¤ London Olympic 2012 ¤
Executive Summary -:-
The
impacts derived from major events are enormous especially when effective and
efficient strategies are applied to manage the event. The Olympic Games have
been held after two years during winter or summer, and for the year 2012,
London successfully won the bid to host the event. An Economic Impact
Assessment prepared for the event to be held in London by Blake, (2005)
estimates that a low of 9,399,414 and a high of 10,388,826 tickets will be
sold. This gives the estimates of how huge the visitors will be.
Bedfordshire and other cities need to be very prepared to
cash in on the influx of visitors during this period. The businesses must
establish themselves before the games and also remain afloat after the games;
this means they must be sustainable. Bedfordshire has its strengths and
opportunities to attract the visitors and make the businesses benefits in their
venture from the Olympics. Such strengths include a rich historic heritage and
numerous tourist attraction sites. The business described offers catering,
hospitality and accommodation services which must be marketed to the countries
before the event. The business will have social, economic, and physical impacts
during the entire period. For the business to be successful there is need to
offer quality and efficient services which will be packaged to suit various
clients during and after the games.
Introduction
-:-
The
Olympic Games are among the world's major events in which athletes from the
world over take part in different competitions. The games are divided into two;
the summer and winter Olympics where the host cities manage both the Olympic
and the Paralympics games. The games are held after two years alternatively,
and thus occur after four years of those specific seasons. These Games have a
history dating as far back as 8th century BC where they were held in Olympia,
Greece. Ever since then the games have seen drastic changes including the
formation of the International Olympic committee (IOC) in 1894. This committee
is charged with the responsibility of overseeing the running of these games (Malfas, et al. 2004).
The impacts of the Olympic are numerous and some remain
immeasurable since the may not be identified
immediately. These include both positive and negative impacts. The Olympics
have been very instrumental in the nurturing cooperation and understanding of
people's way of life in various nations and cities. It is an event where the
best of the best in sports come to prove their skills while the audience cheers
them on bringing a spirit of unison, love and peace. On the other hand, it
improves the economic situation of the host city where residents reap the short
term and long term after the event (Malfas, et al.
2004). However, there are also negative impacts occur which necessarily do not
overtake the benefits of the events; there are also direct and indirect
benefits involved.
The report focuses on the business environment,
marketing, and finance elements of the impacts that will be experienced during
and after the Olympic games. Its main objectives include; describing and
explaining the basic functional elements of business and a range of generic and
specific environments in which businesses are active. To investigate and
evaluate specific effects, influences and changes deriving from environments
and unique situations in Bedford during and after the Olympics. To understand
the purpose and role of the concept of Management; to describe, explain and
apply models, concepts and techniques to specific business and management
examples, problems and contexts. To demonstrate an understanding of the
interaction between the functional elements of business; and to describe and
evaluate a range of organisational structures, concepts, and models and apply
them to a variety of current business institutions and organisations.
London Olympics will provide many benefits for its
firms in terms of marketing and increased revenue from the sales made. The many
people travelling to watch the games and participate will be part of the market
to target for any firm willing to gain from the Olympics. Big firms with
adequate revenue could sponsor some of the field events in the Olympic. This
will be used as a marketing strategy that will associate the users of those
advertised products with the winning teams in that field. This could result to
enormous sales of the product or service. The tourism industry will take
this chance to market their tourists’ products such as game parks, historical
sites and its naturally attractive features. This will be a fantastic
experience for the tourists and the country can build on with advertising
around the globe to attract more tourists in the future.
The Olympic Games
will be an open forum for investors from foreign countries. Investors how would
wish to invest in any industry will have a chance to choose from the many industries
involved. A firm wishing to extend its share capital will have a chance to grab
this opportunity but only if it will be actively involved in selling its
product and services to the participants and the visiting tourists. For
instance, a firm in sporting business would benefit from the investors help in
upgrading sport activities and staging the games. This would lead to
globalization of the firm in different parts of the world.
Forerunners
-:-
The first significant
attempt to emulate the ancient Olympic Games was the L'Olympiade de
la République, a national Olympic festival held annually from
1796 to 1798 in Revolutionary France. The competition
included several disciplines from the ancient Greek Olympics. The 1796 Games
also marked the introduction of the metric
system into sport. In 1850 an Olympian Class was started by Dr William Penny Brooks at Much Wenlock,
in Shropshire, England. In 1859,
Dr Brookes changed the name to Wenloack Olympian Games. This annual sports festival
continues to this day. The Wenlock Olympian Society was founded by Dr. Brookes on
November 15, 1860.
Between 1862 and
1867, Liverpool held an
annual Grand Olympic Festival. Devised by John
Hulley and Charles Melly,
these games were the first to be wholly amateur in nature and international in
outlook, although only 'gentlemen amateurs' could compete.The
programme of the first modern Olympiad in Athens in 1896 was almost identical
to that of the Liverpool Olympics. In
1865 Hulley, Dr. Brookes and E.G. Ravenstein
founded the National Olympian Association in Liverpool, a forerunner of the British Olympic Association. Its
articles of foundation provided the framework for the International Olympic Charter. In
1866, a national Olympic Games in Great Britain was organized at London's Crystal Palace.
Background -:-
The last
summer Olympic Games were held in Beijing city in 2008 and the 2012 games will
take place in London, United Kingdom. London got the bid to host these games
that will take place between 27th July to 12th August 2012 after beating the
rival cities Moscow, New York, Paris and Madrid in a hotly contested voting on
the 6 July 2005 in Singapore during the IOC 117th session.
UK enjoys and indeed has one of the best world's arts,
commerce, healthcare, entertainment, media, tourism, professional services,
transport and fashion making it one of earths leading city. Its business
potential is stunning with a high GPD and numerous financial institutions in
Europe. London hosting the Olympics in 2012 came after a successful bid
following a decision on 19th October 2005; the Bedford Olympic Opportunities
Support Team (BOOST) was formed to further the agenda of a successful bid.
Bedfordshire is strategically placed geographically to
get the benefits from the successful London bid of the Olympics. The city has
to ensure that the Olympics Games benefits trickle down to them. The factors
that favour Bedfordshire is the efficient transport links to London, sporting
facilities that exist in the city, a 2000m rowing lake in Willington, a
multi-cultural community, plenty of accommodation, and sport science
facilities. Bedfordshire is a city in the central part of England; which is
ceremonial and historic city. It borders Cambridgeshire to the North-East,
Northamptonshire to the North, Hertfordshire to the South-East, and
Buckinghamshire to the west. Politically it has three unitary authorities which
are the boroughs of Luton and Bedford and the District of central Bedfordshire.
Findings
The Economic Situation in other Host Cities
-:-
In a
report by Blake (2005) "The Economic Impact of the London 2012
Olympics" identifies the nature of contention on the issue of the bid.
Political ideologies had been brought to figure out the impacts of mega events
to cities, however the bid was successful and they have to deal with the
impacts both negative and positive. An economic impact assessment (EIA)
conducted involved the spending on committees and individuals; spending on
infrastructure; other costs involved such as transport, accommodation, food,
and entertainment. The spending is accounted for in terms of goods and services
and the spending is measured on how it translates to income to the businesses,
employment and output to the residents.
Previous Olympic Games have had their economic impacts to
the countries they have been held since 1984. The Los Angeles Olympic Games was
estimated to have a US $2.3 billion and created 73,375 jobs (Blake, 2005). The
games held in Seoul 1988 provided approximately $1.6 billion and supported
336,000 jobs; for Barcelona in 1992 the economic impact was estimated to be $30
million and supported 296,640 new jobs Atlanta in 1996 was estimated at $5.1
billion and provided 77,026 jobs. In the Sydney 2000 Olympic Games generated US
$ 5.1 billion and an extra 156,198 jobs (Blake, 2005).
The Sydney games not only generated income and employment
in Australia alone but also in New South Wales (NSW). In the pre games period
the gross domestic product was estimated at $ 546 for NSW and $ 564 for
Australia. The Real Household Consumption for the pre games period was at $ 255
and $200 for NSW and Australia respectively. The employment was estimated at
101,000 and 111,000 for NSW and Australia respectively during the same period
see table 1 (Blake, 2005). In the games year the GDP, the Real Household, Consumption
and employment estimated at $1237, 255, and 24,000 respectively for NSW; and
$1,128, $382, and 29.4 for Australia. In the post games period till 2006 the
GDP, the Real Household, Consumption and employment estimated at $291, $273,
and 3000 respectively for NSW, and $309, $473, and 400 for Australia. The
Olympic Games in Athens in 2004 estimated an impact of US $ 10.2 billion and an
employment figure of 300,400 (Blake, 2005).
The London Estimates -:-
The
estimated spending in the London games was based on the visitors spending,
costs of infrastructure, running costs and tourism costs. The benefits must be
reflected in the nation i.e. UK, then in London (host city), and other regions
around London. The revenues must surpass the costs for the nation to benefit
economically. According to Brake (2005) the estimates for local sponsorships
would be at a low of œ 240 million and a high of œ 590 million. The ticket
sales would be at a low of œ 250 million and a high of œ 350 million. Transport
would be at a low of œ 30 million and a high of œ 50 million. Asset sales would
be at a low of œ 35 million and a high of œ 110. Catering would be at a low of
œ 7 million and a high of œ 10. Television rights would be at a low of œ 410
million and a high of œ 500 million. TOP sponsorship would be at a low of œ 98
million and a high of œ 120 million. As indicated in table 2 a total estimate
low of œ 1,164 million and high of œ 1,627 million would be expected in the
event (Blake, 2005).
The operating costs would be in establishing new and
refurbishing existing venues and estimated at a low of œ 23 million and a high
of œ 46 million. Technology would be at a low of œ 240 million and a high of œ
300 million. Establishing an Olympic village would be at a low of œ 42 million
and a high of œ 144 million. Administration would be at a low of œ 210 million
and a high of œ 300 million (Blake, 2005). Providing security would be at a low
of œ 16 million and a high of œ 27 million. Transport would be at a low of œ 50
million and a high of œ 60 million. Ceremonies and culture would be at a low of
œ 30 million and a high of œ 60 million. Advertising and promotions would be at
a low of œ 70 million and a high of œ 90 million. As indicated in table 3 a
total estimate low of œ 931 million and high of œ 1089 million would be
expected in the event (Blake, 2005).
For Bedfordshire organisations need to tap into the
visitors markets; this will mean investing in the accommodation, catering and
hospitality sector. The businesses need to start planning for the numerous
visitors in this period. Such investments need to encompass the whole period
and beyond thus they must be long term. The estimates given by Blake, (2005)
indicate that estimates of a low 9,399,414 and a high of 10,388,826 tickets
will be sold during the Olympics. The athletes are estimated to be more that
11,550 while the number of officials will range from 7,200 and 8,800. In
addition, there will be approximately 22,000 media visitors, 51,700 volunteers,
and 7,700 sponsor visitors. The foreign Olympic family was estimated to range
from 4,500 to 5,500 while the UK Olympic family will range from 2,700 to 3,300.
The Impacts
The social economic impacts -:-
The
major revenue source will involve selling of tickets; however there are other
revenues from various activities that will be done by businesses in and out of
the host city. As the visitors troop the venues they will contribute a lot to
economic growth from their spending and consumptions (Zimbalist, 2010). There
will also be jobs created by the events for instance establishment of business
that will need attendants and also self employment.
The social impacts on the other hand may be negative
especially in the host city where people may be evicted to give room for
Olympic building and accommodation. For the purpose of the Olympic numerous
funds are diverted to making the preparations and the actual event from the
poor and low income earners. Social services are also at times interrupted to
give way for expansion or so that they may serve visitors while the locals are
pushed aside. The costs of products and services increase during this period
due to the upsurge of visitors or expectations and speculations leading to
higher costs of living (Zimbalist, 2010). For the business it must consider
whether the decision to change its structure for the event will be sustainable
not only for the one time but in the long run.
Socio-cultural impacts -:-
The host
city becomes home to very many people of different cultures, this will
definitely affect the culture of the residents. The benefits of such events
will be such as the residents will change their attitude towards certain things
such as sports and get more involved (Lenskyj, 2000).
The events can reinforce regional traditions and values and improve regional
pride and community involvement. The country has a chance to showcase its
culture which might attract visitors in future contributing to sustainable
tourism. On the other hand the influence of culture by those who visit is also
possible and this may cause loss of culture for the residents.
Physical Impacts -:-
The event creates a chance
to create very efficient and effective services to support the visitors. These
physical structure and services established during the event will stay for a
longer period and serve the residents later. These include stadiums, hospitals,
hotels, and social amenities.
Political impact -:-
The local regional and
central government are all involved in the preparations and the administration
of the event. Therefore, political decisions are inevitable since public
governance has to be involved (Lenskyj, 2000). The
decisions made are subject to political interests and private profit making
organisations.
Discussion -:-
According
to Cashman (2002) in the article "Impact of the
Games on Olympic host cities: university lecture on the Olympics" the
impacts can be divided into four periods; they include firstly, the period when
preparing for the bid and the winning of the bid to host the Olympics; secondly
the seven years required for preparing for the Olympic games, thirdly is during
the staging of the games which is a short period of around 16 days; and
fourthly, is the period after the games.
The impacts that are likely to be experience for the host
city consist of, change in the city design, the physical environment change,
the influence of the culture, the improvements on infrastructure i.e. air,
rail, and road transport. In addition there are costs and expenses that are
involved, changes in decision making and governance, political changes and
improved relationships (Zimbalist, 2010). It is no doubt that tourism increases
tremendously where businesses benefit a lot from the spending from the
sportsmen and audience. The sports require increased services and products such
as venues and other facilities which are present even after the games.
Moreover, communities create a common situation which will create an
understanding environment thus more consultations and involvement.
For Bedford the bidding period is over and London has won
the bid. Maximising the business, financial and marketing benefits from the
event is the next move. Tapping into being a major participant in the Olympics
will play a major role in sharing the cake brought to England by the visitors
and sportsmen as they celebrate the Olympic spirit.
It is evident that the benefits do spill over to other
town and cities that surround the cities hosting the games. In this cases since
London is hosting the games, Bedfordshire stands to benefits from the event. This
means that whether the organisation is offering products or services the stand
to gain if they apply an effective marketing strategy (Lenskyj,
2000). The sales can be targeted to the various visitors present during the
games. The visitors may include; international, sponsor, the broadcasters, the
Olympic family, athletes and officials and domestic visitors.
Each period generates different economic, cultural,
social and environmental impacts to the organisations that take the advantage.
The economic benefits run high during this time and businesses are always at
their peak. The organisations in Bedfordshire need to keep their plans ready
and invest in the services industry since at this time services are mostly
demanded. Providing high quality services and very affordable services will
attract the numerous customers to the city as tourists or participants.
In order to tap this potential the borough, local and
central authorities need to have a strategy to attract the visitor to the city.
Biding for tenders to build training centres, and
other essential facilities will be the first step in exploiting the event. The
organisations in Bedfordshire have to market themselves appropriately before
and during the event, so that the visitors may visit the city (Zimbalist,
2010). Re-branding the city is necessary including all tourist sites and
evaluation of the services and products organisations to ensure they will
impress the visitors. The political will must be present in the ideas since any
unstable area will be avoided by the visitors and might even have negative
effects to the whole event. The environment in Bedfordshire is safe and
friendly which will act as an added advantage to attract the visitor. It has a
multi ethnic community that makes it easy for all visitors to fit in the
society. Technological advancements also favour the organisations in the city
since it is technologically advanced.
The city also has numerous tourist attraction sites due
to its rich history. Castles, museums, art galleries, national trusts, a
heritage railway amusement and theme parks, and cathedrals will form part of
the tourist attractions to the city (Lenskyj, 2000).
Other strengths about the city are the presence of a networked transport i.e.
rail, road and air that is linked to London making it easy for the visitors to
commute to the venues and back. Its central location in the UK makes it better
placed to attract visitors. The city however does not have a coastal beach that
can attract beach lovers. Language is a very important factor and the use of
English in the UK is a great advantage not only to the country but also the
city of Bedfordshire (Lenskyj, 2000). Most visitors
know English as it is the most spoken language in the globe. For those who
don't know English the city and organisations will offer translators in various
stations to guide the visitors.
Conclusion -:-
The
organisations in Bedfordshire can have a successful implementation of
businesses that ensure they tap the numerous benefits to their city. Strategic
planning is require to ensure the business prepare adequately for the Olympic.
During the seven year preparation period they should aim at focusing on setting
up the services required. Setting up of training venues so that they may
attract visitors to the city is an important strategy. This will involve the
local government which must have ideas to invest in such avenues. For the
business organisations such as those that are going to offer accommodation,
catering and accommodation services, they should aim at getting as much
visitors as possible.
They can start by building extra rooms in view of the
fact that the number of visitors will be large. In this venture, the seven year
preparation period is enough to establish the investment. There is need for a
marketing strategy which will involve selling attractive packages to the
participating countries. Such packages will include high quality services, and
attractive offers that will make the countries participants and visitors opt
for the services. This must be done prior to the effective date of the
Olympics, to ensure the hotel rooms are booked to capacity before the event.
There is also need to have a strategy to ensure the
clients have easy access to the game venue or are able to view the games from
televisions at accessible places. Such as strategy would involve having buses
to take the visitor to the venues and back to the hotel, including tours to
different tourist sites in the city. Those who love swimming will not be left
out since there can be artificial beaches developed during the construction of
the facilities making it all inclusive. The clients should also be assured of
security during their stay and a very efficient customer care should be in
place to serve the customers better.
- Ankit Singh
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