Benefits and Shortcomings of Outsourcing Sports Venue Services Essay

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Outsourcing Sports Venue Services

Outsourcing sports service management has become a recent innovative strategy to cut costs and deliver quality services to customers. Amidst of increase in the costs of operations, increasing sport venue organizations are outsourcing some of their management services to third party companies. (Schiederjans, 2005). While outsourcing management services or pertinent services has several advantages, the outsourcing business services have some shortcomings, which management of sports venues should take into a consideration.

The objective of the study is to investigate the advantages and disadvantages of using the third party companies for the sports venues business.

Advantages and Disadvantages of Third Party for Sports Venue Business

Outsourcing is a business tool that sport venue organizations use in turning their non-core activities to the third party providers. The outsourced service assists organizations to focus on sales efforts in order to maximize revenues. Zullo, Burden, & Li (2014) argue that increasing number of sport venue companies have adopted the outsourcing strategy to earning additional revenue and cut the costs of operations. Typically, outsourcing has become a crucial business strategy that assists firms turning their non-core activities to third-party providers while concentrating on the core activities. Similar to other businesses, the venue management organizations have also faced stiff competitions in the competitive business environment. Thus, managing all the business processes is becoming too costly amidst of growing competitions and pressure from stakeholders, thus, firms do not have an option but to outsourcing part of their businesses in order to cut costs. For example, sport venues companies are obliged to turn their marketing businesses to the third party.

The major benefit of turning the sport venue services to the third party is the revenue growth. It is essential to realize that ticket sales are the major operation of the sports venue, by allowing other parties to take over non-core businesses, sport venue companies will be able to focus on the businesses that generate more revenues.

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Moreover, the sports venues provide several soft services that include cleaning, catering, security, vending machine services and receptions. While the soft services are the essential components for the sport venue companies, however, outsourcing some of these services will assist the sports companies to deliver quality services to their customers thereby enhancing competitive market advantages. Coupled with a guarantee revenue growth, turning some of the business processes to a third party will assist the sports venues to implement better promotion and marketing of the sports activities. It is essential to realize that marketing companies are more specialize in this line of business. They guarantee a wide coverage for the sporting events. Thus, a sports venue allows a third party marketing company to promote their business which will assist them achieving competitive market advantages. (Burden, & Li, 2005).

Moreover, sports venues will be able to integrate the latest information technology tool to their business process. In the contemporary business environment, the IT has become a strategy that organizations employ to achieve competitive market advantages. Typically, the IT tool has become an important factor that shapes business strategy in the competitive market environment. The importance of IT cannot be overlooked because it assists firms to formulate strategies linked to their business development. Despite the benefits of IT tools in the formulation of business advantages, in-house IT resources are still expensive for many sports venues. Moreover, some management of sports venue does not have skills and capabilities to manage the IT resources successfully. Additionally, providing direct employment for IT professionals is not cost-effective because the salary and remunerations for the IT professionals are very high,….....

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Burden, W. & Li, M. (2005). Circumstantial factors and institutions' outsourcing decisions on marketing operations. Sports Marketing Quarterly, 14(2), 125-131.

Porter, M.E. (2008). The Five Competitive Forces That Shape Strategy. Harvard Business Review.

Power, K., Desouza, C. and Bonifazi, C. (2006). Outsourcing Handbook: How to Implement a Successful Outsourcing Process, London; Philadelphia: Kogan.

Schiederjans, M. (2005). Outsourcing and Insourcing in an International Context,

Armonk, N.Y.: M.E. Sharpe.

Zullo, R. Burden, W. & Li, M. (2014). Outsourced Marketing in NCAA Division I Institutions: The Companies' Perspective. The Sports Journal.

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