Entrepreneurial Business Planning
Discuss about the Sport Entrepreneurship.
Entrepreneurship is a crucial element in the world that has led to economic and social growth. It provides new employment opportunities and improves the economic standing of the country. It involves the application of creativity and innovation in business practices to produce different goods and services (Ratten, 2012).
The sports industry is unique and dynamic, and it is also inherently entrepreneurial in different areas. Sports entrepreneurship is defined as any innovative activity in the context of sports whereby the majority of events that involve risk-taking and being proactive. Sports entrepreneurship is defined by Robson, Wijbenga &Parker (2009) as the mindset of organizations and people who actively engage in the process of pursuing opportunities that may exist in the sports field. It exists because entrepreneurial activities are in almost all sports organizations albeit invisible. Sports entrepreneurship is an emerging field where innovation is critical because it involves mainly the maintenance and creation of new ventures (Rawhouser, Cummings & Newbert, 2017). It also involves decision-making activities, practices, and processes that lead to the development of markets, services, and products in the sports sector (Marvel, Davis & Sproul, 2014).
Sports entrepreneurship thrives because entrepreneurship is a crucial component of a healthy economy and thriving industry. Over the years, the sports industry has been growing extensively, and it is now worth about $600 billion across the globe (Maina, 2018). Even though the recent recession events adversely affected the sports sector, there are still many opportunities in the industry. In the united states, the sports market has been valued at $400 billion (Nová, 2015); (Ratten, 2010). Different factors have influenced the consumption of sport. First, there has been a ‘sportification of the society.’ This refers to the changes that have occurred in the social values and attitudes of the society as well as the economic and political operations. Second, globalization has led to increased consumption of sports products. Another factor that has increased sports consumption is democratization. Finally, technological advances, economic development, implications for civic pride, and sports events have also led to an increase in sports consumption (Ratten, 2011).
Organizations that are sports related usually create connections with different stakeholders in and out of the sports industry and they also contribute to the national economy. The various stakeholders include consumers, competitors, the government, professional athletes, and sports managers.
The sports entrepreneurship industry is different from other consumer products and businesses in a myriad of ways. The sports sector uses symbolic elements such as the teams and athletes. It is also special regarding its promotion methods, finance, marketing, and in its products. Additionally, it has high levels of unpredictability and inconsistency. It also makes use of the celebrity status of different professional athletes. Finally, the sector is characterized by a long product life cycle which is depicted by fluctuating seasonal demand (Hemme et al., 2017).
The Unique Nature of the Sports Industry
Social entrepreneurship just like the entrepreneurship within any given firm is a factor of both internal and external factors. The internal factors include organizational culture, strategies, structure, and the personality of the various leaders. Conversely, the external factors include government relations, product and market cycle, industry globalization, and the environment. Sports entrepreneurship also follows the product life cycle just like any other product. There is the introduction stage where different products and services are introduced into the market, followed by the growth stage. In this stage, the sales revenue increases as the venture gain market share. The firm then enters the maturity stage where the sales stagnate and finally, it gets into the decline stage where sales revenues begin to go down. Since sports entrepreneurship is continually changing, the steps move quickly, and hence there is a need for endless creativity and innovation to identify the next opportunities (Ratten & Babiak, 2010). Sports entrepreneurship is composed of different sports enterprises which may be involved in environmental, financial, and social issues.
In general, entrepreneurship involves profit-seeking and the taking of risks. However, on top of these two elements, sports entrepreneurs are also motivated by other factors such as the love of sports, egotism, and civic duty (Chih Ho, 2017). The individuals who carried out entrepreneurship in the sports field earlier on were trailblazers who were very innovative in a bid to find new entertainment options that they could bring to the market. In so doing they had to take massive risks and work to satisfy different needs that were unmet in the sports field.
According to Ratten & Babiak (2010), innovation is the primary factor when it comes to sports entrepreneurship. Different sports entrepreneurs usually make use of promotional innovation, product innovation, and technological innovation techniques in a bid to remain competitive and satisfy the needs of their target market. There has also been innovation that is related to different sports equipment. Technological innovations that have been created in the sports field can be viewed in various areas such as in computer games and sports videos. In 1992, there was a technology that was advanced in the sports entrepreneurship sector called the photo finish technology. In the recent past, technology has been used in the legitimization of the secondary ticket market by different organizations such as StarHub (Chih Ho, 2017).
Different sports organizations also pioneered innovative approaches to product promotion. The primary tool that has been used in advertising is technology. The new media has been used in sports promotion and marketing all over the world. Sports organizations have made use of different social media platforms such as Facebook, Twitter, Instagram, and Snapchat. Additionally, they have used podcasts, discussion boards, email, and the world wide web to engage sports customers across the globe.
Factors Influencing Sports Consumption
According to Spigel (2015), one of the most viewed categories of online information is sports news. The different sports organizations have a continuous inflow of new customers as well as direct contact with their already existing ones. This enables them to effectively communicate with them and inform them of any changes that may occur in the sector. Therefore, technological advancements have led to the creation of new markets internationally as well as the enhanced distribution of information. Innovation also leads to increased market share and improved profit levels.
The field of sports entrepreneurship is made up of people who leverage different opportunities that exist in the sector and from their networks, and it involves the optimization of resources by assessing to find where they will prove to be most effective. According to Yang Yang & Konrad (2011), sports entrepreneurship is the identification of procedures and conditions through which different business ventures that emerge are created with a social orientation.
The central area where social entrepreneurship occurs is in professional sports. Four major groups have been identified to enjoy the services of professional sports. These include governments and corporations that purchase teams, private investments and the government who construct different sports facilities, television and other forms of media that have exclusive rights to broadcast, the fan base which is characterized by the purchase of the merchandise form various teams, viewership, and levels of attendees (Ratten & Trobe, 2013).
Sports has been intertwined with society over the years. Consequently, in addition to sports entrepreneurs being motivated by increased market shares and profits, they have improved the performance of their organizations through delivering social and community objectives. There have therefore been many welfare programs in the society that have been created by social entrepreneurs that have aided in promoting their brands and enhancing their economic performance. Corporate social responsibility is one crucial element that many entrepreneurs incorporate into their operations. The four pillars of CSR are economic, legal, philanthropic, and ethical operations (Aminian, Nikkar & Sadeghi, 2014). Therefore, even though many social entrepreneurs get into the business with the aim of making a profit, they also operate within the legal and ethical provisions and assist in improving the community around them.
The complexity of the global market has led to increased risks being shouldered by sports entrepreneurs. The different sports contexts that sports entrepreneurs are involved in include community sports that are not motivated by profits to play as well as professional sports teams that are driven by gains for them to play (Aminian, Nikkar & Sadeghi, 2014). It is vital to use entrepreneurial strategies that business people employ in the business ventures when it comes to sports entrepreneurship. One needs to have sufficient knowledge of the market and possess the ability to interact with the different stakeholders in the industry. It is vital always to be aware of the changes and shifts in the market to remain competitive. One major thing that entrepreneurs are aware of is information asymmetry that exists in the marketplace. By being aware of information that other stakeholders do not know in the market, social entrepreneurs can identify opportunities that are in existence and take advantage of them.
The Product Life Cycle in Sports Entrepreneurship
A significant phenomenon that has become rampant in the social entrepreneurship sector is outsourcing. This has become prevalent due to the globalization of the sports industry. Sports entrepreneurs have engaged the services of other people in the production of different goods and services at lower costs than they would have incurred in their countries (Aminian, Nikkar & Sadeghi, 2014). This had led to decreased production costs which have caused the profit margins to increase considerably.
To achieve success, sports entrepreneurs need to be innovative, creative, flexible, and growth-oriented. They are always looking for ways to change the sector by being continually innovative. Additionally, they look for new opportunities that may exist in the industry by considering the different trends that are taking place as well as anticipating future trends. Furthermore, they search for untapped profit sources continually. One primary source of information for sports entrepreneurs is their contacts as opposed to newspapers and magazines.
According to a study conducted by Mondalizadeh (2014), the primary source of information for sports entrepreneurs in the Chicago area hall of Entrepreneurship are individuals in their networks and not public sources of information. Sports entrepreneurs hence use their social networks to improve their capabilities. One significant sports entrepreneur is LeBron James. He signed endorsement contracts with both Upper Deck and Nike before his admission into a professional team of basketball for more than ninety million dollars (Mondalizadeh, 2014). Sports entrepreneurs are also risk takers and optimistic individuals. They also have to be very creative as they start different ventures.
Sports entrepreneurs have also taken advantage of venture capitalists in the sports industry. Over the past few years, venture capital firms have increased their operations in international activities including in the context of sports. Venture capitalists provide market information and resources to the sports entrepreneurs (Jones, Jones & Williams-Burnett, 2017). They have therefore enabled sports entrepreneurs to expand their operations and increase their market shares both in domestic and international markets.
Sports entrepreneurship has been characterized by many challenges faced by the entrepreneurs in the pursuit of different goals. One major problem that they have encountered is the constant change in the form of their enterprises. Entrepreneurship is based on the creation of value through the identification of opportunities. It also deals with the manner in which organizations cope with the changing competitive landscape (Lisetchi & Brancu, 2014). Sports entrepreneurs hence have to remain updated on market changes as well as regularly identify new opportunities, or else they may be rendered obsolete.
Motivations for Sports Entrepreneurship
Another major challenge for sports entrepreneurs is the need to keep up with technological advancements in the industry. The majority of sports fans remain connected with their favorite sports teams through different social media platforms. This consequently puts pressure on the teams to keep updating their Twitter feeds and Facebook timelines. The various sports venues also have to keep up with technology (Ciletti, 2012). Therefore, the social entrepreneurs have to keep enticing fans through the use of technology to ensure that they keep making profits.
Technological advancements have also negatively affected sports entrepreneurship because people are now able to watch the games in the comfort of their own homes. Incidentally, professional sporting groups such as the NFL and the NBA have their television stations and mobile applications. This has adversely affected sports entrepreneurs who provide sports arenas and profit based on the number of attendees. This, therefore, calls for the construction of sports facilities that entertain fans in a way that cannot be replicated in their own homes (Ratten & Trobe, 2013). There has also been a decrease in public support for sports projects causing some sports entrepreneurship ventures to incur losses. Finally, there has been a reduction in public safety which has caused many fans not to participate in sports events.
One theory that explains sports entrepreneurship is the theory of planned behavior. According to this theory, an individual’s behavior and intentions are determined by their perceived behavioral control, subjective norms, and attitudes towards different behavior (Whelan & Msefer, 2006). Initially, the theory of planned behavior started as the theory of reasoned action which was used in the prediction of a person’s intentions to carry out specific activities at a given place and time.
The theory of planned behavior now states that the achievement that one makes is dependent on both abilities which are influenced by behavioral control and motivation (Yang Yang & Konrad, 2011). This theory applies to sports entrepreneurship because this field requires one to have a positive attitude in different entrepreneurial activities. One also needs to be highly motivated to bring about productivity and keep being innovative even when things do not go as intended as is the case sometimes.
Additionally, subjective norms are put into consideration in sports entrepreneurship because one needs to ensure that people will approve of the products and services being offered. Social norms are also critical elements which end up being changed in some cases when sports entrepreneurs introduce new products into the market (Spigel, 2015). The theory of planned behavior, therefore, relates directly to sports entrepreneurship because the entrepreneurs decide on what to do and deliberately create strategies that they employ to make their ventures profitable and involved in social entrepreneurship.
Innovation in Sports Entrepreneurship
Another theory that relates to sports entrepreneurship is the theory of demand and supply. According to this theory, an increase in demand for different products leads to increased prices while an increase in supply causes the prices to decline. Social entrepreneurs apply these principles in their business operations as they seek to increase their profits (Whalley & Clar, 2006). Incidentally, some provide specific exclusive products which are low in supply, and they are sold for very high prices.
Different trends have occurred in the field of sports entrepreneurship. First, in this era of tablets and smartphones, there has been an advancement in stadium technology, and many of them are using smart technology to operate. They provide 4G network and Wi-Fi for fans and even use technology to give replays and deliveries to people’s seats.
There has also been a rise in the number of female fans in sports. Over the years, the field of sports has been male-dominated, but in the recent past, there have been many women who have been endorsed by major companies in the promotion of their brands. Sports have also been characterized by many outdoor live performances and global expansion of the activities. Finally, big data has been used in the decision-making process of different stakeholders. Data analytics is used in making predictions such as the likelihood of a player getting hurt, chances of success, and defensiveness, among others (Yang Yang & Konrad, 2011).
In conclusion, it is clear that sports entrepreneurship has become major entrepreneurial venture across the globe. The entrepreneurs need to keep up with changing trends in the sector and remain updated in a bid to stay competitive. There are also different theories that explain the operations of sports entrepreneurs such as the theory of demand and supply and that of planned behavior. Finally, it is clear that sports entrepreneurs need to be innovative, creative, optimistic, and take risks for them to succeed in this sector.
References
Aminian, E., Nikkar, H. & Sadeghi, S. (2014). The importance of sports entrepreneurship by providing appropriate strategy based on views of sports managers. International Conference on Arts, Economics and Management.
Chih Ho, J. (2017). The effect of supervisor support on employee voice behavior based on the self-determination theory: The moderating effect of impression management motive. Journal of Entrepreneurship & Organization Management, 06(01).
Ciletti, D. (2012). Sports entrepreneurship: A theoretical approach.
Hemme, F., Morais, D., Bowers, M. & Todd, J. (2017). Extending sport-based entrepreneurship theory through phenomenological inquiry. Sports Management Review, 20(1), pp.92-104.
Jones, P., Jones, A. & Williams-Burnett, N. (2017). Let’s get physical stories of entrepreneurial activity from sports coaches/instructors. The International Journal of Entrepreneurship and Innovation. Retrieved from https://journals.sagepub.com/doi/abs/10.1177/1465750317741878 [Accessed 19 May 2018].
Lisetchi, M. & Brancu, L. (2014). The entrepreneurship concept as a subject of social innovation. Procedia – Social and Behavioral Sciences, 124(20). Retrieved from https://www.sciencedirect.com/science/article/pii/S1877042814020114
Maina, P. (2018). Sports entrepreneurship. Kuzabiashara.co.ke. Retrieved from https://www.kuzabiashara.co.ke/sports-entrepreneurship-23435
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Nová, J. (2015). Developing the entrepreneurial competencies of sports management students. Procedia – Social and Behavioral Sciences, 174, pp.3916-3924.
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