Chinese Businesses in the European Football Industry: A Case Study on how Suning Holding Group Acquire F.C. Internazionale Milano to Assist in Realizing Beijing Global Ambitions

Philip Sinkbæk Jensen

Student thesis: Master thesis

Abstract

Background
Encouraged by Xi Jinping’s anticipation for a Chinese football revolution, the government is actively formulating football development strategies under global ambition projects such as the Belt and Road Initiative and China First-policies. Beijing’s formulation of a multifold football development has directed Chinese companies to venture in European football clubs. The retail-giant, Suning Holding Group, holds 100 per cent of equity stocks in Italian-side FC Internazionale Milano. While Suning’s firm-specific assets aid Inter in building a reconceptualized business model to become financially self-sustainable, Suning is implicitly advocating for Beijing’s interest in global positioning. By navigating in a costly, yet competitive industry of international football, Suning is actively looking for business opportunities in Italy, which are realized in a signed MoU between Suning and the Italian Trade Agency. Chinese OFDI has become more than just equity-boosts for the lucky ones.
Purpose
The purpose of this paper is to provide insides to the new-modern OFDI phenomenon of Chinese companies investing in European football clubs to leverage resources of goodwill back to the homemarket while facilitating business opportunitiesfor host-markets abroad. This represents a completely new outlook of Chinese OFDI where international asset-augmenting is transferring resources and capabilities into unorthodox brands with the ambition of developing the brand. In this way, China builds strategically comprehensive partnerships with Italian authorities to establish new trade agreements for Italian brands to be channeled towards the purchasing power of the Chinese middle-class.
Approach
A single case study of how the acquisition of Suning and Inter Milano reconceptualize traditional OFDI strategy relying on classic strategic management- and internationalization theory.
Results
Football has become a catalyst for growth. Clubs are perceived as global brands and proper businesses with immense opportunities for growth and business development outside home. Football clubs become social institutions themselves while Suning becomes an institutional builder for Inter, Beijing and the ITA. In this way, Suning aids Inter in reaching the footballing elite and exploiting brand potential in China, Beijing in enhancing the BRI, and finally the ITA in accessing new business opportunities in China.

EducationsMSc in Business, Language and Culture - Business and Development Studies, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages134