Sports Industry Sports Industry has three sectors namely: Public Sector Non-Profit or Voluntary Sector Private Sector State or Public Sector: The businesses operating in this sector does not aim for profit, and are government funded (Loughborough, 2010). It includes government or specialist agencies that make sport’s policy and provide funding to sectors of Sports Industry (Hoye et al., 2012). Public Sector is responsible for development of elite athlete programs, drug controls and support specialist roles (Hoye et al., 2012) Sub-Sectors of Public Sector: National Governing Bodies Local Leisure Centers Sports Charities Private Sector: Unlike Public Sector, Private sector sports industry operates for profit making. The private sector includes mainly sporting apparel and equipment manufacturers, media companies, leisure clubs, event management companies, professional leagues and their team members (Hoye et al., 2012). Some of the many sub-sectors with Private Sport Sectors are: Sports Brands e.g. NIKE and Reebok Professional Football Clubs e.g. Barcelona and Real Madrid Sports Management Companies Sports Marketing Companies Sports Event Companies Voluntary Sector: This sector relies on funding from private enterprises and community. The sector usually organize development programs, operates amateur clubs, regulate sporting codes, develop players and coaches etc. Sub-Sectors: According to (Meek, 1997), the Sport Industry mainly consists the mainly the following sectors: Sports Entertainment and Recreation Sports Support Organizations Sports Products and Services As per the study (Meek, 1997), the Sport Industry can be further divided into the following subsectors as mentioned in the figure below The Supporting SubSector I: Administration and Regulatory Athletic Associations The Supporting SubSector VI: The Supporting Sub-Sector II: State, Municipal and County Sport Councils and Authorities Sporting Goods Manufacturers, Wholesalers and Retailers The Sport Producing Sector The Supporting SubSector V: Sports Management Firms (Marketing, Public Relations, Event Management, Athletic Representation, Financial Consultation, etc.) • Professional and Semiprofessional Teams • Intercollegiate and Interscholastic Athletic Departments • Municipal and County Recreation Departments • Sports and Fitness Clubs • Independent Professional Athletes, Sports Trainers and Instructors, Owners of Racing Participants (e.g., Race Cars and Horses) • Other Event and Service Producers The Supporting Sub-Sector III: Sports Facilities and Buildings Types of Organizations: There are four types of organizations within Sports Industry. The four types of organizations are: Sole Proprietorship: A sole proprietorship is a type of organization, which is owned by one individual. The organization may have other members, but all the major decisions are controlled by the owner. The revenue and expenses pertain to the owner, thus, only the owner is subject to income tax (Eksteen, 2014) Partnership: A partnership is owned by multiple people. A partnership operates with a goal to maximize the profit of the partners. The partners bring resources to the partnership in the form of labor, capital and expertise (Eksteen, 2014). Limited Liability Company A limited liability company is a type of structure, which protects its owners from personal responsibility for the company’s liabilities or debts. The limited liability companies have the characteristics of both partnership and sole proprietorship (Fernando, 2022). Non-Governmental Organization This sector relies on funding from private enterprises and community. The sector usually organize development programs, operates amateur clubs, regulate sporting codes, develop players and coaches etc. (Eksteen, 2014). The Market Size and the Growth As per the study (Gough, 2022), the global sports market is expected to grow to $501.43 billion in 2022 from $354.96 billion in 2021. Market Forecast 707,84 501,43 354,96 2021 2022 2026 As per the graph, the market size of sports industry will soar to $707.84 billion in 2026. As per the study conducted by Deloitte, the blending of the real and digital worlds of sports will accelerate the growth of the market size. Secondly, Block-chain enabled innovations will open new markets. Thirdly, Sports betting has been normalized over the years, and now companies are rigorously looking for customers in sports betting business. Lastly, the focus of sports society on sustainability and mental health will assist in the growth of the market size. Organization in Producing Sector For the industry analysis, this study has selected a sports Good manufacturer company, Adidas as subject of the study. Background of Adidas Adidas started its operations as sports goods manufacturer in 1949 in Germany with a mission to provide athletes with the best possible sports equipment. As per Adidas, the turning point for Adidas was the final match between Germany and Hungary in 1954 in which German team was wearing Adidas’ light football shoes. Germany won the match, subsequently, Adidas became a world-famous sports good producer. However, over the years, Adidas has been innovative in its field to sustain and compete. Products Adidas offers a variety of sports products. The company’s products portfolio includes footwear, apparel and accessories. The apparel and Accessories mainly include: Sunglasses Fitness equipment Balls Bags Size and Scope Adidas is the second largest sportswear manufacturer worldwide and largest in Europe (Tighe, 2022). In 2021, the brand value of adidas reached to $16.5 billion. Furthermore, in terms of customer satisfaction, adidas is leads its competitors (Tighe, 2022). The organization’s Net Sales in 2021 amounted to 21 billion Euros. Vision Adidas vision is to be the leaders in design with a particular attention on getting the best out of the athletes by providing performance guaranteed products in the global sports market (adidas, 2022) Mission of the Organization The Mission of the organization is to be the world best sports brand. The organization gets together to create and sell the best sports product and to offer the best service and consumer experience in a sustainable way. Furthermore, the company mission is to be the inclusive, credible, and sustainable leader in the industry (adidas, 2022). Business Purpose As per adidas, the business purpose of the organization is to change lives through sport. It strives to expand the limits of human possibilities, include people and unite people through sport. Furthermore, the organization’s purpose is to create a sustainable world (adidas, 2022). Corporate Hierarchy The Corporate Hierarchy of Adidas is: CEO CFO Chief Corporate Communications Officer General Counsel Global Heads of Brands Head of Public Relations Member of Management Board, Global Operations Member of Management Board, Global Sales Chairman of Board Vice Chairman Board Vice Chairwoman of the Supervisory Board, Employee Representative Vice Chairman of the Supervisory Board Member of the Supervisory Board Corporate Bodies Stakeholders of the company As per adidas group, the stakeholders of the organization are those people who get affected or affection the operations and activities of the organization. The group has divided its stakeholders in the following diverse groups: Employees of the Group Investors and Shareholders Authorizers Business partners Suppliers Service Providers Customers Opinion Formers Organizational Structure The organizational structure of adidas is summarized in the following chart General Manager Functional Manager Functional Manager Functional Manager Functional Manager Sales Manager 1 Marketing Manager 1 Operation Manager 1 Finance Manager 1 Sales Manager 2 Marketing Manager 2 Operation Manager 2 Finance Manager 2 Adidas organizational structure incorporates geographic divisions in regional and sub-regional levels. Since adidas has multiple business units, thus, the managerial duty is cut down to business units namely: footwear, apparel and equipment) and function such as Finance, Marketing, Human Resource, Sales and Operations). In order to support the significant valuation of adidas brand, teams at the organization are divided on the basis of product and regional wise. The teams are also answerable for broader policy and regulation. The matrix approach features overlapping responsibility and multiple chains of command. Advantages and Disadvantages of Matrix Organizational Structure The advantages of Matrix Organizational Structure include Managing Complexity As per the study (Gos, 2015), organizations, which encourage individual discretion and participative decision-making cope with uncertainty more effectively as compared to strongly hierarchal one. The main reason is with participative decision making the organization has more information, both internal and external, to deal with complexity. Communication effectiveness As per the study (Gos, 2015), Matrix organizational structure encourage more channels for lateral communication as compared to traditional organizations. The only disadvantage of Matrix organizational structure as per the study (Gos, 2015) is that it increases level of conflicts. In matrix organizational structure, the boundaries of responsibility and authority is often unclear and overlapping, thus, conflict arises in resource allocation, technical issues, salary etc. Conclusion The interrelationship between internal departments in matrix organizational structure has more pros than cons. Given the uncertain economy, limited resources and technical complexities in the contemporary world, the enhanced interrelationship between departments can be beneficial for an organization as it will have more relevant data to cope with the uncertainty as compared to a traditional centralized setting. References Hoye, R., Nicholson, M., & Brown, K. (2015). Involvement in sport and social connectedness. International Review for the Sociology of Sport, 50(1), 3– 21. https://doi.org/10.1177/1012690212466076 https://learnzone.loucoll.ac.uk/sportres/CourseGenie/Sport/2010spec/AASELevel3/L3SportAsABusiness /L3SportAsABusiness_01Mod/L3SportAsABusiness_01Mod_01.htm http://lib.bvu.edu.vn/bitstream/TVDHBRVT/15827/1/Sport-Organisation-and-Administration.pdf Goś, K., 2015. The key advantages and disadvantages of matrix organizational structures. Studia i Materiały, (2/2015 (19)), pp.66-83.
