DIGITAL TRANSFORMATION IN SPORTS

INDUSTRIES : FANS CENTRIC

Msc. Digital Management

Antar Caesar Saryuf

Supervisor :
Dr. Mani Venkatesh
 TABLE OF CONTENTS

TITLE PAGE

CHAPTER 1 INTRODUCTION 1

CHAPTER 2 LITERATURE REVIEW 5

2.1 Customer Loyalty 6
2.1.1 Attitudinal Loyalty 6
2.1. 2 Cognitive Loyalty 6
2.1. 3 Behavioural Loyalty 7
2.1. 4 Identification Theory 7
2.1. .5 Fanaticism 8
2.1.5.1 Characteristics of Fanaticism 8
2.1. 6 Internal Involvement 9
2.1. 7 Desire to Acquire 9
2.1. 8 Social Interaction and Personal Meaning 9
2.1. 9 Sport fan personality and character 9
2.2 Sport Industries 12
2.3 Digital Transformation 16
2.3.1 Digital Transformation Domain 16
2.3.1.1 Engaging your customers 17
2.3.1.2 Transform your products 17
2.3.1.3 Optimizing operations 17
2.3.1.4 Empower your employee 18
2.3.2 Digital Innovation 18
2.3.3 Digital Disruption 20
2.3.4 FC Barcelona Digital Implementation 23
2.3.5 Real Madrid Digital Implementation 27

CHAPTER 3 RESEARCH METHODOLOGY 32

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 3.1 Introduction 32
3.2 Research Setting 32
3.3 Quantitative Research 34
3.4 Data Collection Procedures 36
3.5 Selection of Sports Organization 36
3.6 Data Collection Approach 36

CHAPTER 4 PROPOSED WORK 37

4.1 Descriptive Statistics 37
4.2 Analytical Proofs 37

CHAPTER 5 DISCUSSION 43
5.1 Answer to Research Questios 43
5.1 Conclusion 47
5.1 Future Works 47

REFERENCES

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 CHAPTER 1

INTRODUCTION

Digital transformation anFd disruptive innovation describe the comprehensive

reorientation of an industry including its business models due to the coming of age of
digital technologies: the digitization of products, services, and processes. It is
happening in every sector of business, including the sport industry was affected by
digital transformation, beginning from the way the sport is lived, with the fan which
can be constantly informed and interact with his favourite team.

The estimates on how big the sports industry is, varies by source, but it’s commonly
considered to be more than $500 billion, with some estimates running up to $1.3
trillion! The industry connects many different activities, ranging from hot dogs sold
at sports events to multimillion transfer fees paid by the biggest clubs when acquiring
new superstars. The business features numerous participants: from rights owners
(athletes, clubs, leagues and federations) to sports agencies, sponsors, investors and
broadcasters — competing over a bigger and bigger pie, as the sports industry is
growing faster than most.

But not all sports disciplines are represented equally in these finances. Number one,
worldwide, is — no surprise here — association football (soccer), with a 43% share of
the global financial sports market. Football (American) is also on a distant second
place, with 13%. Baseball (12%), Formula 1 (7%) and basketball (6%) are the only
three sports also having an over 5% share in addition to the top two. They’re
followed by hockey (4%), tennis (also 4%) and golf with a 3% total market share in
terms of finances.

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Nowadays people watching a football match on television while accompanied by a
gadget, whether it was a smartphone, tablet or laptop. Even if the survey respondents
were narrowed to only millennial (those who born between 1981 and 1997), that
number will much increase. This is called the second screen phenomenon. On the
second screen, most of them are looking for to watch the replay of important goals or
events, checking scores of other matches, looking at statistics and analysis and
showing status on social media platforms.

From the survey in 2018 by copa90, media that focused on the culture of ball
spectators, more than 60% chose to watch the football match via internet streaming.
At the 2018 World Cup, in Indonesia there were cellular providers that provided paid
streaming services for all matches from opening match to the final match. Illegal
streaming is also not a hard-to-find item on the internet, which is a threat for TV
broadcaster industries.

Up to this point, a radical change in the spectacle of football can be simplified into
two conclusions. First, there has been a change in the behavior of people watching
football. Secondly, there is a change in people's consumption patterns towards
watching football. This second point will affect the broadcast copyright landscape
with the increasingly prevalent presentation of matches through digital media.
Besides the reducing of fans engagement, the rising of esports is also disrupting the
supply-and-demand model of tradition sports, with Kleiner Perkin's Internet Report
2017 claiming that as many millennials now have a "strong preference" for their
favourite esport, as those sports fans that share this level of passion for their
preferred team. Esports are taking potential future fans away from traditional sports

Those disrupted push the industries, moreover, the sports team to facilitated the
infrastructure of their asset in order to give better customer experience to their fans
besides the website, then, e-commerce, the official mobile app, virtual reality, should
be imagined for 90 minutes in the stadium and far beyond this time frame

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At the Philips Stadium, own by PSV Eindhoven, the top Dutch club, the supporters
once held a demonstration. They reject free WiFi inside the stadium which actually
makes it easy for viewers to access the internet. The reason is they want to support
for the club directly in the stadium by kept shouting and yells throughout the match
instead of looking at their smartphone.. They put up banners in the stands saying this
sentence: "If you want to sit back, it's better at home." Apparently, for some people
the stadium experience is actually more entertaining than looking at the screen.

The evolution of Sport Club concept, in addition to new possibilities offered by

digital transformation, has led to the development of digital implementations in the
sport organizations, approaching even more the traditional enterprises. Live
broadcasts connect fans to clubs from all around the world, but what happens when
the match is over? They flock online, devouring content, from following social media
accounts, to keeping up with the latest news, watching replays, and engaging in
passionate discussion with like-minded supporters.

This new era of connectivity is only set to exponentially increase fan engagement.
By 2020, more than 40 percent of the population will be considered digital natives –
people who have grown up with technology, who are completely comfortable with
engaging with it in all aspects of their lives.

Sebastián Lancestremère, General Manager for Microsoft Digital in Sports states that
“Digital transformation is redefining the sports industry and shaping the fans’
consumption behaviour. These fans, the customers of our customers, have evolved
how and where they consume content and entertain themselves.”

How do sports club keep up with this change? How do they tap into every resource
possible to increase their engagement with existing fans, while gaining new ones?
Considering that FC Barcelona and Real Madrid is the first and second on the world
´s most popular sports organization on social media in 2018, writer will put these two
clubs as the benchmark of this research. This thesis objective is to investigate in
depth in the concept of Digital Transformation towards the fans, in particular how it
is articulated in the sport industry.

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OBJECTIVE :

• To analyze the impact of digital transformation in sport organizations

• To assess the significance of digital transformation in sport industries

RESEARCH QUESTIONS :

• How does fans centric change the face of sport industries

• What drive the sports organization to digital transformation

• How does the digital transformation change the sports organization

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 CHAPTER 2

LITERATURE REVIEW

2.1 Customer Loyalty

Customer loyalty and satisfaction is vital for modern day business for two main
reasons. First, customers are scarce resource it is far easier to obtain from an old
customer than from a new one. Second, customer loyalty and satisfaction has a
positive effect on the profitability revenues of the company (Rosenberg & Czepiel
2017.) There are two-dimensional approach to loyalty has been a dominant theory of
past studies (Gahwiler and Havitz, 1998; Park, 1996) :

1. Loyalty as primarily an attitude that leads to a relationship with the brand.

2. Loyalty is primarily expressed in terms of revealed behaviour (i.e. the pattern of

previous or past purchases).

Loyal customers are considered key contributors to organisational profitability and

success (Ferrand, Robinson, and Valette-Florence, 2010) and understanding the
psychological processes that are behind customer decisions is an important topic of
research (Braeutigam, Rise, Swithenby and Ambler, 2004).

This concept could also be said to stems from research by Oliver (1999) and Uncles
et al. (2003), whose theories state that in order to increase repeat purchase behaviour
and ultimately loyalty, the customers cognitive and emotional commitment to the
brand must first be addressed. When discussing loyalty in the context of sport,
cognitive thoughts, emotions and behavior are the key indicators of fan loyalty (Funk
and Pastore, 2000; Funk and James, 2006).

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2.1.1 Attitudinal Loyalty

It has been argued that in order for “true” loyalty to exist, there must be a strong
attitudinal commitment between the customer and the brand (Day, 1969; Heere and
Dickson, 2008; Reichheld, 1996; Whan Park et al., 2010). Attitudinal loyalty, which
explains consumer identification with a product or brand, is based on the idea that
loyalty is a highly developed attitude that is persistent, resistant to change, creates
biases in cognitive processing and provides a general guide to emotion and behaviour
(Funk and James, 2006). From a sporting perspective, fans with strong attitudinal
loyalty towards a team stand firm when their team performs poorly on the field,
transfer their allegiance to team sponsors, and are more likely to purchase
merchandise (Neale and Funk, 2006).

Measuring a sporting fans attitudinal loyalty towards a particular sporting club/brand

has been a difficult task for researchers so far, with considerable research conducted
on behavioural loyalties such as attendance at sporting events and the purchase of
season-long memberships (Hall, O‟Mahony and Vieceli, 2010; Shamir and Ruskin,
1984; Worthington et al., 2010).

2.1.2 Cognitive Loyalty

Cognitive loyalty is a consumers psychological preference for a brand, consisting of

positive thoughts and beliefs about purchasing a product or service on the next
purchase occasion (Hartel, Russell-Bennett, Lloyd and Russell, 2008). Through
marketing research, cognitive loyalty has been identified as one of four components
of loyalty, with the others being affective loyalty, behavioral loyalty and behavioral
intention (Gremler and Brown, 1998; Oliver, 1999). Hartel et al., (2008) contended
that emotional and cognitive loyalties are not stages that occur in a progressive but
components of loyalty that can co-occur.

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2.1.3 Behavioural Loyalty

Models of behavioural loyalty are primarily defined by patterns of brand allegiance,

or the expenditure of purchases towards a brand over a period of time (Fader and
Hardie, 1996; Kahn et al., 1988; Uncles et al., 2003; Worthington et al., 2010). In a
sporting context, attending live sporting events and purchasing team memberships
and merchandise exemplify behavioural loyalty.

Although behavioural patterns such as repeat attendance to sporting events may be

the most evident manifestation of an individual‟s attachment to a team, it ignores the
underlying emotional and cognitive process that help explain the original motivation,
as well as the cause for any deviation to attendance behaviour or association with the
team (Mahony et al., 2000).

2.1.4 Identification Theory

Identification theory is used to examine individual group identity with well-

developed propositions and strong empirical support (Lin and Lin, 2008). Brands
often serve as symbolic devices, affording the consumer a public personality or
culture with which to identify and project his or her own self-image through an
affiliation or relationship with the brand (Reizbos, 2003), which can really strengthen
a consumers connection with particular brands (Crosby and Taylor, 1983). Porat
(2010) identified a football fan as one whose devotion to a preferred club dominates
his entire way of life. The identification he has with his preferred team is a
permanent component in the fans identity profile. Fans are often willing to attend
games even during seasons of poor performance, withstand criticism from other
supporters, and donate their time and money to express their support for a particular
club (Wakefield and Sloan, 1995).

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2.1.5 Fanaticism

Fanaticism is a very complex term that takes on different forms and is connected
with many meanings, as it holds within itself and can be defined through many other
concepts (Smith et al. 2007). It is also a very important phenomenon in modern
culture, marketing, as well as people’s personal and social realities (Kozinets, 1997).

Truly loyal fans, or “fanatics” possess a deep emotional connection with their
favourite sport or team, and demonstrate this attachment through years of
membership and season-ticket purchases, and withstand criticism from others or poor
team/player results (Dees et al., 2010).

Fanatics demonstrate the highest degree of attendance loyalty at sporting events,

displaying intense emotional responses and strong positive attitudes towards a
sporting individual or team (Hall et al., 2010). For fanatic supporters, the relationship
with their preferred team has become a significant and central part of their lives, and
as a result they are much less likely to alter their behaviour or level of commitment
(Mahony et al., 2000). In some cases the significance of the sporting team to the
individual can dictate the characteristics of their social and familial relationships
(Porat, 2010).

2.1.5.1 Characteristics of Fanaticism

There has been a lot of confusion as to what the characteristics of fanaticism are.
This is largely due to the fact that fanaticism has often been studied in a negative
light, and that the concepts “fan” and “fanatic” have been given contradictory
meanings. (Chung et al. 2008; Smith et al. 2007) With the gradual acceptance of a
positive view on fanaticism in consumer research as well as the merge of the two
concepts to have the same positive meaning (Smith et al. 2007), the characteristics
have become clearer. Thorne and Bruner (2006) define the four main characteristics
of fanaticism in their research. These are internal involvement, external involvement,
a desire to acquire, and social interaction. Research by Chung et al. (2008) supports
these, but points out that fanaticism does not always include social interaction, and

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can simply be a very personal phenomenon. Moreover, not all fans participate in fan
activities with the same level of intensity (Thorne and Bruner, 2006), meaning that
the characteristics of fanaticism can be seen in varying degrees (Hunt et al. 1999).

2.1.6 Internal Involvement

According to Thorne and Bruner (2006), fanaticism, firstly, includes internal

involvement, which means fans “focus their time, energy and resources intently on a
specific area of research”. Fans derive great pleasure from the source of their interest
and express a lot more interest in this area than do non- ‐fans (Kozinets, 2001; Belk
and Costa, 1998). A fan’s internal involvement is defined by extraordinary levels of
loyalty and devotion, which imply that attachment goes beyond ordinary levels
(Chung et al. 2008). Fanaticism becomes more that just a simple engagement
between the consumer and object, and involves strong emotional attachment as well
as feelings of love, intimacy and dedication (Pichler and Hemetsberger, 2007). This
can be seen e.g. through a fan missing the object of their fanaticism when they are
away from it (Chung et al. 2008). The consumption process is this way turned into a
highly personalised system of beliefs that support finding, establishing, and
transforming the consumer’s identity (Smith et al. 2007).

2.1.7 Desire to Acquire

Fans are characterized by an intense desire to acquire, and through that possess
material objects related to the area of their fanaticism (Thorne and Bruner, 2006).
Often fans desire to buy and re-‐buy specific products and “will not have any other”
(Oliver, 1997, p.392). Fans themselves often cannot explain why some object is so
appealing, but sometimes it is the desire itself that is found to be desired (Belk et al.
2003).

Therefore fans find pleasure in not only possessing objects, but also in wishing for
them (Thorne and Bruner, 2006). Like many individuals, fans choose to express
themselves through consumption (Thomson et al. 2005). Desire can thus become the
driving force behind consumption because it’s a pleasurable feeling invested with

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meaning. Desired objects can further become channels for love, respect, recognition
and status. (Belk et al. 2003) .

Moreover, fans largely identify themselves through the objects of their fanaticism,
and these become an important part of their self- ‐perception (Belk and Costa, 1998).
Fans have been known to create shrines out of these kinds of items, and, in extreme
cases, fanatical objects can even become more important than food or shelter
(Kozinets, 1997). Apart from collecting products, fans also make items related to the
fanaticised object, this way contributing to the culture and making it even more
personalised (Brown, 1997).

2.1.8 Social Interaction and Personal Meaning

Fanaticism brings out a desire for social interaction (Thorne and Bruner, 2006). This
interaction can manifest itself in many different ways: fans may choose to converse
online or meet in real life (Kozinets, 2001). Through the interaction, a person’s status
or group membership can be established as fanaticism may also have social
significance (Oliver, 1999). This way fanaticism becomes an intensely personal
phenomenon (Chung et al. 2007, 2008). It is therefore also important to notice that
that being a fan can be both public and private (Passmore, 2003).

2.1.9 Sport fan personality and character

Sport fan has similar personality and character to one another but in a recent sport
spectator taxonomy, Giulianotti (2002) suggests the existence of four types of
spectators: Supporters, Followers, Fans and Flaneurs. Using literature on the
hypercommodification of football and body culture, Giulianotti (2002) categorizes
spectators using "two basic binary oppositions: hot-cool and traditional consumer". It
is define by two category, “hot-cool” which is the way to identify their characteristic
to support the club(Giulianotti, 2002). “Hot” means spectators are those whose
"forms of loyalty emphasize intense kinds of identification and solidarity", while
"cool" spectators are those who "denote[s] the reverse".

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Supporters are traditional/hot spectators, with long-term personal and emotional
commitments, and a full 'thick' relationship with the club 'that resembles those with
close family and friends. The club becomes 'a totemic representation of the
surrounding community'.

Supporting the club becomes central to life. Supporters have imaginary relationships
with the club and what it is seen to represent, which can include 'distinctive local
values'. Supporters form a subculture, in the classic sense. As with other subcultures,
there may be further divisions inside, however, such as those hardcore supporters
who have always supported the club and those who have recently appeared [and
there is a reference to Thornton's notion of subcultural capital here but footballing
subcultural capital cannot be bought commercially].

Followers are also traditional but more cool, taking a detailed but more distanced
interest in a club. Forms of solidarity may either be thin or thick, ranging from
particular links between clubs, as when a favourite player goes to another club, or
ideological attractions as in the fascistic followings of certain European clubs.

Thicker forms include much deeper links of friendship and rivalry 'across club
supporter groups', or friendships based on 'religious - ethnic sentiments', or even
social connections between club hooligans, or through common national origins.
Some 'abstract social and cultural values' are involved in the attachment to a club,
and consumerist attachments can be denied.

Followers may have other forms of allegiances, and manage these as 'a set of
"nested identities"'. At the most practical level, this can mean that there is always a
team to support, but there must be some connection --'only flâneurs... would declare
a penchant for both Liverpool and Manchester United, or Fiorentina and Juventus'.

Fans are hot consumer spectators. The relationship is a strong one but more distant,
and mediated through 'market centred sets of relationships', such as 'the
consumption of related products... merchandise... shares... or contributing to fund-
raising initiatives'. Fanzines and other forms of media facilitate this relationship. In

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thick forms, purchasing the team shirt might help to demonstrate their visual support
for the team, whereas buying souvenirs or shares is one of the thinner forms -- one
which is particularly useful for the exiled fan. There is a greater awareness of market
forces at work and the financial needs of the club. However, this form of attachment
is itself “utilitiarian” [“pragmatic”, as earlier studies of worker involvement in their
jobs called this], and lack of success can produce either fan protests (thick forms), or
disillusionment (thin).

Flâneurs are cool consumer spectators, able to browse and remain cool as a result of
“a depersonalised set of market dominated virtual relationships”. The flâneur himself
has developed away from the classic mid-nineteenth century types. For example it is
no longer confined to males, although the flâneur still requires considerable amounts
of 'economic, cultural, and educational capital to inspire a cosmopolitan interest in
the collection of experiences'.

Flâneurs are just as likely to switch allegiances between clubs, or even between
sports. Big international clubs openly welcome flâneurs nevertheless. There is a
possible contradiction here, because more traditional and hot fans are also consumed
as part of the experience, even though they are also condemned aesthetically.

2.2 Sport Industries

In defining sport, The Council of Europe (1993) has defined that "Sport" means all
forms of physical activity, which through casual or organized participation, aim at
expressing or improving physical fitness and mental well-being, forming social
relationships or obtaining results in competition at all levels. The most important
definition of industry was given by Michael Porter in 1979: a “group of competitors
producing substitutes that are close enough that the behavior of any firm affects each
of the others either directly or indirectly.”

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Later, Porter defined the term more precisely as “a group of companies offering
products or services that are close substitutes for each other, that is, products or
services that satisfy the same basic customers’ needs.” This new definition
emphasizes the importance of industry borders and industry’s role as a market
supplier or producer of goods and services, as distinguished from a market, defined
as a consumer of goods and services.

As Dejonghe (2006, pointed out, a definition of sport which only focuses on the
physical activity of participation is too narrow for an economic value study for sport.
For the purposes of this study, passive contributors to a sport economy such as
broadcasting rights, sponsoring, merchandising and sports betting (Dejonghe, 2006,
amongst other contributors which need to be further explored and uncovered, and in
addition to the economic activity generated by all participants to the sport industry in
South Africa, will also need to be included into a definition of sport.

Shannon (1999) says that the growing interest in professional sport has ensured focus
on the sport industry as big business, and that there can be no doubting that sports is
truly a business venture. He goes on to further state that how one defines the sport
industry will have a dramatic effect on the size of that industry, but that there can be
no question that the size of this industry is large and its impact substantial (Shannon,
1999,). Estimating the size of the sports industry is an important exercise, and unlike
other industries, the sports industry extends across the usual classifications of
economic activity included in national income and product accounts (Humphreys &
Ruseski, 2009).

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 Figure 1. Sports Market Revenue

It includes mass participation in sport and watching, listening, and following sports
competitions on various media. Data from each of these areas have problems that
make it difficult to accurately estimate the size of the sports industry (Humphreys &
Ruseski, 2009). Johnson, Groothuis & Whitehead (2001) also share the view that
even though the economic value of sports public goods may be large, economists
have rarely attempted to measure them. Von Allmen (2005) says that studying the
economics of sport can be a further incentive to study further in the field of
economics. He goes on to further state that seeing economic theory explained and
tested in such an inherently interesting context can stir interest in motivated students
to continue as students of economics, not only as students of sports (Von Allmen,
2005).

2.3 Digital Transformation

Information, communication and connectivity technologies (ICT) have improved

greatly during the last decade creating new functionalities (Bharadwaj, Sawy, Pavlou,
& Venkatraman, 2013). These ICT tools further enable the production, storage and
handling of information, and facilitate communication between human beings and
electronic systems (Ibem & Laryea, 2014).

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ICT tools are often called digital technologies and are shaping the way people live,
communicate, consume and work, breaking the barriers of time and space
(McDonalds, M. Russel-Jones, 2012). The existence of social media such as
Facebook, Google has shape the way we living these days.

Many organizations nowadays feel pressured to change in order to meet customer

demands and face competitive pressure (Westerman, Calmejane, & Bonnet, 2011). In
an attempt to do so, they often undergo so-called digital transformation initiatives.
Digital Transformation is quite a trend, the global digital transformation market is
expected to grow from $150 billion to $p.369 billion in the coming five years
(MarketsandMarkets, 2015). The solution that enable digital transformation are so
called social, mobile, analytics, and cloud technologies and can be considered the
underlying technologies of the digital transformation phenomena (Bharadwaj et al.,
2013).

While there are several consultancy-related studies such as Fitzgerald et al. (2013)
and Westerman et al. (2011) that state the importance and potential upside of digital
transformation there is very few truly academic literature available on the concept of
digital transformation. As such digital transformation remains a popular buzzword.

The attempts to conceptualize digital transformation by Westerman et al. (2011),

Stolterman and Croon Forst (2006) and Lankshear and Knobel (2008) have led to
holistic definitions that do no break down the concept. One aspect that became
apparent is that digital transformation does not entail gradual incremental changes,
but fundamental “radical” changes due to digital technologies. Additional
clarification of the concept is needed.

Furthermore few studies have focused on the effects that digital transformation has
on organizations. As Piccinini et al. (2015) have concluded the limited digital
transformation research so far has primarily focused on managerial issues. Bhardwaj
et al. (2013) and Granados and Gupta (2013) describe how organizations should use
digital technologies as part of their business strategy to compete in a digital world.
While Lucas et al. (2013) specify examples of IT transformations that occurred in

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four distinct sectors and the implication for organizational policies. In addition Setia
et al. (2013) specifically addresses the customer-side of digital business strategy.

2.3.1 Digital Transformation Domain

Our point of departure for exploring the ‘What’ of digital transformation builds on a
framework with four primary domains. This approach highlights digital progress
within customer engagement, product development, operational processes and people
empowerment, and by focusing on these four domains the approach provides a
holistic perspective on companies’ level of maturity on their digital transformation
journey. At the same time, it offers a perspective on how companies prioritize each of
the domains in their digital development strategies and highlights how far they have
come in leveraging digital initiatives to create real value and impact within each area.

Figure 2: Digital Transformation domain

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2.3.1.1 Engaging your customers

A key element on the digital transformation journey is the move towards a highly
customer-centric mindset. Among the companies rate that customer engagement is a
Very high” or “High” priority. While many of these companies have still not fully
adopted a digital and customer-centric end-user perspective, they are becoming
increasingly aware of the need to step up their efforts in leveraging the digital
opportunities to create customer engagement beyond a traditional transactional focus.
However, in general, and particularly in digitally less mature industries, customer
engagement is still prioritized lower than internal operational efficiency
improvements. Hence, there still seems to be a significant potential across companies
to develop an even stronger customer-centric mindset to leverage digital solutions in
creating even deeper customer engagement.

2.3.1.2 Transform your products

With the advent of big data, increased customer insights, and opportunities of
augmentting products and services through new digital features, companies are
seeing a potential in optimizing and individualizing their offerings. Despite this
realization, the transformation of products and services is still a relatively limited
focus area on the digital agenda. Some companies in digitally mature industries like
media and telco have definitely moved into this space, but generally, companies are
still in an exploration phase where the transformation of products and services are
mostly in a test phase, and where tangible solutions on how to package the increased
amounts of customer insights are being explored.

2.3.1.3 Optimizing operations

“Optimizing operations” is prioritized the highest among the four identified domains.
Digitalization is perceived as a key lever in optimizing the efficiency of internal
operations, not only through ensuring basic IT infrastructure and effective backend
systems, but also through the development of technical solutions targeting for

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example the optimization of production processes, value chain improvements, or
automation of customer service. Besides the potential for efficiency improvements
and hence reduced resource requirements, companies experience that the new digital
processes enable a higher quality of services, ultimately leading to a stronger product
offering and higher customer satisfaction.

2.3.1.4 Empower your employee

“Empowering employees” is the area that has gained the least attention to date, and
many companies have just recently started focusing on employee enabling solutions.
The primary focus of digital employee empowerment is still to ensure up-to-date
computer systems and platforms to facilitate effective communication and day to day
work processes. However, recently, some companies have started experimenting with
more advanced digital HR solutions such as community based tools to facilitate
inclusion, open dialogues and cross-functional collaboration as well as more data
driven HR management tools to enable early, real-time feedback.

2.3.2 Digital Innovation

Digital innovation – defined as “creation of (and consequent change in) market

offerings, business processes, or models that result from the use of digital
technology” (Nambisan et al., 2017) – has become the driving force of business and
social innovation (Barrett, Davidson and Vargo, 2015). During the last decade, rapid
technological development in areas such as mobile, social media platforms, cloud
computing, analytics and Internet of Things has enabled radically new
(re)combinations of digital and physical components that produce novel products and
services (Yoo, Henfridsson and Lyytinen, 2010; Barrett, Davidson and Vargo, 2015).
These new combinations rely on digitization, i.e. the encoding of analog information
into digital format. Digital innovation encom-passes a wide range of innovation
possibilities, such as new products, platforms, services, and customer experiences
(Nambisan et al., 2017).

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To understand why digital innovations are different from normal innovations, it is
necessary to understand how digital technologies differ from earlier technologies.
According to Yoo, Henfridsson and Lyytinen (2010), there are three distinctive
characteristics of digital technologies, namely the reprogrammability, the
homogenization of data, and the self-referential nature of digital technology. The
reprogrammability allows a digital de-vice to perform a wide array of different
functions and these functions can be reprogrammed any time.

Thus, the scope, features, and value of digital offerings can continue to develop and
expand even after the launch of innovation (Nambisan et al., 2017) The
homogenization of data means that any digital contents (audio, video, text, and
image) can be stored, transmitted, processed, and displayed using the same digital
devices and networks, thus separating the content from the medium. Thus,
innovations are inex-pensive and fast to scale as almost any device can process any
content. The self-referential nature of digital technology means that diffusion of
digital innovations accelerates the use of digital technologies, which in turn fosters
digital innovation.

Thus, a positive virtuous cycle emerges lowering entry barriers, decreasing learning
costs, and accelerating diffusion. (Yoo, Henfridsson and Lyytinen, 2010) It is also
noted that digital technologies have a dual role in digital innovations. On the one
hand, they act as an operand resource enabling digital connectivity, which in turn
reduces communication cost and increases speed and reach (Lusch and Nambisan,
2015; Lyytinen, Yoo and Boland, 2016). For example, digital technologies nurture
innovation by establishing value network and allowing sharing of resources and
knowledge in that network (Barrett, Davidson and Vargo, 2015). On the other hand,
digital technologies act as an operant resource initiating innovation and creating
novel opportunities (Lusch and Nambisan, 2015; Lyytinen, Yoo and Boland, 2016).
As an example, digital innovations.

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2.3.3 Digital Disruption

While innovations have opened new opportunities to compete and achieve

competitive advantage. It has been acknowledged that digital technologies have
disruptive nature which can lead to industry transformation (Lyytinen and Rose,
2003). There are several examples from the industries such as publishing, media, and
telecommunications where entire industries have been transformed by digital
innovations (Yoo, Henfridsson and Lyytinen, 2010). These industries have faced
disruptive innovations which have thoroughly changed incumbents market position
and customer behavior.

The term disruptive innovation refers to innovations which are truly transformative
and can alter existing rules of competition (Christensen, 1997; Lyytinen and Rose,
2003). These examples raise a question how digital innovation disrupt industries. For
the past decades, Christensen's (1997) work on disruptive technologies and innova-
tions has been one of the most influential theories in the field of innovation
management. The main idea of the disruptive innovation is that in the beginning new
innovation has worse performance than current solutions on a primary performance
dimension, but it performs better on an alternate dimension. Over time, new
innovation improves on the primary dimension so that it appeals to mainstream
customers and thus it causes disruption in the market.

As incumbent firms have focused on serving mainstream customers and their

expectations, they fail to recognize new competitors from niche markets that could
take over the market. This can cause leading firms to fail because their products offer
inferior value to customers and at this point, it is too late to reach the new entrant.
(Christensen, 1997) Even though Christensen's (1997) work has contributed
significantly to the strategy liter-ature and it is highly praised by managers, many
scholars have challenged and criticized it in several aspects. Danneels (2004) brought
up five themes about disruptive innovations that are questionable: (1) the actual
definition of disruptive technology; (2) predictive use of the theory of technological
disruption; (3) explanation of the success of incumbents; (4) the implications of the
theory for the merits of being customer-oriented; and (5) the merits of creating a

20
spin-off to commercialize the disruptive technology. In addition, Tellis (2006)
studied these themes and argued that, in contrast to the Christen-sen’s theory,
technologies do not evolve along S-curves, they do not cross in performance only
once, and they do not always start below and end above the prior technology’s level
of performance.

To define the disruptive innovation better, Markides (2006) proposed that not all
disruptive innovations are the same, but they should be categorized by tech-
nological, business-model and new-to-the-world product innovations. Thus, based on
these factors, Christensen’s theory should be used more as an indicator of
possibilities that may happen, but avoid using it as a complete truth.

Christensen's (1997) theory suggest that digital distruption happen when new
technology and competitor does not start from unserved customers with different
needs. Rather, it targets all customer segments because of its better performance at a
lower price and greater customization. Examples of such disruptions include
smartphone navigation apps with their impact on navigation-product makers, Skype
and Whatsapp with their impact on calling and messaging and Spotify with its impact
on radio and recorded music.

This view on digital disruption can be linked to the layered modular architecture and
distinctive characteristics of digital technologies introduced above (Yoo, Henfridsson
and Lyytinen, 2010). As digital innovation happens on service or content layer, it is
possible to diffuse innovation rapidly and with nearly zero-cost. Also, because of the
layered architecture, disruption can come from unexpected directions why it is hard
to defend. For example, when Google introduced its Google Maps (content and
service layer) application on Android platform (service layer), every Android phone
turned to be a navigator.

This kind of rapid diffusion from previously separate industry is hard to de-fend
which in turn led to steep business decline among navigation-product makers.
Secondly, Pagani (2013) studied how value creation and capture shift in digitally

21
enabled value networks in response to incremental innovations and cross-boundary
industry disruptions.

The study recognizes three types of value networks (control point constellations): (1)
closed vertically integrated model, which describes the short-term static properties of
industry structure (e.g. analog TV broadcasting); (2) loosely coupled coalition model,
which refers to the emergence of an incremental innovation (e.g. digital TV); and (3)
multisided platform model, which characterizes the emergence of cross-boundary
industry disruptions (e.g. emergence of Apple TV and Netflix).

As value net-works evolve from one model to another, the most critical change
happens in the value creation and value capture logic. In the closed vertically
integrated model, the value creation and capture are characterized by the presence of
large, strongly connected members. The loosely coupled coalition model is
characterized by the management of relations and value with partners along the value
chain. In this model, most of the value will be captured by service providers as they
act as “bottlenecks”. Multisided platforms bring together two or more distinct groups
of customers, building an infrastructure which creates value by reducing distribution,
transaction, and search costs. Value capture happens by collecting revenue from each
side, although one side is often subsidized. To sum up, as value net-works evolve
because of technological advancement, value creation and capture points change,
which in turn can cause industry disruption.

This change in value networks can be rapid because of technological advancement

why incumbents position can be negatively impacted. (Pagani, 2013) Thirdly, Bughin
and van Zeebroeck (2017) suggest that digitization disrupts incumbents business
through two loop effects. The first loop that disrupts incumbents’ business is new
digitally enabled entrants that are creating new competitive dynamics. New entrants
take market share from incumbents, put pressure on price, alter customer behavior
and change value distribution.

22
The study found that these effects are larger in more digitally advanced industries
and that effect hurts slower-growing companies the most. The second loop that can
impact negatively on incumbents’ business is the reaction of legacy compa-nies to
each other. This is called “red-queen” competition where legacy companies create a
self-reinforcing process where they first imitate digital entrants and then one another.

2.3.4 FC Barcelona Digital Implementation

FC Barcelona emerged onto the scene in 1899, “within this volatile milieu of
political factionalism and cultural divergence”, led by the Swiss textile emigrant,
Joan Gampert. It is worth noting that only ten days before the official formation of
the club, the mayor of the city of Barcelona resigned in protest of what Phil Ball
describes as “spiraling new taxes imposed by central government in Madrid, a tax
particularly resented in light of the fact that Barcelona’s burgeoning economy was
beginning to prop up the country”.

But perhaps somewhat surprisingly, politics andissues of this nature were of little
importance to the club in its first decade of existence, and Barça “identified above all
with the city of Barcelona”. This is evident in the club’s original crest, which was the
same as that of the city itself. Due to this for the Catalan people FC Barcelona is part
of their identity that they will carry.

The club’s digital strategy is comprised of three departments: social networks, digital
content (which are managed by the Communication Department) and the web
platform and apps (which are managed by the Online Department). The team
responsible for the digital strategy is integrated to the structure of the Club as
opposed to depending on an outside company to manage or establish the digital
strategy. According to a presentation made by the club when first unveiling the
digital strategy there are three categories in which the strategy is divided: audience,
loyalty, and monetization. In the audience category the club has placed their own
Web page, and the social networks Facebook, Twitter, YouTube and Google+.

23
The club has accounts on each of these sites and, as mentioned before, they are
among the most followed sports entities on the Web. The loyalty section is described
as “un univers blaugrana adaptat a diferents públics en constant evolució” (a
blaugrana universe that adapts to different publics in constant evolution). This
section includes the following departments of the club: Barça fans, Socis (members),
Penyes (official fan clubs), Fundació (the FC Barcelona Foundation), Empresa
(Enterprise), and FCB Junior (the club’s page specially aimed at kids). The loyalty
section also includes the following contents: current events in the club; matches,
results and classifications: real time statistics: integration with social networks: and
the digitalization of part of the historical archive of the club. The monetization
section includes: ticketing, members, mobile apps, sponsors, and ecommerce.

However, all of these different departments and strategies would be inefficient if

audiences were not able to understand them, which is why language plays an
important part in the digital strategy. At the time of writing, the club’s website offers
version of it in Catalan, English, Spanish, French, Arabic, Japanese and Chinese. The
news published on Facebook and Google+ are posted in Catalan, English and
Spanish; and the club has different Twitter accounts to accommodate different
languages, which include: English, Catalan, Spanish, French and Arabic.

What is interesting about the uses of Facebook, Twitter and Google+ is that the news
posted there are headlines and links to the official website, making it seem as if the
social networks are just a gateway into the actual FC Barcelona website. With the
employment of social networks the club is able to provide real time updates. Their
Twitter accounts are employed to provide updates during matches played by the first
team, and also to provide quotes of press conferences in real time. The official
website of the club provides a real time radio broadcast of matches played that,
depending on which version of the website one accesses, is narrated in different
languages.

This merger of real time and language options allows the club to not only reach a
large number of fans but also to accommodate the needs of these fans by providing
content in the fans’ own language. Another example of the way the club wants easy

24
access and interaction is their mobile applications. The club has seven official apps
that are available for free download on iTunes (some are also available on Google
Play).

These apps include games and they also provide live updates of the matches the
teams (either the football teams or the club’s Basketball team) are playing. For an
example of the different types of apps that FC Barcelona has in existence we can
look into FCB World and FC Barcelona Fantasy Manager. FCB World is an app
specially developed to keep fans informed of matches, news, and the classification of
the teams in the different leagues they are playing.

This particular app could be described as a “to-go” version of the club’s website. It
offers images, videos, information and even the option to buy tickets for games and
the Camp Nou museum and it is updated almost as immediately as the actual website
is. FC Barcelona Fantasy Manager on the other hand, is an app that allows its users
to step into the role of manager for FC Barcelona. The app allows the user to build
their own training facilities and administer the club; and while the user is able to
create a team, train it, and even making sure its players are fit for matches, they can
also have their team compete against the team of another user from any part of the
world and win prizes.

Having different types of apps allows FC Barcelona to cater to the different interests
that its followers have and to make sure that regardless of these interests the fans are
always informed by and entertained with the club. If the club makes certain
distinctions among its apps, it does the exact opposite when it comes to the different
competitions in which they participate.

According to the Social Media Manager of the club, Jaume Pons, the club employs
the same strategy to promote the first team throughout all the competitions they
participate because they do not consider any match as more or less important as
other. This constancy in the club’s coverage of the team’s matches allows fans to
keep up with the different competitions in which they participate. Keeping track of

25
the growth of the online followers of the club is a very difficult task because every
day the club gains new followers from all over the world.

There is a sense of closeness that the virtual media provides to fans that are not
located in Barcelona. Journalist Clive Thompson said, after interviewing several
Facebook and Twitter users, that ambient intimacy (that develops from the sense of
closeness virtual media provides) becomes a way to “feel less alone.” By allowing
fans to receive real time updates and providing information on the club and the team,
fans no longer experience a sense of alienation or have to wait and depend on
television broadcast on FC Barcelona to be informed on what is happening with the
club.

What is more, social networks allow fans to answer back or provide feedback to the
club, thus opening a new communication channel. However, this new channel is still
regulated by the club, because on their official website there is no space for fans to
comment. Because of this, the club is still able to be in control of what is displayed
on their website.

The social networks allow the fans to have a space where they can comment and
share what the club publishes; this creates a sense of interactivity among the fans. On
January 31, 2013 FC Barcelona launched the latest innovation in their digital
strategy: FCBfeel.com. The club described it as a “digital meeting point” and it has
all the characteristics that social networks have. It allows fans to personalize the
information regarding the club they want to receive; it allows them to create their
own profile and upload pictures in it; and it also allows for fans to connect and
communicate with other fans that share their interests.

There is a special emphasis on both location and experience: “the campaign puts
special emphasis on the Camp Nou as location that offers a unique and unforgettable
experience, a place where the players and the fans give it their all to be part of the
biggest Blaugrana spectacle in the world.” Camp Nou, despite being one of the
largest stadiums in world (with a capacity for over 99,000) would not be able to fit
all of FC Barcelona’s fans within its walls. In spring 2016, wi-fi is slated to be

26
available inside the Camp Nou and nearby areas, it will have to enable up to 99,000
people to connect while in the stadium.

What is more, most of the fans of the club are not located in Barcelona; on the
contrary, they are located across the globe. The way in which the club is able to make
their fans from different countries feel like they are “part of the biggest blaugrana
spectacle in the world,” is to provide the closest thing to it: virtual interaction with
the club. This is what FC Barcelona’s digital strategy allows fans all over the world:
the opportunity to be part of the matches, of the news and of the events in real time.
Liquid communication facilitates the bursts of interactivity the club and fans
experience during certain events.

2.3.5 Real Madrid Digital Implementation

Madrid CF was founded in March of 1902, and it will perhaps shock many to hear
that Carlos Padros, the club’s founder and the man described as the “patriarch of
football madrileno”, was actually a Catalan. Backup by the King of Spain at that time
Real Madrid emerged into wealthy clubs and winning a lot of championship. The
history continue to this day the clubs names turned in to Real Madrid CF and has
nickname “Los Galacticos” due football players recruited during the "galácticos"
policy pursued during Florentino Pérez's presidency at Real Madrid.

Real Madrid understands the importance of its followers. The club is the world’s
largest sports franchise, with more than 100 championships to its name, and it has
been recognised as the best football club of the 20th century by FIFA. Despite its
success however, the club was missing one key ingredient – the ability to connect
more closely with its fans. With a 500 million-strong global following, this was no
mean feat, but embracing technology has enabled the club to lead the way, pushing
the boundaries of fan interaction and retention like never before – all while
generating new revenue streams in the process.

Officially partnering with the Microsoft Sports Digital Platform, the Microsoft
Services team has worked closely with the club to create a new technology solution

27
which integrated innovative digital services across all areas of the club, based on the
Microsoft Cloud and Office 365 platform.

Real Madrid began working on a digital strategy and building on our connections
with the players and celebrity fans to run the campaigns. It was an amazing time, and
everything went perfectly, and we overtook Barcelona to become the first brand in
the world to hit 100 million The victory was made possible by putting together a
comprehensive plan that consisted of a geo-targeted organic strategy for content and
growth. Not many people realize that 97% of Real Madrid fans Facebook are located
outside of Spain.

"As a sports organization, Real Madrid is a media organization , which not only
provide a sports, but also entertainment, material, which also a huge social
platform.” Since 99% club fans cannot attend the matchday in Santiago
Bernabeu, exciting content and digital services is what clubs has to offer to those
fans. The club estimates that 15 channels which club build their relationship
with the fans, including through application, website, social media, online store,
TV club, ticket membership dan many more.

These are split between first-party channels such as the app which are fully owned
by Real Madrid, secondary channels - which have the club logo but are operated by
other companies, and third-party channels such as social media. "Millennials are
going to make up 40% of the global population by 2020, and they spend an hour and
a half per day on social media, they consume videos, they play games."

In return the club gets back intelligent information and data about fan likes, their
preferences and their choices. That enables the club to tailor its commercial services
and offers to supporters, not only for its own products, but towards those of its 13
business partners, such as Adidas or Emirates. Hence, the added importance of the
creation of a new digital business model in the social media age.

28
Indeed, Mr Lancestremere says Real Madrid could be considered more like Netflix,
in that it creates and streams content, rather than a traditional football club. "Sports
clubs have to be entertainment powerhouses. Football is now part of the
entertainment world, 365 days a year," Rafael de los Santos Navarro, global digital
director for Real Madrid, explained at a football business forum in London this
summer.

"We want to reach, retain, and monetise engagement. "At the end of the day we are a
football club, but we are also a content company, and this is the asset we bring to
people. You have to think about all the sources of revenue and positioning yourself
for the revenues you are going to make tomorrow." “The fan base is very fragmented,
so we try to reach all of our fans in their own language, which has been reflected in
the club, hiring new people to manage these accounts in different languages with two
English-speaking community managers, two Spanish speakers, two Chinese, one
Japanese, two Arabs, and one French, so we’re growing quickly in that respect,” says
de los Santos. “

But the content can be completely different in Colombia, where most people will be
watching James [Rodriguez] content because he’s Colombian, compared to a fan in
Wales or England who may be more interested in Gareth Bale. That is the kind of
company we are more than anything, which is a global media company.”

The goal behind all Real Madrid’s social media is to make its digital content
operation into a revenue generator for the club. De los Santos breaks it down into
three key channels. First-party channels such as the app are fully owned by Real
Madrid, while secondary channels–such as the online store, ticket sales, and Real
Madrid-branded mobile games–all have the logo but are operated by other
companies. Third-party channels are those in which Real Madrid has an official
account but doesn’t own, such as Facebook, Twitter, Instagram, Snapchat, and all the
other social media.

29
“The core thing is knowing our fans better and getting as much information about
them as we can,” says de los Santos. “Having this information benefits how we
communicate with them, but also what we offer them, how we present our sponsors
to them, and how we bring value to them, how we tailor our content to each
platform.”

Less than 3% of Real Madrid’s 87 million Facebook fans are located in Spain. The
country with the most of the club’s Facebook fans is Indonesia. Obviously a global
brand needs to tailor its content to international audiences, but often this means
simply translating everything into several languages. For Real Madrid, whose biggest
growth areas are the Middle East, Asia, Latin America, and the U.S., whether it’s on
social media or within it’s own app, it goes beyond language to the content itself.

“The fan base is very fragmented, so we try to reach all of our fans in their own
language, which has been reflected in the club, hiring new people to manage these
accounts in different languages with two English-speaking community managers,
two Spanish speakers, two Chinese, one Japanese, two Arabs, and one French, so
we’re growing quickly in that respect,” says de los Santos. “But the content can be
completely different in Colombia, where most people will be watching James
[Rodriguez] content because he’s Colombian, compared to a fan in Wales or England
who may be more interested in Gareth Bale. That is the kind of company we are
more than anything, which is a global media company.”

In just the last year and a half, the importance and stature of social channels even
within sponsor contracts has grown along with the club’s digital ambitions. “The
number of lines in the first contract I saw related to social channels was maybe a
paragraph in the entire contract,” says de los Santos. “Nowadays, the latest contract
I’ve looked at had 20 pages outlining how this sponsor wanted to be treated or
integrated within our social channels. That’s how much it’s changed.”

30
Howe says that for social channels there are two forms of revenue: direct and
indirect. “We’re hoping to start monetizing video across all social networks–we get
more than 150 million views on Facebook alone–Twitter Amplify, Snapchat Global
Stories, they’re all direct forms of revenue that we’re already involved with,” says
Howe. “Then indirect revenue, how do we support internal business functions within
the club, like selling shirts, and Real Madrid’s museum is also the second most-
visited museum in Spain. How do we sell more tickets to the tour? More primary and
secondary game tickets? And how do we drive higher revenue from our sponsor
partners in social?”

31
 CHAPTER 3

RESEARCH METHODOLOGY

3.1 Introduction

On This chapter describes the research methodology used in the thesis. First, I
present the research setting of the study. Then, I explain the approach to the study,
and finally, I describe the data collection and the data analysis methods that were
employed.

3.2 Research setting

The Introduction chapter starts with the fact that the way fans now engage with
sports has changed significantly. The most notable aspect of this evolution is the
rapidly increasing use of social media. The digital transformation and the technology
that fuels it has enabled fans to interact with their club way beyond the game itself.

For complete the introduction, refusing to embrace the opportunities the digital world
has to offer is now no longer an option. Developing new business strategy that
focusing to engage fans experience is a must.In the first chapter, a literature review is
carried out. Starts with the definition of customer loyalty and its types. It continues
with sports fan personality and character and sport industries itself, follow by digital
transformation phenomena, that push anykind of industries to digitize their business
unit.

The following step is the core of the thesis, by using business model canvas, which
writer will put in the end of the research to analyse of the implementation of digital
strategies in sport organizations. It is also valid for a feedback on which area is the
area in which the club has main invested in technologies.

33
In order to minimize the scope, this research will going deeper to raise football club
as the example of the sports organization. We give some details on how we chose the
sports organization and how to access this useful information. Based on the Deloitte
Football Money League 2019 ranking, which has been posted in deloitte.com
(Deloitte is one of the leading professional services organization in the country
providing services in the area of audit, tax and legal advisory, financial advisory,
consulting and risk management) in January 2019, we have choosen 2 of the leading
ones among 20 of them, Real Madrid and FC Barcelona as the benchmark.

This selection order is from top to bottom based on company capital. Information is
derived from audited financial statements or information sourced directly from
individual clubs. This profile report reflected that the wealthier and successful sports
organisation are, hence more money they can invest for the new innovation and
transformation since it is directly proportional in fact that Real Madrid and FC
Barcelona are football clubs that has the most digital community. All these 20
companies meet two requirements: having official website and social media account
such as Facebook, Instagram and Youtube

3.3 Quantitative research

Quantitative Research is used to quantify the problem by way of generating

numerical data or data that can be transformed into usable statistics. It is used to
quantify attitudes, opinions, behaviors, and other defined variables – and generalize
results from a larger sample population. Quantitative Research uses measurable data
to formulate facts and uncover patterns in research. Quantitative data collection
methods are much more structured than Qualitative data collection methods.
Quantitative data collection methods include various forms of surveys – online
surveys, paper surveys, mobile surveys and kiosk surveys, face-to-face interviews,
telephone interviews, longitudinal studies, website interceptors, online polls, and
systematic observations.

34
Data preparation includes determining the objective of data collection, methods of
obtaining information, and the sequence of data collection activities. One of the most
important aspect in this process is selecting the right sample for data collection. The
data is then carefully collected from only those people who are most relevant to the
objectives of the study. Known as a target segment, this sample is a group of people
who are similar across a variety of variables.

After developed the model, we will measure the rate of fans engagement towards the
sports club itself, the dependent variable is the number content that released on clubs
digital tools per day. Independent variable is Internet adoption, which composed by
four indicators: “Website global rank”, “bounce rate”,“daily pageviews per visitor”
and “number of followers”, the four metrics are updated daily based on the trailing 3
months, from 1 May 2019 until 31 July 2019.

“Bounce rate” is the percentage of visits to the site that consist of a single pageview,
it has been one of the most KPI (Key Performance Indicator) for website. As
important as “bounce rate”, “daily pageviews per visitor” estimates the daily unique
pageviews per visitor on the site.

The “number of followers” measures the number of new followers you've gained on
a specific social media platform over a set period of time and compares that to a
predetermined target. It's important not only to measure how many new followers
you get, but also compare that to your objectives or even your competitors. While
Website rank is an important indicator to show the quality and popularity. Among my
20 samples, Liverpool FC has been placed on the highest rank with 5568 worldwide.
While, SSC Napoli has been placed on the lowest rank with 172999 worldwide. The
other two KPI on official website are bounce rate and daily pageviews per visitor,
they help people to understand how interested a site’s visitors are with the site’s
content.

35
3.4 Data collection procedures

This section explains in detail the data collection procedures used in this thesis. First,
the process of selecting case companies as well as case companies’ profiles are
presented, and then the data collection approach is described

3.5 Selection of sports organizations

As per August 2019 Real Madrid has 110 million followers on their Facebook while
FC Barcelona has 103 million whereas on Instagram each of them has 77 million and
76 million each. For each company, as described below, we collected two main types
of data: (1) a club’s website engagement, and (2) the intensity of its content that
released on clubs website per day.

There are two approaches to measure a club´s website engagement. First approach is
the evaluation on official website. We downloaded the website-traffic data as website
global rank, bounce rate and daily page views from Similiarweb.com. From there we
can measure the popularity of the website. The rank is calculated using a
combination of average daily visitors to this site and pageviews on this site over the
past 3 months. In another word, with the higher rank means the greater popularity.

3.6 Data collection approach

For media platform, we chose clubs websites, Facebook and Instagram. I believe that
website is a online presence strategy allows you to market your business online, a
website is also important because it helps you establish credibility as a business,
whereas Facebook and Instagram are the most influential and accessible social media
tools in world, these two chosen Social networking website are increasingly effecting
social interaction because of many features including websites, forums, photos
sharing, texting, and many others.

36
 CHAPTER 4

PROPOSED WORK

4.1 Descriptive Statistic

Figure 3 : Descriptive Statistic

For medium reach summary, we chose two indicators: the number of fans, in this case
followers, and posts of the football Instagram account itself. There is a huge cap on fans
number, and we can say that the popularity among different football club account is not
the same. Unfortunately on instagram writer cannot access the creating time of the
account, so writer cannot measure the longer of account created rather than straight with
the number of posts.

4.2 Analytical Proofs

As we know, rank reflects the website quality, content and popularity. There is a positive
correlation between Internet adoption degrees with website rank. From figure 5, we can
see that the mean of website rank to be on the top of rank it is not just matter the club has
big starts such as Ronaldo or Messi, on the other hands its is attracting fans to support the
club itself.

37
 Bounce
Company Rank Rate Daily Pageview

Real Madrid 9651 60,74 2,93

FC Barcelona 16484 46,33 3,53

Manchester United 9728 59,90 2,66

Chelsea 14673 54,51 3,15

Bayern Munich 15805 44,70 4,76

Arsenal 7899 57,23 3,22

Paris Saint Germain 34159 46,60 4,34

Juventus 25118 46,79 3,79

Liverpool FC 5568 50,20 3,83

Manchester City 20113 52,66 4,39

Borussia Dortmund 27142 49,02 3,66

Atletico Madrid 48724 45,70 4,46

Spurs 18248 50,14 3,90

Inter Milan 26657 44,30 3,82

Leicester City 52035 51,03 5,1

Napoli 172999 47,18 3,62

Everton 44298 48,26 4,53

Southampton 124634 62,11 2,72

West Ham 56698 62,74 2,91

Schalke 04 43506 51,17 4,76

Figure 4 : Clubs ranking,bounce rate and dailpage view

38
 Srategy that run on the digital departement holds the key for the development of digital
media on a organization. As Global head of digital of Real Madrid, Rafael de los Santos
said that “Many sports teams post 10 to 15 times a day on Instagram,” says Howe. “The
first thing we did was go a couple of days without posting, and we found that we’d grow
more on days we didn’t post than on days we posted 10 to 15 times. So the club worked
really hard to find the right cadence for that platform, and we now post no more than
once or twice a day.”

The rate of successness of their strategic approach can be seen reflected by the ranking
each clubs has. To engage with the fans the club has to be showing up each days on social
media since the fans wanted and eager to know whats going on inside the club, not only
during the weekend when the match start, after collecting data from various football club
that has great amount of fans basis on social media writer observe from 1 May 2019 until
31 July 2019. to count how many posts on instagram from each clubs account.

Mean
posts per Number of
Company Day post

Real Madrid 1.8 2672

FC Barcelona 7.3 12200

Manchester United 5.1 10500

Chelsea 5.8 10300

Bayern Munich 3.2 10500

Arsenal 6.8 15400

Paris Saint Germain 1.9 5600

Juventus 2.9 7500

Liverpool FC 5.4 9650

Manchester City 2.8 7900

Borussia Dortmund 2.6 5100

Atletico Madrid 5.6 9700

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Spurs 4.8 5800

Inter Milan 5.3 6600

Leicester City 4.8 5800

Napoli 4.4 6500

Everton 2,3 3500

Southampton 2.4 5300

WestHam 2.9 5500

Schalke 04 5.3 7800

Figure 5 : Club instagram posts

In general itself as Instagram and Facebook are reaching out more people than actual
website, by creating a content that has connection or links attached to the content itself, it
would works as a gate connection to get more traffic and better ranking position for the
clubs website.

Literally the fans are the one who are following the clubs on social media but it was
actually the club who are following the fans. When the fans behavior changes and goes
more and more to digital channels, and away from physical channels, clubs naturally
need to offer the best channels and solutions there. That is why the clubs developed
mobile app to reach more fans and with the attractive content to offer from mini games to
ecommerce on their mobile app. Building an application that allowed 3rd party stores to
join the platform created value to all participants: fans got discounts by using the app in
the stores, stores got more sales as discounts attracted new fans, and clubs got more fans
on their platform.

Clubs Instagram Facebook Total

Real Madrid 77,8 110 187,8

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FC Barcelona 76,7 103 179,7

Manchester United 31,1 73 104,1

Chelsea 18,3 48 66,3

Juventus 30,9 35 65,9

Bayern Munich 18 46 64

Paris Saint Germain 23,9 37 60,6

Liverpool FC 19,3 34 53,3

Arsenal 15,5 37 52,5

Manchester City 14,8 37 51,8

Borussia Dortmund 8,3 16 24,3

Atletico Madrid 8,2 14 22,2

Spurs 5,9 11 16,9

Inter Milan 3,6 12 15,6

Leicester City 3,2 6,8 11

Napoli 1,8 4,4 6,2

Everton 1,2 3,5 4,7

Southa mpton 627k 3,6 4,2

West Ham 956k 2,9 3,8

Schalke 04 735k 3,1 3,8

Figure6 : Clubs social Media

followers

Created engagement and interest, via the content, which then sent traffic back to the
online store and created conversions and shirt sales. Social media also opens up

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additional ways for sponsors and club partners to activate their partnerships. Why we can
see Real Madrid has the highest rank because now they have the opportunity not only to
be in the stadium although in 2018 they lost their lost their mega star, Cristiano Ronaldo
to Juventus, on the shirts and on their website but they can also get their message across
via social media and provide engaging content for the fans. It is proved that the fans
engagement is not only depends on clubs star players but also how the clubs navigate
their social existence.

Clubs had developed KPIs to track their social media channel transition and internal
development. For example clubs had put a lot of emphasis to find relevant KPIs to track
their fans behavior shift to digital channels. They wanted that their KPIs do not contradict
social media and their website. By focusing on engagement, reach, leads ,conversions.
When Real Madrid Instagram account had 3 million views in 24 hours on a 15-second
clip from practice, we are seeing a massive shift in how people are consuming social
content. As long as your audience is engaged, no matter how small that audience is, it
will grow organically and generate more leads..

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 CHAPTER 5

DISCUSSION

5.1 Answers to the research questions

RQ 1 : How does fans centric change the face of sport industries

Figure 7 : Business model canvas for sport club transformation

This model is composed by nine building blocks:

1. Customer Segments : The customer segment building block outlines

the target audience an organization aims to serve. Since our target is fans, the
meaning can be broad so we can put it in to few different groups such as

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social addicted, technically prepared, young fans, statistic lovers, families,
international fans, fans form other region of the country, etc.

2. Value Proposition : Value proposition refer to the things a business

offers its customer base. This building block can include both products and
services. Fans and supporters are considered the most important asset for the
club, without them all what they do would be meaningless. By giving them
easier oppurtunity to give the clubs support from get the ticket online and
shopping on clubs ecommerce website. In return for the clubs, they will get
fans data to store and analyze important information about your existing and
potential customers. Collecting this information can also save your company
money by building a database of customers for future marketing and
retargeting efforts.

3. Channels : Channels refer to the way a business delivers its value

propositions to customers. This can be done in two different ways: through
channels the business controls or ones it doesn’t. By using app and social
media it can gives the fans what they need, when and how they need it. And
for a sports fan, it really is about need over want. What they need is live audio
match commentary, team news and other scores; live streamed press
conferences; push notifications for match information, such as line ups, goals
and the result. As it happens. Live. Without delay.

4. Customer Relationships : The customer relationships building block

identifies how a company interacts with its customers. To maintain the
loyalty, investments should be also done in improving the fan experience,
offering new inputs and opportunities, to engage people so it will create a
strong bond that make the both sides feels appreciate.

5. Revenue Streams: The revenue streams category lists all the ways that
a business makes money from each customer segment. As the match are
broadcast worldwide the sport club would get piece of cake from the share
while sponsorship for the stadium naming rights, jersey sponsors as well as
from merchandise selling and ticket matches. Merchandising products that

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can be personalized online and are then delivered to the fan. As writer
believe, sponsorship will transform further in the coming years, away from
pure brand visibility in the stadium towards the ultimate question: how can a
sponsor gain real brand loyalty and increased sales within the worldwide fan
base of a club? And in order to answer this question, a club needs to perfectly
understand their fans: who are they? Where are they? And what are their
preferences and customer habits? Something that can only be answered, if a
club is truly digitally transformed.

6. Key Resources : A company’s key resources are anything it needs to

provide value to its end customers. These resources may be the people who
work for the business or specific tools or physical objects. They could also be
financial sums or intellectual ideas. By using digital resources means any
engagement of a football club in the digital industry and world beyond its
core businesses and classical areas of activities.

7. Key Activities: The key activities in a business are the activities that
allow a company to effectively execute its value propositions. The sports
clubs are a content provider. We do it on a weekly basis, every time we play a
game, which is the most important content we make. But after the game is
over, we have more content that people can consume whenever, and wherever
they want.

8. Key Partnerships : The key partners building block refers to the

relationships a company builds in order to run more efficiently. digitalization
in ticketing focuses on the whole aspect of the customer sales journey of
tickets through the web - with or without a virtual view on the pitch -, mobile
selling applications and stadium entry solutions (e.g. QR codes /paperless
tickets), dynamic pricing and digital fan platforms for ticket re-sales and
exchange.

9. Cost Structure : The business model elements result in the cost

structure.by investing the money on the development technology of stadium
such as wifi access, digital order forms like scannable QR-codes for drinks

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and food with an integrated payment solution , digital booking and
reservation system for hospitality clients offering various (extra-paid) match-
day services, more innovation on the mobile app to increase engagement of
fans through games, etc.

RQ 2 : What drive the sports organization to digital transformation

There are 2 main factors, from the fans and the sports organization itself.
Fans needs are shifting across the industries which push companies to digital
trans-formation. As fans experience the possibilities of digital innovations in
more digi-tally advanced industries, their expectations rise and transfer to
other industries as well. This, in turn, creates pressure for firms across the
industries to develop digital innovations. For example, as fans are using
Facebook or Netflix, they start to think why the interfaces and customer
experiences in finance or sports are not similar. This driver had pushed each
industry to digital transformation their business process.

Sports organization are also facing new types of competitive pressure due to
competition. While more and more clubs trying to get as much influence for
their fans across the world, the possible way to reach is through digital world.
Perhaps the real competition itself is on the pitch but off the pitch these sports
organization are targetting all fans segments that is why there are many
approach like for instance in China where Facebook is banned, these sports
organization will do the penetration with their chinese social media such as
Baidu.

RQ 3 : How does the digital transformation change the sports organization

Within organisations new technology and digital innovations can alter and
streamline the business processes. It is a transformation that goes throughout
the whole organisation and often changes the organisation’s work force.
Numerous sports entities have created new roles and departments that focus
on innovation, new technologies and the digital transformation process in
general.

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5.2 Conclusion

The purpose of this article was to analyze the impact of the digital
transformation on the sport organization and to asses the significance of
digital transformation in the sports industry. Through “Bounce rate” is the
percentage of visits to the site that consist of a single pageview, it has been
one of the most KPI (Key Performance Indicator) for website. As important
as “bounce rate”, “daily pageviews per visitor” estimates the daily unique
pageviews per visitor on the site.

The “number of followers” measures the number of new followers you've

gained on a specific social media platform over a set period of time and
compares that to a predetermined target. It's important not only to measure
how many new followers you get, but also compare that to your objectives or
even your competitors. Social media is the platform and the open gate for the
clubs to reach their fans.

Engagement can be measured from social media and the way clubs handle
their social media account is the reflection of how sports club increase the
loyalty of the fans. We can interpret that a clubs website engagement level
affects clubs behavior on social media. In another word, good website
engagement level organization trend to do innovation on social media.

5.3 Future Works

For choosing the indicators of Internet adoption, we chose only

similliarweb.com and most of other research was did manually by checking
each clubs page one by one every day due to there are no other access to
check the backdoor of the clubs social media account. The last limitation is
on the measurement on the result and finding since the writer having a lot of
problems such as broken laptop and lost a lots of informations.on the
measurement on the result and finding since the writer having a lot of
problems such as broken laptop and lost a lots of informations

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REFERENCES

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