Background
The idea of creating a partnership is getting increasingly more attractive to a range of organizations operating in the context of the global economy. Indeed, due to the need to develop a strong competitive advantage and expand in the target market acquiring new customers, an organization needs substantial support from another entrepreneurship. Even corporate giants form collaborations to attract a new audience and create product awareness after recent rebranding, as the case of Microsoft and National Football League (NFL) has shown. Despite the fact that the organizations are having significant troubles with the issues related to brand awareness, as well as the faults in technology, the partnership is likely to result in positive outcomes as soon as the PR issues are addressed.
Benefits and Disadvantages of Alliance
Benefits
Promotion
Although both brands became household names a while ago, it will be a sensible step to carry out a new promotion campaign that will shake the dust off of the companies’ marketing department. By using the devices created by the Microsoft Corporation, the members of the NFL will advertize the products to the football fans. Similarly, with a clever marketing campaign, the NFL organization will be able to attract the attention of Microsoft users to its products. Thus, the collaboration is likely to have a mutual positive effect on the companies’ PR processes.
Customer Satisfaction
The innovative solutions that Microsoft is able to deliver to its target audience are bound to increase customer satisfaction rates significantly. Specifically, the needs of fans will be met once the IT tools will provide them with an opportunity to experience the game “from the comfort of their living rooms” (Chansanchai, 2014). Thus, the NFL organization will be able to attract an increasingly larger fan base, therefore, expanding further into the target market.
As far as the Microsoft Organization is concerned, the chances that it will offer for both fans and coaches will make people appreciate its brand devices even more. The firm will provide its customers an opportunity to participate in the fantasy football (FF) more actively. For instance, it is expected that 74.7 people will engage in FF in 2016, which is 130% compared to the 2014 data (57 million participants) (Bregsler, 2015).
New Products
The cooperation between the organizations has also allowed MS to brand its new product known as HoloLens. Although immediately marked as a rip-off of Google Glass and Oculus, it proved to have its own unique flavor (O’Connor, 2015), and it is currently expected to generate a $150-profit by 2020 (Gaudiosi, 2015).
Although promoting its products in the same way is going to be rather problematic for NFL, the organization will still be capable of keeping the focus on some of its recent goods, such as clothes and sports inventory (T-shirts, helmets, and collectibles). As a result, it is quite possible that sales are going to increase for NFL as well. In fact, Microsoft’s global revenue has increased impressively since the excitement for HoloLens peaked (see Fig. 1).
Disadvantages
PR issues
Unfortunately, the cooperation between the companies has brought not only benefits to the parties involved but also significant problems. For instance, the members of the NFL seem to have a poor concept of Microsoft’s products as they often refer to the devices as iPads. Which is even worse, the announcers also refer to the company’s products a to the devices designed by Apple (Gaines, 2014).
Though NFL does not have as many issues in the Public Relations department at present, the lack of focus on the new products, including sportswear, is quite noticeable. As a result, the firm may face the threat of remaining unrecognized by new customers, even though the promotion process might return positive results with the old ones.
Technology
Microsoft has also been failing to meet the NFL standards, though obviously due to a string of misfortunes rather than poor service quality. For instance, the MS surface tablets used to display the score went off for 20 minutes during a match once (Rains, 2016).
Discussion
A closer look at the subject matter, however, will show that the effects that the collaboration between Microsoft and NFL has had on both organizations are going to be quite positive in the long run. First and most obvious, the fact that both organizations have gained a significant weight in the environment of the global economic community needs to be brought up.
In addition, the technology provided by the Microsoft Company helps not only players but also spectators. For instance, the people that come to watch the show can enjoy a much better view. As a result, the participants are likely to enjoy the show better and, therefore, are going to appreciate the technological advances that Microsoft offers to them. Consequently, they may become the company’s customers after they are introduced to the plethora of technological opportunities that the entrepreneurship has to offer them.
The process of attracting a new audience to the NFL products, though being more complicated, is bound to be successful as well. In a similar way, the firm will engage more people into watching football and, therefore, being interested in the corresponding sports products.
Analysis
To identify the current trends and locate the opportunities for Microsoft and NFL, one will have to consider the recent changes in the revenues retrieved by both organizations. As the chart below shows, Microsoft has been enjoying a rather consistent growth since its partnership with NFL began.
Similarly, the global sales of NFL have gone up after it formed a partnership with Microsoft (see Fig. 2). As the chart below suggests, there has been a consistent increase in the company’s total annual revenues from $8.35 billion to $10.58 billion. Which is even more peculiar, a sharp rise in the revenue streak that could be observed from 2013 to 2014 follows the beginning of the partnership between Microsoft and NFL.
The charts also make it quite clear that the increase in the revenues of both organizations amount can be tracked down to the point when the partnership was created. Based on the graphs provided above, one may assume that the cooperation between the organizations is likely to return positive outcomes for both companies. Nevertheless, it is essential to make sure that the PR and technology issues mentioned above should be acknowledged and addressed by both organizations. Otherwise, a sharp rise in the customer dissatisfaction rates is likely to trigger impressive losses for both firms.
Reference List
Bregsler, G. (2015). Nearly 75M people will play fantasy football this year. New York Post. Web.
Chansanchai, A. (2014). Microsoft and NFL add benefits on the field and in the living room. Microsoft. Web.
Gaines, C. (2014). Microsoft paid the NFL $400 million to use its tablets, but announcers are calling them iPads. Business Insider. Web.
Gaudiosi, J. (2015). How augmented reality and virtual reality will generate $150 billion in revenue by 2020. Fortune. Web.
Microsoft’s annual revenue worldwide, from FY 2002 to FY 2015 (in billion U.S. dollars. (2016). Web.
O’Connor, F. (2015). No Google Glass or Oculus Rift copycat, Microsoft’s HoloLens has its own ideas. PC World. Web.
Rains, B. (2016). Checking in with Microsoft’s $400 million NFL sponsorship at year three of five. Sport Techie. Web.
Total revenue of all National Football League teams from 2001 to 2014 (in billion U.S. dollars). (2015). Web.