1SeminarStrategic Management & Sports Events OrganizationsLionel MalteseMaître de Conférences Paul Cézanne University (Aix-Marseille III)Affiliate Professor Euromed Marseille School of ManagementStrategic Planner French Tennis Events (Marseille, Paris, Roland Garros, Lyon, Toulouse)
2Degree & 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-PceAcademic Thesis in sport events context…« Maître de Conférences »Paul Cezanne UniversityStrategyIUT-IAE (2004…)Affiliate ProfessorEuromed MarseilleStrategySports & EventsManagement(2006…)Professional Consulting (Strategic Planner)& Event Organization (Entertainment management)Pampelonne Organisation(Open13, BNP Paribas Masters, Roland Garros, ATP, FFT, FFR, Occade Sport (GPTL-ASVEL), Team Lagardere…)(2001…)
3Sports Organizations ? Production Actors Council Media Broadcast Sports goods& EquipmentsProductionSponsorsEventsClubsFranchisesInstitutionsFederationsActorsAthletesagentsConsultingAgenciesCouncil
4Club (or franchise) VS sport event Professional athletes management and controlClubs and Franchises :Contracts : transactions and salaryMotivation : training, selection, financial premiums Athlete = “asset” for the managersEvents :Fees (ATP, PGA for instance)No control of sport performance by the managers Dependency of the athletes (calendar for instance) and their professional associations (ATP, PGA, UCI…)
5Main “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
6Focus 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……
7For consumers : Entertainment & Event = “experiential service” Key questionsStrategic 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…
8But… 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
9But : 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’ interpretationThe key for sport organizations : your stakeholder analysis.
10Sport organizations – performance and stakeholders You can evaluate returns for :MédiaAthletesSponsorsInstitutionsSpectatorsCitiesSuppliersOwner…. Various PIs for different objectives and muliple stakeholders…
11Managing 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…
12Categorization of events Scale of impacts (attendance, media, profile, infrastructure, costs, benefits)HighLowLOCALMAJORHALLMARKMEGA-EVENTCategory of event
13Categorization 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…)
14Categorization 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…)
15Stakeholders in sport organizations Private sponsorsPublic sponsorsSport institutionsEvent / ClubOrganisationAthletesSuppliersSpectatorsMedia
16Now before studying strategic analytic tools : 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 ?
17Main Strategic Approaches (Saias & Métais, 2001) POSITIONINGMOVEMENTResource-Based View RBVPermanent TransformationS.W.O.T5 ForcesCompetitiveAdvantageSTRATEGIC « FIT »STRATEGIC« INTENT »Michael Porter & CoGary Hamel and C. K Prahalad & Co
18FIT 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).
19Porter’s Five Forces (Industry) Barriers to EntryBargaining Power of CustomersBargaining Power of SuppliersCompetitorsSubstitutes
20What are we able to make with what we have ? INTENTWhat 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?)
21Concepts definitionsResources : 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
23VRIO Properties Is the resource or capability… Implications Valuable RareDifficult to imitateDifficult to substituteOrganizationalImplicationsNeutralize threats and exploit opportunitiesNot many firms possessPhysically uniquePath dependencyCausal ambiguitySocial complexityNo equivalent strategic resources or capabilitiesProductive exploitation by the organization
24FIT : Soccer metaphorThe 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).
25Intent : 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)
26So 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 stakeholdersMaintain our performanceTo 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 !)
29RBV first model for a sport organization Partnership Resources ConceptsRBV first model for a sport organizationPartnership ResourcesReputationalResourcesResourcesportfolioPROPERTIES?PlayersCoach (club only)Relational ResourcesPhysical ResourcesCoreCompetencies,CapabilitiesOrganizational team,ManagersPerformance, SucessSport SuccessFinancial SucessPublic SucessLong Term
30Success case Open13 1993---2008 www.open13.org “Familial professional “bricolage” from Marseille”VIDEO
32Cascade of assets Learning Organizational Capabilities RelationalResources« Axes »LearningOrganizationalCapabilitiesPartnershipResourcesReputationalResourcesPhysical resourcesStock of resourcesDynamic Capabilities« Bricolage »
33Partnership 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…)..
34DefinitionProvision of assistance either financial or in kind to an activity by a commercial organization for the purpose of achieving commercial objective (Meenaghan, 1983)Sponsorship involves two main activities (Cornwell and Maignan, 1998) :exchange between a sponsor and a sponsoree whereby the latter receives a remuneration (cash or in-kind contribution) and the former obtains the right to associate itself with the activity sponsoredmarketing of the association by the sponsor
35Sponsor support : financial or not Firm, non profit organization, institution…SPONSOREDEntity : individual, group, oragnization, event…Area : sports, arts, environment..Benefits for the sponsor : achieve communication objectivesMediaSponsortargetSponsoredTargetPUBLIC
36Strategic approaches for sponsorship Passion approach : passion of a CEO (“The dancer of the President”) : RLD (Adidas – Om), Serge Kampf (Cap Gemini – BO)Opportunistic approach : link between a sponsorship project and a firm CEO (Sodexho / Cities – Thomson / Canal +…)Strategic approach : sponsorship integration with the global strategic communication or marketing strategy of a firm (banks, sport brands… )
37Implementation by the event organizer Targeting – Activation – Faithfulness - Innovation Knowledge about the sponsors activities (strategy – marketing – finance – human resources)Event = pool of communication and marketing tools => “Fit” with sponsors needsDo not implement a communication tool if you’re not able to evaluate or control it… Be careful to overflowing effects !
38Communicate about your sponsors loyalty (faithful) Implementation by the event organizer Targeting – Activation – Faithfulness - InnovationActivation :Participative actions for the sponsors and their target (best example : NBA All Star GameImportance of the HOSPITALITY (B to B and B to C) (best example : PR “Village”)Communicate about your sponsors loyalty (faithful)If you can (very rare) : using your sponsorship evaluation about efficiency in your event !Innovation : NTIC – Buzz Marketing – Technological innovation (MSL for instance & HD for TV broadcast)
39Summary : being “sensemaking” ! Understand the sponsor needs (your customer !) :Targeting for your sponsor (sponsor day for instance)Linking your media planning with the communication strategy of your sponsorsSelecting the mediaNo concurrency between the brands…Being aware for new activations….Making you sponsor dependant and not the contraryUsing strategic FIT for your sponsor but You must be a “visionary” (strategic INTENT)
40Event communication (sponoring resources) Event or ClubPartneship ResourcesVRIOLinkageamongresourcesSponsorEvent communication (sponoring resources)
41Relational ResourcesEvent Manager’s Social Capital (Christian Bîmes & Jean-Claude Blanc, Patrice Clerc & Jean-Marie Leblanc …)Relational and business networks : GPTL (Marie Roussille (Occade) in Lyon), Pampelonne (Jean-François Caujolle)
42Public Relations (PR) ?Public Relations is a management function which tabulates public attitudes, defines the policies, procedures and interest of an organization followed by executing a program of action to earn public understanding and acceptance. " (Edward Bernays)According to Michel Crozier (1957) : Public Relations is a set of processes used by managers to gain external publics’ sympathy and goodwill.
43PR for events managers Press-relations : control & development Events creation during your eventPolitical PR« People » exploitation (dedicated person in your organization)Construction and management of relational networks inside and outside your eventForging an « iron cage » for your event network : be carefull about the balance between quantitative and qualitative interpersonal relationships
44Interpersonal “ties” efficiency (Granovetter, 1973) “The Strength of Weak Ties”, 4 criteria :Relation durationEmotional intensityIntimacyServices reciprocity between stakeholders
45Physical (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…
46Reputational Resources Event legend and history : JO, America’s Cup, Le Tour de France, Roland Garros, Wimbledon…Corporate Reputation : FFT, Amaury, IMG, Octagon…SUPERBOWL VIDEO
49Top 20For the 20 most admired companies overall, FORTUNE's survey asked businesspeople to vote for the companies that they admired most, from any industry.RankCompany1General Electric2Starbucks3Toyota Motor4Berkshire Hathaway5Southwest Airlines6FedEx7Apple18Google9Johnson & Johnson10Procter & Gamble11Goldman Sachs Group12Microsoft13Target143M15Nordstrom16United Parcel Service17American Express18Costco Wholesale19*PepsiCoWal-Mart Stores
50Shareholders performance Stakeholders Performance Understanding the Meaning of Performance ?AthletesPerformanceShareholders performanceBrandExploitation ?EventReputationPerformanceEventInternal MeasureP.A.P.E.RTestPR Efficiency(Partners)SponsoringEfficiency(Partners)InstitutionalPerformanceMediaPerformanceStakeholders Performance
52Reputation = key asset but difficult to control Media expositionBeing Good or Being Known (Business School cases !)Notoriety / ReputationActors Reputation (athletes, coach, Managers) : differences between local & major / hallmark & mega events
53Expressive organizations ? ServicesHospitality : B to C – B to BIn the context of Entertainment and sport : organizations (clubs & events) are expressiveSports organizations compete based on their ability to express who they are and what they stand for.Emotional and symbolic expressiveness is becoming part of the experience of doing business…Expressiveness : strategy must serve all stakeholders and that means employees as well as customers, shareholders, creditors, suppliers, local or special communities, and the media.ProductSport competitionExperienceEntertainmentExpressiveness implementation :Very difficult !
54Linking Identity, Reputation and Expressive Organization (club or event) Brand
55Identity (Fombrun, 1996)Corporate identity describes the set of values and principles employees (and players) managers associate with a company.Corporate identity derives from a company’s experiences since its founding, its cumulative record of successes and failures : very important for sports organizations !
56Reputation (Fombrun, 1996)“Reputation” is the general estimation in which one is held by the public (American Heritage Dictionary’s)A corporate reputation represents the “net” affective or emotional reaction – good or bad, weak or strong – of customers, investors, employees, and the general public to the company’s name.
57What’s in a name ? Sports organizations names are very strategic : CitiesObjects, animals, groups, symbols, features : Colts – Bulls – Celtics – Patriots - Indians…Sponsors : BNP Paribas, H Cup , Evian Masters, Andros Trophy…Moreover : in a market society like ours, it’s clear that names – and the reputations we associate with them – have economic value :Michael Jordan : continued to bring in top endorsement income from companies like Nike, Hanes, General Mills and Quaker Oaks (estimated $ 13 million a year)Jack Nicklaus, Arnold palmer (golf), Joe Montana, Wayne Gretzky, Andre Agassi, Zinedine Zidane…
58Reputation and mediaDifficulty to control inside de Communication Mix (TV, Radio, Internet, Press, posting) !For sports organizations : you can develop your own information for the public : official website (very important !) and sometimes own press (production) or TV
64The expressiveness quotient (Fombrun and Van Riel, 2004) Communicates Appropriately with Everyone…Carries out Visible Stakeholder Initiatives…Participates in Worthy Social Initiatives…VisibleIs Recognizably Different...Makes a Distinctive Promise…Stands out…DistinctiveExpressivenessQuotientWalks the Talk…Is Identifiable in its Communications…Conveys a Consistent Message…ConsistentStates Its Beliefs Openly…Discloses Information in a Timely Fashion…Shows Responsiveness to all Stakeholders…TransparentIs Credible and Sincere in Its Communications…Is Honest…Is Appealing to deal with…AuthenticThe expressiveness quotient (Fombrun and Van Riel, 2004)
65Reputation management in action ! You have toCreateProtectRepairyour reputationIndeed bad reputation can affect brand development… (OM)
66But don’t forget your resources reputation ! Sponsors BrandPR and CEO celebrityLocal or cultural identityHospitality (stadium)Your history !“Being Known” => not always “Being Good”(Stade Français or NY Knicks cases…)
67Reputations are magnets : they help a company attract resources (Fombrun and Van Riel, 2004) EmployeesMake jobs more attractive& motivate hard workCustomersEncourages repeat purchase& builds market shareInvestorsLowers capital costs& attracts next investmentREPUTATIONMedia JournalistsGenerates more favorablePress coverageFinancial AnalystsAffects content of coverageAnd recommendations
68Measure : reputation Quotient (6 dimensions and 20 attributes) (Fombrun and Van Riel, 2004) 7-pt scale7 = describes very well1=oes not describe wellSocial ResponsibilitySupports Good CausesEnvironmental ResponsibilityCommunity ResponsibilityEmotional AppealFeel good aboutAdmire and RespectTrustProducts & ServicesHigh QualityInnovativeValue for moneyStands BehindVision & LeadershipMarket OpportunitiesExcellent LeadershipClear Vision for the futureREPUTATIONFinancial PerformanceRecord of profitabilityLow Risk investmentGrowth ProspectsOutperforms CompetitorsWorkplace EnvironmentGood Place to workGood employeesRewards Employees Fairly
69Transfer in the context of sports organizations 7-pt scale7 = describes very well1=oes not describe wellSocial ResponsibilitySupports Good Causes (Ethic)Environmental ResponsibilityCommunity Responsibility(fans)Emotional AppealAdmire and Respect sport& athletesPassion & hedonismComsumerexperienceProducts & ServicesHigh Quality of sport show& experienceInnovativeValue for money (tickets)HospitalityVision & LeadershipMarket OpportunitiesExcellent LeadershipClear Vision for the futureCEO celebrityREPUTATIONFinancial PerformanceRecord of profitabilityLow Risk investmentGrowth ProspectsOutperforms CompetitorsMedia returns - affluence Stakeholders performanceWorkplace EnvironmentGood Place to workGood employeesVolunteers management
71Remarks… Communication : fit with the actuality ? Merchandising and memory ?Identity and Reputation : places – french inheritanceThe athlete is known because of the eventDifficulty to target : popular event“Caravane” : sponsoring unicityEvent director : charisma and celebrity : Jean-Marie Leblanc Christian Prudhomme
72Questions ? Answers ? How do you manage an exceptional (mega) event ? Development ? Innovation ?Answers ?You have to maintain your level !Reputation management (creation – protection (doping) – repair) : pivotal resource !If you can : transform your event reputation into a brand+External control (sponsors – media – institutions – communities…)
81Be visible Be authentic Etre consistent Etre distinctive 5 principlesReputation ManagementFor Roland GarrosBe visibleMedia choice (F2-3)Stadium evolutionBe authenticTraditional identityHistory respect (museum)Etre consistentSport advantageSponsors control (colors on the court)Etre distinctiveSport exception :Grand SlamClay courtsPhysical impactsEtre transparentCommunication (ex players)FFT is an association(now difficulty with Christian Bîmes)
83Cascade of assets Learning Organizational Capabilities ReputationalResources« axes »LearningOrganizationalCapabilitiesPartnershipResourcesPhysicalResourcesRelationalResourcesStock of resourcesDynamic Capabilities« Bricolage »
84Jean-Claude Blanc : resources management strategist… TV Rights€32 millionPublic Relations€31 millionSponoring€25.5 millionTicketting€21 millionEquilibrium « Resource-Based » ( )No Resources Dependency+External control of the environment= rents optimization (most important in France)