How Business Innovation Feeds into Sport

Innovation in a Competitive Environment
09/01/2020 16:18

Sport is sometimes seen as a sector which lags behind the corporate sector in terms of innovative thinking, technology and reinventing itself to stay relevant with new generations. This is also a core reason for the foundation of companies such as Sports Innovation Lab and projects such as the ERASMUS+ funded project CHAMP.

 

Upon this reflection, ICSSPE led a videoconference discussion on innovation in the corporate sector and examined the most relevant tools and good practices that can be transferred to the sports movement.

 

Inaugurating the discussion was Keri McDonald, TAFISA staff member and ICSSPE co-author of the CHAMP literature review which collected evidence-based business innovations, concepts outside the field of sports, in order to derive a learning opportunity for sport club innovations. Following this, ICSSPE Executive Board Member Anneliese Goslin, guided the dialogue towards an in-depth look into current innovation and strategic management in sport clubs. During the videoconference the previously mentioned literature review was deconstructed. Some key takeaways from this discussion are as follows:  

 

Business Models and Environments 

 

Cooperate companies which lie on different environmental levels were analysed using three different business models – PESTEL, Porters Five Forces and SWOT. Through this analysis sport clubs can gain a holistic overview of its business opportunities and limitations.

 

The Macro level –  Analysing a global leader such as McDonalds can help sports clubs to understand how companies positively respond to external environments and how they adapt to change, retain clientele and foster loyalty. For this analysis PESTEL was used as it examines in-depth the complete external environment.

 

The Meso level – The analysis of transnational cooperation’s like Uber, shed light into a highly competitive environment. Porters Five Forces was used alongside the analysis as it is designed to focus on the competitive environment in which the companies are situated in. Insight such as this, provides understanding to the different ways cooperation’s adapt in competitive environments.

 

The Micro level – Looking at companies from an organisational level, such as TOMS, helps sports clubs to dismantle their inside. The SWOT analysis was used for this as it specifically looks at the current organisation’s situation and position through the analysis of the strengths, weaknesses, and the opportunities and threats. Through this, strategies can be revised.

 

Furthermore, through implementing the ‘consumer loyalty model in the organised sports movement’ (insert link from you tube video of where she talks about the model), sports clubs are more likely to sustain a consumer following. The key components within the consumer loyalty model are; competitor advantage, satisfaction, perceived quality, brand image and multiway communication. The five components all feed into loyalty, which leads to acquiring and retaining customers. Being innovative in all five components must be accommodated by sports clubs in order to stay ahead of the game. The results from the different case studies were translated into the five components, providing sports clubs with structured tips and guidance on how to stay innovative:

 

Competitor advantage

  • Consider economic context, is this affordable for my target market?
  • Define your Unique Selling Point(USP)
  • Offer referral programme

Satisfaction

  • Adapt to the needs of target – consider if services are accessible
  • Modernise services – consider apps, payment methods, ask for feedback,
  • Provide customer services built on trust and care. Retaining customers is cheaper and recruiting new customers.

Perceived Quality

  • Align with governmental strategies
  • Build long term relationships with consumers by understand needs
  • Signify the club ethos to provide high quality products/services

Brand Imagine

  • Cooperate Social Responsibility (CSR): Increase your credibility through ethical and sustainable business decisions
  • Nurture your staff and promote employee satisfaction as a core of your business approach
  • Consider political situations – it is hard for brands to recover from controversy

Multiway Communication

  • Utilise technology to obtain data relating to market behaviour and consumer trends
  • Use digital marketing and social media to increase brand awareness and reach – cheapest form of raising brand awareness and engagement.

 

Current Innovation in Sports Clubs

 

There is evidence that innovation is somewhat alive within the sports movement. However, it is partly dependent on the type of sport organisation. Innovation in commercial sport organisations are more advanced with technology and the products offered, whilst non-profit sport organisations are more often focused on services and to a small degree product innovations. Anneliese Goslin considers innovation a natural output of creativity; and some business models, in particular the non-profit sport club business models, tend to block creativity due to the lack of analytical and strategic thinking. Analytical and strategic thinking is not regarded as a necessity within sport business models, therefore innovation is hindered. In addition to this there is a huge lack of time and commitment to drive innovation in governing boards which consist of volunteers. Reversely strategic management, analytical and strategic thinking and Key Performance Areas are at the core of corporate businesses – ultimately opening the door to creativity. Strategic Management is an essential tool that sports clubs must utilise if they want to translate their vision into reality.

 

Watch the full presentation from Keri on the ICSSPE YouTube Channel.