Executive Summary

The report mainly focused on analyzing the key factors that promote the success of the Homeless World Cup project based on the business model. Different enterprises have different business models to follow. The business model describes the mechanism of how an organization creates, delivers, and captures values.

This report listed some key factors that bring the hosting of the Homeless World Cup. It is found that partnership is very critical to host the large-scale football race. The partnership means establishing a good cooperation relationship with other business companies to obtain more support including the material and financial donations to ensure the smooth implementation of the project. As was indicated in the case, Nike provides huge funds for support in the Homeless World Cup project.

The continuous support for Nike to involve in the project is a powerful guarantee to host the event sustainably. It is also found that there are some unbeneficial factors that inhibited the growth of the project. Due to that, the homeless players come from different countries around the world, there exists a language and Visa barrier when exchanging the players to other countries.

In terms of the associated risks, the sponsors like Nike may interrupt their investment in the project when they found that the result is not satisfactory and the sales do not increase significantly. It is also found that there may be a legal risk because of the imperfect legal system about the Homeless World Cup project.

In order to reduce the risks, it is recommended that the organization should implement the risk management strategy to effectively reduce these risks and enhance the performance of the Homeless World Cup project so as to attract the sponsors like Nike to continuously involve in the project.

Introduction

The organizer of the Homeless World Cup is a social enterprise that hopes to use the power of football to inspire homeless people to change their lives. The company works with 70 national partners to develop grassroots soccer programs and other support around the world. There will also be an annual football league to bring homeless teams together from different countries and regions of the world to celebrate the result of the project. The first football league was held in 2003 and has grown ever since.

Currently, the social enterprise is primarily responsible for coordinating the work of partners in 70 countries, providing support and guidance in football and management skills, and assisting in the construction and development of sustainable projects aimed at positively impacting homeless and socially excluded groups around the world.

This report will first discuss the key factors that explain the growth of the Homeless World Cup based on the business model. It also analyzes the likely factors that would further accelerate the growth of the project. Following this, it will analyze the current factors and likely factors that inhibited the growth of the event. Then, it will discuss the benefits for Nike to partner with the organization that holds the Homeless World Cup as well as the potential problems and associated risks. Last but not least, it will give a strategy suggestion to promote the sustainable involvement of Nike in this project.

Framework for the case analysis

Key factors to explain the growth of the Homeless World Cup

Huge value for the event itself

For a successful business model, the product itself can play a key role in the final success (Sommerrock 2010). In terms of the event of the case, the main purpose is to solve the social issue that many people are homeless. The United Nations estimated that there are at least 100 million homeless people in the world today. This phenomenon happens in each country.

The host of the Homeless World Cup will help end this phenomenon so that everyone can meet the basic human need to have a home. It is found that homelessness forces people to become isolated and further impedes their abilities to share, communicate and work with others. Daily survival is a top priority over long-term planning, but it often leads to chaotic lifestyles.

However, when people contact football, they began to communicate with others and establish friendships to learn to trust and share. They become more active and responsible to participate in the training and competition. They also began to feel valued in respect and social position. These skills and qualities will all be transferred into everyday life, helping them realize that they can change lives.

This is the basic change theory of social enterprise. After participating in the annual competition, a large number of participants significantly improved their quality of life, mainly through employment, permanent residence, and education, and so on. Some of the players also became semi-professional or professional football players or coaches. 94% of the players show that the World Cup had had a positive impact on their lives.

It is also found that in the week before the race, the athletes were little more than street people, but in the race, they became heroes cheered by tens of thousands of people. This is where they can find a sense of belonging, meet the challenges of working in a team, regain a healthy attitude towards life, gain self-esteem, and have a pleasant experience, which together will have a positive impact on the quality of life of most participants.

The significant meaningfulness of the event itself on the society explains the growth of the Homeless World Cup because it will obtain social and government support all over the world.

The establishment of partnerships

The partnership means that the organization can operate both globally and locally in each country (Sommerrock 2010). The headquarters of the Homeless World Cup is located on the south stand of the Hibernian Easter road stadium. The organization maintains its operations through cooperation with partners in 70 countries around the world.

To build the organization into a social enterprise for participants, their partners will provide needed professional services, including education, employment, medical or legal advice. For example, this case shows that the organization had searched the cooperation with Nike and some other companies to obtain financial support. At the same time, the organizer of the event also works hard to search for the support of government and social media through communicating the positive impact of the activity with them.

Likely growth accelerators

It is likely that the media publication can become the growth accelerator to the event.

The ranger World Cup should establish a global brand image and deliver their stories through a wide range of media. For the success of a business model, it should not only rely on excellent product quality but also rely on extensive media publicity and advertising to win popularity (Sommerrock 2010). Media is an important guarantee for the success of an enterprise’s product and service in the market. Companies can quickly build their brand and influence power through media advertising and publicity (Sommerrock 2010).

It is impossible that the products and services of a company can be sold all over the world without advertising. Enterprises can use advertising means and strategies to expand product sales, achieve corporate profits and spread corporate image so as to enhance the competitiveness of enterprises (Sommerrock 2010). In this case, the organization of the World Cup event can make full use of the media to transfer the importance of hosting the event to society and different enterprises.

In particular, the good result and social impact of hosting the Homeless World Cup can be transferred to the public so as to attract more support from the different shareholders such as enterprises, governments, and other shareholders.

Another way to promote the growth of this project is to provide more support from homeless participators around the world. Although the organization obtained the support from the support to provide the visa to those players from other countries, more incentives can be sent to them. For example, the host of the event can provide some financial support for those players who are too poor to participate in the event that is hosted in another country.

Besides, the organization also can search for the support of government and enterprises to commit to providing some work opportunities after finishing the football race. This method is beneficial to enlarge the scale of the Homeless World Cup to attract more publicity to focus on the event. This is also beneficial to enhance the competitiveness of the race and increase the quality of activity so as to accelerate the growth of the activity.

The factors that inhibited the growth 

Language barrier

One of the factors that inhibited the growth of the project is the cultural difference among different countries. The participants for the race come from different countries. So, there exist huge cultural difference among them. The difference will lead to the communication barrier when participating in the race activity for the team. For example, when the host of this event planned to exchange their homeless vendors to other countries, these players face the issue of language and it is very difficult for them to communicate with the local people, which affected the final effectiveness of this exchange.

Visa problem

Another factor that inhibited the growth of the project is the Visa issue. For the players who want to participate in the football game, they need to obtain a Visa to enter the country. For the audience of the game, it is also necessary for them to obtain a Visa, which is a basic condition for those participants from other countries to participate in the project.

It is obvious that the government has set many barriers for those people who want to obtain a Visa. For example, the government for the country hosting the World Cup will check the qualification and conditions of the applicants carefully.

At the same time, the application time for the Visa is very long, which also leads to many people forego the opportunity of applying for the Visa. So, the Visa issue has inhibited the growth of the Homeless World Cup. In this case, Visa is a barrier that inhibited the exchange of the homeless sellers with other countries.

Capital support

The most issue for the Homeless World Cup’s growth is the financial support for the project. Obviously, the host of the Homeless World Cup needs to spend huge capital on the race such as the construction of the stadium, organizing cost, publication fees for the activity, and so on.

However, this organization is only a non-profit organization that aims to reduce the number of homeless people through the method of sports. It is difficult for the organization to have enough money to carry out the activity. Although the organization has adopted the self-financing method based on selling paper and searching for the fund support of businesses and companies such as Nike, it is not enough to achieve sustainable development for the Homeless World Cup.

The potential factors that inhibited the growth

Coordination among different partners’ interests

According to the case, it is found that there are many companies that have involved in the cooperation with the organization of the Homeless World Cup. In this process, different partners may have different interests and return requirements. Some enterprises want to obtain the brand’s publication through the activity.

Other partners aim to obtain the return from the revenue of the audience. Without good coordination among the partners, the fund may be interrupted due to the exit of some partners (Sommerrock 2010). Once the fund cannot be provided, the activity will be affected directly and cannot reach the expected effectiveness for the project.

Some enterprises may interrupt the cooperation with the organization

Based on the partners’ support including the donation of sports material, funds, and other services, the project can be carried out normally. However, the project may fail to reach the expected result for the partners. For example, the brand image cannot be improved significantly through the Homeless World Cup although they have invest3ed much in the project.

In view of this, these partners may lose the confidence to continue their investment in the activity. Under this circumstance, it is difficult for the organization to obtain long-term funds support and cannot achieve sustainable growth to the project of Homeless World Cup.

The benefits to partner with the Homeless World Cup

Corporate sponsorship of large-scale sports events, especially large-scale international sports events can not only promote the popularity of the enterprise and present the competitiveness of the brand in the industry but also create a lot of hidden business opportunities, which is of great value for the enterprise to establish a brand image (Sommerrock 2010).

The most direct benefit of enterprises’ involvement in the Homeless World Cup is to increase the sales of products. Yili dairy became the only dairy sponsor of the Beijing Olympic Games in 2008, taking advantage of the huge business opportunities brought by sports competitions to boost sales. In China’s 500 most valuable brands’ selection, Yili Group’s brand value soared from 16 billion yuan in 2007 to 20 billion yuan in 2008. The sponsors of the 2008 Beijing Olympic Games were UPS, Haier, Sohu, Tsingtao beer, etc.

All of these enterprises have benefited greatly during and after the Olympic Games. In the case of the Homeless World Cup, Nike can enhance its brand image through the activity. Nike can post its brand logo on the stadium and provide sports clothes and sports equipment for the players, which is the best opportunity to present its brand image and popularity to the world’s people.

Whether it is the advertisement in the middle of the competition, the billboard in the stadium, or the logo on the athletes’ clothes, it is more natural and easier to be accepted by consumers. Compared with the blunt promotion of TV magazine advertising, the kind of indirect and invisible publicity will make consumers have no resistance. Therefore, the companies involving in the activity can obtain the popularity of their brand image so as to increase sales.

Enterprises’ involvement in the activity is beneficial to increase the relationship with other groups. In general, a large sports event includes many parties such as the organizers, host, sponsors, athletes, and many other roles. The sponsor can take the opportunity to establish close ties with the government or other enterprises, laying the groundwork for future development. It is also helpful to learn each other’s marketing and promoting techniques through communication with other sponsors at home and abroad.

In addition, Nike’s involvement in the Homeless World Cup is a presentation that the company is taking social responsibility. According to the requirement of corporate governance, it is necessary for enterprises to take social responsibility and publish corporate social responsibility reporting (Sommerrock 2010).

For Nike, the performance of taking more social responsibility can win a good social reputation for the enterprises. It is also beneficial to enhance the competitiveness of the Nike brand in the industry when involving itself in the project. The competition of modern enterprise is not only the competition of market share, brand, and product but also the competition of service and enterprise image (Sommerrock 2010). Active involvement in the activity can enhance its image of taking social responsibility and further improve its market competitiveness.

Finally, the involvement is beneficial to achieve the enterprise’s sustainable development. Corporate social responsibility is conducive to create a broader environment such as improving employees’ sense of responsibility, enthusiasm, and creativity (Sommerrock 2010). It is also helpful to obtain other companies’ trust, cooperation and help. All of these are beneficial to help the enterprise achieve sustainable development.

Potential issues for the event 

For the event, there may be many potential issues in the process of sports such as equipment failure, athletes were injured, absent audience riots, etc (Sommerrock 2010). Especially, it also considers the venue’s schedule time arrangement, transportation and communication facilities, safety facilities and weather conditions, etc. These factors constitute a dynamic system of large sports events, no matter which links the problem.

The associated risks for the event

First, it faces the sponsor exit risk. Sponsors lack long-term strategic vision and risk awareness. They are eager to achieve the expected benefits. When the benefits cannot reach the expected results in a short time, they may choose to withdraw. The sponsor also may choose to withdraw due to financial problems in the operation of the sponsor.

Second, the default risk of a sponsor may occur. For example, although some sponsors promise to sponsor a certain amount of money and sign sponsorship agreements, the failure to fulfill the agreements or only partial fulfillment of the agreements, which will make it impossible for the organizers of sports events to carry out their work as planned or even make the games impossible (Sommerrock 2010).

Third, the project may face reputation risk. It refers to the situation that sponsors’ business problems lead to the deterioration of sponsors’ image and cause a negative impact on the image of the event such as product quality problems, brand image problems, etc (Jarvie & Ahrens 2019).

For reputation risk, it is necessary to pay more attention to the impact of the deterioration of the image of the event on the image of sponsors. The Beijing organizing committee for the 2008 Olympic Games considered sponsors’ long-term interests when selecting sponsors (Sherry & Strybosch 2012). The committee believed that if the sponsors failed after one or two years, it would also damage the image of the Olympic Games. Therefore, once the sponsorship contract is signed, the fate of the event organizer and the sponsor will be closely linked. For the Homeless World Cup event, the organizer should carefully check the qualification of sponsors to reduce the risk.

In addition, the project also may face personnel risk. It refers to the event sponsor’s influence on event bidding, preparation, and holding due to the event organizer’s limited technical operation ability or personnel moral issues (Okada 2017). For the Homeless World Cup, the players are mainly homeless people. Most of them are not accepting the high-degree education and professional training, so the players’ riot may occur in the process of race. In this case, the organizer of the Homeless World Cup project is Young who came from a small-scale newspaper organization and the experience in the large-scale football sports organization may be defective. In terms of the sponsors, they have different experiences, psychological and moral conditions, which will directly bring risks to the sponsorship implementation process.

The project may suffer legal risk. Some related fields of large-scale sports events cannot even be protected by corresponding laws, which leads to the frequent occurrence of some infringement phenomena and causes the relevant stakeholders to suffer negative legal consequences and huge losses, such as intellectual property infringement of sports events and commercial personality infringement of athletes (Spaaij & Westerbeek 2010).

Moreover, compared with the policies and laws generally used in society, the planning of the organization and management of some large competitions is in great conflict with people’s customary cognition of current policies and regulations to a large extent. This kind of cognitive conflict will lead to the public’s ignorance or even wrong understanding of some laws and regulations and lead to potential dangers.

A strategy to make Nike involve in the event continuously

For the organizer of the project, he should continuously improve the quality of the race to attract Nike to involve in the event sustainably. In order to improve the race quality and effectiveness of the Homeless World Cup event, it is recommended that the organization should implement the risk management strategy. Risk management is actually a process of risk planning, implementation, and management. The essence of risk recognition and research is to better prevent and effectively control the occurrence of the risk. In view of the above risks, the following measures should be taken to avoid the risks.

First of all, the organization should improve the legal system, strengthen government support and protect the rights and interests of sponsors from infringement. In the process, the organization can adopt the method of contract transfer. The tournament organizing committee can sign the contract respectively with the sponsors and suppliers in which the risk liabilities and obligations are clearly presented. In the contract, the government is required to reduce intervention and promote the development of sports events through the market mechanism. It also requires the government to provide preferential policies and encourage various enterprises to sponsor sports activities.

The organization should make full use of the intermediary and media power. Generally, the sports brokers are familiar with and good at operating advantages of the market and adopt the appropriate methods such as coordination, organization, and management to provide the contract negotiations, consulting, advertising planning, funding for sports events (Sherry & O’May 2013). Media is a useful tool that can be used to exchange and rebroadcast information. Without the intervention of media, the communication function of sports is greatly weakened. Therefore, the organization can cultivate high-quality sports brokers who know law and sports management to maximize the benefits of sports event sponsorship (Crawford & McGowan 2017).

Last but not least, it is necessary for the organization of the Homeless World Cup project to establish a perfect sports event sponsorship effect evaluation system. When enterprises spend a lot of manpower and financial resources on the sponsorship of sports events, they should not just blindly strive for hard work without asking whether the investment is economic and reasonable and whether the expected results have been achieved. Through the evaluation, the deficiency in the design and implementation of the sponsored program can be timely found and corrected.

It is also beneficial to have a good idea of the effects after the end of the sponsorship activities and provide references for future marketing activities. It should be paid attention that the evaluation should not only focus on the evaluation of the sponsorship effect of sports events after the event but also it should carry out the evaluation of the sponsorship of sports events before and during the event. For the Homeless World Cup project, it has been evaluated that there may be some problems that would happen in the process of race such as players’ riot and staff injuries event and so on, which would affect the effectiveness and image of the race.

When the race’s image is damaged, the sponsor’s image will be affected. Therefore, it is suggested that the organization needs to pay more attention to the event and provide a full evaluation of the events before and during the project. The perfect evaluation system will be helpful to enhance Nike’s trust and confidence in the project results, so as to increase their involvement in the activity continuously.

Conclusions

In conclusion, the report analyzes the key factors that promote the growth of the project and some factors that inhibited the project’s growth. The key factors that promote the growth of the Homeless World Cup include the high value of the activity itself and its cooperation with the partners such as Nike to obtain financial support. The potential growth factors include the media publication and financial support of the homeless players. Some factors that have inhibited the growth of the project include the language barrier, Visa barrier, and the shortage of funds for the project.

The potential factors that may inhibit the growth of the activity include interest conflicts among the sponsors and the contract’s interrupt from sponsors. For Nike, it can benefit from the sponsorship of the race. Nike can increase its brand image through sponsorship. It also can enhance the company’s image because the sponsorship can present that the enterprise is practicing social responsibility taking.

There may be some problems for the events such as players’ riot, injuries event, and so on. The associated risks contain contract risk, financial risk, legal risk, and personnel risk, and so on. It is recommended that the organization should take different measures to reduce the risks so as to enhance the quality and effectiveness of the project.

References

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Okada, C. (2017). Poverty and sport: Stories from the Homeless World Cup. Osaka Human Sciences, 3, 1-19.

Sherry, E., & O’May, F. (2013). Exploring the impact of sport participation in the Spaaij, R., & Westerbeek, H. (2010). Sport business and social capital: a contradiction in terms?. Sport in Society, 13(9), 1356-1373.

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