Using Porter’s competitive forces model, analyze the NBA’s market situation. How does the use of Akamai help the NBA (National Basketball Association) compete in this market?
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According to Michael Porter, there are five forces that influence the strategy that a business chooses to implement. These five forces are bargaining power of customers, bargaining power of the business’ suppliers, threat of substitute services and products, threat of new entrants, and rivalry among the existing competitors (“The Five Competitive Forces” 80). Rivalry among existing competitors has influenced the NBA’s strategy. Apart from NBA.Com there are other sites that provide online streaming of basketball games, break down league statistics, and provide team news. Sites such as ESPN provide news whereas Live-TV-Today has live streams for most league games.
This is NBA.Com’s current competition. NBA has partnered up with Akamai, a global online content distribution platform. One way the use of Akamai has given NBA an edge is through the use of its 25,000 servers located across the globe. These servers and data centres ensure that the site is never overloaded when accessed by many users at the same time. During big games, such as the playoffs, the site traffic is usually very high. Users receive content from the server either closest to them or has a good connection. That teams have dedicated sites on the OS Stream ensures that any news about the team is more reliable than news from other sites. The site is also well organised with an easy to use interface (Akamai).
Using Porter’s generic strategies model, what do you think is the NBA’s overall strategy or strategies?
Porter’s generic strategies model is a way to analyse an organisation’s position in the industry and evaluate its competitive advantage. Companies will employ a differentiation strategy, cost leadership strategy, or a segmentation strategy (Competitive Strategy 25). The NBA has implemented a product differentiation strategy. A product differentiation strategy involves providing a product different from the competition. Organisation will have skills, resources, and capabilities that the competition lacks.
The NBA has leveraged on Akamai’s capabilities in delivering dynamic and personalised content. The reliable and quality online stream of videos and other media from NBA.Com gives it an edge over other sites. The global presence of 25,000 Akamai servers ensures the site does not get overloaded like most sites that are prone to congestion. Akamai is also able to determine what kind of Internet connection users are using. They can therefore customise content for individual users based on this information (Akamai).
Why is it important that all fans in the world have the same experience?
It is important that fans all over the world have the same experience because the NBA is a global brand with global appeal. The games may be played in cities in the United States and Canada, but the fans are located all over the world. The 2013-2014 season will have 92 foreign players from 39 countries playing in the league (Helin). The fans in their home countries will want to have the same experience as the fans watching in stadiums. Delays, especially in relaying live games, and the fans may opt for other sites providing live streams or TV broadcasters.
Why is it important that individual franchise owners can build, manage, and distribute on the NBA platform their own content?
It is important that individual franchise owners can manage and distribute their own content. The franchise owners get to pick content that reflects their team’s culture. They can communicate to their legions of fans across the globe a true reflection of the team. Fans will have the same info on their teams regardless of their location. Franchises are also able to put in place a positive media strategy. In some cases, such as the unveiling of a new player, the franchise may want to be the first to report to the public. With the numerous sources of news on the Internet, fans want a reliable source of information.
The word partnership appears several times in the video. Who are the NBA’s partners? How does the concept of a strategic ecosystem apply to the NBA’s partnership strategies?
NBA’s partners are those businesses or organisations affiliated with the league. They include TV partners, apparel manufactures, sports drinks makers, car makers, and electronics companies. Notable partners include Taco Bell, Gatorade, Kia Motors, and AT&T Wireless (Clark). These partners are aiming at leveraging on NBA’s global appeal to boost their sales. Their adverts are visible on the site, on courtside, and other places NBA events are held. With visitors to the site from 220 countries this is a vast audience for the adverts.
A strategic ecosystem is where various organisations work together to produce a product or service. They combine their varying expertise into a value web. The companies are therefore able to concentrate on their core competencies. They extend to their partners in the value web what they cannot accomplish on their own (Rosemann 17). For example the partnership between Lenovo, NBA, and Akamai creates a strategic ecosystem.
NBA organises the games and provides other content on their site. Akamai ensures that the games and information can be accessed from anywhere in the world. Lenovo gets to advertise on NBA.Com through a marketing partnership (Akamai). This subsequently helps Lenovo increase sales and profits. NBA and Lenovo can therefore reach a wider audience while maintaining their employment and infrastructure costs. Through these partnerships NBA is also able to grow its revenue through advertising.
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Akamai. “Customer Testimonials – NBA”. Online video clip. Akamai. Akamai, n.d. Web.
Clark, Kevin. “NBA Renews Major Ad Partnership Deals.” The Wall Street Journal: Online Edition. The Wall Street Journal, 2011. Web.
Helin, Kurt. “Record 92 Foreign Players on NBA Rosters.” Pro Basketball Talk. NBC Sports, 2013. Web.
Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press, 1980. Print.
—. “The Five Competitive Forces that Shape Business Strategy.” Harvard Business Review, Vol. 13, No. 1 (2008): 78-93. Print.
Rosemann, Michael. Handbook on Business Process Management 2: Strategic Alignment, Governance, People and Culture. Berlin: Springer Heidelberg, 2010. Print.