Case Study Description of MasterCard International: World Championship Soccer Sponsorship
MasterCard must decide whether to renew the sponsorship of the World Cup and other soccer events in light of a 100% increase in the sponsorship fee and a strategic realignment by MasterCard. A rewritten version of an earlier case.
Swot Analysis of "MasterCard International: World Championship Soccer Sponsorship" written by David J. Arnold, David Lane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mastercard Sponsorship facing as an external strategic factors. Some of the topics covered in MasterCard International: World Championship Soccer Sponsorship case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the MasterCard International: World Championship Soccer Sponsorship casestudy better are - – increasing household debt because of falling income levels, increasing energy prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs,
geopolitical disruptions, technology disruption, etc
Introduction to SWOT Analysis of MasterCard International: World Championship Soccer Sponsorship
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MasterCard International: World Championship Soccer Sponsorship case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mastercard Sponsorship, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mastercard Sponsorship operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of MasterCard International: World Championship Soccer Sponsorship can be done for the following purposes –
1. Strategic planning using facts provided in MasterCard International: World Championship Soccer Sponsorship case study
2. Improving business portfolio management of Mastercard Sponsorship
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mastercard Sponsorship
Strengths MasterCard International: World Championship Soccer Sponsorship | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mastercard Sponsorship in MasterCard International: World Championship Soccer Sponsorship Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Mastercard Sponsorship in the sector have low bargaining power. MasterCard International: World Championship Soccer Sponsorship has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mastercard Sponsorship to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Mastercard Sponsorship
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mastercard Sponsorship does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Mastercard Sponsorship is present in almost all the verticals within the industry. This has provided firm in MasterCard International: World Championship Soccer Sponsorship case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Mastercard Sponsorship has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mastercard Sponsorship has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Mastercard Sponsorship in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Mastercard Sponsorship is one of the most innovative firm in sector. Manager in MasterCard International: World Championship Soccer Sponsorship Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Mastercard Sponsorship is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Mastercard Sponsorship is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Mastercard Sponsorship is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MasterCard International: World Championship Soccer Sponsorship Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Mastercard Sponsorship is one of the leading recruiters in the industry. Managers in the MasterCard International: World Championship Soccer Sponsorship are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Mastercard Sponsorship digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mastercard Sponsorship has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Mastercard Sponsorship has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in MasterCard International: World Championship Soccer Sponsorship HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Mastercard Sponsorship has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study MasterCard International: World Championship Soccer Sponsorship - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses MasterCard International: World Championship Soccer Sponsorship | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MasterCard International: World Championship Soccer Sponsorship are -
Increasing silos among functional specialists
– The organizational structure of Mastercard Sponsorship is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Mastercard Sponsorship needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mastercard Sponsorship to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Mastercard Sponsorship has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Mastercard Sponsorship even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MasterCard International: World Championship Soccer Sponsorship, is just above the industry average. Mastercard Sponsorship needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study MasterCard International: World Championship Soccer Sponsorship that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case MasterCard International: World Championship Soccer Sponsorship can leverage the sales team experience to cultivate customer relationships as Mastercard Sponsorship is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, David J. Arnold, David Lane suggests that, Mastercard Sponsorship is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mastercard Sponsorship is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MasterCard International: World Championship Soccer Sponsorship can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As MasterCard International: World Championship Soccer Sponsorship HBR case study mentions - Mastercard Sponsorship takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the segment, Mastercard Sponsorship needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Mastercard Sponsorship, firm in the HBR case study MasterCard International: World Championship Soccer Sponsorship needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Mastercard Sponsorship has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Mastercard Sponsorship supply chain. Even after few cautionary changes mentioned in the HBR case study - MasterCard International: World Championship Soccer Sponsorship, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mastercard Sponsorship vulnerable to further global disruptions in South East Asia.
Opportunities MasterCard International: World Championship Soccer Sponsorship | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study MasterCard International: World Championship Soccer Sponsorship are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mastercard Sponsorship to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mastercard Sponsorship can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Mastercard Sponsorship can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. MasterCard International: World Championship Soccer Sponsorship suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Mastercard Sponsorship can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mastercard Sponsorship in the consumer business. Now Mastercard Sponsorship can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Mastercard Sponsorship can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mastercard Sponsorship to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Mastercard Sponsorship to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Mastercard Sponsorship has opened avenues for new revenue streams for the organization in the industry. This can help Mastercard Sponsorship to build a more holistic ecosystem as suggested in the MasterCard International: World Championship Soccer Sponsorship case study. Mastercard Sponsorship can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mastercard Sponsorship can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Mastercard Sponsorship can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mastercard Sponsorship in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Loyalty marketing
– Mastercard Sponsorship has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Mastercard Sponsorship to increase its market reach. Mastercard Sponsorship will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats MasterCard International: World Championship Soccer Sponsorship External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MasterCard International: World Championship Soccer Sponsorship are -
Technology acceleration in Forth Industrial Revolution
– Mastercard Sponsorship has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Mastercard Sponsorship needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mastercard Sponsorship can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study MasterCard International: World Championship Soccer Sponsorship .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mastercard Sponsorship in the Sales & Marketing sector and impact the bottomline of the organization.
Environmental challenges
– Mastercard Sponsorship needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Mastercard Sponsorship can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Mastercard Sponsorship needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Stagnating economy with rate increase
– Mastercard Sponsorship can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mastercard Sponsorship with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Mastercard Sponsorship is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mastercard Sponsorship needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Mastercard Sponsorship business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Mastercard Sponsorship
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Mastercard Sponsorship.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mastercard Sponsorship.
Weighted SWOT Analysis of MasterCard International: World Championship Soccer Sponsorship Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study MasterCard International: World Championship Soccer Sponsorship needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study MasterCard International: World Championship Soccer Sponsorship is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study MasterCard International: World Championship Soccer Sponsorship is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of MasterCard International: World Championship Soccer Sponsorship is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Mastercard Sponsorship needs to make to build a sustainable competitive advantage.
