World Cup: Outstanding Value

Tue 13th Jul 2010 | Money & Finance

At the Soccer City stadium in Johannesburg on Sunday, the 2010 World Cup came to an end with the spectacularly anticipated, all European showdown between Holland and Spain.

Statisticians and data freaks have done the number crunching – compiling all the crucial (and the perhaps more peripheral) data to try and establish just who was in pole position to win the title. No stone was left unturned: from detailed breakdowns of both team’s tournament record (solid wins from Holland, 12 goals scored, 4 conceded; five wins from Spain, one loss, seven goals scored, just two conceded), to analysis of players’ WAG credentials, to predicted line-ups, to absolute scrutiny of the two managers.

However, possibly the most interesting piece of statistical paraphernalia that has surfaced from the torrent of World Cup data feeds comes from Frontier Economics, a leading European economic consultancy, who recently carried out an analysis of the economic value of the players from some of the World Cup’s most successful teams.

The study, concentrating on the 10 national teams that were the most likely to claim victory at this year’s World Cup, used data on past transfers to estimate the value of each player expected to play in the starting line-up of each team, and then combined the estimates for each player to establish a total for each of the 10 teams.

The results make for interesting reading: given that the Spanish line-up for the World Cup came out as the most valuable, with an estimated total of around $382 million, while Holland only placed eighth on the list with an estimated total of around $196 million.

Star players Andrés Iniesta and Fernando Torres, who were valued at both $55.5 million and $54 million respectively, bolstered Spain’s hefty value; while Holland, who despite excelling in the tournament itself, seemed to lag behind in terms of value.

Teams filling the gap include England, Portugal, Brazil, France and Germany; the latter of these having only lost out on a place in the tournament final earlier this week to Spain.

It could be argued that the monetary value of the teams equate to how much the team is worth in terms of ability and skill. However, taking this tack, Holland’s presence in Sunday’s final is clearly bucking the trend: there are six other teams that follow this logic, deserve a place in the final more than the Dutch.

Or do they? Just why are the Dutch doing in the final if the six other teams who are not are essentially made up of more talented footballers? What is the true meaning of ‘value’? The answer, quite frankly, is simple: management strategy.

Take a look at Bert Van Marwijk, the Holland boss, who has been able to select virtually the same starting 11 in all six matches of this tournament, barring the odd injury or suspension. As a result, Marwijk has guided a tight-knit team throughout the competition, a team which has not only remained unbeaten in their last 25 games, but who also claimed the “victory of the tournament” by beating favorites Brazil in the Semi-Finals.

A successful application to strategy is key for any business, whether you’re a football club, an SME or any global Fortune 500 firm. The key is to understand your strategy, lead from the front and execute accordingly, which could be just why Holland has found itself at the centre of the World Cup Final storm.

One person who knows all too well the importance of strategy is Christopher S. Dean, Chief Strategy Officer at Skype. In a recent interview with MeetTheBoss.tv he said: “To be a good strategist, and I really view myself as a very practical strategist in a lot of ways, you have to communicate. Constantly being focused on an external perspective and having and making sure that the data you have is brought into and bears upon your strategy, are some of the critical pieces to being a good strategist in this market.”

Skype, which in 2005 was acquired by eBay for $2.5billion, was again sold in 2009 – though for considerably less. However, between that time, millions of individuals and businesses used Skype’s technology to make free video and voice calls, calling theorists who said the site had been overvalued back in 2005 into doubt.

So are businesses (or footballers) just overvalued or overpaid? Or is the true meaning of strategic value worth more than just what your key players earn? “I view myself as being a facilitator of the process,” adds Dean. “I’m not the single, brilliant individual who develops Skype’s strategy.  I facilitate a process. I have a strategy team. I work with the executives. I work with the investors. And we all together bring together and formulate the strategy.”

Article supplied courtesy of www.meettheboss.tv

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