This research aims to look into Manchester United’s current business strategy in line with the club’s performance in all competitions in Europe and England.
(Oscar, 2016) Manchester United, nicknamed “the Red Devils,” is one of the most successful English clubs, based in Old Trafford. The club was founded in 1878 as Newton Heath LYR Football Club, and the name changed in 1902, and they moved to their current stadium, Old Trafford, in 1910.
Pre-Sir Alex Ferguson Era
The club won its first trophy in 1908 under the late Ernest Mangnall, who managed the club as the head coach from October 10th, 1903, to September 1912. After a successful tenure, the club hired Late Sir Matt Busby in February 1945 during the later end of the world war James W Gibson, the club owner. Sir Matt Busby was known for his visionary leadership skill and total winning mentality. During this tenure, the team was able to win two league titles, 1955-1956 and 1956-1957, and despite the Munich air disaster, he was able to rebuild the team that later won the 1963 FA Cup and the league title 1965-1967 and 1967-1968. Due to this success, he is recognized as one of the most influential leaders in the history of Manchester United (Steve, 2022).
Another manager came to Manchester United to raise the standard of success for himself and the club. The name of the manager is Sir Alex Ferguson. After a successful tenure at Aberdeen Football Club, the team was led to winning three Scottish premier division titles, four Scottish Cups, the European Cup Winners’ Cup, and the European Super Cup. He joined Manchester United in November 1986 when Manchester United was 11th on the First Division league table and was introduced by the chairman Martin Edwards.
During the Sir Alex Ferguson era at the club, he was consistently able to develop a Micro rebuilding strategy that created a consistently winning performance which resulted in winning a total of thirty-eight trophies, including thirteen league titles, ten community shields, one FIFA Club World Cup, five FA Cups and two UEFA Champions League making him the most successful manager in the history of English football and one of the best managers in the world (Robin, 2019).
Post-Sir Alex Ferguson Era
Despite the club’s success, Manchester United has not been able to replicate the winning momentum after the retirement of Sir Alex Ferguson, which can be called the (post-Sir Alex Ferguson era). The club has hired four main managers (David Moyes, Louis Van Gaal, Jose Mourinho, Ole Gunnar Solskjaer) and three caretaker managers (Ryan Giggs, Michael Carrick, and Ralf Rangnick). If there are a lot of changes happening at the level maybe it is time to look into the strategic management system of the club to understand the reason for these changes and the performance of the club on the Football pitch.
Strategic Management Analysis Tool
It is important to properly evaluate the issues within Manchester United from two major perspectives, internal and external, in order for the club to design a formidable strategy to bring them back to the winning ways. To guide the club through the process of strategic change, the use of SPACE MATRIX ANALYSIS will be a strategic management tool (framework) to be used. SPACE analysis has been used as an integrative device in the teaching of strategic management models (Thompson, 1993) to analyse individual companies (Radder and Louw,1998).
However, there are factors to consider to help us through the process; the internal factors are Competitive advantage and financial strength, while the external factors are Industrial attractiveness and environmental stability (Hariyadi & Mardjono 2017). These factors use a quadrant shape analysis from a graphical analysis to guide top organization leaders to make strategic decisions. This analysis shows the organization the current strategy position of the organization, and they are;
· Conservative: This is a position of an organization with a low growth rate in revenue
· Aggressive: This is a position of a financially stable organization due to their heavy commercialized activities.
· Defensive: This is a position of an organization with less financial capacity but has a competitive advantage.
· Competitive: They are competitively weak in an unattractive industry without financial resources (Slatter, 1984).
To apply the framework to Manchester united situation they are elements to consider across all factors. The external factors; Environmental stability and Industrial attractiveness and these
following elements respectively:
Environmental stability is found at the low end of the Y-axis
· Stock market performance of Manchester United
· Economy performance of England (where the club is located)
· Price elasticity of players (values of players in the market)
Industry Attractiveness (IA) the found at the right end of the x-axis
· Current Growth potential of the club
· Current Profit potential of the club
· Current Financial stability of the club
The Internal factors; Competitive advantage (CA) and Financial Strength (FS) and these following elements respectively:
Competitive advantage (CA) is found on the left-hand side of the x – axis
· Cycle of the players (Player retention)
· Cycle of the Manager (Manager retention)
· Playing style
Financial strength (FS)is found at the top of the Y-axis
· Returns from deals, sales of shirts, and advertising slots
· Sponsorship retained
· Liquidity
· Debt level
· Inventory turnover
Each represents a sub-factor to which a value can be assigned between 0 and 6; for FS-IA and 0 to – 6 for CA-ES. These scores are assigned according to subfactors in line with the industry conditions in the Matrix below.
According to the analysis above, Manchester united current performance analysis shows that the club falls within the aggressive position making it a club with a commercial focus organization and relatively stable. It does not necessarily mean reflection correlates positively with the team’s football performance.