Money Balls Strategy - Essay Example

Money ball’s Strategy The movie money ball is about the Oakland A’s team, and their use of a revolutionary new strategy called sabermetrics. The film is based on the Oakland Athletics team’s season in 2002, and Billy Beane’s, the team’s manager, attempt to establish team, which would be highly competitive, in the future. The manager and assistant General manager Peter Brand are confronted by a financial situation that is unfavourable to their franchise. With the departure of their star players on the free agent status, they come up with a sophisticated approach called sabermetrics. This approach involves the scouting and analysis of players followed by their acquisition. Through this strategy, they acquire Chad Bradford, a pitcher, and Scott Hatteberg, a catcher. They go on to win an American league record 20 games in a row. This team did not qualify into the World Series in 2002, and they have not made in back into the series ten years down the line. These years remained impressive ones, not only in the history of the game, but also in the franchise. The need to get this team back into World Series, and win more titles called for the team’s top management to adopt and implement new strategies, which will ensure the future success of this team. This paper, therefore, seeks to describe how new strategies, especially technology and innovation, can create a competitive advantage for an organization with reference to the movie “Money ball’s Strategy”. The Oakland A’s vision was to find young players who had little ability for pay negotiations (Rosner & Kenneth). In 1995, new management broke up the roster of the team in order to trim costs and this caused performances to nose dive. At this same period, they designed the new strategy based on a low budget, concentrating on on-base percentage. By 1999, performances had begun to improve, with their revenue responding to this performance. Attendance spiked dramatically, while ticket prices also rose. This showed that their strategy for getting victory in games was successful at exploiting the opportunity at profit. During the period spanning 2000-2004, the average position player’s wage went up from $2.6 million to $3 million (Rosner & Kenneth 358). Home run hitters earned approximately $3.5 million more than the rest of the players. This was difficult for the Oakland A’s team to follow, since they were not in a position to challenge well-established and financially sound teams. However, the Oakland A’s discovered that there was gross undervaluation of on-base percentage in the market. The most significant method of measuring skill at batting had been batting average, which weighted home runs and singles the same. The slugging percentage was also in use where home runs counted four times as much as singles. These two, however, ignored walks and sacrifices. There was undervaluation of the ability to get on base. Lack of hitters possessing superior skill at market premiums, who master the patient art of touching base via walks, validated the A’s approach in identifying these players. This translated into winning more games at a discount compared to their competition. At first, however, the team’s scouts were hostile and dismissive to the sabermetrics approach that was non-traditional for scouting players. The manager began to select players based on base percentage, therefore, assembling a team with more potential than their finances would have allowed. The Oakland A’s used an integrated low-cost and differentiation strategy (Rosner & Kenneth 358). This allowed them to adapt to the changing financial environment, which was going beyond them, allowing them to learn and integrate new technologies and skills, while improving their ability to leverage core competencies more effectively across their business model, and enabling them to purchase hitters with improved features at much lower costs. Using this strategy, they managed to exploit the low market demand that was there for those kinds of hitters before their competition realized what they were doing. The Oakland A’s, however, did not win a world series, even with the sabermetrics approach. Their competition especially the Boston Red Sox hired the father of sabermetrics, Bill James, and adapted the approach that he had helped the Oakland A’s integrate. This helped them win their first title in decades. The Oakland A’s have not gone undergone the same winning record when compared their earlier blazing run. This could be symptomatic to the coming back into play of money as other teams adopted the sabermetrics approach. Therefore, when the competitors caught up, the rules changed again (Rosner & Kenneth 359). The management strategy of the Oakland A’s was to minimize payroll and contend for a spot in the playoffs (Rosner & Kenneth 360). They were able to win on the cheap, where other teams fared worse with much larger budgets. Their strategy was implemented by going for cheaper and younger players who showed outstanding potential. Their organization structure consisted of several levels of teams that went all the way down to the kids. These are professional level, the AAA level, also the Sacramento River cats, the AA level, also the Midland Rock Hounds, the A+ level, also the Stockton Ports, the A level, and the A- level (Rosner & Kenneth 360). The levels below professional all act as feeders for the professional level grooming talent. This structure was driven by the vision of minimizing costs spent on buying premium players via spotting talent from a young age through sabermetrics and grooming them for the professional level. Their structure changed to adapt to their strategy since the lower levels had been neglected and only consisted of three levels (Rosner & Kenneth 360). All this came with vehement opposition from scouts, and the athletics manager himself (Rosner & Kenneth 360). The manager decides to play the team to their traditional ideals, despite the fact, that they were unsuitable recruiting via the new sabermetrics method. They overcame this by trading away their remaining traditional star player to force the manager to switch to the new and unproven recruits, which worked. Today, the A’s are struggling in the league, and are in the process of registering worst performance that they have had experienced, in the last ten years. The strategy worked for a while before other teams picked it up and hired better coaches at better remuneration packages. The club is still using their sabermetrics methods, but they are now open to all and thus not an advantage. Work Cited Rosner, Scott and Kenneth L Shropshire. The business of sports. Sadbury: Jones & Bartlett Learning, 2011. Print Read More