/2012BusinessBenefits_HeatherHancock by Northwest Regional Development Agency

The 2012 Games Business opportunities for the North West . Heather Hancock, Partner, Deloitte

ÂŠ2007 Deloitte MCS Limited. Private and Confidential

Introduction: Our commission with NWDA The NWDA commissioned Deloitte to undertake a study to consider the following:

• What opportunities for business will arise from the staging of the 2012 games?

• What will the nature, scale and timing of these opportunities be? • What strength does the NW have that may align the requirements of the Games’ supply chain?

• How can businesses in the NW access opportunities in the 2012 Games supply chain?

• What interventions are required to maximise the amount of business benefit realised in the Northwest?

Delivering the 2012 Games IOC IOC

BOA BOA

GLA GLA

LOCOG LOCOG Olympic Olympic Board Board

Olympic

LOCOG LOCOG

Delivery

ODA

LDA

Authority GOVT GOVT

Infrastructure Infrastructure

ordination Co Co-ordination

LDA Transport Transport

Olympic Delivery Authority (ODA) – The ODA will deliver the new venues and infrastructure for 2012 and has appointed a Delivery Partner, the CLM consortium (CH2M HILL, Laing O'Rourke and Mace), to manage the delivery of the construction programme for the Games; London Organising Committee of the Olympic Games (LOCOG) – The organising committee will organise, publicise and stage the 2012 Games. It will also report directly to the International Olympic Committee on The 2012 Games; 3

2012 Games: The Facts • Current official budget - £3.3 billion • Expected new official total figure - £5.1 billion (excluding VAT and contingency) • Impact: – Estimates between £1.9 & £5.9 billion increase in GDP – 8,000 job years – Some regions suggesting £600 million in regional benefit – Government ‘commitment’ to regional legacy benefit • Current Preoccupations for Deliverers – ODA  Planning Application  Agreeing costs with Government  Mobilisation of Delivery Partner – LOCOG  2012 Games Foundation Plan  National Sponsorship Deals

5 yrs:4 mths:30 days

Scale & Type of Opportunity •

Three types of opportunity – Direct Opportunities, arising from projects and products created specifically for the 2012 Games; – Indirect Opportunities, arising from the creation of general infrastructure, transport networks and other facilities in the city and other locations to meet the demands of the 2012 Games; – Related Opportunities, arising from the increased flow of investment and the rise in tourist numbers, the impact on sporting participation etc.

• •

Direct & Indirect Supply Numerous requirements, for example; – – – – –

Construction Manufacturing Professional Services Advisory Catering

Opportunities so far • Both LOCOG and ODA have undertaken some procurement to date • This has largely been driven by ODA in appointing partners to prepare, design and deliver the sites and physical infrastructure required

• Several ODA frameworks have been initiated, including; – Financial Services – Specialist Consultancy Services – Transport Technical Services • Some specific ODA appointments have been made – Main Stadium - McAlpine – Delivery Partner - CLM – Canoe Course Masterplanning • LOCOG procurement focus has been on establishing the organisation and its functions – Back Office Systems - Accenture – Insurance Services - PwC – Organisational Design – HR Services - Deloitte • The procurement pattern to date reflects that of previous Games but much further out from ‘Games Time’ • In early February, a high level procurement schedule was released for some of the major opportunities

Opportunities for the North West •

We focussed on areas where there was a genuine competitive advantage for NW businesses – or where one could be supported by public sector intervention

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Alignment to existing regional strengths and strategies

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Olympics as a catalyst for improved fundamental business performance, and a future marketing platform

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Challenges & Limitations:

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Complex procurement landscape and lack of information

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Public procurement challenges for SMEs

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Globally competitive marketplace

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Speed & frequency of opportunities

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London’s ‘global city’ status lending natural competitive advantage

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Cost pressures (double edged sword?)

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Legislative and other requirements e.g. diversity, health & safety, sustainability

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Competition from other regions

Aligning North West strengths and 2012 needs Food & Drink

Green Technologies

Sport

$21 million of food procurement One Planet: local, sustainable food High quality NW food products Merchandising opportunities Sponsor and incumbent monopoly?

One Planet Games Innovation and Technology NW seems to have strong offer Need to act early – relationships Arup in strong position

Old Trafford group football fixtures Sports supply chain– legacy benefit NW sports services (ticketing, stadia) Competition from Games incumbents

Differentiating the region’s offer Digital & Creative Major media requirements Ceremonies experience from CWG BBC relocation to Salford Merchandise – games/music/media Relationship driven supply chain

Visitor Economy

Other

‘Pull’ of Games for visitors NW distance from London - +ve/-ve? Manchester – UK Gateway Global Brands – Man Utd, Lakes Competition from London

Business & Professional Services Advanced Engineering & Materials Biomedical Minimal Opportunities?

Realising the Opportunities

• Nature, scale, timing and requirement of specific opportunities remains unclear. The London Games are ahead of IOC traditional schedule. • Lack of clarity regarding supply chain management and access to opportunities • Not clear whether the regional benefits and SME benefits can be prioritised when the pressure starts to bite. • Principles for intervention: – Public sector intervention likely to influence success at the margins –so existing support systems should be adapted where possible to maximise return on investment; – Information provision and high value bespoke support is important; – Proactive relationship development will be the differentiator; – Consideration must be given to indirect opportunities that may have a stronger legacy benefit. – Don’t be seduced by the Olympic windfall if it is a diversion from the strengths of your core business strategy

• NW businesses will benefit from the Games anyway – the challenge is to optimise those benefits 9

Recommended Intervention – Supply Chain I Business Support - To provide general and bespoke business support to enable companies in the NW to access 2012 supply chain opportunities • Online Information Portal • NW 2012 Business Opportunities Co-ordinator • Bespoke Advice & Support (diversity, health & safety, sustainability) • Tracking business engagement and support

Innovation/Technology Showcase – To promote NW companies with a particular strength or product that is relevant to the 2012 supply chain and may present an opportunity for direct or indirect supply to a range of 2012 ‘buyers’ • Relationship Building • Innovation Identification • Showcase Event(s) • Bespoke advice and support Major Events - To use the London 2012 Games to strengthen the major events supply chain in the region • Business focused events for major events supply chain opportunities • Test events • Supplier Directory • Map Supply Chain • Meet the Buyer Events 10

Recommended Intervention – Supply Chain II Supply Chain Specific Interventions - To further enhance the NW sector strengths by supporting businesses in specific sectors to enhance supply chain capabilities to access 2012 opportunities. • 2012 Supply Chain Events • Direct company level intervention Merchandise Licensing - To promote the merchandise opportunities to NW companies and secure merchandise licenses for NW products for retail as official 2012 merchandise. • Identify opportunities for proactive marketing • Promote opportunity to companies • Events, support, lobbying, relationships Sponsorship - To promote opportunities to NW companies, or companies with significant operations in the NW to become an official sponsor or partner of IOC or London 2012 • Sponsorship Opportunity Monitoring Sports Supply Chain - To ensure that the anticipated increase in sports participation, an intended legacy of 2012, is translated into commercial opportunity for NW business in the sports supply chain • Determine requirements for mapping/audit • Review trends in participation and associated supply chains • ‘Sport Proof’ business support network 11

Recommended Intervention – Visitor Economy UK Gateway – NW Travel Packages - To leverage the NW strengths as a major international gateway to the UK, home to globally significant brands in order to increase visitor numbers to the NW before, during and after the Games. • Explore bespoke travel package offer • Marketing and promotion • Leverage Liverpool 2008 opportunities • Supply Chain requirements – promote and support Football Related - To leverage the North West as a host region for Olympic football events to attract football specific tourists to the region before during and after the Games. • Explore bespoke travel and ticket packages • Inward Investment Potential • Supply Chain requirements – promote and support

Recommended Intervention – Cultural Olympiad & Training Camps

Regional Cultural Olympiad - To generate maximum socio-economic benefit for the region from actively creating a regional Cultural Olympiad • Regional Cultural Olympiad Strategy • Supply chain mapping around cultural events Training Camps – To market the region on the back of the Olympic teams which use pre-Games training camps into the region. • Identify facilities that have made applications • Track matching up with national Olympic Committees/Associations • Understand existing and potential connections with those countries • Identify supply chain opportunities for the camps, and for the broader relationship with the home nation • Plan appropriate campaign to build relationships, promote strengths and reinforce supply chain opportunities

Conclusion • Winning 2012 business will not be easy • Tactical interventions and developing relationships may create competitive advantage • Fundamentals of good business are strongest asset a business can offer

Be competitive

Invest in relationships 14

Understand your market differentiation

6 Feb 2013