Business Plan: Business Plan for Oakland's Women

Pages: 20 (5622 words)  ·  Bibliography Sources: 10  ·  Level: Master's  ·  Topic: Sports  ·  Buy This Paper

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[. . .] Other WNBA teams which have also secured sponsorship deals so far include the Washington Mystics with Inova Health System, Seattle Storm with Bing, New York Liberty with Foxwoods Casino and Los Angeles Sparks with Farmers insurance.

Another business strategy adopted by WNBA teams to grow their revenue base includes selling of teams merchandise products, which are mostly the WNBA jerseys. Sales of WNBA merchandise products has so far recorded impressive growth because in 2008, the league merchandise sales increased by 36 per cent while sales of WNBA jersey increased by 46 per cent. In the period of 2009 to 2010 the leading offseason jersey sales were those of Candace Parker who plays for Los Angeles women's basketball team.

WNBA teams also depend on ticket sales as their primary source of income and if there is a large turnout of fans this means that the team will be able to cover the cost of its expenditure budget that comprise of expenses such as players salaries, purchases of training gears, coaches and other technical assistant staff salaries and maintenance of their court among other expenses.

Conclusively it is important to note that up to the present moment the Women's National Basketball Association has not been able to replicate the same financial success that has been recorded by the National Basketball Association. Secondly, the success of any business strategy employed by any of the WNBA teams largely depends on the performance of that particular team in the league championship i.e. teams that perform better in the league mostly recorded success in their business strategy unlike those teams that perform poorly in the league championship (Porterfield, p. 51-57, 2008).

Analysis of the industry and business environment

Under this section the business plan will detail a comprehensive analysis of the sports industry specifically in Oakland, California and the business environment that exits in that area. This analysis will help in justifying why it is feasible to establish a WNBA team in Oakland, California. The tool or theories that will be applied in this analysis include the Porter's five forces, the SWOT analysis and the pest analysis.

Porter's five analyses

According to Porter (1980) the five forces help in determining how the economic value of a service or product is divided among the industry and the prospective new entrants, substitutes, distributors, suppliers and customers. Analyzing these forces show the fundamentals of the industry that are attractive, it further indicate the drivers of industry profitability and gives a forecast of how industry profitability will evolve in the future.

Illustration of the Porter's five forces;

Threat of substitutes

Bargaining power of customers

Bargaining power of suppliers

Rivalry among existing competitors

Barriers to entry

Source: Studies conducted by Gibbs and Sutton (2001, p. 67).

Threat of substitutes

General substitution in the market has the potential to reduce the demand for a particular product or service since there exists a potential threat of customers switching to another alternative (Porter, 1980). In the basketball sports industry this threat exists due to existence of different leagues that also include the National Basketball Association which is more superior to the Women's National Basketball Association. However, in Oakland, California this threat is mitigated by the fact that the Bay area is itself very popular with women's basketball, in addition the Stanford University and the University of California, Berkeley women's basketball teams both have great fan support. This therefore means that a WNBA team in Oakland will be less threatened by the existence of other substitutes due to high fan support for women's basketball in the region.

Bargaining power of suppliers

This present business plan for the establishment of a new WNBA team in Oakland, California tends to increase the bargaining power of suppliers who in this case are the corporate sponsors. The bargaining power of corporate sponsors will increase because they will be exposed to more teams which may be performing equally well in the league championship. The increase in number of WNBA teams exposes corporate sponsors to more teams thereby lowering the leverage of teams in the WNBA. With regards to the WNBA teams it gives them equal access to corporate sponsors and increases the need for better performance amongst them. Lastly it eliminates various barriers for new entrants, which increases the numbers of teams in the WNBA and hence diverts power to suppliers again (Porter, 1980).

Rivalry among the current industry players

The Women National basketball Association has witnessed a very significant increase in the number of teams in the league since its inception and there has also been a league dominance of big teams, which have star players and great financial resources. Thus for any new basketball team in the league such as the one to be established in Oakland, California the competition will be too high and in order to win over a larger fan base the new team will have to strive harder and become the best in the WNBA league championship.

Investors of the new Oakland team should be ready finance the new team and ensure that it is made up of Oakland's best women basketball players and that the teams is well equipped and properly trained. This will not only guarantee the team a high standing in the WNBA league but it will also enable the team win over their rival teams in the WNBA.

The fan base and corporate partners' bargaining power

According to Porter, the more services and products become undifferentiated or standardized, the lower the cost of switching to an alternative product and hence more power is passed onto the consumer. As for the new Oakland's WNBA team it has no option but to perform better in the league championship in order to maintain their current fans and corporate partners otherwise due to the supporter's higher bargaining power they are likely to switch to other teams once the new Oakland teams performs poorly in the WNBA league championship.

Threat of new entrants

The new Oakland's WNBA team shouldn't be threatened by the possibility of other new teams joining the Women National Basketball Association because the various requirements that exist before a team can join the WNBA are very high and only a few teams can meet those standards or requirements.

Pest analysis

Political and legal analysis

Since the new team that will be established in Oakland, California will be representing the region in the United States' women national basketball association league championship, this therefore means that the team's performs and operations will be subject or under the influence of the legislative and political conditions of State of California.

Legislations governing sports and in particular the women's basketball are the main political factors that will majorly affect the new Oakland's women basketball team and if the team through its operations is always keen on observing and adhering to these legislations, then it will not be negatively affected by political factors (Ehrbar, 1998). It is also important to note that polices and regulations of the Women National Basketball Association also count as political factors that will influence the teams operations and performance. If the WNBA introduces policies which are unfavorable to the team then this most likely will negatively affect the team's performance, and also if the team fails to adhere to rules and regulations prescribed by the association it will face unfavorable consequences.

Economic analysis

External economic factors are likely to influence or affect the teams overall operations and performance. According to Ehrbar, (1998) the main economical factor likely to affect the new Oakland's women's basketball team is the high unemployment rate within the region which is attributed to various factors that include the recent economic recession. This will have a negative impact on the attendance or ticket sales of the team since it is only a few people who will have a considerable amount of disposable income and can indulge in leisure activity such a buying tickets or team's merchandise products. The economic factors can't be controlled by the team hence its' financial performance or profitability is largely dependent on the global economic condition.

Social-cultural analysis

Oakland, California as a region is considered as one of the most multi-cultural regions in the United States of America; meaning that the population is composed of more multi-ethnic / racial persons than other regions in the United States. And due to the fact that the new team will be established in such an environment it is therefore necessary that it ensures it represents this cultural or ethnic diversity in its team set up. The team's players will have to be drawn from different ethnic/cultural background to ensure that it is a true representation of the region and that local supporters can identify themselves with the team.

Competitive analysis

The Women National Basketball Association's league championship is characterized by intensified competition among different teams in the association which are all equally qualified and have players with great skills in basketball. This competition is the major threat for the new Oakland's women basketball… [END OF PREVIEW]

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Business Plan for Oakland's Women.  (2011, July 11).  Retrieved April 23, 2019, from https://www.essaytown.com/subjects/paper/business-plan-oakland-women/1263049

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"Business Plan for Oakland's Women."  Essaytown.com.  July 11, 2011.  Accessed April 23, 2019.
https://www.essaytown.com/subjects/paper/business-plan-oakland-women/1263049.