Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball

Billy Beane and the Oakland A's have 'changed the game' in terms of talent identification, analytics, and player investment in Major League Baseball (MLB). Cases A and B are designed to provide and inspire learning on these topics by recounting Billy Beane's success as the Oakland A's General Manager over the past 16 seasons (1998 to 2013). The case, through analysis of performance and financial data over this time period, establishes Beane as the most efficient GM in MLB and shares concepts, information and data to allow for improved understanding of the barriers and drivers to the adoption of new and disruptive innovations in the sport business.

Authors :: George Foster, Norm Oa??Reilly, Ryan Lippert, Carlos Shimizu

Topics :: Innovation & Entrepreneurship

Tags :: Disruptive innovation, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball" written by George Foster, Norm Oa??Reilly, Ryan Lippert, Carlos Shimizu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beane Billy facing as an external strategic factors. Some of the topics covered in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball case study are - Strategic Management Strategies, Disruptive innovation and Innovation & Entrepreneurship.

Some of the macro environment factors that can be used to understand the Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc

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Introduction to SWOT Analysis of Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beane Billy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beane Billy operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball can be done for the following purposes –
1. Strategic planning using facts provided in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball case study
2. Improving business portfolio management of Beane Billy
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beane Billy

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Strengths Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Beane Billy in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball Harvard Business Review case study are -

High brand equity

– Beane Billy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beane Billy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

High switching costs

– The high switching costs that Beane Billy has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Cross disciplinary teams

– Horizontal connected teams at the Beane Billy are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Operational resilience

– The operational resilience strategy in the Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Training and development

– Beane Billy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Learning organization

- Beane Billy is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Beane Billy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Digital Transformation in Innovation & Entrepreneurship segment

- digital transformation varies from industry to industry. For Beane Billy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beane Billy has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Superior customer experience

– The customer experience strategy of Beane Billy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to lead change in Innovation & Entrepreneurship field

– Beane Billy is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Beane Billy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Strong track record of project management

– Beane Billy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Low bargaining power of suppliers

– Suppliers of Beane Billy in the sector have low bargaining power. Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beane Billy to manage not only supply disruptions but also source products at highly competitive prices.

Analytics focus

– Beane Billy is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by George Foster, Norm Oa??Reilly, Ryan Lippert, Carlos Shimizu can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

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Weaknesses Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball are -

High bargaining power of channel partners

– Because of the regulatory requirements, George Foster, Norm Oa??Reilly, Ryan Lippert, Carlos Shimizu suggests that, Beane Billy is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

Need for greater diversity

– Beane Billy has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Workers concerns about automation

– As automation is fast increasing in the segment, Beane Billy needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

No frontier risks strategy

– After analyzing the HBR case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball, is just above the industry average. Beane Billy needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Lack of clear differentiation of Beane Billy products

– To increase the profitability and margins on the products, Beane Billy needs to provide more differentiated products than what it is currently offering in the marketplace.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball, it seems that the employees of Beane Billy don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

Slow to strategic competitive environment developments

– As Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball HBR case study mentions - Beane Billy takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball, in the dynamic environment Beane Billy has struggled to respond to the nimble upstart competition. Beane Billy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, firm in the HBR case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Beane Billy 's lucrative customers.

Aligning sales with marketing

– It come across in the case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball can leverage the sales team experience to cultivate customer relationships as Beane Billy is planning to shift buying processes online.

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Opportunities Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities highlighted in the Harvard Business Review case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball are -

Leveraging digital technologies

– Beane Billy can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Beane Billy can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Low interest rates

– Even though inflation is raising its head in most developed economies, Beane Billy can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Creating value in data economy

– The success of analytics program of Beane Billy has opened avenues for new revenue streams for the organization in the industry. This can help Beane Billy to build a more holistic ecosystem as suggested in the Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball case study. Beane Billy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Using analytics as competitive advantage

– Beane Billy has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beane Billy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Use of Bitcoin and other crypto currencies for transactions

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Beane Billy in the consumer business. Now Beane Billy can target international markets with far fewer capital restrictions requirements than the existing system.

Building a culture of innovation

– managers at Beane Billy can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beane Billy to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Beane Billy to hire the very best people irrespective of their geographical location.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Beane Billy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Beane Billy can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Beane Billy is facing challenges because of the dominance of functional experts in the organization. Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beane Billy can use these opportunities to build new business models that can help the communities that Beane Billy operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.

Better consumer reach

– The expansion of the 5G network will help Beane Billy to increase its market reach. Beane Billy will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

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Threats Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball are -

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Beane Billy.

Shortening product life cycle

– it is one of the major threat that Beane Billy is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Beane Billy business can come under increasing regulations regarding data privacy, data security, etc.

Technology acceleration in Forth Industrial Revolution

– Beane Billy has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Beane Billy needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball, Beane Billy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Beane Billy in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

High dependence on third party suppliers

– Beane Billy high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Stagnating economy with rate increase

– Beane Billy can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

Consumer confidence and its impact on Beane Billy demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Beane Billy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Beane Billy in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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Weighted SWOT Analysis of Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Beane Billy needs to make to build a sustainable competitive advantage.

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