3 International Business Lessons for Sports Leagues

Posted on June 29, 2016

3 International Business Lessons for Sports Leagues

3 International Business Lessons for Sports Leagues

By Susan Salzbrenner, Senior Consultant and Erik Dobos, Senior Global Account Manager, Aperian Global

Sport has lent its vocabulary and metaphors to the business world for decades, whether it is to describe a winning mentality or the consistent traits of a champion. We often compare the characteristics of a successful athlete, such as hard work, discipline, learning from failure to that of successful business leaders. But what can the sports industry adopt from business? How can the sports industry benefit from lessons learned by multinational corporations as they expand across the globe?

With the professionalization and globalization of the sports industry in full swing, sports leagues and professional clubs are reaching across borders to expand their brand reach globally, as well as recruit the best international talent. By measures of global mobility, the soccer industry is the most globalized industry in the world, with almost 50% of all professional soccer players having experienced an international migration during their active careers. During the last soccer World Cup in Brazil 2014, more than ⅔ of the national team players played for a country different than their nationality (PEW Research Center, 2014).

Recently, the National Football League (NFL) has taken games overseas to the UK in an effort to expand its brand to new markets, while the National Basketball Association (NBA) is well on its way to hitting its goal of raising ⅓ of all sales contribution from outside the U.S. Its efforts to penetrate foreign markets with programs such as “Basketball without Borders”, “Global Games”, and using its more than 100 international NBA stars for global branding purposes are successful examples of the NBA’s internationalization strategies.

While professional sports are now beginning to address the needs and demands of a global target audience, global private business organizations have played this game a while longer.

What lessons and advice can multinational corporations share with sports leagues?

(1) Adopt a global leadership style

Developing local leaders and executives in relevant regions and providing them with a clear career path has proven to be a vital strategy for long-term success in a foreign market. Deploying home-proven talent life cycles to markets like India, Brazil, and China can be challenging without the local buy-in, knowledge, and network. By 2025, nearly half of the world’s companies that earn more than $1 billion annually will have headquarters in developing nations. How can sports leagues benefit from this shifting focus location?

In order for sports leagues and professional clubs to succeed in a new international market, leaders will have to deploy the skills and strategies to recruit, engage and retain a local workforce. Both local and headquarters employees will need to deal with a certain amount of ambiguity while reaching strategic and operational conclusions across cultures. The best in business are known to invite the unexpected and shift their communication and leadership styles depending on local norms and values (Gundling, Cvitkovich & Caldwell, Leading Across New Borders, 2015). Sports leaders would do well to emulate these global leadership skills in order to succeed in new markets.

SCOPE

(2) Think global, act locally

The emerging and existing middle classes in nations like China, Indonesia, Brazil, and India are larger than that of Europe. For international export successes like the NBA, the Champions League, or the Premier League, these markets represent a greater purchasing power among exponentially increasing numbers of people.

Without a localized marketing strategy that fits the needs and reality of the fans, sports clubs and leagues will leave a huge market share on the table. Successful multinational organizations have demonstrated that local partners are vital in achieving the balance of representing a global brand while localizing the message and meaning. Every country has strong lifelong affiliations with a certain sports culture, whether it is cricket in India, rugby in New Zealand and South Africa, soccer in Brazil, or handball in Denmark. Introducing a new sport and its associated sports culture to a local market requires a thorough analysis of the white spaces in this particular region, as well as local sports traditions and cultural values.

The Danish sports brand Hummel has a vision to “Change the World through Sport”. When FIFA approved soccer players to wear a religious head covering in 2014, the Danish brand began a collaboration with the Afghanistan Football Federation to design national team jersey that would include a hijab jersey for the female soccer players. They carefully studied the Islamic laws around observing hijab while designing a jersey that represented both the Afghan heritage and the Hummel brand. As a local advisor and partner, Hummel asked Khalida Popal, former Afghan women’s soccer captain, to provide input and feedback during the design process. [Read more here]

Sports culture is deeply rooted in a country’s traditions and cultural heritage. A well-defined affiliation like this can only be found in very few corporate brands around the world. It, therefore, requires a long-term perspective and prolonged resources to introduce a new sport or brand (for example, American football into soccer-crazy England). Because sport can be such a fundamental aspect of a cultural identity, the importance of achieving a global mindset in the sports industry is even greater than in other international businesses. A high level of cultural competency is a must when global growth is part of the business development strategy and long-term sustainability is the goal.

Another interesting example of using local partners and communities is the sports apparel brand Li Ning. The Chinese brand contracted Dwyane Wade, a U.S. American NBA basketball icon, to endorse and market its shoes to the large North American market. It  introduced a limited-edition, concept line “I am Dragon,” reflecting the brand’s Chinese heritage, which tapped into the huge community of sneaker collectors all around the world.

(3) Leverage diversity

Multinational organizations are increasingly focusing their efforts on leveraging a diverse workforce to remain competitive, innovative and the best in their fields. Research has consistently shown that inclusive organizations outperform more homogeneous organizations when leadership supports such an environment (Adler, 1997).

To increase their global market share and brand reach, sports clubs and leagues need to represent the diversity of their fans and the fans’ idols (the players) in all parts of their organization. Only when you understand the local culture and what the sport means to it can you deliver the most suitable products or services to that target group.

An affiliation or connection to a sports team develops quite early in the life of a fan and future customer. Developing the next generation of fans may, therefore, require a long-term approach that involves community outreach, social responsibility projects, and targeted education about the sport and its rules.

Top-ranked diversity leaders use the input of local focus groups in key markets to gather local knowledge that helps them design products or events that fit the need of those customers. Reaching out to communities that are underserved or less tied to the local sports culture (e.g. immigrants) can be one way to increase brand awareness and market share.

Major League Soccer (MLS) used the under served U.S. soccer market to meet the demands for a professional league, and has been demonstrating fast growth in stadium attendance, TV ratings, and media coverage. Its point of differentiation to bigger, more established foreign soccer leagues was the ability to offer local, in-stadium experience. At the same time, MLS realized that it cannot compete for attention from the basketball or baseball fan. Instead it focuses its long-term strategy on “building and growing a long-term commitment [in a separate and distant soccer market] with so that ultimately, X number of years from now, our fan base will be much larger than it is today,” as Commissioner Don Garber noted. [Inc. Interview with Don Garber, 2014] 

In Summary

In order to focus on a diverse audience and reach billions of people around the world, sports management and leadership need to shift their mindsets and behaviors to allow a multitude of perspectives to be heard and considered. Without global leadership skills and clever, innovative international market strategies, international sports clubs and leagues will always remain in second or third place behind the local fan favorites.
 
About The Authors

Susan_Salzbrenner_compSusan Salzbrenner is a Senior Consultant at Aperian Global and founder & CEO of Fit Across Cultures. She supports teams, professional athletes, and (future) global leaders to navigate across cultures and careers. 
Connect with Susan on LinkedIn.

 


ErikD--compErik Dobos is a Senior Global Account Manager at Aperian Global. Erik partners with clients to identify, develop, and implement customized learning solutions to address global talent development challenges and support organizational strategies.

Connect with Erik on LinkedIn.

 

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