Brazil’s Bid’s to Host the 2014 FIFA World Cup Essay

Introduction

Mega-events that are convened for a short duration, such as the Commonwealth Games, Rugby World Cup, World Expos or the FIFA World Cup (Rogerson 2009), are increasingly being recognized as having the potential to make a substantial contribution to contemporary society, not only through the long standing belief associated with healthy living, an active lifestyle and regular physical activity, but also through sports contribution to the social, cultural and economic development of the hosting city or country (Emery 2002).

The FIFA World Cup, in particular, has become a top agenda for successive governments around the world because of its potential to act as a significant catalyst for change by not only acting as a springboard for economic, political and social development, but also strengthening the global image and positioning of the host (Pellegrino & Hancock 2010). The present bidding proposal aims to justify the bid for Brazil to host the 2014 FIFA World Cup, by undertaking a critical analysis of the country’s strengths and weaknesses in hosting the mega-event.

Methodology

The present bidding report undertakes a critical review and analyses of existent literature, including peer-reviewed articles, fact sheets, country reports and official FIFA webpage, to achieve the set objective – justifying the bid for Brazil to host the 2014 World Cup, four years after the mega-event was successfully hosted in South Africa in 2010.

Consequently, the secondary data from the mentioned source materials has been evaluated through content analysis, which is basically a methodology that is applied to enable the identification and summarization of important content in a more scientific and systematic manner (Rabinovich & Cheon 2011).

The justification for using secondary data rests on the premises that: (1) it is economic because someone else has already collected the data, (2) bears a comprehensive and in-depth breadth, and (3) is often informed by expertise and professionalism that may be absent in research projects of small size (Boslaugh 2007).

Background Information

The FIFA World Cup

Perceived by many as the most popular mega-event of all times, the FIFA World Cup is an international quadrennial sporting competition that continues to build its global popularity and appeal, even in the face of stiff competition from other global sporting events and audience fragmentation.

The sport’s global governing body, known as the Fédération Internationale de Football Association (FIFA), has the exclusive mandate and rights to administrate in all matters regarding the World Cup (Futures Sport Entertainment 2010), not mentioning that its executive committee has the final say on which country is best suited to host the event after a careful and in-depth analysis of the many bids that are put across by countries as they seek to be given the exclusive rights to host the event (Briedenhann 2011).

The first World Cup competition took place in 1930 while the most recent tournament was hosted by South Africa in 2010, with industry analysts suggesting that the month-long event attracted a cumulative viewership of 8 billion people, up by 2 percent on figures for 2006 (Futures Sport Entertainment 2010).

The FIFA World Cup is considered a mega-event as it shares the following characteristics: 1) A clear-cut starting and finishing point, 2) fixed, absolute deadlines, 3) one-off organization, normally superimposed on other work, 4) large risks, and; 5) immense opportunities (Emery 2002).

Bidding Country: Brazil

Available information demonstrates that “…Brazil, officially denominated the Federative Republic of Brazil (Brasil or Republica Federativa do Brasil), is the fifth-largest country (with a total area of 8,514,877 Km2) and the fifth most populous country with an estimated population of 190 million inhabitants” (FIFA 2007, p. 14).

The capital city of the country is Brasilia and the official language is Portuguese, although a sizeable number of the population concentrated in the metropolitan areas of state capitals has a working knowledge of the English language. The country not only takes pride in its mega stadiums capable of successfully staging a world-class event of the nature and scope of the FIFA World Cup, but also has in its staple some of the world-renowned mega cities, including Sao Paulo, Rio de Janeiro, Salvador and Belo Horizonte, among others.

After successfully hosting the World Cup in 1950 despite the challenges presented by the aftermath of the Second World War, Brazil is only too eager to be given the opportunity to host the prestigious sporting event once again and enter into the ranks of countries such as Germany, France, Mexico and Italy, which have hosted the World Cup twice (Ernst & Young Terco 2011).

Analysis of the Internal Strengths & Weaknesses of the FIFA World Cup

The main purpose of this section is to elucidate the internal strengths and weaknesses of the FIFA World Cup event which, in the view of the Brazil bidding board, could substantially influence the trajectory and outcome of the bidding process, especially in relation to the comprehensive and focused attempt by the Brazilian government and other relevant stakeholders to bid for the rights to host the 2014 FIFA World Cup.

Strengths

The advantages of hosting the World Cup are immeasurable; however, it is obvious that an mega-event of the scope and context of the FIFA World Cup will not only provide opportunities for sports fans and tourists to have memorable experiences, but also for cities in Brazil to build their social capital and expand their infrastructural networks (Hede & Kellett 2007), and for the Brazilian government to induce new income and opportunities in the country’s economic outlook through tourism and business activities (FIFA 2007).

If the 2010 FIFA World Cup in South Africa was able to draw a cumulative audience of 8 billion people (Futures Sport Entertainment 2010), it is unimaginable how the image value and reputation of the Brazil and its cities will be enhanced if only the country is lucky to win the rights to host the 2014 World Cup.

Furthermore, the hosting of the World Cup in Brazil will bring massive revenues to the central and local governments in terms of ticket sales, television rights, corporate sponsorships, value-in-kind contributions as well as tourism marketing (FIFA 2007; Ernst & Young Terco 2011).

Weaknesses

There exists a multiplicity of challenges that are intrinsically related to the hosting of mega-events such as the FIFA World Cup and the Olympics. One of the mainstream weaknesses of hosting the FIFA World Cup is that it is associated with huge public spending because the hosting nation must develop the facilities and infrastructure needed to make it a success (Kaplanidou & Karadakis 2010).

Brazil, for instance, plans to spend in excess of R$ 105 billion in facilities and infrastructure projects because the cities that could be used to host the event need development of not only state-of-the-art arenas, but also the logistics to accommodate visitors and develop easy access to critical points of the participating cities (FIFA 2007; Ernst & Young Terco 2011). A huge public spending is also earmarked for the construction of new amenities as well as modernizing the already existing ones, including airports, hotels and the transit system.

Contingency plans also need to be put in place to deal with adverse environmental concerns attributable to the tourists travel, their food and consumption dynamics, the massive noise and waste generated by the presence of many visitors in the selected hosting cities (Collins et al 2007). Security arrangements may also present some difficulties to the organizing committee as witnessed in the recently concluded 2012 London Olympics.

External Analysis of the Bidding Country

The main purpose in this section is to employ some of the well-known strategic planning and decision making tools, such as PESTLE, SWOT and Porter’s 5 Force analyses, to not only critically assess the viability of Brazil in her attempt to bid for the rights to hold the FIFA 2014 World Cup, but also to evaluate the country’s strong and weak areas as it places this bidding proposal for consideration.

PESTLE Analysis

The PESTLE analysis encompasses the political, economic, social, technological, legal and environmental factors that Brazil wants to present to FIFA’s executive committee to demonstrate the country’s competitive position to host the upcoming FIFA World Cup in 2014

Political

Available information demonstrates that “…Brazil’s commitment to host the 2014 FIFA World Cup has been demonstrated at all levels of government, by the bid LOC and by the public as a whole” (FIFA 2007, p 8). The current government is more than willing to spend huge amounts of money (estimated at around R$ 29. 6 billion) to build new stadiums and renovate the existing ones, provide excellent training facilities for the teams, initiate a modern air and urban transport infrastructure that would comfortably meet the demands of the 2014 FIFA World Cup, as well as improve on the already existing hotel infrastructure to meet visitor demands (FIFA 2007; Ernst & Young Terco 2007).

According to a report released by the Bertelsmann Stiftung Institute, “…domestic approval rates associated with government policies have greatly increased in recent years, and international observers too have increasingly praised the government’s policies” (Bertelsmann Stiftung Transformation Index 2012, p. 3).

What’s more, Brazil has slowly turned herself into a leading democracy in Latin America, not mentioning that that the just concluded presidency of Luiz Inacio Lula da Silva, who is a passionate football fan, has been instrumental in turning Brazil into a market economy.

Economic

Not only did Brazil rank the world’s fifth largest economy by the end of 2010, but recent macroeconomic statistics demonstrate that “…it performed better than many other economies in the face of the [recent] global economic crisis” (Bertelsmann Stiftung Transformation Index 2012, p. 2). Brazil’s GDP is the highest in Latin America, growing at an annual rate of 7.5% and demonstrating signs of further growth due to a large and mature mining, oil, agricultural, technology, manufacturing and service-oriented sectors (Ernst & Young Terco 2011).

However, the country’s economic analysts need to make concerted attempts to address the prevailing income inequality among the Brazilians, which is thought to be one of the world’s highest as noted in the transformation index. The noted income inequalities may jeopardize efforts made by the country towards ensuring that local populations are factored in as an important revenue entity through ticket sales.

Social

Football is embedded in the daily lives of Brazilians, implying that the country has the capacity to attract huge audiences due to its football history as well as its many football legends. Indeed, the public has a huge enthusiasm for football (FIFA 2007).

Brazil is currently grappling with the problem of lack of safety and security in certain parts of the country due to gun and drug related crimes, but the most important factor is that the government has the needed material and non-material resources as well as the technical know-how to improve the security situation before the commensurate date (FIFA 2007).

Additionally, the country has been on the spotlight due to media reports that her security machinery constantly engages in numerous human rights abuses such as extrajudicial killings, employment of excessive force, unwarranted beatings, abuse, and persecution of prisoners (Bertelsmann Stiftung Transformation Index 2012).

Technology

Brazil is at the pinnacle of the technology revolution in Latin America. Not only does the country prides itself as among the first in the region to lay down an fiber optic cable that has dramatically reduced internet costs while guaranteeing efficient and reliable broadband services (Ernst & Young Terco 2011), but it also has excellent media and telecommunication facilities that could be used by world reporters and other audiences to send and/or receive news and stream live events of the competition (FIFA 2007).

It is imperative to note that greater exploitation of these essential technology assets is not only going to substantially benefit the hosting of the World Cup in different Brazilian cities separated by time and space, especially in relation to enhanced accessibility, effective communications and cost-friendly marketing initiatives, but they will work in tandem to curtail operational costs, improve the quality of life of the visitors during the entire hosting period, as well as trigger more innovative and creative conceptions (Leonardsen 2007).

Legal

Although the legal system in Brazil has been a subject of scientific inquiry due to issues related to corruption and inefficient delivery of justice (Bertelsmann Stiftung Transformation Index 2012), the democratic space recently enjoyed in the country has made it possible for the legal system to become increasingly responsive to the needs and expectations of people.

Nowadays, not only is it becoming increasingly difficult for business people to bribe a judicial officer or corrupt a court of law with the view to get preferential treatment, but the business community is now required by law to comply with various international legal statutes such as the equal pay act, sex discrimination act, health and safety at work act, and race relations act (Padovano & Bertacchini n.d.).

Additionally, the country has put in place effective and efficient dispute resolution mechanisms to ensure that business misunderstandings do not necessary result in resource-sucking court battles (Ernst & Young Terco 2011).

Environmental

Environmental concerns are critical to the successful hosting of a mega-event, and Brazil seems to be in the driver’s seat here due to its largely tropical weather condition and world-class sunny beaches that are clearly bound to provide more impetus for tourists to visit the country and sample its many tourist attractions and destinations.

However, event planners should come up with contingency plans to ensure the adverse effects of increased human settlement in some cities within Brazil are successful dealt with (Bertelsmann Stiftung Transformation Index 2012).

SWOT Analysis

This section purposes to employ the SWOT analytical and decision-making tool to evaluate Brazil’s chances to successfully bid and host the 2014 FIFA World Cup. Extant literature demonstrates that the “…SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture” (Dharmaraj et al 2010, p. 68). The main results of the SWOT analysis for Brazil are presented in the table below

Table 1: SWOT Analysis for the Bidding Country

Porter’s Five Forces Analysis

Available information demonstrates that the Porter’s 5 Forces model is the most outstanding analytical tool employed in management sciences to assess the nature and scope of competition in any given industry by employing the following variables: ‘threat of market entry by new entrants; threat of alternatives; bargaining power of buyers; bargaining power of suppliers, as well as the level of rivalry between existing competitors (Henry 2008). This section undertakes a critical analysis of the competitive external environment

The bidding committee spearheading Brazil’s bid to be given the hosting rights for the 2014 FIFA World Cup is aware of threats posed by other countries also competing to be granted the rights to host the event, but is relying on the core strengths of the country as analyzed in the table above.

To be successful in its bid, therefore, the committee must actively develop the capacity to not only anticipate the competitive moves made by other candidate countries, but also be aware of the probability of the having to battle it out with other new entrants for the rights to host the month-long sporting event.

Additionally, the country needs to play its cards carefully knowing that there exists intense rivalry between countries that would want to use the 2014 FIFA World Cup as a springboard to socioeconomic, infrastructural and tourism development and hence may want to use its bargaining power (e.g., strong GDP, good amenities, big population, good stadiums and infrastructure, etc) to demonstrate that it is indeed better placed to host the upcoming soccer event.

A Critical Review of Key Success Factors for the Event

Brazil demonstrates numerous success factors in its bid to host the 2014 FIFA World Cup, but the most relevant ones include:

• Availability of world-class stadiums that only require minimum renovation; excellent hotel facilities and infrastructure that can accommodate a large influx of visitors;
• A large population of almost 200 million people, most of who are great enthusiasts of football;
• Prior exposure of hosting the FIFA World Cup in 1950;
• Immense support from government, especially in its promise to fund the event to the tune of R$ 105 billion on facilities and infrastructure alone numerous cities located across the country;
• A great tropical environment that will definitely encourage more visits by tourists.

It is impossible to analyze these success factors individually due to limited space. However, extant literature demonstrates the importance of the hosting country to have excellent stadiums, infrastructure and facilities to accommodate the large number of visitors during the event (Padovano & Bertacchini n.d; Westerbeek 2002).

Brazil has 14 world-class stadiums and plans to build four new ones before 2014 (FIFA 2007), not mentioning that it has several well developed cities (such as Sao Paulo, Rio de Janeiro, Salvador and Belo Horizonte) that could be used as the various hearts of the World Cup (Ernst & Young Terco 2011). These cities are interlinked with an excellent transport system that only needs very minor improvements to be able to meet the challenges presented by hosting the competition.

The political class has put its weight in ensuring that Brazil succeeds to host a superb World Cup should it be allowed the opportunity to do so (Bertelsmann Stiftung Transformation Index 2012), not mentioning that a population of nearly 200 million citizens may actually become active consumers of the World Cup due to their great and unparalleled love for football (Padovano & Bertacchini n.d.).

An Analysis of Strategic Options Available to Ensure Successful Hosting

This analysis is premised on addressing the SWOT issues identified in previous sections of the proposal. To ensure successful hosting of the World Cup, Brazil may want to consider doubling its security personnel before 2014 to provide adequate security to crime hotspots as well as event venues.

Training of more police officers may be a costly affair for the country (Padovano & Bertacchini n.d.; Vinton 2011), hence Brazil may want to borrow a leaf from the London 2012 Olympics organizers and recruit volunteers as well as security professionals from private firms to ensure adequate security is guaranteed.

Owing to a lack of strong corporate support (FIFA 2007), the government and other interested parties may want to develop programs and strategies that may lead to stronger and more fruitful public-private partnerships, especially in sponsoring sports events. This option is strategic in that it will not only ensure that the private sector chips in to fund the event, but will also raise the standards of the venues and other facilities due to easy access to financial resources.

The government, on its part, needs to adopt stringent and effective strategies aimed at addressing the huge income and social disparities that characterize Brazil’s population. This option, according to experts, will ensure that more Brazilians will be able to participate in the World Cup and contribute to increased revenue arising from ticket sales and engagement in other Word Cup-related activities (Pellegrino & Hancock 2010; Vinton 2011).

Lastly, the education system may contribute towards the elimination of language barriers as the country prepares to host the event by designing and implementing an education policy that will ensure students in high school, colleges and universities are exposed to elementary English lessons.

Conclusions & Justifications of the Event Bid

From the different analyses presented in this bidding proposal, it is clear that Brazil enjoys distinct advantages over other competitors and therefore should be accorded the opportunity to host the 2014 FIFA World Cup.

As suggested elsewhere, availability of world class stadiums and cities, excellent hotel facilities and infrastructure, a big soccer-loving population, strong economic growth as demonstrated by the recent GDP indicator, as well as immense support from the government of the day, provide the needed justifications for Brazil to be granted the rights to host upcoming FIFA soccer competition.

Of course there are several challenges that Brazil needs to surmount, especially in the provision of adequate security, straitening it human rights record and addressing social inequality. However, the country has the needed knowhow and resources to address these issues before the start of the competition.

Additionally, no other competing nation can surpass Brazil’s strong economic outlook going into the future, implying that the country has the potential to successfully deal with the threat posed by the ongoing financial problems in Europe and America. Consequently, as demonstrated by Shakira’s popular theme song that 2010 was Africa “time to host the World Cup”, 2014 should be time for Brazil to do the same (Vinton 2010).

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