Imagine that the Red Bull company acquires an English Premier League football club. What would be the respective benefits to the parties? Which (enterprise) enhances its distinctive assets and capabilities more?
What will be an ideal response?
Red Bull has already demonstrated benefits from owning the successful Red Bull Formula One
racing team and other sporting clubs including football. The main benefit to Red Bull is publicity
that has created a much valued and distinctive external image, leading ultimately to enhanced levels
of consumption of its core product. The target club would acquire endorsement and funding to
develop its facilities, acquire better players and so on. In principle, both enterprises stand to gain
enhanced resources and capabilities. If the club should fail competitively, it would not enhance Red
Bull’s image. If it succeeds, its resource base is proportionately enhanced much more than Red
Bull’s since the latter already has a successful portfolio (i.e. the marginal returns to Red Bull of each
additional sponsorship deal seem likely to decline). However, if the target is of much higher standing
than existing portfolio members, then the benefits would be synergistic and mutual. Given Red
Bull’s long term engagement with sports enterprises, it seems fair to speculate that it would consider
any such opportunity. For example, if Ferrari F1 was open to sponsorship, would Red Bull continue
to sponsor either or both Red Bull Racing and Torro Rosso?
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