Real Madrid Case Study

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The Presentation is Submitted to Kedge Business School . It analyses the position of Team Real Madrid from a case from HBS and recommends solutions for it.

Published in: Business, Sports

Real Madrid Case Study

  1. 1. « In Spain it is easier to change spouses, political party or religion than it is to change soccer club. In soccer, a fan is a fan for life. » REAL MADRID Ines SCHULLER Lambert ROLLAT Brittni PING Guru PRASAD Xiadong JIANG (Vincent) Chantal INGRAM Rong XHAI (Vanessa)
  2. 2. • • • • • • • • Soccer - birth of legends Rise & shine The turn around Dead end or reaching the stars? Rivalry Figuring ways to victory Scoring our goals Let’s get busy YOUR NEXT 90 MINUTES +2
  3. 3. • Most popular sport worldwide • Core promise - victory and a good show • Largest soccer clubs in Spain (Real Madrid - FC Barcelona) • Associations SOCCER – BIRTH OF LEGENDS
  4. 4. • Category: Football Club Spain (La Liga) • Sector: Sports • Slogan: Hala Madrid! • Segment: Millions of people across the world who love to play or watch football • Target Group: Typically, men in the age group 15 and above globally RISE & SHINE
  5. 5. Madrid Football Club FIFA 1902 1904 RISE & SHINE King of Spain granted Royal (“real”) to the club 1920 EU Cup Final made Real Madrid bestknown soccer team 1960 Players are free agents 1995
  6. 6. • Vision: To be the best soccer club in the world • Mission: To leverage the Real Madrid brand globally • Goals: • Financial flexibility • Team of top players • Leverage the Real Madrid brand and content across variety of distribution channels VISION & MISSION
  7. 7. 2000 Name : Florentino Pérez Rodríguez Position : President of Real Madrid Tenure : 2000 - 2006 & From - 2009 Background : Businessman / Civil Engineer THE TURN AROUND
  8. 8. • Old Training pitches • Generates €500 million Sell Assets Buy Back rights • Boxes in stadiums - €16 million • Refurbish & double boxes • In ground perimeter space Develop them Generate Income • € 16 Mills / Year THE TURN AROUND SOCIEDAD MIXTA • • • • • Merchandizing Sponsorships Distribution business Online business Contracts
  9. 9. SELLING SHARES 2000 Year 2000 10% Team Real Madrid Caja Madrid 20% 70% Sogecable THE TURN AROUND
  10. 10. GROWTH IN REVENUES Marketing Revenues in Millions € 142 Forecasted • SPONSORS 83 39 2000-2001 THE TURN AROUND 2003-2004 2005-2006
  11. 11. Assembling GALACTICOS THE TURN AROUND
  12. 12. Building the walls … Where is the ROOF ? Merchandising Match Day Broadcasting • • Others THE TURN AROUND • • • RM TV Broadcasting Rights www.realmadrid.com Magazines Fan Card
  13. 13. How to transfer Real Madrid fans and supporters into dedicated customers ? • Ratio: revenue/number of fans (in million €) -> Manchester United : 251.4/45= 5.50 -> Real Madrid : 192.6/93 = 2.07 DEAD END OR REACHING THE STARS?
  14. 14. Tangible Intangible • New market participant – foreign investors • Overexposure & excessive commercialization • Player focus • Counterfeit products • Element of uncertainty • Lack of talent SUBISSUES
  15. 15. • Ownership: Private fixed membership – around 55 000. • Operation: As a professional organization. • Business model: Pursuing most famous players at all costs. • Players are portfolios under Real Madrid Brand. RM has 50% of image rights (= 50% of income) – can be win-win for all parts. RIVALRY • Ownership: Private membership of around 200 000 + public shares. • Operation: as a professional sports team. • Business model: Heavily depends on retail, merchandizing, apparel and product licensing performance – fans’ spending.
  16. 16. International marketing and new technologies, 3% Merchandize, 15% Commercial, 27% Match day, 46% Match day, 41% Sponsorship, 10% Broadcast, 26% Media, 32% • Revenue Stream: 2003 • Revenue Stream: 2003 • Revenue 2003: 192.6 €m • Number of fans: 93 million • Revenue 2003: 251.4 €m • Number of fans: 51 million RIVALRY
  17. 17. Building a story of value – brand & content – in order to exploit Real Madrid’s brand equity globally • • • • Clustering China, India & US Targeting of different segments Use emotions and sentimental attachment Player-studded advertising STRATEGY
  18. 18. Actions Transformation of fans into customers Increase revenues Gain new market share Image Public share offers - ++ + -- Market development CIU + ++ ++ ++ Product diversification +++ ++ + ++ Local & MNC partnerships ++ ++ ++ + Sponsors + ++ + + Focus on sourcing of players ++ ++ ++ ++ FIGURING WAYS TO VICTORY
  19. 19. • Market development China, India & US • Promoting soccer through fan tours • RM Junior Tournament • Product diversification • Diversification of Socios membership card & Hala Madrid magazine (local discounts) • Exploit internet-based technologies (website, mobile internet) • Retail outlets (exclusivity & experience) SCORING OUR GOALS
  20. 20. • Local & MNC partnerships • Local soccer clubs • Fast Food chains: toys • Limited edition products • Sponsors • Charity to improve image (UNICEF) • Focus on sourcing of players • CIU brand ambassadors • Focus on young player program SCORING OUR GOALS
  21. 21. • Philosophy of Marketing: Customer knowledge Experience PROFIT $$ • 1) Which need does Real Madrid reinforce for its consumers/fans? • 2) Which ways could Real Madrid Segment its market? LET’S GET BUSY
  22. 22. • Segmentation • Marketing/Merchandising • Cost • Going Public DEVIL’S ADVOCATE

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