Assignment:
HYPOTHETICAL CASE SCENARIO
The Real Madrid Futbol Club is thinking about expanding its brand in the United
States to build youth soccer academies and a professional franchise team, a soccer-specific stadium that will host league matches, international matches, concerts and other family entertainment operations. They are considering buying into either Major League Soccer (MLS) or United Soccer League(s) (USL) franchising systems to be located in the Phoenix metropolitan areas in Arizona.
PRIMARY GOAL
The goal is to develop partnerships to enhance the brand value of Real Madrid in the US from the grassroots level to the professional league levels through connecting the commercial, business, youth and grassroots components and
other market opportunities.
MARKET INTENTIONS
The North American professional soccer market is a primary target for foreign soccer clubs like Real Madrid that seek to extend their brand, identify new players, produce new revenues, generate new channels of distribution, extend
and establish their global fan base, and other global branding and marketing opportunities.
HISTORY
Some foreign clubs have attempted to enter the North American market and have failed. A general lack of understanding and partnerships were related to not achieving desired results. Developing a brand in the U.S. is a long-term initiative that requires partners that understand the local, regional and national market, the business of sport in the US, more particularly, the business of professional
soccer/futbol, in North America.
OPPORTUNITIES
An MLS or USL professional franchise can serve as an access point to European clubs for players from North, Central, and South America. A European club like Real Madrid can utilize the MLS or USL as a competitive platform as a proving
ground or development arm for players before moving to Europe to play at the higher levels (a farm-team or feeder-system so-to-speak). MLS and USL envision foreign clubs to directly own a franchise or at least be part of an owner/investor group that operates the franchise. Minimally, foreign clubs like Real Madrid have the opportunity to obtain a partial stake in an MLS or USL franchise where MLS and USL can provide connections for prospective franchises to affiliate and build these partnerships and expanded brand operations.
QUESTIONS:
Question 1. MLS and USL franchises contain a vertically integrated club structure that contains programs from recreational youth to the professional ranks. How would you recommend Real Madrid create formal relationships and affiliations with major youth clubs in Phoenix that can become directly linked to the club? What would that model look like? Would it be better to develop their own youth club and academy system? Compare and contrast the two models. Defend your positions.
Question 2. Some foreign clubs want to mitigate their risk of investment by attracting US-based partners that can operate the franchise. In other words, let one partner conduct the business side of things (i.e. stadium management and operation, concerts, other events, etc.) and let the other partner handle all soccer-related activities (i.e. the team itself, youth development systems, etc.). What would be a compelling reason Real Madrid can offer a potential investor partner to help mitigate that investment risk? Defend your answer.
Question 3. Some international clubs may not want to do the above, but desire to create and fully own a professional franchise in North America. What problems and challenges does this scenario present for long-term business development, commercial activities, the grassroots movement, fan development, player development, understanding the market, other opportunities and operations? Defend your answer.
Question 4. Foreign clubs like Real Madrid can establish a relationship in a specific market like Phoenix with opportunities for a nucleus of affiliations throughout other segments of North America. Discuss the differences between planning for domestic and planning for international activities. What are several potential problems Real Madrid is likely to encounter doing business in the US? Recommend possible solutions. Defend your answer.
5. Differentiate among domestic market extension orientation, multi-domestic market orientation, and global marketing orientation for the Real Madrid's case. Describe how the orientation guides international operations for Real Madrid in the US. Provide examples of new market and revenue opportunities. Defend your discussion.