Pest of South China Football Club free essay sample

Not many people could expect that Hong Kong national football team could beat Japan national team and got their first gold medal in East Asia Game 2009. The amazing result not only stole the spotlight from public but also made The Hong Kong Government rethink about the development of local football market. A marketing research company was invited by government to analysis the environment of local football market and recommended some of the strategy for enhancing the building of the market. It was expected that the rank of the Hong Kong football will rise to the top n Asia within 10 years. For the football development proposal, not many people showed optimistic attitude, because of a lot of difficulties which all local football clubs can not ignore. Now, it will be explained how the political, economic and social factors challenge the development of local football club by an analysis of local football market using PEST model. Also, a legendary of local football club South China Athletic Association Football Club (SCFC) will be as example for explaining their strategy against such factors. PEST Analysts PEST analysis stands for Political, Economic, Social and Technology analysis. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operation. As the technological factor have not brought a high threat to the local football market, the factor will not be mentioned in the following analysis. Political For a developing football market, the role of Government is essential. It is because the amount of investment liked the facilities, the youth development and the subsidy of operation cost in football club are very huge. Few business investors would have incentive to take the responsibility when the size of market is still very small. Thus, only the government can take the responsibility in creating an environment and attract football investor. J league is a successful representative. However, obviously, the support from Hong Kong government is far from enough. In Hong Kong, only the football club in B and C division can gain subsidy from the government, when the club raises to A division, the subsidy will be cut immediately. Although the subsidy is Just 300 thousands a year in maximum, the cut of subsidy till bring not less football club in a financial difficulty. For instance, Eastern Football Team, a traditional local football club, decided to downgrade to C division due to the financial difficulty during 2008/2009. Furthermore, the support of youth development from government is not sufficient. (HKSI). As a result, the funding is obviously insufficient compared with other sports. According to the fgures in 2009-2010 from Leisure and Cultural Services Department, the youth development funding to the item of football is HKD 139 a people compared with squash which is HKD 352 a people. In the total 58 of sport item in HKSI, the amount of funding in football is 55 th. It seems that government does not emphasize on the development of local football at all. Thus, compared with 60s to 80s, there are few youth potential footballs player can be found nowadays, Economy In Hong Kong, political factor is seems the core factor which affect the football market. However, we still should not underestimate the factor of economy. Since 2008, the financial tsunami has flow the global economy. Hong Kong, as an international city, was apparently not avoidable. Thus, there is no wonder the football market is also affected. Generally, the main income of a football club is come from three sources the sale of football ticket, the business sponsor and the sales of promotional football item. Some of world football club liked Manchester United can generate over than 3 Billion a year from those sources. In Hong Kong, the situation is a little bit different.. Unlike the period during 60s to 80s, there are Just few football clubs gain business sponsor nowadays. The sale of promotional football items also exist in some sizable football club only. The main sources of income for a majority of football club come from the sale of gate ticket and the investment from investor. According to the announcement of HKFA, the average sale of ticket was Just HKD 1837, 92 dunng 2008/09. In 2009/2010, the sale lower, dropped to HKD 1594, 74. The amount is even not able to pay the salary of football player. Although the price of football ticket is affordable, football ticket is not a necessity. In addition, there are lots of different choices likes England premier league, Spain premier league which can be watched in TV football channel. Thus, it is not wonder the result is reflected the influence by the economy downturn, Furthermore, economical recession not only affected the sale of football ticket, but also the incentive of investment by investor that is fatal factor for almost all the club. Chan Ping, a coach of Wo Fu Tai Po Football club, claimed that the operation cost is at least HKD 5 millions per year. It is not affordable if they Just rely on the sale of football ticket without the investment of investor. However, Chan also added a sad truth that 9 of 10 football clubs make a loss. Thus, lots of investor will prefer cutting heir investment to football club under economical recession. For example, Tuen Mun Progoal Football Club was disqualified due to financial difficulties after their investor cut their investment during 2009/2010. Generally, the income of a football club is depended on how many supporter they have. In 60s-80s, the performance of local football team was brilliant. The ranking of Hong Kong national team was top in Asia. Most of famous football stars were emerged liked Yiu Chak Yin, George best, Chow Chee Keong. As a result, the popularity of football market was very hot during the time. Mostly, the Hong Kong Stadium was full when there was football match. It was the golden time of local football market. However, after the mid of 90s, due to the All Chinese Trend , the performance of Hong Kong football team dropped year by year, as a result the bright time was never came back. The number of audiences could reflect the truth. According to the report of investigation of local football consultant , during 2008/2009, the number of audience in average was Just 1128. The figure reflected that the local football market was no longer popular. The change has brought tangible and intangible consequences. For tangible onsequence, the change not only affected the sale of football ticket, but also lowered the incentive of commercial sponsor. During 60s to 80s, commercial sponsors to football club were very common, liked Seiko, Bulova, Lai Sun. However, following the decline of football market, the number of commercial sponsor was also declined.. It directly affected the income of all football clubs. For intangible consequence, unlike the bright period during 60s to 80s, professional football player is no longer treated as an admirable career. Instead, a professional player may be treated as an unprofessional, low salary and no future career. In many cases, a fresh football player may Just earn 6-7 k a month, some maybe even lower. Few younger with high education level would choose a professional football player as their career. Thus, over the ten years, there are few outstanding football star was emerged and the total average performance of local football club was dropped. To summarize the above factors, there are three difficulties that all local football clubs are facing The storage of financial support , the difficulties of seeking young potential football player and the decline of supporter. The three difficulties are faced y all football clubs and there is no exception. Now, it is going to explain how SCFC responded to the challenge and what strategy they used. South China Athletic Association Football Club (SCFC) South China Football Club (SCFC), founded in 1904 but played under its present name from 1908, is one of the most famous football clubs in Hong Kong. During the past, there were lots of super football stars were developed by the club liked Lee Wai Tong, Yiu Chak Yin, Lee kin Wo. Not surprising, the team has won all the honors in Hong Kong. However, in 2003 2006, because of the All-Chinese policy, the club faced the ardest time in their history. If the number of teams were not increased from eight to ten since 2005/2006, the famous club must not be avoidable dropping into the back to the top of football team in Hong Kong. The strategy of South China Football Club Building the brand name In a marketers view, building a brand name is essential. A successful brand name can ensure their sale increasing and make a block against competitors with less resource. Thus, SCFC also followed the rule building the brand name as their first priority. First, nowadays online marketing is very popular as a strategy of promoting goods nd building relationship with customers. Thus, SCFC also tried to develop relationship though this way. For instance, Mr Lo Kin Shing, the head of SCFC, has built a blog and insists on writing some news or some opinion about SCFC every day. It is a way to make the relationship between fans and SCFC become closer and increase the loyalty of fans to club. Second, liked what other foreign football club do, creating a mascot is also a way developing the brand name. In 2007, SCFC created SCAA Family as their first mascot. It not only helps developing the image of club but also increases the sale through elling the related items. Third, as a football player, nowadays is not supposed focusing on playing football only. In order to gain more publicity, the football players in SCFC have been arranged acting in TV shows, TV program liked Flight of South China in Dream. The brand name of SCFC has been apparently developed. SCFC not Just represent as one of football team in local football league but as a representative of Hong Kong football. According to the information from HKFC , the average of ticket sale last year was around HKD148000, but SCFC is over HKD 466000 that is over than 3 times of average amount. Also, SCFC have gained sponsor from different famous brand over few years liked Emporio Armani, Adidas, Panasonic. It proved that SCFC have taken benefit from the influence of their brand name. Attracting young potential player One of the main reasons why it is hard to attract young potential player to Join the local football market is that the average of salary is too low. For example, in Wo Fu Tai Po football team, some of their players even need to find one more part-time Job to earn their living. In order to tackle the problem, Mr Lo has promised that the salary of their player must be over the average of the market. Some of their players liked Chan Siu Ki even earns around 40 thousands a month which meet the salary level of business professions. Another reason why local football market is not attractive for younger is that there that the path of being a professional football player is a very long and harsh progress. Thus, younger must have a football star as a model they can follow. Otherwise, they will not have incentive enough to seek for being a professional player. Thus, SCFC also created their football star. Chan No. 7 (Chan Siu Ki). After East Asia Game 2009, due to the amazing performance in this game, Chan became very ot. Mr Lo did not miss the chance promoting Chan as the icon of SCFC. When there were any promotions of SCFC, Chan would be required to act as an ambassador. Also, Mr Lo helped publishing a memoir of Chan, in order to promoting Chan as a successful football star. SCFC successfully detached the typical image of local football player which were unprofessional, low salary and no future. Instead, they let their team become professional, high income and admirable. Strengthen the ability From the view of football fans, the most consideration must be the performance of match. In order to strength the ability of football club, SCFC built a partnership with Tottenham Hotspur Football Club, a famous football club in England Premier League in 2009. In the partnership, Totternham significantly supports SCFC s coaching development through the exchange of scientific data, coaching materials and visits of coaching staffs to and from both teams. Though this partnership, it is believed that SCFC can directly learn the experience from the English football club and enhance the ability. Also, over the few years, SCFC showed actively in the transfer market. The majority of ootball stars in Hong Kong were also brought in the Club. According to the clubs information, the budget of the club for the coming league will be around 15 millions that is over 10 times of some of local football clubs. Thus, it is not surprising SCFC could win almost all the competition in local league over the past few years. The performance of SCFC over past few years proved that their strategy was success. The club not only continuingly climbs to the highest in local league for 4 times over the past 4 years, but also getting a satisfied result rank 4 in AFC Cup in 2009.. Conclusion The success of South China was not Just depended on good player and good coach but the combination of commercial and sport elements. Unlike other CEO of local football club, Mr Lo aimed to make his club be profitable and he did. In the nearly future, after the successful model of South China, it is believed that another club will also follow its model that make the local football market become much more commercial and raise the level of football market.