NBA Video Case Essay

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Chapter 3 Video Case
Jeremy M. Deck

1. Porter’s Competitive Forces Model, or five forces model as it is also referred to, is used to evaluate the impact of several broad factors that exert forces on an industry collectively. The NBA is a professional sports conglomerate that has the rights to all professional basketball played in the United States. What is unique about their position is that their content and products are protected by US copyright laws under intellectual property, but many countries outside of the US do not adhere to these laws. Additionally, the NBA is the number one professional basketball franchise in the word. This also puts them in a unique position in that their competition is very minimal with relation to their current scale. Akamai provides a one of a kind service to the NBA in that content streamed over the internet is only streamed to those people that have subscribed thus preventing pirating and copying. This enables the NBA to enforce their copyright restrictions on individuals outside of the US, and simultaneously deliver that content at the fastest connection speeds possible to ensure the NBA’s integrity.
2. Porter’s Generic Forces Model highlights a business’s strategy towards achieving a competitive edge over their competition. The NBA not only has a competitive advantage in the US and increasingly worldwide, but they also arguably possess an absolute advantage in the area of professional basketball. They must compete with other professional sports teams, globally, but they have cornered the market in that they have carved out a niche that enabling them to focus on their efforts on monitoring their content. This effort helps them monitor to whom and where they content is delivered. This data suggests that pursue a higher cost differentiation focus strategy highlighted in the bottom right quadrant. This is possible because they have a very narrow competitive scope and can focus on providing services that provide innovative customer solutions.
3. The NBA is an increasing global company. They must reach customers and fans around the world without regard for the time of day in the US. The content must be delivered at a comparable speed of content in the US. NBA fans internationally have the disadvantage of living sometimes 12 hours around the other side of the world. This means the NBA’s content must stream live to those that are interested in seeing a game at 4:00 AM, and conversely must be able to be viewed 12 hours later with the quality and feel of live. The quality of the content allows the NBA to expand its reach into more countries around the world and deliver this content in almost real time in HD quality. In an interview with Forbes NBA President, Heidi Ueberroth, was asked specifically what is driving international interest in the NBA: “It’s all about the game. The Playoffs were incredible, and The Finals match-up features All-Star players that are known worldwide. Basketball’s popularity is at an all-time high. Fans want to see the very best compete and what’s unique in our sport is that the best players in the world play in a single league. Basketball is the number-two sport globally with an estimated 500 million people playing the game. We work with FIBA, the governing body of basketball, and local federations on developing the game at the grassroots level. We believe our joint efforts to encourage participation helps bring fans to the game.”
Akamai helps the NBA deliver this content and because of the game’s popularity, they can afford to take innovative approaches with respect to their content, the game itself that showcases international talent.
4. Individual teams can help showcase their brand, and this helps not only loyalty in the brand but the teams themselves. The Chinese people tuned in to watch Yoa Ming, and thus many were Houston Rockets fans. However, more importantly the NBA has a vested interest in controlling the merchandise and content
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