tom30133f14 | Operations and Project Management in Today's Competitive Environment

Sports play a role in many different people’s lives. Soccer or Football depending on where you live, takes the cake as far as being the most popular sport in the world. Manchester United happen to be the world’s richest and most popular soccer team. Often criticized for their large amount of spending in order to acquire the world’s greatest talents in the sport, Manchester United has managed to win the most Premier League titles and 3 UEFA Champion’s League titles. Although, Manchester United has had a lot of success on the field, they have had even more when it comes to the business aspect.

Wall Street Valuation
From a financial standpoint, Wall Street has valued Manchester United as being the richest soccer club in the world. Mike Ozanian from Forbes states, “Wall Street now affords United an enterprise value of $3.6 billion. Math: market value ($3.05 billion) + long term debt ($613 million) – cash ($57 million).” This valuation is very impressive due to Manchester United having a poor season due to their shift in management after Sir Alex Ferguson retired last season.

Manchester United and Adidas:
Recently, Manchester United ended their partnership with Nike and moved on to Adidas. Mike Ozanian from Forbes tells us, “English soccer team Manchester United and German sportswear maker Adidas have agreed to the richest uniform deal in the history of sports. Adidas will pay $1.3 billion over 10 years to United, or $130 million a year, beginning with the 2015-16 season.” You would think that 1.3 billion is enough, right? Not for Manchester United. Mike Ozanian also states, “But the Adidas kit deal, coming comes along with the team’s $559 million, seven-year shirt deal with Chevrolet (also the richest in sports) means it will continue to have the cash flow to turn an operating profit and sign elite players.”

Capacity and Inventory:
Since Manchester United are very popular, there will be a huge demand as soon as the new Adidas uniforms roll out. However, until then Manchester United will still have a lot of the Nike uniforms available. Manchester United will have to decrease their capacity slowly and lower the price of the Nike uniforms as the end of the season approaches. This will result in a decrease of the Nike inventory due to more sales, which is what they want as soon as they can start selling the new and highly anticipated Adidas uniforms.

The Competition:
Manchester United may have the lead but other teams are getting closer. The two most popular teams in Spain would be Real Madrid and FC Barcelona. Forbes put a value of 3.44 billion for Real Madrid and a 3.22 billion valuation for FC Barcelona. Another advantage for these clubs is that they have the two best players in the world, Cristiano Ronaldo (Real Madrid) and Lionel Messi (FC Barcelona).

Questions:

Do you think that sports teams are nothing more than a business?
What are some good ways to sell inventory that consists of jerseys with decreasing demand?
Do you agree with Manchester United’s valuation?
Do you think it is fair to fans to constantly release new jerseys, which causes them to keep repurchasing?

Sources:

Valuations:
http://www.forbes.com/sites/mikeozanian/2014/07/15/wall-street-says-manchester-united-most-valuable-team-in-world-after-adidas-deal/

http://www.forbes.com/sites/mikeozanian/2014/07/14/manchester-united-and-adidas-agree-to-richest-uniform-deal-ever-in-sports/

Images:
http://img.bleacherreport.net/img/images/photos/003/038/545/hi-res-afe91e10675aad43b3dcf4438437a283_crop_north.jpg?w=630&h=420&q=75

http://i3.mirror.co.uk/incoming/article3823301.ece/alternates/s2197/Manchester-United-new-Kit.png

The iPad Mini could soon be obsolete due to the new and exciting iPhone 6 plus. Apple users have been waiting for a phone that could match the size of the current Androids in the market. However, the arrival of the iPhone 6 plus has impacted the future of the iPad mini. Although, Apple has just released the new and improved iPad mini 3, this does not mean that there will one day be a fourth.

Sales
Apple is in the business of making money just like everyone else. According to Motley Fool of Nasdaq.com, “Apple’s iPad sales have suddenly declined in the past two quarters after phenomenal growth in the first four years of the product category’s life.” Customers were originally purchasing the iPad due to its large screen size and favorable portability versus a laptop. Since phones have increased in screen size, customers have been purchasing these phones and leaving their iPads at home. The fact that iPad sales have declined in the past two quarters is something that Apple will take note of and forecast for in the future.

Product Life Cycle
In my opinion, I would say that the iPad mini is just entering the decline stage of the product life cycle. New iPad minis are lacking product differentiation. Apple has released the iPad Air and I strongly believe that this will be the future for Apple as far as tablet computing goes. Additionally, iPad sales have declined and releasing an iPhone 6 plus close to the size of an iPad mini will only discourage customers to purchase the iPad mini since the iPhone 6 plus has comparable size. The iPad Air is a much larger tablet than the iPad Mini and this gives it a huge size advantage over the iPhone 6 plus.

Performance
The iPhone 6 plus actually has a faster A8 processing chip while the iPad mini 3 has an A7 processing chip. This means that the iPhone 6 plus will run faster and more efficient. The iPhone 6 plus is also equipped with the M8 motion coprocessor, which is much superior to the M7 motion coprocessor of the iPad mini 3. The iPhone 6 plus has to take the edge as far as performance goes due to its upgraded specifications.

Operations
Since sales are declining for iPads, Apple will have to adjust their inventory and forecasts for the future to make sure they are not making too many. We learned in class that having excess product and not enough demand is a huge negative for a company. Finally, Apple will have to make the decision on whether or not to discontinue the iPad mini depending on what stage of the product life cycle it is in.

Some questions to think about: