Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
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
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 - – there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
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.
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
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 -
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.
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.
Organizational Resilience of Beane Billy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Beane Billy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Innovation driven organization
– Beane Billy is one of the most innovative firm in sector. Manager in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Beane Billy has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball firm has clearly differentiated products in the market place. This has enabled Beane Billy to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Beane Billy to invest into research and development (R&D) and innovation.
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.
Diverse revenue streams
– Beane Billy is present in almost all the verticals within the industry. This has provided firm in Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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 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.
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.
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.
High cash cycle compare to competitors
Beane Billy has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Beane Billy has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Beane Billy even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Beane Billy has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Beane Billy has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Beane Billy has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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 -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Beane Billy can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Beane Billy can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Beane Billy can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Beane Billy to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Beane Billy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Buying journey improvements
– Beane Billy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Beane Billy can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Beane Billy to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
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.
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 -
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Beane Billy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Beane Billy will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Environmental challenges
– Beane Billy needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Beane Billy can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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.
Regulatory challenges
– Beane Billy needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beane Billy can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball .
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.
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.
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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