A strategic analysis on the New York Red Bulls

Table of contents

Executive summary

A strategic analysis on the New York Red Bulls

Background

SWOT analysis

Current Strategy

Alternative strategies and recommended changes

Conclusion

References

Executive summary

The following paper is about the New York Red Bulls and their strategic plan for the future. The first part introduces the organization and gives background information about why the topic was chosen and who the New York Red Bulls are.

The second part is a SWOT analysis about the organization to see what they are doing good and where are weaknesses in the organization.

Next is and introduction the strategy of the organization. This includes the their vision, goals, objectives and culture. This is necessary because the next part is a introduction from other clubs and their strategy and what the Red Bulls can learn from their strategies.

The outcome of the paper is that there are many different areas where the New York Red Bulls should create new strategies or work on their current ones. This paper only focuses on the branding of the organization and the popularity. It shows that there are some deficits in the ways of the communication with the community and also the advertisement for the games and events is not the best. There are a few opportunities what they can do to make this situation better and bring more people in to the stadium and make the brand more popular.

A strategic analysis on the New York Red Bulls

I decided to write my paper on the soccer club New York Red Bulls for many reasons. I play soccer since the age of four and was always following the Bundesliga (division I soccer in Germany) and international contest, like the Champions league. For me, who did the undergraduate in business administration, I always see the things with a business view and it is very interesting how soccer clubs or in general sports organizations work. My previous internship was at a non-profit sports organization which got all their money by sponsors or government money. Now I am working for the New York Red Bulls, which is a club owned by the beverage maufacturer Red Bull. New York Red Bulls is an incoperation which means that it is seperated from the Red Bulls. But they still need approval for all their expenses from the headquarter in Salzburg, Austria. The process is very interesting. They have to create a budget plan by october for the upcoming year and present it at the headquarter. This is very difficult because in the field of soccer thigns can change. If they make it to the play offs, they need to spend more money because they have more games.

Another reason for this topic is, that I like to compare different clubs from all over the world. Soccer is not as popular in the united states as it is in europe. The problem is that it has to compete with so many other sports, which is not the case in europe. One example for this is that the New York Red Bulls need to have a sales department to sell tickets. In Europe the people fight to get tickets for games and almost all games are sold out; and the capacity of the stadia in Europe is much higher than in the united states.

Looking at this points I was thinking about what strategy can the New York Red Bulls use to make them more popular as a brand. How can they get more fans and compete with the other sports? There are not many people out there who know about the New York Red Bulls, especially the older generations. Soccer is getting more popular these days, especially after the women’s team won the world cup in 2015. One question I asked me after that was: Why does the New York Red Bulls do not have a womens team? They should have the resources to create a professional womens team and they also work with girls at their youth academy.

I will look into the strategy of New York City FC, which is a competitor of the New York Red Bulls and see what they do different and if they have more fans and if so why. I will also look into the strategy of the german team bayern munich and see if the New York Red Bulls can learn from them.

Background

The New York Red Bulls are one of 20 teams in Major League Soccer (MLS). Until the acquisition by the Austrian beverage company Red Bull in 2006 the teams name was MetroStars. Previously, the team was known as the New York / New Jersey MetroStars and was one of the founding members of the major league soccer in 1996 (Havsy, 2006). In March 2006, the Anschutz Entertainment Group sold the MetroStarsHavsy, to Red Bull Co. Ltd. Red Bull then changed the team name to New York Red Bull, also the colors of the team and the complete corporate design has been amended accordingly. New York Red Bulls is one of several clubs under the leadership of the Austrian company. Red Bull owns club worldide, such as FC Red Bull Salzburg in Austria, Red Bull Brasil, Red Bull Ghana and RB Leipzig in Germany (ESPN, 2006).

All the home matches are played at Red Bull Arena (RBA) in Harrison, New Jersey. The arena has a capacity of 25,000 seats and is the most popular soccer-specific stadium in North America. The stadium is also owned by the Red Bull GmbH and is used at the headquarter from the New York Red Bulls. That means all the offices are placed in the arena which gives the employees the opportunity to work at the stadium (NYRB, 2016).

The New York Red Bulls has a good mix from home grown players and players with international experience. For example, one of the biggest transfers was Thierry Henry who ended his soccer career in 2014 at the New York Red Bulls. He is a french player who played for the national team in french and was very successful. The first team also features U.S. international Sacha Kljestan, 2014 MLS Golden Boot Winner Bradley Wright-Phillips, and other players with USMNT experience. The amount of home grown players who made it to the roster of the first team is a result of the New York Red Bulls nation's premier youth soccer development programs, from local soccer partnerships across New York and New Jersey to Regional Development Schools and the Red Bulls Academy teams.

Nevertheless, the New York Red Bulls in the previous 17 seasons could not enter the championship. 2000 and 2010 they were the Eastern Conference to decide for himself , in 2008 they came into the final against Columbus Crew and 2000 it was enough after all, still for the semifinals. But mostly the quarterfinals was a terminus for the team (Krause, n.d.).

The current market value of the New York Red Bulls is 11,95 million Euro which is around 13,5 million dollar. Compared to that the competitor New ork City FC has a market value of 19,10 million Euro, the german club RB Leipzig, which is also owned by Red Bull and is only a second divison team has a market value of 39,35 million Euro. If we look at the market value of bayern munich, which is the most popular german club, playing in the first division (Bundesliga) we can see that the market value is 617,10 million Euro. That value is higher than the value of the whole MLS market value (274,95 million Euro) (transfermarkt, 2016).

Last year there was a big change at the New York Red Bulls. Before the season started the sporting manager, Ali Curtis, fired the previous head coach Mike Petke and hired Jesse Marsch the current coach. The fans loved Mike Petke because he had a succesful season with the team and they could not understand why they fired him. At the same time Thierry Henry retired from his career. It was a very difficult situation for the New York Red Bulls and the fans were mad because of the decision. There were a lot disscussion going on and the sales department was scared to loose a lot of the fans. But Jesse Marsch proved that it was the right decision to hire him because the Red Bulls had a phenomenal season (Tasch, 2015). Now, the fans are apologizing for treating him wrong and are thankful for what he brought to the team. That was shown at the town hall meeting, February 10 2016. Two hundred fans had the opportunity for a Q&A round with representatives from the team. In 2015, it was a disaster and all the fans were jelling at the represantitves. This year, it was an amazing event were all the fans were happy and congratulating the people for the success.

SWOT analysis

Strength:

Red Bulls is a brand which is worldwide known. This can be a strength but also be a weakness for the New York Red Bulls. A strength because people know Red Bull which makes it easier for the club to advertise their brand because people can associate with the brand. It is a weakness because real fans can think that they do not have the name because they love soccer and show the passion for soccer, they only have the name because it is sponsored by Red Bull and they are not really interested in the market because they sponsor so many other events too.

Since Red Bull owns the organization and also the stadium the club should not have any issues with resources. For example could they spend a lot money, compared to other MLS teams for new players or well-known international players. They also own the stadium and can make revenues with renting different parts of it for events.

The previous season was very succesful for the New York Red Bulls. They made the play offs and then lost in the finals. This succes was very important for the organization because it got more popular through that. Success is always a strength in a soccer franchise because the more succesful your organization is the more fans you have.

The organization is very present on social media. They have a homepage, a twitter account, facebook and instagram. Since the social media manager is very young and takes care of the platforms the pages are always up to date and they can present inside news very fast.

The branding is very unique. It is nearly impossible to buy any merchandising with a rede bull logo. It is possible to get jerseys from the players or fan accesoires but other than that people can not buy any merchandising with the red bull logo.

Weaknesses:

A positive part of the organization is that they are very present on social media. They are pesent in different channels and doing a good work. The weakness on this is that they do not do enough advertisment outside of social media. They do not have any signs at highways or on the streets to advertise the club or games. Also, they do not have any flyers or announcements on radios or newspapers about their upcoming events.

Another weakness is that the organization does not provide any type of information about the other team on game days. Usually, teams have a game day newsletter were they present their team and the team they are playing. They also introduce their partners and have a few short stories about their youth teams or a specific player. The New York Red Bulls do not have such a newspaper, neither in paperform nor on their social media platforms.

Many fans are complaining about the logo from the New York Red Bulls. They had a really strong commitment to the old name and logo, when the club was called Metro Stars. With the new owner the logo is now related to Red Bull but it does not have any relations to soccer and that makes the fans angry. They do not see a relationship between the logo and soccer and they can not identify theirselves with the club that much anymore. That is a weakness because the club can loose fans if they can not identify theirselves with the organization. This problem is not only related to the logo, it is also related to the name. Many people do know Red Bull and that makes the soccer club not really special because they are investing in many different sports and they own four different soccer clubs. People can get confused because they do not see a relation between the name and soccer.

The biggest weakness of the organization is the parking situation around the stadium. There is not really parking space for the fans on game days. They can either pay for parking or they have to walk at least 15 minutes if they want to park for free. Other soccer clubs provide parking and it is included in the ticket price. When people want to see a New York Red Bulls game they have to pay for parking or the subway.

Opportunities:

Soccer is getting more and more popular and with winning the world cup in 2015 the americans really like womens soccer. Creating a women’s soccer team would give the New York Red Bulls a good opportunity to make their brand more popular and would bring them more fans because people in the united states appreciate women’s soccer and like watching it.

Another opportunity is to get more well-known player or internatioanl player. When Thierry Henry played for the club they got more fans because he was a well-known player. The organization has the money they could invest in more players to make the brand more popular but they are not doing it.

The stadium has many different areas the organization could rent for other events. They could have concerts in there on the field or rent the different places inside the arena. For example they are renting it for Barmizvas but they could offer it for companies events or weddings because there is a lot space for bigger events.

Since the Red Bulls own many different soccer clubs in the world they could provide a trip to the united states as a tourist attraction. For example people from Germany know that Red Bull owns a soccer team in germany. You could send out advertisments to those fans to visit the Red Bulls arena in Harrison when they are planning to go to New York. In general they should try to get a space in tourist handbooks that would make the brand more popular because people read the handbooks to see where they can go and what is around.

Threats:

Always a threat are competitors. For the New York Red Bulls there are two different types of competition. The first one is competition inside the league. With the founding of New York City FC they now have a competitor right around the corner. The problem is that NYCFC has a few international players who are known world wide. People now think about changing their team because the yhave more famous players. It is also an issue because there are two clubs so close to each other. The second competition is different sports. In the united states soccer has to compete with baseball, basketball or football which are all sports that are very popular and it is difficult to make fans change their sports and their passion for one sport.

Another problem is that fans do not have a relationship to the club, they are only attending the games because of certain players. If those players are leaving the club the fans are going to leave too. The New York Red Bulls had this problem when superstar Thierry Henry retired from the team in 2014 and when they fired the old head coach of the team. Many fans left the club and it got harder to sell tickets because people thought it was not worth it to go to the games anymore because their favorite person was not on the field anymore.

Another threat is that popularity is depending on success and you can not control success. One day the team wins and another day they loose. But the fans do not want to see that. They only want to see the team winning and if there is a more succesful club in the area they are going to change the club. Also, if the club is not succesful the fans do not come to the stadium and watch the games and the club gets less famous. People start talking bad about the club and the way the team is playing and they get frustrated because they want to see a winning team when they spend money to go to the games.

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