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Real Madrid Club de Futbol Case Solution

Solution Id Length Case Author Case Publisher
2840 1395 Words (7 Pages) John A. Quelch, Jose Luis Nueno Iniesta Harvard Business School : 504063
This solution includes: A Word File A Word File

Real Madrid, a century-old football club with 93 million fans worldwide, signed David Beckham, a 28-year-old midfielder and fashion icon from England, in July 2003. Beckham's €35 million transfer from Manchester United was a big hit in Spain. On his press conference day, 8,000 fans bought his jersey for €62–€78. Real Madrid capitalized on Beckham's popularity and boosted the club's image and merchandising sales in the region with four matches in Asia a month later. The 2004 presidential election challenged the work of Florentino Pérez, owner of the club. With over 240 million people playing at least once a week, football was the most popular sport in the world. Accessible to people of all ages and backgrounds, national pride and identity were also symbolized by football, as demonstrated by the Mexican president who wore his team's T-shirt during a press conference following the 2002 World Cup.

Following questions are answered in this case study solution:

  1. What are Real Madrid's resources?

  2. What investments do they need to make to sustain these resources?

  3. Should Real Madrid try to develop a large fan base in the United States?

Case Study Questions Answers

1. What are Real Madrid's resources?

Real Madrid, one of the world's most successful football clubs, has many resources and is also a financially strong club, as is made clear by their signing of a high-profile player such as David Beckham for €35 million from Manchester United. Their main sources of revenue include match-day revenue, sponsorships, merchandising, and TV rights, and their financial strength helps them to acquire top talent, maintain world-class facilities, and pursue goals for club development. 

The name of the club itself holds a lot of value as its rich history, glorious achievements, and iconic players have made it a household name. The club is acclaimed worldwide due to its penchant for winning, along with the promotion of a certain type of lifestyle and entertainment. Brand equity helps the club acquire sponsors and lucrative partnerships, which helps its goal of global expansion. The players are valuable, being the most talented of local and international footballers, who boost the competitiveness of the club and its value. 

Real Madrid has a strong reputation with solid financial backing, which allows it to attract and retain top-notch players and win both domestic titles and European trophies. The large fan base is also a big revenue-generating asset, as they have an estimated 93 million fans across the globe, who in turn support the club with loyalty and by becoming people who vouch for the club. Fans also help generate revenue from ticket sales, merchandising, and other club-related events, which makes the global presence of the club extremely noteworthy. Santiago Bernabeu, the club’s main stadium, is another strong asset, as it seats almost 80,000 fans and hosts home games, which allows the club to generate big amounts of match-day seat revenue. Other aspects of the club’s infrastructure include world-class training facilities, youth academies, and strong administrative infrastructure. 

The management team, led by President Florentino Perez- who took charge in the year 2000- is also very strong, as they have created a cohesive strategy that prioritizes decision-making, financial stability, and global expansion. The expertise and value of the club have shown sustained success and growth, and brand partnerships allow it to boost its resources as well. One example is Adidas, which helps make shoes for the team, assisting the club with cutting-edge sports technology, financial support, and global expansion. These brand partnerships also generate revenue for Real Madrid. The club's diverse resources have made it one of the biggest names in the world in club football. 

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