There is a line in the latest issue’s students article by Tony Davies
that I would advise all football managers to take note of.
“Cost leaders should reduce supply costs as far as possible without compromising the required level of functionality, while differentiators must ensure that additional benefits do not result in prices that exceed that which the customer is willing to pay,” he said.
Now, I’m probably on to a bit of a hiding to nothing trying to apply sound business principles to the la-la land of football, but this could be simplified to: “Don’t pay over the odds, just because you’re desperate.”
As the transfer window begins to close, many clubs will undoubtedly start to worry they don’t have the required resources for the upcoming season. A signing now could certainly “add value”, but what is the price worth paying for this?
As Tony explains in his piece, the concept of “added value” is always a trade-off between cost reduction and improved functionality. If Arsenal ends up paying more than it wants for a decent defender, but then he prevents enough goals to win the team the championship, he’s great value.
And consider the cost of inaction? What if you don’t pay the fee demanded, but the team ends up relegated? Tough decisions, familiar to procurement professionals, lie ahead for managers in the next few weeks.