BUS317
Strategic Management
Short Essay

1. Introduction to FC Bayern Munich

FC Bayern Munich, a German sports club that is based in Munich, Bavaria, Germany, was formed in 1900. It has gained its recognition through its professional football team by dominating in the ‘Bundesliga’, a German football league, and is currently one of the world’s most successful clubs and biggest sporting brand (M., 2016). It has won a record of 25 league titles, 17 German cups and 5 times European champion (UEFA, 2015). FC Bayern Munich has been sticking to its guiding principles alongside with all necessary trainings and developments designed to help them achieve the highest performance in football (Global Premier Soccer, 2015).

Bayern Munich’s success is mainly ascribed to its capacity to maintain its performances with the presence of quality players. Additionally, Bayern Munich has a competitive edge through its low-ticket prices as well as high brand value in which they exist in the minds of customers (Krishnan, 2014).

2. The Value Chain

2.1 Technology

Systems, Applications & Products in Data Processing (SAP), a multinational software corporation, has been FC Bayern Munich’s official partner in the area of sport analytics and enterprise software (SAP News Center, 2014). With Bayern Munich having the most loyal and passionate set of football fans who have been supporting them throughout, it places an emphasis on the club to strengthen the relationship between them. For instance, the club had come out with its free official ‘Bayern app’, which can be accessed through smartphones and tablets to increase fan engagement (FC Bayern München AG, 2016).

Utilizing SAP’s technology, the club has managed to create a form of unique value through intensifying the communication channel with its fans, personalizing their experiences and rewarding them for their loyal support (Ogus, 2014).

2.2 Marketing and Sales
As mentioned by Dolles and Soderman (2013), the brand stands for everything within a football club. Activities such as winning a game or the entire league, which helps to enhance the team’s functional value, could be seen as a form of brand enhancement. As most supporters are primarily attracted by the prospect of success in terms of winnings, the best promotion would be to perform a great show on the field with the best performing team (Richelieu & Pons, 2006). Keeping in mind the end goal of achieving an extensive range of supporters and fans, Bayern Munich has emphasized on the club’s quality of players and the sustainability of their high and preserved performance. However, to retain its supporters, there is a need to consider other values too, since the preferences of existing supporters often go beyond winning.

FC Bayern Munich has pursued a competitive advantage based on low-ticket prices. This has allowed many to be able to afford watching the teams that they support, live at the stadium. On top of that, it helps the club to build up both its reputation and goodwill, thus enhancing its brand value.

3. Core Competencies

For a firm to achieve and sustain its competitive advantage over its competitors, its capabilities and resources should be of value, rarity, inimitability and non-substitutability, in light of the VRIN framework (Hinterhuber, 2013).

FC Bayern Munich has always been known for its quality of players. One core competency of the club would be its organizational culture, which has been derived from its continuity of strong management, along with its recruitment strategy that is based on youth development and star players (Rikardsson, 2013). The management stresses on its culture of retaining retired talents who had previously performed remarkably on the field, to join them in managing the club. This vertical integration management approach allows the ex-players to boost the club’s value by transferring their experience, knowledge as well as expertise to the younger generation of players. In addition, younger players may draw inspiration from the ex-players and become more motivated to strive and to perform better than them, thus creating a winning culture (Elberse, 2013). With continuity, the extraordinary management has possessed the capability to sustain its winning culture over the decades in which, collectivistic characteristics and values have been well attached, enabling the club to work towards sporting success. Based on the VRIN framework, the creation of winning culture plays a part in Bayern Munich’s competitive advantage over its competitors as this approach takes numerous years to cultivate, which gives the supporters and fans a rare and inimitable value.

Besides achieving sporting success, Bayern Munich has also improved its brand image by significantly targeting both the German and the global markets. Maintaining closely knitted relationships with its main partners such as Adidas, Allianz Insurance and Audi, it has allowed the club to receive numerous sponsorship deals (FC Bayern München AG, 2016). One of which includes the shift to the 75,000-seaters ‘Allianz Arena’ in 2005, which had cost approximately 340 million euros to construct the entire stadium. This has not only helped the club generate revenues through ticketing sales, but also allowed more supporters to watch football matches live. With its competence to market itself successfully to the world, the club has attracted many sponsorship deals as well as broadcasting rights from large and renowned companies (Bar-Eli, Galily & Isreali, 2008). This further enhances the club’s value as it generates revenue and establishes brand loyalty through new fan bases all over the world. However, it is relatively easy and common to replicate it. Based on the VRIN framework, this ‘sponsor and customer targeting’ strategy of Bayern Munich needs to be complemented with success on the football pitch through winning more silverware, so as to maintain this competitive advantage with their sponsors and at the same time, create an inimitable experience to their supporters and fans.

4. Environmental impacts and Conclusion

Despite Bayern Munich being able to successfully establish and preserve its core competencies over the years, there are several external environmental factors, which are beyond the control of the club (Hanson, Hitt, Ireland & Hoskisson, 2014). For instance, there were intense competitions with their rivals as well as globalization. Given time, the competitive advantage that the club has possessed, would be significantly reduced if other football clubs were to develop winning cultures in their teams too. In spite of that, Bayern Munich can prolong its winning culture and strengthen its team members’ mind-set by continuing its culture of converting retired star players into their management system, to better improve its culture and concurrently developing a stronger youth academy. Since globalization is unavoidable in today’s world, the club can take advantage of the situation by actively looking for sponsorships in the global markets. In a nutshell, FC Bayern Munich’s business strategies are different from others and at the same time sustainable, which makes the club so unique and successful today.

Reference List

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