Case Study on Manchester United : Leadership Crisis after 2013

1. Leadership Crisis after 2013
Group 2
Aayush Jain (B15063) | Aishwary Gupta (B15066) | Akshay Ratan (B15068) | Ankit Anand (B15071) | Ankit Pokharna (B15072)

2. Some statistics
IPR Worth $ 592 Million
Forbes Most valuable sports team
Valued at $3.3 Billion
Sponsorship Worth $1.3 BN

3. Formed as the Newton Heath LYR Football Club
1878
Sir Alex Ferguson joined as the manager when
the club was on the verge of relegation.
1986
Renamed to Manchester United when it was on
the verge of Bankruptcy
1902
Ferguson retired and chose David Moyes as his
successor
2013
Moyes was sacked after a poor season and Louis
Van Gaal replaced him as manager.
2014
History of MUFC

4. Managers of MUFC
- Restructured youth system
- Changed staff policy
- Attacking brand of football
- Led MUFC to become global
power house
- Longest running manager
- Intimidating personality
- Won 38 trophies in 26 years
Alex Ferguson
- No trophies won by his last club
- Never managed a big club before
- Ferguson’s choice
- Changed entire Backroom staff
- Switched to Defensive style
- Loss of dressing room support
- No consistent playing philosophy
Davis Moyes
- Continued Defensive style
- Slightly Improved Performance
- Spent £ 250 MN on players
- Thin Squad
- 134 injuries since 2014
- Intimidating personality
- Reluctance to change
philosophy
Louis Van Gaal

5. Bargaining Power of
Suppliers
• Increasing proportion of
sponsors revenue
• Rise in say of sponsors &
agents in club operations
Bargaining Power of
Buyers
• Fans demanding “United
Way” of football
• Demand for immediate
results
Competitive Rivalry
• Liverpool’s performance
improving since signing
of Jurgen Klopp
• Pep Guardiola to join
Man City next season
Threat from New Entrants
• Leicester City’s leading with
attacking football
• Tottenham with highest number
of shots on target
Threat from Substitutes
• Fans may switch over allegiance
to clubs like Real Madrid &
Barcelona if United does not win
trophies
Company Analysis

6. Major Issues
Manager did not have a
credible Plan-B
Evident from the different
playing styles, Managers
were not a cultural fit for
MUFC
Change of entire backroom
staff
CEO & Manager retired at
the same time
Lack of credible succession
policy
In spite of a successful
team, no successor was
groomed from within the
team

7. Performance
- Could not secure top 3 position after 27 years
- Players incoherent due a history of attacking game
- Poor game statistics for the current season
Sponsors & Fans
- Lack of support from fans
- 71 % fans demanding Van Gaal’s exit
- Threats of staging boycotts by fan clubs.
Finances
- From profit of £ 146 MN (2013) to loss of £ 1MN (2015)
- Can lead to 30% reduction in kit sponsorship
- Share price fall from $19.35 to $13.86
- Broadcast revenue to be distributed based on rank
Players
- Difficulty in buying world class players
- Increased number of injuries
- High burn out rate among players
- High reliability on a few players
Threat of never ending transition spiral something which once an English
giant Liverpool has been facing since last 26 years
“Though business is doing well, the current playing style of United is
not what we want to see.” – CEO, Adidas (£ 750 MN Kit Sponsor)
Crisis

8. Trophies per season
Transfer expenditure(in Mn Euros)
Comparison
0.231
1.462
1.0
0
0.000 0.200 0.400 0.600 0.800 1.000 1.200 1.400 1.600
Pre Ferguson
Ferguson
David Moyes
Van Gaal
Avg trophies per season
0
20
40
60
80
100
120
140
160
180
Ferguson Moyes Van Gaal
30
78
168
17
36
78
Absolute Avg
Inflation adjusted avg

9. Jose Mourinho Louis Van Gaal Ryan Giggs
Leadership Options

10. Favour
Best win percentage record in EPL
Ability to grind victories
Won trophies with all the clubs he
has managed
Charismatic character with strong
intimidating personality
Ability to bring best out of players
World class players want to play
under him
Against
Tendency to buy ready made stars
rather than to devlop youth
Never stayed in a club for more
than four years
Defensive style of football
Highly controversial figure
Differences with few of the
existing MUFC players
Jose Mourinho

11. Favour
Associated with club for three
decades since the age of 14
Deep understanding about the
culture and philosophy of the club
Idolised by fans and respected by
players because of his
achievements in playing career
Learnt managerial traits under
Ferguson
Advocate of youth development
and attacking brand of football
Against
Lack of first hand managerial
experience
Knife in a gunfight with impending
arrival of Guardiola, Conte
Being assistant manager, he can
be partly held responsible for
United’s performance
May lack ability to attract world
class players
Indifferent record in his short stint
as interim manager
Ryan Giggs

12. Favour
Achieved his job objectives
Highly experienced manager who
has won titles in each of his club
None of the MUFC manager has
won a competitive title in his first
two years
Resolute
Grinding results inspite of number
of injuries
Advocate of youth development
Against
Lack of visible improvement in
team inspite of spending £250
million in 2 years
Defensive style of football
Lack of support from media and
fans
Team management skills
Partly to be blamed for the stark
increase in number of injuries
Reluctance to change his
philosophy
Louis Van Gaal

13. Thank You