MTI unveils cricket business strategy model

MTI Consulting has conceptualised, researched and published MTI's 11C Cricket Business Strategy Model as part of their thought leadership initiatives.

The model provides a strategic planning framework for Cricket as a business and is ideally suited for Cricket Authorities around the world.

Hilmy Cader

The development process used a blend of sports business models and best practices in business strategy models, benefiting from strategy work carried out by MTI in over 40 countries. Last year, MTI along with UK's Intangible Business, carried out a pioneering study to financially value the eight IPL Franchisees.

In unveiling MTI's 11C Cricket Business Model, the CEO of MTI Consulting explained the rationale for a strategy model for the 'World's Hottest Sport' as described by Forbes.

The business of cricket is estimated at US$ four Billion globally, growing at 15% per annum and could be easily classified as a 'FMCG' (fast moving consumer good). Not only does it touch the hearts and minds of over two billion consumers worldwide, it accounts for a significant proportion of consumer television and web surfing time as well as the enormous amount of casual consumer chat!

It is argued that this form of unscripted entertainment is capturing a share from other forms of leisure and entertainment.

It is now opening new frontiers, from Afghanistan to Argentina, from Canada to China and from Namibia to the Netherlands.

The innovation curve has just begun, with the likes of IPL Twenty20 series, and it is expected to capture an increased share of the consumers and the advertisers' wallet.

Many in the industry still see it as a competitive sport; consumers see it as a form of entertainment; cricketers see it as a viable career; above all it is among the most competitive and dynamic industries, that rivals many conventional industries.

Given the many facets of the cricket industry (players, spectators, TV viewers, sponsors, advertisers and boards), it requires a holistic business strategy framework, that can benefit from proven strategy formulation models, yet does not fail to capture the essence of cricket.

MTI's 11C Cricket Business Model has been developed as a framework (with relevant tools) to help Cricket Authorities to analyse, strategise and realise greater heights for the Cricket as a business.

The strategy formulation process starts by analyzing Cricket's performance (in a given country or territory) based on the end results by which the success of the industry must be measured. In the case of cricket, this includes three equally important success criteria.

The consumer has a finite amount of time, discretionary income (and passion) that different types of leisure activities compete for. Some of these could be between sports and some from other forms of entertainment. For instance, TV ratings and tickets sales of Bollywood movies dropped during the IPL.

It could also be between different types of sports, for instance the decline of cricket in the Caribbean attributed to the intensified marketing of Baseball and Basketball in the Americas.

Cricket as a product needs to be constantly researched and evaluated if it is providing value to consumers and if competitive activities and sports are making inroads.

Based on these findings, like in conventional industries, the product (in some cases the brand) needs to be fine-tuned, this is an on-going process.

As in the case of West Indies Cricket, it may take many years to see the consumer impact on the game, however once this happens it will take as many more years to reverse the trend.

So the key is on-going research and feeling the pulse of the consumer who consumes this product on a daily basis.

Given that a significant part of cricket consumed is still between countries (unlike Soccer), the 'production' of cricket requires the collaboration of two or more countries, hence this calls for the need to factor in all the bi-lateral and multilateral negotiations between boards at this stage of the process. Like in soccer, with the advent of the likes of IPL, the type of collaborations will change, and this needs to be monitored and factored into the strategy formulation process.

There is bound to be competition within different formats of cricket, competing for the consumer's cricket dollar.

The modules on core formats and consumption will help determine the demand for cricketers _ based on the demand for cricket, very much like a typical manpower planning exercise in a business.

Like in the movie industry, the stars (the cricketers) hold the key to 'cricket' entertaining, audiences, which determines the financial health of the industry.

The module on Cricketers will intensively focus on the total development and welfare of the cricketers, applying relevant human resources management principles.

Given that Cricket has no equity investors in the conventional sense, it has to use the power of its brand (this includes that of the country, the authorities, the players, the venue and the cause) to generate capital, the threshold for which substantially increased.

At this stage of the strategy formulation process, every opportunity to en-cash the power of cricket is pursued, in addition to the main revenue streams of television rights and sponsorships.

A battery of financial analytics will be run at this stage that measures the power of 'Brand Cricket' and how it is translated to the bottom-line.

Cricket Authorities can also wear the hat of an Investment Banker and ask the question 'What do we need to invest to win the World Cup (Champions) and achieve a quantum increase in revenue (Currency) and what will be the ROI for instance a Cricket Bond or other financial instruments that can be traded in capital markets.

The emergence of the Virtual Cricket Stock Exchange of India could well be the fore runner.

Finally, the other ten components of the model need to be proactively and interactively managed, not just administered.

The organizations responsible for managing cricket need to align their structures, competencies and processes based on findings from the other 10Cs.

Here there is a case for cross-industry learnings, while recognition of technical specialists with hard core cricket experience.