Internal Analysis of the NBA - Assignment Example

Internal Analysis of the NBA Introduction The National Basketball Association is among the global sports association and since its inception it has strived to maintain its image in the international sport. It is imperative to note that the path to gaining an international image has not been smooth. Several questions have to be answered in order to get a limelight if NBA is capable of maintaining its image globally. One may ask if it has the resources and capabilities in the 2010-2011 seasons. If it has the capabilities and resources; are they hindered by desire for global success? These are some of the questions that the paper will attempt to answer. The best approach to internal analysis of NBA will be discussed. The approach will assist in the analyzing the strengths and weaknesses of NBA. The paper will begin by analyzing the capabilities and resources NBA had before the 2010-2011 season; the analysis will be from a case study done by Coulter. The capabilities and resources in the 2010-2011 seasons will be analyzed. The best approach to internal analysis of NBA will be discussed. Resources and Capabilities NBA Has As Of the 2010-2011 Season The Resources and Capabilities before the 2010-2011 Season (The Case Study) The National Basketball Association (NBA) has undergone tremendous changes from a domestic sport to an international commercial sport and this indicates a major understanding of the resources and capabilities. All the success and efforts are attributed to the NBA commissioner David Stern who has helped NBA become a global brand. Professional basketball began in the mid-1990s and NBA gained the international game appeal. There are key players in the NBA who have sparked international interest. These players include Yao Ming of China, Dallas Mavericks’ Dirk Nowitzi of Germany, Pau Gasol of Spain, and Tony Parker of France, Denver Nuggets of Brazil, Gordan Giricek of Croatia and Darko Milicic of Serbia. All the mentioned are international basketball players. It is estimated that out of all the players in the NBA, 64 players come out of the United States territory. Other than the international players, NBA has taken its games globally. The NBA league has held several preseason games in the Latin America, Asia and Europe. Among the major plans by the commissioner of NBA was creation of multiple teams in the European region before the end of the 2000 decade. The NBA league has faced challenges like the retirement of Michael Jordan and the cancellation of almost a third of the league games in the mid-1990s. The challenges almost crashed the NBA league. Stern, the commissioner of NBA addressed the issues by looking at what the NBA had top offer, that is the resources and capabilities. He found that NBA could offer consumer awareness of basketball both domestically and internationally, several young talented players and renowned image and a track record (Coulter 132). Among the things that Stern did were: Expand the NBA offices network globally. The reason was to gain the NBA popularity, make it visible to the consumers around the world, sell a vast amount of track records and make several tours occasionally. Enhance the image of the NBA league on the Internet through its web site. It is estimated that about 40 percent of the people who visit the NBA website come from the rest of the world; that is outside the United States (Coulter 133). The Resources and Capabilities in the 2010-2011 Season The External Environment Globalization NBA has utilized the television and commerce to popularize the game globally and its influence in the world has been fuelled by marketing and television. The television has allowed NBA to reach many people around the world; it is estimated that NBA league is watched in 212 countries and in 42 different languages. The estimated number of people watching NBA league through the television is said to be over 750 million people. The foreign players in the NBA league are estimated to be around 80 of the 430 positions in the NBA team. This shows how NBA has its touch on the global basketball game (Wachtel 1). The playing field in the basketball is becoming more financial as foreign leagues are buying players from the NBA league. The dominance of NBA in basketball around the world is diminishing and this may deprive it of its resources and capabilities (Wachtel 1). Demographics Almost a half of the adults who attend NBA league matches are educated and have college degrees. The median household income of NBA fan attending the NBA games is approximately 87,000 United States dollars and the average household income is around 116,000 United States dollars. From these statistics it is evident that NBA has the resources because most of its fans are educated and their earnings average (NBA). The age group that mostly attends the NBA games is the 25 to 64 age group; they make up 63 percent of all the fans. The NBA fans are from different ethnic groups. Ethnic minorities make up 23 percent of all the NBA fans (NBA). Economy The NBA Collective Bargaining Agreement is expiring at the end of the 2010-2011 season and conflicts are emerging as new negotiations begin. The conflicts are not about negotiations but money. Mediocrity is the order of the day as the owners do not want to pay the players a good amount of money and the players argue that the amount they are currently being paid cannot sustain their families (Smith 1). The conflicts in the negotiations are set to affect the performance and credibility of NBA in the 2010-2011 seasons. This may deprive them of their resources in terms of the revenues and their capabilities in terms of the players’ morale. Technological Changes NBA is set to hold a technological summit that will discuss the changing dynamics in the technology, media and sports. In the previous summits held, changes in distribution platforms, content creation consumer adoption, business models and other political and social implications of the digital age have been discussed. The focus in 2011 will be on the consumer models in ticketing, video and mobile platforms, disruptive digital business and a look at the development of the universal broadband access in the developing world (NBA). Regulations and Their Effect on the Buying of Players The NBA league is constantly looking for the foreign players in order to maintain their popularity and there are factors to look into when recruiting international players. The regulations on the legal entry requirement into the United States may deprive NBA of young players. These players have the potential and are capable of competing in the NBA league but the age restriction constraints the young players (Free Management Articles 1). The reliance on young players may adversely affect the performance of NBA league. NBA has the resources and capabilities but they might affect their desire for success in the 2010-2011 season. The diplomatic relationships between the United States and other nations may affect the recruitment of potential international players. As the manager of NBA, a lot of information is required to determine where to recruit the players as this may affect the ease of the player transfer process (Free Management Articles 1). It is imperative for the management of NBA to keep update with the current international diplomatic relationships with the United States. Internal Environment NBA Management The NBA Commissioner is David Stern and he is among the recognizable executives in the world. He was recognized as the “Most Powerful People in Sports” by the Sporting News. NBA is led by a team of dedicated and skilled individuals who work very close to the Commissioner for the achievement of success (NBA). NBA and Collective Bargaining The Collective Bargaining Agreement is a legal contract between the Players Association and the league and it sets up the rules which are to be followed and operate on. It defines the procedures for determining salary cap, the salary cap, the maximum and minimum salaries, rules for traders, and the NBA draft procedures. It also prevents the NBA from violating antitrust laws. The current Collective Bargaining Agreement is set to expire in the 2010-2011 season. Although it set to expire at that time, the league has the option of extending the expiring date to the 2011-2012 seasons (Coon). NBA Profitability The owners of NBA suggest that in the period of 2009, the expenses and players salaries went out of control and that NBA lost close to 400 million dollars in that season. The owners want to scale the 57 percent of the revenue designated to players to the current agreement that expires in the 2010-2011 season. In the same season, the sales increased by more than 40 percent; that is about an increase of 50,000 sales (Falgoust 1). Approach to Internal Analysis of NBA SWOT analysis will be the best approach; the approach used by Coulter was not very effective. In the SWOT analysis, four parameters are analyzed; strengths, weaknesses, opportunities and threats (RapidBI). By definition, SWOT analysis is a process that helps in the generation of information that helps in the matching of the organization’s programs, goals and capacities with the social environment on which it operates. Strengths and Weaknesses Strengths include the positive intangible and tangible attributes that are internal to the organization and are within the control of the organization. Weaknesses include the factors that are within the organization and make the organization to deviate from attaining its goals. Weaknesses also include areas in which the organization can improve. There are several things that are looked at when analyzing weaknesses and strengths of an organization; The human resources that is the people; their skills and the staff development. Properties such as equipments, buildings and other facilities. Processes such as financial resources, governance, leadership or management, staff development and communication. Products such as sales, products, markets, capabilities, capital structure suppliers, customers and intellectual property (RapidBI). In the case of NBA, these factors are very important in determining their strengths and weaknesses. The players’ skills are very vital in the success of a team. The staffs need to be well trained to yield better results. Better facilities and buildings are also crucial. The governance of the association must concur with the association’s goals if the association has to endeavor. Opportunities and Threats Opportunities are the external factors that are attractive and they show why the organization has to develop and exist. These are opportunities that exist within the environment of the organization. Threats are external factors that are beyond the control of the organization and can place the organization at a risk in its mission or operation. The organization can benefit if the threats are dealt with once they occur. Two factors are looked at in the opportunities and threats; environmental and competitor factors. Environmental factors include the demographics, economic, political/legal, sociological, environmental, technology and cultural. Competitor factors such as resources, capability, ownership, new entrants, market segments, products, prices, promotion, distribution, substitute products, suppliers customers, product life cycle and cost and risk of intellectual property violation of the products (RapidBI). NBA has many opportunities that are unexploited within the sport market segment. There are many potential and capable players around the world. These players can boost the image of NBA in America, the world and the countries from which these players come from. The technology has come in handy and this is a great opportunity for NBA to showcase its talents and capabilities to the world. Threats are looming as many foreign basketball associations are buying players from NBA. This may deprive NBA of the best talents and have an effect on the performance of NBA league. Competition is becoming high and this is a possible threat to NBA. The controversies surrounding the collective bargaining renewal may affect the image of NBA both locally and internationally. Works Cited “2011 NBA All-Star Technology Summit.” NBA, n.d. Web. 11 Feb. 2011. “Globalization of Basketball.” Connexions, 16 April 2009. Web. 11 Feb. 2011. “Macroenvironment of NBA Sports Industry.” Free Management Articles, n.d. Web. 11 Feb. 2011. “Market Economy or Greed: Are NBA Salaries Out of Control?” bleacher report, 12 Feb. 2010. Web. 11 Feb. 2011. “NBA Salary Cap FAQ.” Larry Coon, 2010. Web. 11 Feb. 2011. “Playing at the Pro Level.” NBA, n.d. Web. 11 Feb. 2011. “SWOT Analysis – Matrix, Tools Templates and Worksheets.” RapidBI, 29 Nov. 2007. Web. 11 Feb. 2011. “Winning Audience: The Milwaukee Bucks/NBA Fan.” NBA, n.d. Web. 11 Feb. 2011. Coulter. Strategic Management in Action. n.d. Print. Falgoust, Michael. “Ticket-Sales Figures give Union Swagger Heading into Talks.” USA TODAY, 10 June 2010. Web. 11 Feb. 2011. Read More