Investigating the business model of a professional rugby union in South Africa

Gerstner, Ludwig (2015-04)

Thesis (MBA)--Stellenbosch University, 2015.


ENGLISH ABSTRACT: The purpose of this study was to investigate the business model of a professional South African Rugby Union by determining the core logic and practices of the Boland Rugby Union. Information was gathered mostly through semi-structured interviews conducted with board members of Boland Rugby. Additional information was gathered through observation, the media, the collection of relevant documents, as well as other secondary research methods. Boland Rugby, similar to most South African rugby provinces, has both an amateur and a professional arm. The study indicates that Boland Rugby Union offers a strong value proposition to its target segments focused on development and creating a platform for the different rugby codes to participate and develop. The professional arm is focused on providing the Boland Kavaliers with the necessary resources to compete against other provinces. Boland covers a wide geographical area and therefore a good structure is needed to make governance easier. Market limitations and especially financial resources create challenges towards creating a stronger commercial value. Therefore partnerships with local businesses are essential in providing the necessary value proposition. As shown by the literature review, there are strong links between the different business model components. An important finding was the co-creation that occurs continuously throughout the value creation process. Boland Rugby, its consumers, and all relevant stakeholders play an essential role in creating this value. The Osterwalder model used during the study acted as a good structure to capture the business activities. Looking forward, Boland Rugby will have to explore different business avenues through which they can create revenue and further develop their value offering. It was clear that there is a lack in strategic drive to meet a changing market environment, although the union finds itself in a comfortable position as their geographical area will remain theirs. Boland Rugby has financial challenges that accompany professional sport, and it requires a sustainable financial model with a clear strategy towards long-term objectives. The study recommendations indicate that a change towards professionalism is not necessarily the only option, and is not always well received within a structure that is built on an amateur approach. Depending on the future strategy going forward, commercial rationale will play a central role in future decision-making. One thing is certain, good governance and corporate values are necessary to increase the faith of stakeholders in the decision-making processes and leadership of Boland Rugby.

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