms of Importance

4

Political

Strict Employment laws Consumer Protection High taxes Safety Standards Environmental protection

Threat Opportunity Threat Opportunity Opportunity

Economic

Recession to recovery Low inflation High production rates High immigration

Opportunity Opportunity Opportunity Opportunity

3 4 4 4

Social

Sports Nut High living Standards Workaholic Need for Leisure

Opportunity Opportunity Opportunity Opportunity

5 5 3 4

Technological

E commerce IT Management Buffalo Technology PROZONE 3

Opportunity Opportunity Opportunity Opportunity

5 5 5 5

INDUSTRY ANALYSIS
English Premier League
World's most lucrative football league Combined club revenues of 1.93 billion ($3.15bn) in 200708 Total club revenues of 2.326 billion in 200809 The second most profitable after the German Bundesliga Premier League clubs are some of the richest in the world Deloitte listed seven Premier League clubs in the top 20 for the 200809 season Its ahead of Spains La liga and Italys Serie A A total of 43 clubs have competed in the Premier League

MEMBERSHIP BENEFITS
Guaranteed ticket availability for all league matches at

Emirates Stadium Over 140,000 made available to red members last season 1500 guaranteed tickets for all premier league matches The friends and family option-offers you the opportunity to purchase multiple tickets on your membership card.

PORTERS FIVE COMPETITIVE FORCES

PORTERS FIVE COMPETITIVE FORCES

Bargaining Power of customers
Bargaining leverage is neither high, neither low Buyer volume upon successful times are high Buyer information can be considered high Brand identity is strong Price sensitivity is not extremely high Product differentiation is very high Buyer concentration vs. industry is low Many substitutes are available

PREMIER LEAGUES TICKET PRICES

EPL Most Expensive Tickets

PORTERS FIVE COMPETITIVE FORCES

Threat of Substitution
Low switching costs Buyers are not highly inclined to substitute Price-performance, to a certain level, has no influence on the proffered team Trade-off of substitutes

PORTERS FIVE COMPETITIVE FORCES

Bargaining power of suppliers
High diversity of suppliers Volume is important to supplier Inputs have a high impact on costs and differentiation Switching costs of firms in the industry are low There is a low Presence of substitute inputs

PORTERS FIVE COMPETITIVE FORCES

Threat of New Entrants
There is quite an easy access to inputs There is economies of scale High capital requirements There are strong brand identity in the soccer sector of the sports industry Switching costs are high Easy access to distribution Low expected retaliation from well established teams

ARSENALS FUTURE
Arsenals squad averages 23.2 years which offers potential for growth and maturity.

PORTERS FIVE COMPETITIVE FORCES

Rivalry
High exit barriers Low industry concentration High fixed costs/High value added Low industry growth Low product differences Low switching costs High brand identity High diversity of rivals

SUPPLIER POWER

BARRIERS TO ENTRY

THREAT OF SUBSTITUTES

DEGREE OF RIVALRY
High exit barriers Low industry concentration High fixed costs/High value added Low industry growth Low product differences Low switching costs High brand identity High diversity of rivals

BUYER POWER

High diversity of There is quite an Low switching suppliers easy access to costs Volume is inputs Buyers are not important to There is economies highly inclined to supplier of scale substitute Inputs have a high High capital Priceimpact on costs and requirements performance, to a differentiation There are strong certain level, has no Switching costs of brand identity in influence on the firms in the industry the soccer sector of proffered team are low the sports industry Trade-off of There is a low Switching costs are substitutes PORTERS FIVE Presence of high COMPETITIVE FORCES substitute inputs Easy access to distribution Low expected retaliation

Bargaining leverage is neither high, neither low Buyer volume upon successful times are high Buyer information can be considered high Brand identity is strong Price sensitivity is not extremely high Product differentiation is very high Buyer concentration vs. industry is low Many substitutes are available

BLUE OCEAN STRATEGY

Arsenal FC
As a entity, the club has expanded the width of its market by exploring other areas such as India and America Arsenal FC has embarked on a strategy of saving energy costs, emulating key competitors in total revenue by 2015. Buyer utility maps and buyer cycles are measures employed by the club to study supporters preferences and enhance satisfaction. By adopting such measures, the club will effectively utilize the BOS by making competition from other clubs irrelevant.

CONCLUSION
Potential Future Changes
Foreign investments by individuals imposes financial burden (massive debts among clubs) Wage caps should be in place to fend off astronomical wages paid to players The FA needs to impose a ban on the Big four clubs regarding the amount and number of players they can sign (stabilize competition) Goal line technology should be enforced to enhance fair play. Buyers should also have a say on the maximum amount they are willing to spend on tickets.

COMPETITOR AND MARKET ANALYSIS

Arsenal Football Club

KEY COMPETITORS:THE BIG FOUR

Team Manchester Utd
Management/Boar d
Coach: Alex Ferguson In charge since 1986 CEO: David Gill Ownership: Glazer Family/ Other Minority Owners Coach: Arsene Wenger In charge Since 1996 CEO: Ivan Gazidis Ownership: Stan Kroenke/ Other Minority owners

Players/Acquisition s
25 Man squad Player diversification Net buyers of players Effective use of youth players(academy) 25 man squad Global in terms of procurement Price cap on signings Very successful academy(youth players) Buy Cheap Players 25 man squad Regular buyers of players Limited use of youth players Diversity amongst players 25 Man squad Player diversity Net buyers of players Ineffective use of players

Players/Financial Culture
High discipline within the squad Financial Extravagant Team with highest debt in the league High discipline Wise spending(players and property) Effective Free Cash Flow Financial sensitive(operate under a manageable debt) High player power(Terry & Lampard) Financial extravagant 2nd in terms of debt in the league High Player power(Carragher, Gerard) Financial extravagant Operate under a massive debt

Total Revenue 2009/2010 327.0m

Arsenal FC

263.0m

Chelsea FC

Coach: Carlo Ancelloti Appointed in June 2009 CEO: Ron Gourlay Ownership: Roman Abramovic/Other minority owners Coach: Kenny dalglish Appointed Jan 2011 CEO: Spencer Stuart Ownership: New England Sports Ventures/ Other

242.3m

The Big Four Liverpool FC

217.0m

KEY COMPETITORS
Team Management/ Board
Coach: Josep Guardiola Appointed in 2008 CEO: Rob Conway President: Sandro Rossel Ownership: Membership(socis) Coach: Jose Mourinho Appointed in June 2010 President and Director: Ramon Calderon Ownership: Membership

Players/Acquis itions
Effective use of youth players(Academy) Diversification amongst players Sign mostly domestic players Global in terms of procurement Ineffective use of youth players(Academy) Net buyers of players Highest buyer(unwise spending)

Players/Financial Culture

Total Revenue 2009/2010 365.9m

FC Barcelona

High player discipline Wise investments(players) Huge spread in player ages

Real Madrid FC

Record setter in the transfer market Highest buyer in terms of individual players(Christiano Ronaldo) Financial Extravagant

401.4m

La Liga

KEY COMPETITORS
Team
Management/Board Players/Acquisitions Players/Financial Culture Total Revenue 2009/2010

AC Milan

Coach: Massimiliano Allegri Appointed in June 2010 President: Silvio Berlusconi Ownership: (Silvio Berlusconi)
Coach: Leonardo Araujo Appointed in Dec 2010 President: Massimo Moratti

Global in terms of procurement Players are mostly from Italy and Brazil Sell players at profits

High team discipline Wise spending(Players) Operate under a less debt

196.5m

Inter Milan

Diversification within the squad Players are mostly from Italy Obtain cheap players from Africa Effective use of youth players

High team discipline Operate under an effective cash flow Financial sensitive(spending)

196.5m

Serie A

OTHER COMPETITORS:EPL
Team Management/Board Players/Acquisitions Players/Financial Culture Total Revenue 2009/2010

Manchester City FC

Coach: Roberto Mancini Appointed in Dec 2009 CEO: Gary Cook Ownerhip:Sheikh Mansour Coach: Harry Redknapp Appointed on Oct 2008 CEO: Daniel Levy Ownership: ENIC International ltd/other minority owners

Squad diversification Net Buyers of players Ineffective use of youth players(academy) Hefty price tags on players Squad diversification Buyer relatively cheaper players Sale players at profits Effective use of the youth team

Significant losses on player sales High player power Extravagant spending(strikers)

101.2m

Totenham Hotspurs

High squad discipline Operate under an effective Cash flow Wise spending on players

132.7m

CHAMPIONS LEAGUE CONTENDERS

EPL VS. OTHER MAJOR LEAGUES

ARSENAL FC
Stadium Capacity
The stadium opened in July 2006 and has an all seated capacity of

60,355 Second largest football club stadium in England behind Manchester United's Old Trafford

Management

Recently appointed three senior executive positions at the Club Tom Fox (Chief Commercial Officer), Svenja Geissmar (General Counsel) and Trevor Saving (Head of People and Operations) All three will report into Chief Executive Officer, Ivan Gazidis

Ownership

In total, Arsenal's board of directors currently hold 45.6% of the club's shares The largest shareholder on the board is Stan Kroenke, with 18,240 shares (29.9%) owned via Kroenke Sports Enterprises Next is Danny Fiszman who holds 10,020 shares (16.1% Richard Carr has 2,722 (4.4%) and club chairman Peter Hill-Wood owns 500 (0.8%) Minor shareholders of the club, including former players Ian Wright and Liam Brady, and three shares owned by the Arsenal Supporters' Trust.

FIRST TEAM SQUAD

A Total of 25 players from various countries.

Goalkeepers
Manuel Almunia(Spain),Lukasz Fabianski(Poland),Jens Lehmann(Germany),Wojciech Szczeny(Poland) Defenders Bacary Sagna(France),Laurent Koscielny(France),Johan Djourou(Switzerland),Kieran Gibbs(England),Thomas Vermaelen(Belgium),Sebastian Squillaci(France),Gael Clichy(France) Midfielders Abou Diaby(France),Cesc Fabregas(Spain),Tomas Rosicky(Cech Republic),Samir Nasri(France),Denilson(Brazil),Aaron Ramsey(Wales),Alex Song(Cameroon),Jack Wilshere(England),Andrey Arshavin(Russian),Emmanuel Eboue(Ivory Coast),Emmanuel Frimpong(Ghana) Strikers Robin Van Persie(Holland),Theo Walcot(England),Marouane Chamakh(Morocco),Nicklas Bendtner(Denmark)

ARSENAL FC VS. MANCHESTER UTD

Revenue and Net Profit
Match day revenue is rather comparable between Man Utd and Arsenal Media revenue is higher for Man Utd due to the further progress in Champions League and EPL Arsenal did much better commercially on and off the field due to 156M made in property

development Profit from the sale of players has tripled that of Man Utd due the clubs reputation of selling players at good values.

POTENTIAL FOR GROWTH

Which Club has a better future Opportunity for growth?
Player Sales:

On the field, I rate both teams equally in their ability to progress to later group
stage and be in the top four in the EPL. Arsenal have a greater propensity for revenue stream from player sales. Man Utd do not traditionally monetize this area well Overall, in terms of adding value to shareholders, Arsenal is the better investment. Cash level, Debts and Assets Analysis Man Utd had twice the amount of total assets compared to Arsenal in 2010 The increase in Debtors within one year from 278 mil to 675 mil puts Arsenal in a better financial position in terms of the interests paid to finance the debts

ARSENAL VS. MAN UTD

Free Cash flow, Depreciation and Interest Expense
Arsenal operated under a superior cash flow compared to Man Utd This reflected lower interest payments and lesser capital expenditures The club was in a better shape due to good profits and lower depreciation compared to Man Utd The interest expense as a percentage of total debt is higher for Man Utd at 10% compare to 6%

for Arsenal indicating much higher cost of capital. Man Utd tend to be net buyers of players instead of sellers which is why their net capital expenditures is higher than that of Arsenal Right now Arsenal can probably pay down its debts due to its effective FCF. They paid down 135 mil in debts this financial year.

REVENUE REFLECTIONS
Commercial, Broadcasting and Match day Revenue
Real Madrid FC ranks first in terms of commercial revenue(Sale of jerseys and

other endorsement deals) Arsenal and Man Utd boast huge earnings in terms of match day revenues(high price tags on tickets) Real Madrid FC also earns massive profits from the sale of its broadcasting rights(Exert a Monopoly power over other teams)

Arsenal Revenue Statistics vs. Other Clubs

MARKET SIZE
English Premier League World's most lucrative football league Combined club revenues of 1.93 billion ($3.15bn) in 200708 Total club revenues of 2.326 billion in 200809 The second most profitable after the German Bundesliga Premier League clubs are some of the richest in the world Deloitte listed seven Premier League clubs in the top 20 for the 200809 season Its ahead of Spains La liga and Italys Serie A A total of 43 clubs have competed in the Premier League

KEY TRENDS
Corporate Structure Operated as a corporation and is owned by the 20 member clubs Chairman, Chief Executive and Board Of Directors oversee daily operations The FA has VETO power when new rules are adopted by the premier League Sponsorship The Premier League has been sponsored since 1993 1993-2001: Carling( FA Carling Premiership) 2001-2004-:Barclaycard(Barclaycard Premiership) 2004-2007:Barclays(Barclays Premiership) 2007-Present:Barclays(Barclays Premier League)

CONTINUED: KEY TRENDS

Finances
The Premier League has the highest revenue of any football league in the world Total club revenues of 2.326 billion in 200809 Premier League clubs are some of the richest in the world

"Football Money League", listed seven Premier League clubs in the top
20 for the 200809 season

Stadia
Stadium attendances are a significant source of regular income for Premier League clubs Combined total capacity of the EPL in the 201011 season is 770,477 with an average capacity of 38,523 For the 200910 season, average attendances across the league clubs

were 34,215 Total aggregate attendance figure of 13,001,616

GROWTH RATE: EPL

Worlds Favorite League
EPL has risen well above Serie A and La Liga in the past year by

1 billion (0.7 billion). Games are broadcast to 600 million homes in 202 Countries across Europe, Asia, Australasia, Oceania, Africa, the Americas and the Middle East

The global rise of the Premier League Overseas rights 2010-2013 1.7bn? 2007-2010 625m 2004-2007 325m 2001-2004 178m

TARGET MARKET
Arsenal FC/EPL East Asia, Africa, Middle East, the US, Canada and Australia Potential Sources for maximization of revenues overseas Premier League giants Such as Arsenal and Chelsea are now focusing their markets in India WHY INDIA FOR ENGLISH CLUBS? Population of 1.15bn Underlying interest in football/Premier League Untapped commercial opportunities Wealthy target audience in Indian middle class Football identified with youth - there are 325m Indians aged 20 - 35 Chance to influence/improve local football Opportunity for corporate social responsibility (CSR) input

MEDIA COVERAGE
United Kingdom and Ireland
Revenue from television rights has helped sustain clubs both on and off the field Major media sponsors include Sky, BBC and ESPN The Premier League sells its television rights on a collective basis The first Sky television rights agreement was worth 304 million over five seasons The league brought in 320 million from the sale of its international rights (2004-2007) Television rights alone for the period 2010 to 2013 have been purchased for 1.782 billion

CONTINUED: MEDIA COVERAGE

Worldwide
Media Coverage plays a vital role in enhancing the EPL Most watched sporting league, followed worldwide by over half a billion people in 202 countries In the US, coverage is shared between Fox Soccer Channel, Fox Soccer Plus and ESPN In Canada, Rogers Sports net owns the Premier League rights The Premier League is particularly popular in Asia(widely distributed sports programme) In China, data from 2003 suggested that matches were attracting television audiences between 100 million and 360 million

Market Segmentation
Type of Factor
Characteristics of People/Organization

Consumer Markets
Young Adults,Adults,Aged Middle & Upper Class(Europe) All Classes(globally) Sports Nut Lifestyles High brand Loyalty Pleasure maximization Repeat purchase behavior Price Criteria

Industrial/Organizational Markets
Entertainment Industry Headquartered in UK Advanced Technology Complex Management High Profits E-commerce/physical buying/selling Revenue generation Repeat/regular Sales Price Criteria Disintermediation High team performance Brand Expansion High Quality Effective Design features Low manufacturing costs(suppliers)

Purchase/Use situation

Users needs and preferences for product characteristics

Product/Service differentiation Low prices/High quality Brand Sensitive

COMPETITORS ANALYSIS
Performance measure of team success/failure
Winning a certain number of games every season Qualification for the European competitions Gaining maximum points from weaker teams Conceding less goals as possible and scoring as many as a team can Focusing on winning silverware both domestically and Abroad Making efforts to try and operate as more environmental friendly organizations These include waste minimization, waste disposal and energy & water use

CONCLUSION
Competitors Analysis:
Teams that keep managers for long spells show more success than those that change management often Team success(winning trophies) generates revenue for the club Clubs that operate under effective cash flows are able to avoid massive debts and high interest payments. Revenue maximization can be achieved by eliminating the monopoly in television rights(Sky) Penetration into new markets such as India can easily boost a c lubs financial capacity Brand Loyalty is enhanced by clubs participation in community activities Market Segmentation enhances clients/clubs relationship Clubs focus on operating environmentally friendly has other teams embarking the same policies which in turn safeguards the environment.

INTERNAL AND SWOT ANALYSIS

Arsenal FC

BUSINESS MODEL
Manager(Arsene Wenger) Noted for his observant and intellectual approach Uses statistical analysis to track development of his players Experiments players in different roles(playing them in different positions The club offers him complete and full support

Academy

Consistently produced footballers ready for first team football Arsenals under-18 are regularly coached by Wenger to measure their capability /Effectiveness Scouts are paid to conduct research both in and out of the country for best competing players

Acquisitions

Developing young players at the academy and turning them into world class players(Ashley Cole) Buying young players and developing them into an integral part of the arsenal squad Selling players at healthy fees(purchasing Anelka from PSG at 500,000 and selling him to Real Madrid FC for 22.3m

BUSINESS MODEL
Selective Use of Investments Players are sold when they are at their peak level and not decline Effective selling of merchandise(well established distribution channels) Attraction of wealthy sponsors(Nike) Attractive style of play Playing mostly conducted in the middle Creating chances is just as important as maintaining possession Compete to win trophies which is translated into revenue Investment in large quality stadium(Emirates Stadium) Increase in match day revenue due to stadium expansion Extra income from pre-season events(meetings and other tournaments)

Style of Play

Stadium

BUSINESS MODEL
Why is Arsenals Business model different from other teams?
Conservative financial approach(price cap on wages and transfer fees) Infrequent change in team leadership/management(Arsene Wenger has been in charge since 1996) The clubs uses a unique style of play(avoidance of long balls and play is mostly centered on the middle) Sell players at a profit(Marc Overmass was initially bought for 5.5m and later sold to FC Barcelona for 22.3m Effective use of the academy to groom young players(Jack Wilshere)

Revenue vs. Ependitures:2005-2011

Season 2010/2011 2009/2010 2008/2009 2007/2008 2006/2007 Revenue 8.096.000 41.976.000 20.944.000 50.248.000 Departures 24 18 16 23 Expenditures 16.720.000 8.800.000 35.332.000 25.916.000 13.266.000 15 17 20 17 27 Arrivals Total -8.624.000 33.176.000 -14.388.000 24.332.000 836.000

14.102.000 22.000.000

22 22

2005/2006

40.480.000

22

-18.480.000

ARSENAL FC: REVENUE

Levels Of Investment
Arsenal generates a huge portion of its annual revenue through various sources. These includes television revenue, commercial revenue and the transfer of players. The overall idea of setting a price cap on the amount of money that can be spent

on a particular player has proved vital in club investment. All proceeds generated from such transactions are carried forward to the next budget in the following year.

Arsenals Financial Report

2010 m
Total wages Additions to intangible assets (player registrations) Profit on sale of player registrations Net expenditure 110.7 19.9 (38.1) 92.5

2009 m
104.0 41.3 (23.2) 122.1

Arsenal FC: Resources

Structural Assets
Emirates Stadium Club Vision, Culture and Goals of Arsenal FC Managerial systems

Relational Assets
Club fans and Club image Season ticket sales Sponsorship and Supporters Promotion Brand

Human Assets
Expertise of football managers Expertise of players

BCG MATRIX
Arsenal FC
Stars (=high growth, high market share) Asia Cash Cows (=low growth, high market share) England Dogs (=low growth, low market share) Americas Question Marks (= high growth, low market share)- India

SWOT ANALYSIS
Business Strategy
The strategy of Arsenal FC is to convert more fans into business customers and enhance customer value through implementation of CRM tools. For this purpose it has tied up with the technology sponsors Dimension Data. Other strategies include:
To seek own routes to market for media rights To deliver branded services to customers through Arsenal TV To have proper mix of home-grown and imported talents Groom players in-house (like Gibson and John Wilshere) Acquire players in case of requirement (like Chamakh and Koscielny)

Strength
Brand conscious Greater Fan base(High ticket sales) Effective distribution Channels Effective free cash flow Increase in Stadium capacity

Weakness
Product and product variety(jerseys to credit cards) More focus on proceeds than soccer

Opportunity
Penetration to the American market Coalition with other teams(USA and Belgium) Diversification of the squad(origin)

Threat
Change of team leadership/owner ship Insufficient funds put into academies Failure to win trophies

Porters Value Chain Model

Primary Activities
Inbound Logistics
Transfer of players and coaching staff

Outbound Logistics
Nike shirt deals Season tickets

Operations
Arsenal TV Finance(clubs credit cards)

Marketing and Sales

Sponsorship deals TV deals Endorsements

Service
Customer service Website

Secondary Activities
Firm Infrastructure
Emirates Stadium Luxury apartments(formerly highbury stadium)

Human Resources
Soccer academy(training) Scouts(recruiting players)

Technical development
Internet presence enhanced and e commerce enabled Personalized content delivered direct to fans(match day analysis)

Procurement
Nike manages clubs merchandising operation

CHOICE OF STRATEGY

Generic Strategy

Arsenal FC offers a wide variety of products and services These ranges income from commercial revenue, financial and merchandising income The club also operates a TV channel, Radio Station, Publishes a magazine, provides newsletters

broad bands, and desktop alert The club therefore has to sought out the best strategy to increase revenue while saving costs and maximizing customer satisfaction. Hence, in analyzing the strategies, the company has to put forward two drivers that ultimately impact the companys revenue status. These includes the Critical Success Factors and the Key Performance indicators. The CSF measure identifies the factors that are necessary for the company to develop and grow

DRIVERS
Key Performance Indicators(KPI)
Sound business plan Stable administration, close communication between all levels of Club Management High quality coaches at both senior and underage levels High profile and acceptance within the community Strong Club presence in schools, both primary and secondary Sound oval management, high standard of club facilities Sound financial management, expenses kept in line with income base Development of Juniors, particularly local based players

CONTINUED: DRIVERS
Internal and External factors that affect Cost differentiation
There are three major cost categories that affect the choice of the strategy used. These include both Internal and External costs related to the operation and development

of the corporate Arsenal FC, the costs related to the operation and development of the sporting club, and other related costs.

Corporate Costs Dept and maintenance costs Costs related to the commercial activities

Infrastructural costs

Club related Costs

Compensation of the Maintenance and players and staff development cost of Purchase of new the stadium players and stuff

STATUS AND PERFOMANCE:ARSENAL FC

Generic Strategy
The scale and scope of activities are greater(differentiation of products/services) There are far more alternatives for the configurations value-adding activities(suppliers and distributors) There are not only greater difficulties in coordinating global activities abut also greater scope of competitive advantage if activities are effectively coordinated(new markets such as America and India) The strategy takes into account cultural and linguistic similarities and differences National economic and factor conditions can be harsened to give competitive advantage

GRAND STRATEGY
Factor
Innovation

Plan of Action
Integrated IT development to improve match-day analysis

Market development

Asia Coalition with Asian companies(Hoang Anh-Vietnams largest property developers and the main distributor of Arsenal FC merchandise in Southeast Asia America Partnering with youth teams to enhance technical assistance(Richmond Strikers Soccer Club Increase fan base by holding pre-season tournaments in the US Establishment of clubs megastores in cities like LA Pre-season membership and loyalty through direct mail and website Core market is the UK Contributes up to 94% of its revenues These include match day revenue, membership/subscription revenue, sponsorship/endorsements and TV deals 6% of its revenue come from other markets such as Asia and America.

Product development

Market penetration

CONCLUSION
Internal and SWOT Analysis
A conservative financial approach has helped improve the clubs

image both on and off the field A stable manager has steered the clubs success by signing quality players at cheaper fees Arsenals style of play has attracted/increased the fan base , hence growth in revenue The club has diversified its resources in a precise manner, thus generating substantial revenue(players and property develoment,eg highbury transformed into luxury apartments) Exploring and entering new markets such as India and The US offer potential for future growth Effective distribution channels enhance club loyalty and increase consumer confidence

CONCLUSION
Generic Strategy
Innovation has been delivered through new product quality

and services Strong brand loyalty has also been created through effective advertising and promotion Distributors have been able to add value to the products through effective distribution channels Merchandise has been made available to the market at cheaper prices through use of latest technology Products have also been marketed on the basis of price to achieve economies of scale.