The Gaelic Athletic Association and the Irish Rugby Football Union are two sporting associations that have established their respective names in the world of sports. These two organizations reside in Ireland, one of the smallest countries in Europe, and yet they have the edge to win over their European competitions. With recession affecting the changing environment, both organizations compete for the various resources each needed. This case study analysis allows the students to look into the business models of the Gaelic Athletic Association and Irish Rugby Football Union and how these models can influence their survival for the generations to come.
Peter McNamara; Olga Ryazanova; Fionn Collins; David Aherne
Harvard Business Review (W13332-PDF-ENG)
August 19, 2013
Case questions answered:
- Compare and contrast the business models for the two organizations, specifically including their customer value propositions, resources and capabilities, revenue and profit models.
- Given the strategic challenges and opportunities facing each organization, what components of the business model are not aligned to achieve success in the current environment? How should the business models for each organization be changed to address these misalignments?
- What are the ongoing source of differentiation and competitive advantage for each of the organizations after your proposed business model redesign?
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Gaelic Athletic Association and the Irish Rugby Football Union: Competing Business Models Case Answers
Compare and contrast the business models for the Gaelic Athletic Association and the Irish Rugby Football Union, specifically including their customer value propositions, resources and capabilities, revenue and profit models.
Both the Gaelic Athletic Association and the Irish Rugby Football Union have formed unique consumer value propositions; GAA’s business model is based on their historical key values, while the IRFU’s model is built around the appeal to its roots and culture.
The IRFU national and provincial teams’ successes have allowed them to give their audience an opportunity to see them in the Heineken Cup, Magners League, and internationally.
With the winning teams on their side, the hype revolving around them increased their popularity in Ireland. Players and coaches are being paid to cultivate an environment where the best athletes and coaches want to be a part of the Irish Rugby Football Union and draw in a community interested in watching the highest level of play.
To some extent, Ireland’s success relative to larger countries also provides the Irish population to pursue rugby as their sport of choice. The communal experience of being a fan and/or involved in the IRFU combined with teams’ successes strike a chord with fans and create an emotional attachment and value proposition.
For the Gaelic Athletic Association, its business model is deeply embedded in local rivalries, whether it be parish, county, or country-level, resulting in 2,600 clubs.
Since Gaelic games are an important part of both their culture and identity, the government also allows money for Gaelic-culture support. This is to allow young people to get to know more about Gaelic games and the existence of the games to be sustained.
Government funding also allows the Gaelic games to be immortalized and echoed through the different areas of the country or world since they would aim for wide exposure and reach.
Volunteerism also played a key role in this as it paved the way for investment in local communities. It also provides open access to games, exposing it to the kids who can and want to participate in it.
Both organizations have key resources and capabilities, as well. They both have their own set of superstars. The players’ names might not be popular across the world, but if you’re into sports, it is natural for teams and sports to have their sets of professional, talented, and experienced players.
Both organizations also have state-of-the-art or modern facilities to offer to their teams, “management, other partner organizations, and brand loyalty” (or sponsors).
The Gaelic Athletic Association embedded game development into their educational institutions, rooting local interest for maximum local exposure. This was also supported by promoting Gaelic games at sports grounds across the nation. The GAA owned a substantial property portfolio that allowed it to hold important regional matches worldwide, such as county and provincial finals.
Consequently, support for the games in the education sector was very strong. This forum was a vital engine in driving the Association, as it presented a huge pool of young players who the GAA could encourage to take up the sport.
Irish Rugby Football Union, on the other hand, focuses on player protection and capability development. They have coaches and officers responsible for the recruitment, development, and retention of players. There is also the “Six Nations” (England, France, Welsh, Ireland, Italy, and Scotland) competition run by an independent company.
For revenue and profit generation, GAA generates them through a “wide range of sponsorship, television rights, merchandise, ticket sales, concerts, and offering conference facilities.”
IRFU generates substantial commercial revenue through “sale of broadcasting rights, sponsorship/advertising and gate receipts surrounding the professional game, and to fund the delivery of recruitment and participation programs for children in schools and clubs around the country. These revenues were then reinvested into sustaining and growing professional and amateur rugby.”
Given the strategic challenges and opportunities facing each organization, what components of the business model are not aligned to achieve success in the current environment? How should the business models for each organization be changed to address these misalignments?
For IRFU, the construction of the Aviva Stadium affected all business model aspects. It can improve profit-generating ability and CVP, but it left millions of debt. Ticket bundle ideas were rejected by fans, decreasing the attendance of the audience.
Centralized contracting player management was also in place, but the retention of key players challenges their abilities and attention attraction of clubs.
Also, because it is a member of the Six Nations, it already has involvement in high-quality competitions and allows greater value appropriation. But with these advantages comes great cost as well, like, government pressure may lead to the TV rights deal renegotiation, which could greatly and potentially affect the income-generating aspect of the Irish Rugby Football Union.
It has also invested in local programs, patronizing local players over the foreign ones. There’s the presence of coach development and community rugby.
What are the ongoing source of differentiation and competitive advantage for each of the organizations after your proposed business model redesign?
Based on the financial statements of the Gaelic Athletic Association and Irish Rugby Football Union, they both have gained profit over the years presented. They also have enough resources and capabilities to meet their creditors’ current and long-term demands and continue to grow as time passes.
Both associations face the same challenges though they’re presented in different forms in terms of expansion, investment, professionalism, and government support. But of course, there is still some room for differences.
Under the customer value proposition aspect of their business models, both organizations pride themselves on their players and teams. The GAA is focused on serving the Irish community around the work and offering entertainment, leisure, and social support and development network. The Irish Rugby Football Union focuses on player localization. GAA gives off a sense of national uniqueness and team spirit while IRFU develops an international level of professionalism among players.
For resources and capabilities, GAA’s human resource development can benefit from internalization. They may consider getting some abroad-based high-level Gaelic Athletic Association players to play for their home teams.
Irish Rugby Football Union’s human resources are focused on the steady pool of young players in their locality to replace those old ones that might leave, tempted by high salaries abroad. They could also give room for development in the hiring process and internal politics.