Management of Sport Organizations Exam 2

Strategy

A course of action used to minimize threats and maximize opportunities in the environment

Four Questions of a Good Strategy

Where compete? How compete? What resources/capabilities? How well execute?

General Environment

Broad external focus: social, economic, political/legal, technological, and global

Task Environment

External factors close to the organization that directly affect its operations

VRIO

Framework for evaluating resources: Valuable, Rare, Inimitable, and Organized

Valuable

A resource helps exploit opportunities, neutralize threats, or advance organizational goals

Rare

A valuable resource that few competitors currently possess

Inimitable

A resource is difficult or costly for competitors to copy, obtain, or substitute

Organized

The organization is structured to fully use its valuable, rare, hard-to-copy resources

Porter’s Five Forces

Rivalry, new entrants, supplier power, buyer power, and threat of substitutes

Facility as part of the Sport Product

The facility affects the sport experience, programs offered, organization image, and revenue

Public Assembly Facility (PAF)

Large venue built for groups to gather for events, such as stadiums, arenas, or convention centers

Facility Ownership

May involve government, nonprofits, private interests, in-house management, or management companies

Facility Manager

Responsible for building operations and planning and executing events within the facility

Building Operations

Managing facility systems, maintenance, staffing, scheduling, budgets, marketing, sales, and safety

Event Management

Planning and executing the many functions and activities that occur in a sport facility.

Operations Management

Planning and executing activities that turn organizational strategy into action

Micro-Level Operations Management

Managing day-to-day facility activities, schedules, events, and programs

Macro-Level Operations Management

Strategic, organization-wide operations planning and execution

Operational Planning

Shorter-term internal plans that translate strategy into specific actions

Strategic Management

Ongoing examination of how well an organization is performing and adapting its strategy

Strategic Management Process

Develop mission/goals, analyze environment, develop strategy, implement, and control

Mission in Strategic Planning

Defines what business the organization is in or should be in, based on customer needs

Strategic Control

Monitoring performance to ensure organizational goals and standards are being achieved

Traditional Control Process

Set standards, monitor performance, compare results, then take corrective action

Social Environment

Changes in social patterns, demographics, values, and institutions

Economic Environment

Overall condition of the economy and how it changes over time

Political and Legal Environment

Government laws, legal systems, policies, and government-business relationships

Technological Environment

Advances that create new products and new ways of producing or delivering services

Global Environment

International political and economic conditions affecting sport organizations

SWOT Analysis

Examines Strengths, Weaknesses, Opportunities, and Threats

Resources

Assets in the organization’s toolbox; may be tangible or intangible

Capabilities

What the organization can do with its resources; its ability to use its toolbox

Three-Legged Stool

Strategy considers external forces, internal resources/capabilities, and execution

Financial Resources

Resources such as debt, equity, and retained earnings

Physical Resources

Tangible assets such as facilities, buildings, machines, and equipment

Human Resources

People-based assets such as experience, knowledge, judgement, skills, and wisdom

Organizational Resources

Assets such as history, relationships, trust, reputation, and organizational culture

Resource-Based View (RBV)

Explains competitive advantage through valuable organizational resources and capabilities

Competitive Advantage

The ability of one organization to outperform its competitors

Competitive Parity

A valuable resource is common, so the organization performs about the same as competitors

Temporary Competitive Advantage

A resource is valuable and rare but can still be copied or acquired by competitors

Unused Competitive Advantage

A resource is rare, valuable, rare, and hard to copy, but the organization is not using it fully

Sustained Competitive Advantage

A resource is valuable, rare, hard to imitate, and fully supported by the organization

Costly Imitation

Competitors struggle to copy a resource because of history, ambiguity, or social complexity

Gonzaga Sweet Sixteen Resource

Three straight Sweet Sixteen runs created a resource of success, reputation, and national recognition

Gonzaga-Valuable

Success increased recruiting, enrollment, donations, merchandise sales, and media exposure onzagaG

Gonzaga-Rare

Very few mid-major programs achieved comparable sustained national basketball success

Gonzaga-Inimitable

Its success was difficult to copy because of history, complexity, ambiguity, and culture

Gonzaga-Organized

Leadership used coaching continuity, financial support, facilities, and media exposure to sustain success

Porter’s Five Forces Purpose

Evaluates the competitive forces that influence profitability within an industry

Competitive Force and Profit Potential

Strong competitive forces lower profit potential; weak forces increase profit potential

Rivalry Among Competitors

How fiercely existing competitors fight for customers, market share, and advantage

Threat of New Entrants

How easily new competitors can enter the industry and compete

Barriers to Entry

Obstacles such as capital, brand recognition, technology, talent, suppliers, and economies of scale

Bargaining Power of Suppliers

The ability of suppliers to charge more, provide less, or influence the organization

Bargaining Power of Buyers

The ability of customers to demand more value, lower prices, or switch to alternatives

Threat of Substitutes

Risk that customers use a product from another industry that meets the same need

Differentiation

Providing something different or special that separates the organization from competitors

Nike-Threat of New Entrants

Moderate: strong brand and scale create barriers, but advertising and distribution are accessible

Nike-Supplier Power

Weak: many suppliers, low supplier concentration, and limited supplier differentiation

Nike-Buyer Power

Moderate-to-strong: buyers can switch and have many competing sporting-goods option

Nike-Threat of Substitutes

Moderate-to-strong because buyers have many alternatives and relatively low switching costs

Nike-Rivalry

Strong because of many competitors, aggressive marketing, and relatively low market growth

Companies and Porter’s Forces

Companies can shape forces through strategy instead of simply accepting competitive pressure

Market

The industry, product market, or geographic arena in which an organization competes

Strategy Formulation

Developing the strategy the organization plans to pursue

Strategy Implementation

Putting the chosen strategy into action through organizational plans and activities