Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, 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 -
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.
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.
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.
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.
Successful track record of launching new products
– Beane Billy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beane Billy has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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.
Ability to recruit top talent
– Beane Billy is one of the leading recruiters in the industry. Managers in the Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Beane Billy has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Billy Beane and the Oakland Athletics (A): Disruptive Innovation in Major League Baseball HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Beane Billy has relatively successful track record of launching new products.
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.
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 -
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beane Billy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
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.
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.
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.
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.
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.
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.
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 -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Beane Billy needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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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