Introduction
The National Basketball Association is among the most well-known organizations in the sports and media industry, being established from the merging of two entities. In contrast to many enterprises, the NBA was designed as and still is, a totally autonomous and self-managed organizational entity (a limited company) whose participants, the teams, are franchises running as individually owned companies. While in the 1940s, franchises received approximately $10,000; nowadays, they receive over $300 million (Mintzer & Mintzer, 2020). However, the success of the NBA should be attributed to not simply marketing but collective efforts and continuous expansion and diversification of services, which made the association among the most powerful entities.
Core Competencies
The NBA has several core competencies. For example, the first one is connected with NBA TV, which “provides both NBA and WNBA games plus league-related programming 24/7” (Mintzer & Mintzer, 2020, p.120). This makes the services of the company more accessible to the customers. Another competency is merchandising, which “continues to be a global multi-billion-dollar industry” (Mintzer & Mintzer, 2020, p.120). The merchandise connected to the players creates a broader customer base. Finally, there are youth camps and programs that “teach young people important skills both on and off the court” (Mintzer & Mintzer, 2020, p.120). In this case, the NBA focuses on the skills of players that can be applied in the field and after retirement, which makes it unique.
Competitive Advantage
Regarding the competitive advantage of the NBA, it is noteworthy that the organization is capable of recruiting and retaining talent in the sphere of basketball and monetizing their abilities and skills even after the stars retire. For example, initially, the association began its operations by attracting “the best young pros fresh out of college,” and then it slowly progressed to incorporating not only men’s teams but women’s teams as well, making the entity more inclusive (Mintzer & Mintzer, 2020, p.70). In this case, the NBA’s biggest advantage is the exceptional recruiting skills. Thus, in comparison with other companies, the NBA has an advantage.
Porter’s Model
It is additionally vital to review Porter’s Model of the NBA. In the book, the authors clearly emphasize the power of the organization and the inability of the new entrants into the industry that could be severe competition to the entity. Due to the financial ability of the NBA to market its brand and attract the best talent, it is nearly impossible for other entities to enter the market. Consequently, there is no threat of substitution since the brand of the association has existed since the 1940s, and the services that the NBA provides, such as the agencies that offer teaching from former NBA players, cannot be substituted (Mintzer & Mintzer, 2020). As for the main competitors in the sports industry, these are Major League Baseball, the National Football League, and The National Association for Stock Car Auto Racing, which are almost monopolies (Mintzer & Mintzer, 2020). In this situation, while in the sports industry, there is intense competition, there is no similar entity in the basketball sector.
The next important aspect is the power of customers, and it can be seen through the sales of merchandise, the prices of which are boosted by clients due to high demand. The merchandising service of the NBA is worth several billion dollars due to this factor (Mintzer & Mintzer, 2020). Finally, the power of suppliers can be seen through sponsorships, and in this case, there are many suppliers of the NBA, and they involve communication companies, such as Verizon, food industry firms, such as Pepsi, and others (Mintzer & Mintzer, 2020). Therefore, the association remains one of the most powerful entities in the sports industry.
VRIO
Finally, the VRIO aspect involves the value, rarity, imitability, and organization of the NBA. The first factor, value, can be seen through the worth of each franchise of the association. According to the estimates, every entity is worth around $2 billion, which makes the NBA valuable (Mintzer & Mintzer, 2020). As for the rarity, in the context of basketball associations, the given entity takes the leading place, and its services are rare, which even allowed the NBA to top MLB in 2017 (Mintzer & Mintzer, 2020). While there is a possibility for the imitability of the services, it is costly, and when taking into account the famous players, it is impossible to imitate the basketball school. Finally, the organization of the NBA is a limited entity, which means that all decisions are made by a certain number of members, making it efficient and less controllable by outside forces.
Suggestions
The suggestions that might be lucrative for the NBA involve increasing brand awareness through positive media coverage. This can include promoting sustainability along with their sponsors and players. As a result, the association can gain an enhanced competitive advantage. Moreover, the organization might create a fund that will support children and young individuals from both developing and developed countries who desire to pursue careers in sports.
Conclusion
In sum, the NBA’s success should not be credited to marketing but rather to group efforts, constant service expansion, and service diversification, which helped the association become one of the most powerful organizations. First, the NBA emphasizes a variety of supplementary services in addition to the games and sponsors. The NBA has the edge over other businesses in luring basketball players and incorporating the academies. As seen from the VRIO model, the company is valuable when looking at franchisees’ worth and has a limited organization, making it less controllable. It additionally has rarity since there are no similar companies and inimitability due to the players.
Reference
Mintzer R. & Mintzer E. (2020). The NBA story. HarperCollins.