The Success of Manchester United Football Club, Nintendo Strategy - Case Study Example

Running head: Case Studies Name Institution Department Date Table of Contents Video games industry 3 Competitive Advantage 4 Nintendo Strategy 5 The success of Manchester United Football Club 5 Factors that contributed to Success of the Club 6 Manchester United’s Strategy 7 Starbucks 7 Differentiation 8 The global recession 10 References 12 Video games industry Since the early 1970s, the video game industry has undergone development stages with the recent development having dawned in 2009. The first generation of video games was characterized by machines that had a single game. Pong is an example of a video game that was created by Nolan Bushnell in 1972 which was acquired by Warner Communications Inc. in 1976 under the copyright of Atari (Grant, n.d). The second generation saw the development and launching of the Atari 2600 video games that included Space invaders (1979) and Pacman (1981). These two games gave Atari an 80 percent share in the video game market in 1982 (Grant, n.d). In 1982, several video game companies such as Mattel with its Intellivision of 1979, Coleco with its Coleco Vision and former Atari employees with their Activision, intensified the competition in the video games industry (Grant, n.d). This competition forced software manufacturers to lower the prices of some games since the market was over flooded with games software. This second video game developmental stage was known as the 4-bit era that lasted between 1972 and 1985. The third sage was known as the 8-bit era (1985-1986), with Nintendo being the key player in the industry at that time. From 1992-1995, Sega Enterprises Ltd, a Japan industry founded by Americans in 1951, came up with the 16-bit home video system. The 32/64-bit generation was experienced in 1995-1998 with Sony Corporation, Nintendo and Sega being the key competitors in the video game industry. It was during this era that the playstation was introduced (Grant, n.d). Later, the 128-bit era saw the creation of playstation 2 in March 2000. Competitive Advantage The three main players in the video game industry are Nintendo, Sony and Microsoft. Nintendo is a Japan card manufacturer that was established in 1889 and entered the video game industry in 1975 (Grant, n.d). Nintendo expanded and established Nintendo of America in 1980 which saw huge sales of video games. Nintendo’s 8-bit Famicom home video was released in 1983 but was later renamed Nintendo Entertainment System (NES) that was sold in New York. Grant (n.d) further explains that Nintendo continued expanding worldwide through the development of video games such as legend of Zelda that sold over a million of copies; Super Mario Brothers that sold over 40 million copies worldwide; and GameBoy which is a portable video game system. To ensure good video game quality and prevent fierce price competition, Nintendo controlled the supply of its game cartridges. All games had a security chip installed so as to ensure that they operate on the Nintendo console. In addition, all games had to be approved by Nintendo before being released whereas the game developers had to follow strict rules when creating the games. Further, Nintendo had full control of cartridges manufacturing and charged a 20 percent royalty fee and a manufacturing fee of $14 per cartridge to its independent games developers (Grant, n.d). Grant (n.d) also states that those licensed to use Nintendo cartridges were “limited to develop five NES games a year and could not release an NES game on a competing system for a period of two years.” Another strategy used by Nintendo to beat its competitors was through lowering the prices of its N-64s software prices so as to attract more game developers and publishers. Nintendo further came up with a new portable version of its N64 console to counter Sony’s smaller and portable version of PlayStation (Grant, n.d). In 2001, a new version of the GameBoy was launched in 2001 with the name GameCube which was an internet-ready 128-bit machine. Nintendo Strategy According to Grant (n.d), the three major markets, North America, Japan and Europe, saw an intensified competition in the video game industry in the spring of 2002. The three major competitors, Sony, Microsoft and Nintendo, had to come up with new strategies to survive in the market. For Nintendo and Sony, they developed adapters for their consoles that allowed internet access but left it to service providers and cable companies to provide infrastructure and host games (Grant, n.d) The success of Manchester United Football Club Football is a big industry with the English football being the most competitive and most watched globally. English football clubs include Manchester United, Liverpool FC, Chelsea FC, Manchester City FC, Arsenal FC and Tottenham Hotspurs FC among others. Manchester United was established in 1878 and became a professional club in 1885. The home of Manchester United is Old Trafford stadium that its first match in 1910. Manchester United rose to fame under in the 1950s and 1960s under the leadership of its team manager, Matt Busby. Busby Babes was the popular name for the Manchester United players during the 1950s and 1960s. The success of Manchester United can be attributed to the efforts of Alex Ferguson ho became the club’s manager in 1986. According to Szymanski (1998), Manchester United has been the most successful football club in England in the 1990s. Statistics show that since the foundation of the Barclays English Premier League in 1992, Manchester united has won 12 titles to-date. Currently, Manchester united players are popularly known as the ‘Red Devils’. The success of Manchester united both financially and in the leagues can be attributed to several factors. Factors that contributed to Success of the Club Firstly, the club’s manager, Sir Alex Ferguson, focused on tapping young talent through his youth policy that was aimed at signing in and training young footballers that would join the club (Szymanski, 1998). The Manchester United Youth Academy was also established to nurture young talent. Despite prior oppositions by the board of directors to purchase new players, Ferguson was later allowed by the then chairman, Martin Edwards, to purchase players. This led to the purchase of five players in the summer of 1989 that cost the club 8 million pounds. However, the club did not achieve any success till 1990 when it won the FA Cup against Crystal Palace and from then on Manchester United was back on the winning track (Szymanski, 1998). According to Szymanski (1998), “the club won the European Cup Winners' Cup in 1991, the League Cup. In 1992, and - most important of all - the inaugural Premier League Championship in 1993; it then won four of the first five Premier League Championships as well as two more FA Cups.” Secondly, Ferguson focuses on training his players as individuals first then as a team because football relies on teamwork for success. He trains his players to coordinate and to play in one team spirit. Thirdly, the delegation of powers in the management of Manchester United club is clear with the board of directors taking charge of administrative and commercial affairs whereas the team manager has the responsibility of team training and selection, player acquisition and playing style. This reduces friction and misunderstanding between the management and the technical bench. Fourthly, the club sustains itself financially through entering into television deals with satellite television companies airing their matches for a fee. In addition, the club’s facilities such as the arenas and stadium facilities are rented out for conferences and other events (Szymanski, 1998). Pre-season tours outside Europe especially in Asia and North America are also used as avenues for acquiring the club’s revenue. Manchester United’s Strategy As a tactic of attracting fans, Manchester United acquires players from unlikely quarters. For example, the purchase of Ji Sung Park form South Korea expanded Manchester’s fan base in Asia which translates into increased revenue. Furthermore, the success of Manchester United can be attributed to its renowned sponsors such as Vodafone, AIG and AON for the playing kits whereas DHL sponsors the training kits. Recently, Bharti Airtel has entered into a deal with Manchester United to nurture football talent in Africa whereby the best players join the Manchester United Youth Academy. Finally, over the years, United has established itself as a brand to reckon with due to its winning history. Therefore, its management as well as players work hard to maintain their image and keep their fans loyal to the club. Starbucks Starbucks coffee franchise was founded by a young entrepreneur known as Howard Schultz in 1986. He started by opening a coffee store in Seattle, Washington through acquiring the rights to the name (Larson, 2008). His ambition saw Starbucks expand at a quick rate by opening new stores in Chicago and thereafter expanding globally to the current Starbucks global empire. To push the company to success, Shultz and his colleagues designed a financial, accounting, logistics and planning design that was necessary for running the firm at the national level. This organizational plan saw the company achieve great success in the 80s and 90s with customers coming from far areas such as Los Angeles, San Francisco and Chicago (Larson, 2008). Starbucks has had to come up with unique strategies so as to beat the competition from its rivals such as those within the specialty coffee market like Tully’s coffee, Seattle’s Best Coffee, Peet’s Coffee and Caribou Coffee, and those outside the specialty coffee market that include Folgers, Proctor & Gamble, Dunkin Donuts and McDonalds among others(Larson,2008). One of the strategies was creating and maintaining a good relationship between Strabucks and its employees since it was believed that the employees are the direct link to customers and if they are treated well they will pass this over to the customers (Larson, 2008). Customers when well treated will be compelled to come back for more services. The internal culture of Starbucks has been made comfortable for the employees to ensure their satisfaction as well as motivation. One of the motivational factors is that all employees working for more than twenty hours a week are entitled to a health-care program. Differentiation Another strategy used by starbucks to compete in the coffee market is through differentiation unlike its past strategy of differentiation that focused on target consumer segment. The present differentiation focuses on differentiation of the product as well as the services. Schultz decided to create the starbucks experience that was aimed at making the coffee store a place for people to meet and socialize. This Strabucks experience encompassed a number of elements. To start with, the coffee served was brewed from high quality coffee beans so as to produce good quality coffee. The second element is the involvement of employees where they are required to brew and serve quality coffee as well as engage customers in the unique ambience of the coffee shop. As mentioned above, starbucks ensures a good relationship with its employees whereby they are given good training as well as fair pay as compared to other American restaurants (Larson,2008). The starbucks experience also involved treating all customers with respect despite their skin color, race or social background. Every customer at starbucks is of great value and is made to feel comfortable when at starbucks. In addition, the layout and design of Starbuks stores is unique and reflects nature with its natural woods and earthly colors. To maintain customers loyalty starbucks has created the Strabucks buzz by ensuring that in almost every urban area there are more than twenty starbucks stores. Furthermore, Starbuck has also used diversification as a strategy of countering competition form rivals. Diversification not only involved making high quality tea and entertainment, but it also involved expanding through licensing of distributors and other stores such as supermarkets to sell starbucks instant coffee. Starbucks started selling food, books and music CDs to its customers, a move that brought huge success to the firm. In its diversification program, starbucks licensed stores to sell their products at different locations so that customers did not have to go to the starbucks-owned stores to purchases the products. Another diversification move was through distribution of starbucks coffee to retail centers such as supermarkets which was also aimed at making it easier for customers to access the products. Other diversification moves include the making of an innovative instant coffee and introduction of financial services like the Starbucks/Bank One Duetto Visa Card. Recently, Starbucks decided to review its management strategy and put more emphasis in corporate social responsibility as well as review the company’s core principles and mission. In a meeting held in October 2008, in New Orleans, Starbucks embarked on activities geared at achieving environmental sustainability, community service, increased commitment to small scale farmers and an initiative to support AIDS programs in Africa. Emphasis was also made on retreating back on focusing on the quality of coffee served as well as quality customer service. The global recession The global recession was first experienced in the year 2007 due to the shifts “in corporate employment, institutional investment, corporate organization, financial services, governments, and household ties to financial markets over the past three decades “ , a move that saw most countries shifting to a finance-centered economy (Davis,2009). This global recession started as an insignificant problem in the United States but later became widespread affecting the global economy. This global financial crisis had severe implications on the individual country economy in particular the loss of jobs and collapsing of domestic firms such as banks and industries. This crisis prompted all industrialized countries as well as developing countries to come up with economy recovery strategies that were aimed at stabilizing the economy and preventing further worsening of the financial problems. An example is the American Recovery and Reinvestment Act of 2009. In developing countries, the best option was to borrow from the International Monetary Fund so as to strengthen the economy (Nanto, 2009). Globally, the economic recovery program is four-phased with policies taking center-stage. The first phase encompasses intervention to contain the contagion and restore confidence in the system. This saw the implementation of “extraordinary measures in scope, cost and extent of government reach” (Nanto, 2009). Nanto (2009) further states that policies have been adopted at the macroeconomic level to lower interest rates, expand the money supply, and actions to restart and restore confidence in credit markets whereas at the microeconomic level, resolving immediate effects of the crisis entails financial rescue packages for affected firms and restructuring of debt. The second strategy is on mitigating the secondary effects of the crisis which include macroeconomic effects. Many countries adopted this strategy through implementing fiscal stimulus packages for economic recovery whereas other countries turned to the international lending institutions to get finances to uplift their failing firms (Nanto, 2009). The third phase of the economic recovery strategy was aimed at redesigning the financial systems so as to reduce risk and prevent future crises. With this came a series of international meetings that were attended by leaders who came up with an Action Plan with a comprehensive work plan that could be adopted by individual governments (Nanto, 2009). Examples of such meetings include the November 2008 G-20 Summit held in Washington, the G-20 Leader’s Summit of April 2, 2009 held in London, and the Pittsburgh Summit held on September 24-25, 2009. The final strategy aims at mitigating political, social and security implications of the crisis. In the political arena, the strategy focuses on helping citizens who have lost their jobs so that they do not enter into movements that are against the government. It also aims at strengthening governments through financial assistance in order to lead their failing firms to recovery. Several countries have also adopted trade related measures to protect domestic industries (Nanto, 2009). References Davis G.F (2009) The Rise and Fall of Finance and the End of the Society of Organizations. Grant R.M (n.d) Rivalry in Video Games. Larson R.C (2008) Starbucks a Strategic Analysis past Decisions and Future Options. Nanto D.K (2009) The Global Financial Crisis: Analysis and Policy Implications. Szymanski S (1998).Why is Manchester United So Successful? 9(4). Read More