STRATEGIC MANAGEMENT OF SPORTS EVENTS AND ENTERTAINMENT ORGANISATIONS

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					                              2nd Semester :
    Marketing Decision and Implementation in Sports Organisations (180H)


A) Sports Strategy and Econmy (90H)

    ����    Strategic Management in Sports organisations (30H) : Lionel Maltese
         (15H) (Rob Simmons (15H))

    ����   Economics and Finance of Professional Team Sports (30H) : Stefan
         Kesenne

    ����    Sport, Consulting and media Strategy (30H) : Thibaut Potdevin (15H)
         (Paul Miquel (15H)

B) Sports Marketing (90H)
    ���� Commercial Sponsorship (30H) : Alain Ferrand (12H) ( Marc Mazodier
       18H)

    ����   Brand Management in sports context (30H) : Dwight Merunka

    ����    Advanced Marketing in sports (30H) : Bernard Cova (15H) (Rob Spencer
         (15H))
                                                           Lecture 1




Strategic Management
           &
 Sports Organizations
              Web site : http://cortoleo.free.fr/ISM.htm



                         Lionel Maltese
Maître de Conférences Paul Cézanne University (Aix-Marseille III)
 Affiliate Professor Euromed Marseille School of Management
Degree & Professional “course”
         Engineer Economist – Econometrics (Magistere 2001)
    DEA in Management Sciences – Strategy IAE Aix-en-Pce (2001)


Doctorat (PHD) in Management Sciences – Strategy (2004) IAE Aix-en-Pce
                 Academic Thesis in sport events context…



  « Maître de              Affiliate Professor         Professional Consulting
                                                         (Strategic Planner)
 Conférences »            Euromed Marseille
                                                       & Event Organization
 Paul Cezanne                  Strategy             (Entertainment management)
  University               Sports & Events          French tennis tournements :
                                                    Roland Garros, BNP Paribas
  Strategy                   Management             Masters, Open13, Canal Plus
                                                             Events…
Communication                  (2006…)
                                                   Public Relations Agency (World
IUT-IAE (2004…)                                        Cup, Special Events…)
Sports Organizations ?
        Media                        Sports goods
      Broadcast                      & Equipments




                          Events                  Institutions
Sponsors                  Clubs                   Federations
                        Franchises



                                       Athletes
           Consulting                   agents
            Agencies
 Club (or franchise) VS sport event
      Professional athletes management and control



Clubs and Franchises :        Events :
- Contracts : transactions    - Fees (ATP, PGA for instance)
and salary
                              - No control of sport
- Motivation : training,      performance by the managers
selection, financial
                               Dependency of the athletes
premiums
                              (calendar for instance) and
 Athlete = “asset” for the   their professional associations
managers                      (ATP, PGA, UCI…)
Managing Sports Organizations :
      Professional View

                                    MARKETING
    STRATEGY                          Sponsoring
   Analysis - Plan                CRM (B o C & B to B)
     Decision                     Products - Services
                                     & Experience


                     MANAGEMENT
                       DOMAINS
                          &
                       EXPERTS



    FINANCES                       HUMAN RESOURCES
      Control                         Athletes & Coaching
      Market                              Organization
      Projects
        Managing Sports Organizations : Academic View
   Sport Management
       North American Society for Sport Management (NASSM) --> Journal of Sport Management
       Sport Management Association of Australia and New Zealand (SMAANZ) --> Sport Management
        Review
       European Association for Sport Management (EASM) --> European Sport Management Quarterly
       International Journal of Sport Management and Marketing (IJSMM)
       International Journal of Sports Marketing & Sponsorship
       Revue Européenne de Management du Sport
       Sport Marketing Quaterly
       Street and Smith's Sports Business Journal
       Cyber Journal of Sport Marketing

   Event Management
       Event Management
       Tourism Management
       International Journal of Event Management Research
       Journal of Convention and Event Tourism
       Event Magazine
       ANAé (France)
       Sydney Australian Center For Event Management (UTS)

   Sponsoring in Marketing domain
       A lot of publications…
    Main “goals” for this seminar !
   Sports organizations [professional Events & Clubs] =
    management “stake” ?

   Proposition of a new Strategic Management Model for
    these organizations !

   Understand & manage key factors of success (or failure) :
    sponsoring, public relations, reputation, physical (stadium)
    & local factors, managerial skills…

   Develop your professional skills on : strategic analysis &
    formulate Sport Organizations Business Plan
    (Development Plan) : STRATEGIC PLANNER for sport
    organizations
       Focus on “Event Concept”
     In sports context, “event” is everywhere :

   National Championships (every week ! : NBA, MLB,
    NFL, NHL, LNF, Top 14, Premier League…)

   National and International Competitions (JO, World
    Cups…)

   One shot events (every year) : Roland Garros, Tour de
    France, ATP, PGA, Superbowl, Formula 1…
    exhibitions…
…
For consumers : Entertainment & Event =
         “experiential service”
                     Key questions

Strategic Marketing :
 How to show the show ?
 How to sell, communicate, package this “experiential
  service” ?
 Who are our consumers : B to B, B to C, C to C… :
  working on communities (fans : difficult for an event !)

Strategy :
 To perform and to develop sustainable performances on :
  sports measures, financial ratios, affluence – audience…
But… we need definitions (Covell an al., 2007)

   Organization : « Any group of people working
    together to achieve a common pupose or goals
    thant could not be attained by individuals
    working separately »

   Management :
       The coordination of human, material, technological,
        and financial resources needed for the organization ti
        achieve its goals.
       Responsibility for performance
                        But :
what is performance for sports organizations ?
   Performance indicators (Pis) give us an
    evaluation process that can provide objective
    and meaningful performance feedback to aid
    future decision making.

   The methods of evaluation are both quantitative
    and qualitative but all the final results depend
    upon one or more manager’ interpretation

   The key for sport organizations : your
    stakeholder analysis.
Sport organizations – performance
         and stakeholders
 You can evaluate returns for :
 Média
 Athletes
 Sponsors
 Institutions
 Spectators
 Cities
 Suppliers
 Owner
….
 Various PIs for different objectives and muliple
  stakeholders…
            Managing an event ?
   Learning by Doing : “operational organization”  Self
    Made Men : (Jean-Marie Leblanc, Jean-François
    Caujolle, Gilles Moretton…) without academic formation
    (tacit knowledge and not explicit : see Julien & Vincent
    presentation…)

   Distinction between :
       Operational activities : press, ticketing, sports aspects,
        technical (stage manager) direction, volunteers or vacations
        management…
       Development (you !) : experts in : Marketing, Strategy,
        Finances, RH… THE FUTURE IN SPORTS ORGANIZATIONS
        (Jean-Michel Aulas, Jean-Claude Blanc, Patrice Clerc, Christian
        Prudhomme…)
       The twice but without sleeping…
  Event Agencies : French Market
     (Report ANAé – Bedouk 1st February 2006)

 ANAe: National Association for Event
 Consulting Agencies

 Agency  services : Consultant, creation,
 conception, operational implementation,
 unifer of key actors (ex : wedding agency)

 France  : 685 agencies (6 570 members of
 staff) – 2 Milliards € (cumulated turnover)
  Event Agencies : French Market
       (Report ANAé – Bedouk 1st February 2006)


 50 % of the agencies have more than 75 %
 of turnover in B to B

 Women     activity ! : 66 %

 Average    53 events operations / year
                        Operations
                                                               % Turnover
30
      25%
25                22%
                             20%
20

15                                      12%
                                                 10%         9%
10

5                                                                       2%
0    Incentive   Meetings Conventions   Public   Parties   Commercial   Shows
                                        Events             Animations

ANAé 2005
                     Localisation
                                                           % Turnover


                    France 59%
            35     31%
            30                  28%         Foreign Countries 41%
            25                                           22%
                                              19%
            20
            15
            10
            5
            0
                 Paris RP      France        Europe     Others
                            (not ParisRP)
ANAé 2005
               Event : definition
   An organized occasion such as a meeting,
    convention, exhibition, special events, gala,
    dinner, etc. An event is often composed of
    several different yet related functions (Getz,
    2005)

   Principles applying to all events :
       Temporary (project)
       Unique combination of co-production factors (this
        aspect is, in fact, the “background” of my courses)
           Categorization of events
Scale of impacts
  (attendance,
 media, profile,
 infrastructure,
 costs, benefits)
High




 Low
                LOCAL   MAJOR          HALLMARK   MEGA-EVENT
                         Category of event
     Categorization of events
 Local or community events : Local
 consumers (Beach events, Corrida,
 Snowboard & Surf contest, ATP
 International Series Tournaments,
 National Events…)

 Major  events : Media interest (coverage &
 benefits) and capability of attracting
 significant visitor numbers (Formula 1,
 Master Series ATP, PGA…)
      Categorization of events
   Hallmark events : identified with the spirit or
    ethos of a town, city or region (synonymous with
    the name of the place) & very traditional
    (Wimbledon is the best example, 24H du Man,
    Paris Dakar, Masters Evian…)

   Mega events : so large that they affect whole
    economics and reverberate in the global media
    (Olympic Games, FIFA World Cup, IAAF World
    Championships, Superbowl, March Madness,
    NBA, MLB, NHL Finals…)
          Stakeholders in sport
              organizations
      Private        Public     Sport institutions
     sponsors       sponsors




Organisation        Event /         Athletes
                     Club



        Suppliers              Spectators
                     Media
So sport organizations are in the “eye” of important actors
“stakeholders” :
Our strategic problematic is :

    How to control external environment
       (stakeholders) and how to be
    independent to perform, to develop
                    and maintain ?
       Now before studying strategic analytic tools :
                   What is Strategy ?
            What are the more “sensemaking”
       approaches to analyze a sports organizations
                and their stakeholders ?
Michael Porter : Competitive Advantage
   Competitive strategy is "about being different. It
    means deliberately choosing a different set of activities
    to deliver a unique mix of value."

   Strategy is about competitive position, about
    differentiating yourself in the eyes of the customer, about
    adding value through a mix of activities different from
    those used by competitors.

   His formal definition : "a combination of the ends (goals)
    for which the firm is striving and the means (policies) by
    which it is seeking to get there."
      Henry Mintzberg : 5 “P”
   Plan, a "how," a means of getting from here to there.
   Ploy, really just a specific manoeuvre intended to
    outwit an opponent or competitor.
   Pattern in actions over time ; for example, a company
    that regularly markets very expensive products is using
    a "high end" strategy.
   Position; that is, it reflects decisions to offer particular
    products or services in particular markets.
   Perspective, that is, vision and direction.
   Main Strategic Approaches
                      (Saias & Métais, 2001)


          POSITIONING                          MOVEMENT




S.W.O.T                                Resource-        Permanent
                 Competitive
                                      Based View      Transformation
5 Forces         Advantage               RBV




   STRATEGIC                             STRATEGIC
     « FIT »
                                         « INTENT »

    Michael Porter & Co                   Gary Hamel and C. K
                                            Prahalad & Co
                             FIT
             What business are we in ?

   S-C-P : Structure Conduct Performance
       The structure of the industry will dictate the conduct
        of firms and thereby their performance (most popular :
        SWOT or “five-forces” model (Porter, 1979)).



   The big illustration is the 5 Forces Model (Porter,
    1979).
Porter’s Five Forces (Industry)

             Barriers to
               Entry




Bargaining                 Bargaining
 Power of                   Power of
             Competitors
Suppliers                  Customers




             Substitutes
 Porter’s Five Forces (Industry)
 The   bargaining power of customers :
     Buyer concentration, volume, relative costs,
      information availability, price sensitivity…


 The   bargaining power of suppliers :
     Relative costs, supplier concentration, threat
      of forward integration, cost of inputs relative to
      selling price of the product
    Porter’s Five Forces (Industry)
   The threat of new entrants :
       Existence of barriers to entry, brand equity, switching
        costs and absolute cost advantage, access to
        distribution, learning experience…
   The threat of substitute products (services) :
       Relative price performance of substitutes, buyer
        switching costs, perceived level of product
        differentiation
   The intensity of competitive rivalry :
       Number of competitors and diversity, rate of industry
        growth, exit barriers, brand equity, level of advertising
        expense, informational complexity and asymmetry…
                         INTENT
    What are we able to make with what we have ?

   RBV (Resource-Based-View, Wernerfelt, 1984, Barney, 1991,
    Grant, 1991) : certain assets (resources and capabilities)
    with certain characteristics will lead to sustainable
    competitive advantage.

   Strategy dictated by unique resources and capabilities of
    the firm (what can the firm do best?)
          Concepts definitions
   Resources : stocks of available factors that are owned
    or controlled by the firm (Amit and Schoemaker, 1993)

   Capabilities : a firm’s capacity to deploy resources,
    usually in combination, using organizational processes,
    to effect a desired end” (Amit and Schoemaker, 1993)

   Dynamic capabilities : capacity of the organization to
    renew competences to be in line with the changing
    business environment (Teece and al., 1997).

   Asset = resource + capability
    Resource Based-View : VRIO model
                    (Barney, 1991)
         Value
                                               Rareness

                      Resources & capacities
                             Lead to
                      Sustained Competitive
                            Advantage

Organization                                   Inimitability


                     Non-
                 Substitutability
            VRIO Properties
Is the resource or        Implications
capability…
                          • Neutralize threats and exploit
Valuable                    opportunities
                          • Not many firms possess
Rare
Difficult to imitate      • Physically unique
                          • Path dependency
                          • Causal ambiguity
                          • Social complexity
Difficult to substitute   • No equivalent strategic
                            resources or capabilities

Organizational            • Productive exploitation by the
                            organization
      Criteria for Sustainable Competitive
     Advantage and Strategic Implications

                   Is a resource or capability…
Valuable   Rare Difficult  Without       Implications
                to Imitate Substance     for Competitiveness
No         No    No        No            Competitive disadvantage
Yes        No    No        No            Competitive parity
Yes        Yes   No        No            Temporary competitive
                                         advantage
Yes        Yes   Yes       Yes           Sustainable competitive
                                         advantage
       FIT : Soccer metaphor

•The strategy (tactical) is a function
of the external environment (rival
teams : opportunities - threats).


•The trainer has a tactic adapted to
the adversary and the players
(resources) adapt to this
positioning (diagram of play).
    Intent : Soccer metaphor

The head coach "visionary" (or
manager) has resources (players)
and sets up a strategy (tactical)
starting from these forces and
weaknesses (resources), in order
to face to certain opportunities or
threats of the environment (air
play, speed, physical
engagement)                           
                                      
                      So What ?
   How can we “implement” that ? It’s very theoretical !

   Your and my job : to be able to construct a business plan
    (development) with a “specific RBV analysis” (your
    “sensemaking background”), and furthermore :
      Persuade and control our stakeholders

      Maintain our performance

      To be “ready” for new opportunities and threats

       because of very instable sports environment…

    Managing resources & capabilities = core competency
         of a “modern” CEO in sport organizations
              (Jean-Claude Blanc…and you !)
         Categorizing resources
   Barney (1991) : 3
       Physical capital : technology, plants, equipment, geographical
        localization…
       Human capital : formation, experience, networks -
        relationships…
       Organizational capital : formal structure, control, routines,
        process, coordination systems…
    

   Grant (1991) : 6
       financial, physical, human, technological, organizational,
        reputation.

   Wernerfelt (1989) : 3
       Fixed assets : plants, equipment…
       “Blueprints” : patent, brand, reputation
       Teamwork “effects” : routines, habits, experience…
An illustration : cinema industry
                   (Miller and Shamsie, 1996)

   Property-based resources :
       Discrete : high degree of control, ownership rights,
        exclusive contracts…
       Systemic : physical facilities or equipment


   Knowledge-based resources :
       Discrete : technical, functional and creative skills
       Systemic : integrative or coordinative skills required
        for multidisciplinary teamwork, collaborative skills…
     A RBV Approach to Strategy Analysis : A Practical
                Framework (Grant, 1991)
  4. Select a strategy which best exploits the
  firm’s resources and capabilities relative to        STRATEGY
             external opportunities
                                                                       5. Identify
   3. Appraise the rent-genrating potential of                       resources gaps
       resources and capabilities in terms of :       COMPETITIVE     which need to
                                                                        be filled
 (a) Their potential for sustainable competitive       ADVANTAGE
                  advantage, and                                         Invest in
                                                                       replenishing,
   (b) (b) the appropriability of their returns.
                                                                     augmanting and
                                                                       upgrading the
2. Identify the firm’s capabilities : What can the                    firm’s resource
firm do more effectively than its rivals ? Identify   CAPABILITIES          base
 the resources inputs to each capability, and the
          complexity og each capability

 1. Identify and classify the firm’s resources.
Appraise Strenghts ans weaknesses relative to
comptetitors. Identify opportunities for better       RESOURCES
            utilization of resources.


     We are going to develop a more practical and specific approach for
                      business plan implementation…
  Sport events & clubs : assets identification

   Sport Event & Clubs                        Assets

                  Ticketting        Players & coach (clubs only)
                                           Partnership
                  Contracts
                                        (sponsoring, partners)
             (sponsoring, Public
             Relations) & Players           Reputation
 Financial                              (event, sport, players)
resources        (clubs only)
                                             Relational
  « Profit        TV rights            (Social capital, relational
centres »                             networks, Public Relations)
               Merchandising
                                              Physical
             Institutions (public      (infrastructures, stadium,
                  subsidies)                    territory)
                                          Organizational
                   History                 Capabilities
Renown       Sport performance         (Core competences, event
                                       driven know how, project
             Affluence, audience            management))
          Partnership resources
   Sponsoring : brand image, image transfer, notoriety,
    visibility, target specificity, TV…
       Examples : BNP Paribas, Louis Vuitton, Rollex, Peugeot,
        Indesit, Adidas, Nike, Fedex, Coca-Cola, Philips, Renault,
        Mercedes…



   Public Relations : Business relations, Employee
    relation, Government relations…
       Examples of RP events : PGA tour, America’s Cup, ATP
        tournaments (Open13, GPTL, RG…)..
      Relational Resources
      Manager’s Social Capital (Christian
 Event
 Bîmes & Jean-Claude Blanc, Patrice Clerc
 & Jean-Marie Leblanc …)

           and business networks : GPTL
 Relational
 (Marie Roussille (Occade) in Lyon),
 Pampelonne (Jean-François Caujolle)
    Reputational Resources
 Eventlegend and history : JO, America’s
 Cup, Le Tour de France, Roland Garros,
 Wimbledon…

         Reputation : FFT, Amaury, IMG,
 Corporate
 Octagon…
    Physical (territorial) Resources
   Stadium : Wimbledon, Roland Garros, Madison
    Quare Garden…

   Territory : Tour de France, F1, Rally & Tennis
    (Monte Carlo), 24 H du Man, Stade Toulousain,
    Pau-Orthez, Derby de la Meije…

    Infrastructures : training camps and
    conditions…
         Dynamic Capabilities and
              Organization
   Dynamic Capabilities : “processes to integrate,
    reconfigure, gain and release resources – to
    match and even create market change”
       Examples : Stade Français (Rugby) with Max
        Guazzini or Roland Garros Brand and co-branding
        (Adidas, Peugeot, Lancel…)


   Organizational capabilities : Project
    Management
       Most “organizational event” : Tour de France !
Concepts            RBV first model for a sport organization

                      Partnership                         Reputational
                       Resources                           Resources      P
Resources                                                                 R
                                         Players                          O
 portfolio
                                      Coach (club only)                   P
                                                                          E
                       Relational                          Physical       R
                       Resources                          Resources       T
                                                                          I
Core                                                                      E
                                   Organizational team,                   S
Competencies,                           Managers
Capabilities                                                              ?

Performance,
                                    Sport Success
Sucess

                Financial Sucess                          Public Sucess

                                       Long Term
               Seminar “logic”
 Theory            Market            Key
                   based                          Consulting
 Model             assets           assets        production


 Strategic      Partnership
approaches                       Reputation
                Sponsorship
                                management          Final global
  Business        Public
Plan & Model                                       Business Plan
                 Relations


  Day 1            Day 2            Day 3


  Open13
BNP Paribas                     2 presentations
                     3
  Masters
                presentations
   Cases
From strategy to event marketing
                             Strategic Intent
      Formalize  Business Model  Business Plan (development)
              Exploration – exploitation – Managing assets
Resource dependency - stakeholders  External control of the organization



                            Implementation




                    Services & Experiential Marketing
                      Segmentation B to C & B to C
         Packaging « hedonic & emotional » experience (services)
 Creation and development of communities : fostering of customer loyalty
 Components of the environment analysis


                       Socio-culturel




                       Environment
   Technological       audit (or scan)             Political




                                           Entertainment related
Competitor Related
                        Economic



                     Just a description…
Steps in the strategic marketing process

1.   Segmenting and targeting the event
     market
2.   Positioning the event
3.   Developing event marketing objectives
4.   Choosing generic marketing strategies
     for events
5.   Selecting the event’s “services
     marketing” mix
    Segmenting and targeting the
            event market

   Identify those consumer segments whose needs
    most closely match the event experience. The
    market segments chosen should be :
       Measurable – that is, the characteristics of the
        segment (socio-economic status, gender, age and so
        an must be accessible to the event marketer
       Substantial enough in size to be worth targeting
       Accessible by normal marketing communication
        channels
       Actionable by the event organizer, given the
        marketing budget and other resources
           Positioning the event
 Event positioning can be achieved in
 different ways :
     The existing reputation of the event (JO)
     The charisma of a director or leader (Michel
      Platini for the french World Cup 1998)
     A focus on event programming
     A focus on performers (players)
     An emphasis on location or facilities
      (Wimbledon = world-standard tennis)
     Price or quality (“classic positioning”)
        Developing event marketing
                  objectives
   Expected results must be defined and
    measurable :
       Box office (affluence)
       Audience
       Media planning and exposition (communication mix :
        TV, radio, press, Internet, local posting)
       Event ranking by the institutions
       Sports performance (cut off in tennis for instance)
       Economic local impact (tourism)
       Sponsoring efficiency
    Choosing generic marketing
        strategies for events
                    Current                   New
                    products                products



  Current     Market Penetration          Product
  Markets                               Development



New Markets       Market                Diversification
                Development



                  Ansoff (1957) product-market matrix
        Selecting the event’s “services
                marketing” mix
   Event product experience (core service) =
       Programming
       Packaging (reception, animation, merchandising,
        catering…)
       The place & tickets distribution
       People (cast, audience, hosts and guests) and
        partnerships (stakeholders such as sponsors and
        media)
       Price, or the exchange of value to experience the
        event
       Integrated marketing (socialization or participative
        marketing (ex : Stade Français, NBA, NHL…))
Summary : The P-A-P-E-R Test
 Promotion      :
     What essential message or important
      information do I want to communicate to the
      public about the event, my sport, or my
      organization ?

     Can I build interest in my sport or organization
      before, during, or after the event ? By what
      measure can this increased interest be
      demonstrated ?
Summary : The P-A-P-E-R Test
 Audience      :
     Who is our target audience for the event, the
      people are most likely to participate, attend, or
      purchase a ticket ?

     Is there an opportunity to win entirely new
      fans or enthusiasts to our sport by
      encouraging their attendance ?
Summary : The P-A-P-E-R Test
   Partnerships :
       Can we use the event to develop, maintain, or
        strengthen relationships with our organization’s
        partners and supporters (e.g., our fans, athletes,
        members, donors, sponsors, community leaders,
        local government) ?


       What kind of experience do we want to leave our
        athletes ad other partners with ? How do we want
        them to feel before, during, and after the event ?
Summary : The P-A-P-E-R Test
   Environment :
       What do we need to communicate about the positive
        attributes of our sports event that sets it apart from
        other leisure activities similarly competing for the
        public’s, or a potential sponsor’s, attention ?
       Do we need to address a perceived time or
        inconvenience that attendees, participants, or
        partners may encounter when deciding to attend ?
       Do we need to address a preconceived notion about
        our sport, or organization, that makes it more difficult
        to generate attendance or participation ?
 Summary : The P-A-P-E-R Test
 Revenue     :
     How much revenue do we need to generate for
      the event and/or for the organization ?
     Do we want or need to generate revenues in
      excess of expenses ? Is this potential profit
      essential to growing the event in the future ?
     How much money can we invest beyond
      expected revenues to achieve our objectives ?

				
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