Club Atletico Boca Juniors Harvard Case Solution & Analysis

Introduction

The paper attempts to describe the current economic situation and challenges faced by an Argentinean soccer club Atletico Boca Junior. The paper provides a new business model for Boca Junior so that it could earn more revenues to retain its football players and satisfy its audience. Lastly, the paper describes the revenues forecasted for Boca Junior.

Analysis

Current Economic Situation and Challenges

Boca Junior is amongst the highest rated club in the Argentinean league which was founded in the year 1905. The club has won 22 national and 16 international tournaments and the club has been earning AR$75 million in 2005-2006 seasons. However, the operating expenses for Boca Junior has a negative 101.5% impact on its operating revenues, whereas, the operating revenues have a positive 100% impact on operating revenues from the year 1996 to 2006. This impact shows that the operating expenses of the club have increased significantly in a higher proportion than its operating expenses. Similarly, the net incomes of the club without transfer of players have negative impact on its previous years of net income from the period 1996 to 2006 of about -44.4%. This shows that Boca Junior does not have a higher source of income than earnings on a player transfer which results in great losses.

The Argentinean club faces huge challenges in satisfying its stakeholders and as well as its customers. The highest percentage of revenues AR$12 million for Boca Junior are collected from customer with the purchase of tickets for the match. However, the club is making its customers unhappy for selling its good players to other rich soccer clubs for higher revenues. The Boca Junior club is being followed by 50,000 members and 50 million fans and it faces the challenge of earning revenues against the fan following from customers. The company faces another challenge of satisfying its stakeholders that include investors, players, and other parties that have direct interest in the club. Investors have the interest of earning more revenues and maximizing their wealth through transfer of players, whereas, the players would also want to associate themselves with a rich Western European league that pays them higher salaries than Boca Junior.

Other than  that the problem being faced by the Boca Juniors is that many European soccer clubs are trying to negotiate a deal for buying two important players of the club namely Fernando Gago and Rodrigo Palacio. The profits that shall be earned from these transfers would eradicate all the losses. However, the president of the club is concerned about the reaction from its fans and members in transferring those players to a richer club. A dissatisfied customer would lead to the decrease in fan following amongst fans and ultimately it would reduce the number of crowd attendance in matches, through which Boca Juniors generates the highest percentage of revenues. Similarly, dissatisfying shareholders would decrease the amount of investments on players as they would leave the club without renewing their contracts with Boca Juniors.

New Business Model Plan

Product Licensing Program

Boca Junior must develop contracts with manufacturing companies for the production of its soccer club related products. Every new product of the club shall be promoted by its players to get huge customer attention. The club would also have the opportunity to expand its business in different countries by providing product licensing to overseas companies (Davis & Hilbert, 2013).

Gambling on Soccer Games

Boca Junior can also earn revenues through betting on its soccer matches. Betting has been made legal in the United Kingdom and in the United States and it is the professional wager for soccer leagues. Bets can be placed on the winnings of either teams or even placement of bet for a draw.

Official Stores and Franchises

The team shall set up its franchises and official across different countries where its master franchise shall be present in Argentina. This expansion shall be progressed in two phases where the first phase would include expansion in the national level and the next phase shall include expansion in international level where the highest fan rate for Argentinean soccer club are present. The league would develop its copy of official match wear, hats, soccer shoes, soccer ball, and other soccer accessories..........................

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Club Atletico Boca Juniors is the most popular football club in Argentina and one of the most decorated clubs in theworld. Throughout its storied history, the club at work and have developed dozens of star players. At eleven in the Boca Juniors, President Mauricio Macri significantly increased net worth and annual income of the club. However, it faces a constant challenge to remain competitive on the field and off it. In November 2006, Macri approaching Spanish and Italian football power, seeking to acquire the player Fernando Gago and Rodrigo Palacio. If Macri to enter into negotiations with the clubs interested in buying star players? If so, how they should approach the negotiations? Allows for in-depth study of the business model Boca Junior, and how it differs from the more wealthy football clubs in Western Europe. Also allows you to appreciate the talent and successful brand management strategies in the context of world sports franchise reach. "Hide
by Anita Elberse, Gustavo A. Guerrero, Alberto Ballve Source: Harvard Business School 22 pages. Publication Date: January 14, 2008. Prod. #: 508056-PDF-ENG

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