Bringing a WNBA Team to Oakland CA

Business Plan for Oakland's Women Basketball Team

Women's National Basketball Association (WNBA)

WNBA's Business strategy

Analysis of the industry and business environment

Porter's five analyses

Pest analysis

Value proposition

The new Oakland's women basketball business strategy

Marketing plan

Implementation of the business plan

Project forecast budget

WNBA stands for Women's National Basketball Association and it is a women's professional basketball league in the United States of America. At the present moment the league is only made up of twelve teams. It was first established in 1996 as women version of the National Basketball Association (NBA) which is male dominated, and the league hosted its first official match in 1997. The Women National Basketball Association usually holds its regular season in the period of June to September, with the finals being played in the month of October, however, in 2010 the regular league season was held in the period of 15th May to 22nd August due the World Championship that was held in September the same year.

It is important to note that most of the teams in the Women's National Basketball Association all have counterpart teams in the National Basketball Association expect for a few. The Tulsa Shock, the Seattle Storm and the Connecticut Sun are the only three teams in the WNBA which don't share the market with a National basketball association counterpart team. On the other hand the Chicago Sky is the only team in the WNBA that has its own arena which it doesn't share with another team or an NBA counterpart team. The other important issue to note with regards to the WNBA is that before all the teams used to be owned by the National Basketball Association; however this has changed since some of the teams are now independently owned. For example the Washington Mystic, Tulsa Shock, Seattle Storm, Los Angeles Sparks, Connecticut Sun, Chicago Sky and the Atlanta Dream all of which are independently owned.

The focus of this business plan is prove and sell the idea that establishing a women's team in Oakland, California that will be incorporated in the Women's National Basketball Association is a viable investment option which has good prospects and potential to generate high income for the team players and even the entrepreneurs financing the Oakland team.

A women's basketball team as investment option has various sources of income with the first being the revenue collected from ticket sales when the team is playing. The second source of revenue is from the sales of a team merchandise such a branded clothing, cups, shoes, caps, pens and any other item which bears the team logo and is directly associated with the team. Thirdly, a women basketball team can generate revenue from endorsements or companies that advertise their products or services using the team, these could be through using individual players from the team or using the whole team in their commercial advert, a company can also advertise through the team's branded items that includes it uniforms. Fourthly, the team can generate income through prize money that is usually paid during tournaments.

The business plan will first of all begin with an introduction of the Women's National Basketball Association in order to give the reader an overview of the industry and how it operates. Secondly, the business plan will evaluate the business strategy involved in women's basketball teams and it is here that the writer aims at presenting the paper as an entrepreneurial project. The third section of this paper will critically analyse the industry and business environment background using theories or tools such as the SWOT analysis, Pestle analysis and the porter's five forces. After conducting the analysis, the value proposition of the business will also be spelt out including the specific business strategy for the women's basketball team that will be established in Oakland, California. In addition the plan will also include a marketing and financial plan, and also the implementation plan for this proposed business.

Introduction

Women's National Basketball Association (WNBA)

On 24th April, 1996 the National Basketball Association approved the establishment of the Women's National Basketball Association and on 21st June, 1997 the league commenced its first season match with a game between Los Angeles Sparks and New York Liberty played at Los Angeles. Originally the league began with only eight teams that included; Utah Starzz, Sacramento Monarchs, Phoenix Mercury, Los Angeles Sparks, New York Liberty, Houston Comets, Cleveland Rockers and Charlotte Sting. However, after the 1997 was concluded four new teams were added to the league brining them to a total of eight teams.

According to Callahan, (2011) when the WNBA league started, the overall quality of play within the league was considerably low, however this changed in 1999 when the American Basketball league folded up facilitating the acquisition of most American Basketball league star players by teams in the WNBA. Some of the ABL stars who joined teams in the WNBA included Jennifer Rizzoti, Kate Starbird who were both standout college performers; Dawn Staley and Nikki McCray who were both Olympic gold medalists. The acquisition of these star players by teams under the WNBA helped in enhancing the overall quality of game in the WNBA league. Since its inception the office of the President of the Women's National Basketball league has only been held by three different presidents who included; Val Ackerman who served in the period 1997 to 2005, Donna Orendestones

Below is a table which shows some of the notable milestones in the Women's National Basketball league.

Milestone

Player

Team

Information

First player signed

Sheryl Swoopes

Houston Comets

23rd Oct,1996

Signed by the WNBA and assigned to Houston.

First points scored

Penny Toler

Los Angeles Sparks

June 21, 1997

Scored the league's first points on a baseline jump-shot.

First triple double

Sheryl Swoopes

Houston Comets

July 27, 1998

14 points, 15 rebounds, 10 assists

First goaltending call

Sylvia Fowles

Chicago Sky

June 3, 2008

Trying to block a layup by Lisa Leslie.

First slam dunk

Lisa Leslie

Los Angeles Sparks

July 30, 2002

Dunked on a fast break against Miami.

Most career points

Tina Thompson

Houston, Los Angeles

1997 -- present

6,

Most career rebounds

Lisa Leslie

Los Angeles Sparks

1997 -- 2009

3,307 rebounds

Most career assists

Ticha Penicheiro

Sacramento, Los Angeles

1998 -- present

2,398 assists

Most points in a game

Diana Taurasi

Lauren Jackson

Phoenix Mercury

Seattle Storm

July 10, 2006

July 24, 2007

47 points

Most rebounds in a game

Chamique Holdsclaw

Washington Mystics

May 23, 2003

24 rebounds

Most assists in a game

Ticha Penicheiro

Sacramento Monarchs

July 29, 1998

16 assists

Most career wins for a coach

Van Chancellor

Houston Comets

1997 -- 2006

211 wins

Most points scored by a team

Phoenix Mercury

July 24, 2010

127 points in a double overtime win against Minnesota

Largest margin of victory

Seattle Storm

August 7, 2010

46-point win (111-65) over Tulsa

Largest attendance for one game

Detroit Shock

September 16, 2007

22,076 in game 5 of 2007 Finals

Source: www.wnba.com

Business strategy

For all the teams in the Women's National Basketball Association it is not all about winning the league title but rather it is also about generating substantial returns for investors who own the teams. Thus it is imperative that each team in the league have an individual business strategy on how it is going to make the investments made by the owners become worthwhile i.e. generate more profits (Porterfield, p. 45-48, 2008).

The most common strategy which WNBA teams employ so as to become more profitable or attract more prospective investors is to perform better in the league championship. A team which performs better in the league championship and wins more titles is likely to be perceived by prospective investors as a highly valuable team which can offer security of income and capital growth to its investors. And hence it is usually common to see that teams which are ranked highly in the league are the ones which are mostly rich and pay their players high salaries.

A wining team that is ranked highly in the league will not only attract investors but also a high number of supporters who would like to be associated with the team's high ranking and better performances. With a high number of supporters any basketball team is likely to attract additional finances from the corporate world who would also like to be associated with a high ranking and popular team. Companies that want to be associated with such teams end up being their sponsors in the league or using the team to advertise their product and services, this off course comes with great financial rewards for the particular team.

In the history of Women's National Basketball Association the first team to receive a corporate sponsorship was Phoenix Mercury in 1st June, 2009 when it landed a Marquee sponsorship. LifeLock signed a partnership deal with Phoenix Mercury to brand the team's warm-ups and jerseys. The team's jerseys were the first to be branded in the WNBA history and this also offered the team another source of income. 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 team. However, since it is sports, proper training and the availability of adequate resources will enable the new team manage this competition and become the league's top team (Bernard, 1981).

SWOT analysis

Strength

The new women's basketball team of Oakland has two main strengths first is the fact that the bay area is very popular with women's basketball, and second is the fact that the Stanford University and the University of California, Berkeley which are located in the region both have already established women's basketball teams that have great fan support.

The fact that the bay area is very popular with women's basketball means that the new Oakland's women basketball team will have an already developed and established fan support. This will be advantageous mostly in terms of ticket sales since many women basketball supporters will fill the arena so as to enjoy their favorite sport being played by their own indigenous team. Secondly, the lovers of the Oakland women basketball team will most likely buy the team merchandise product and hence providing the team with additional stream of revenue. Companies located in the bay area will also have to be associated with the most popular sport and women's basketball team that represents the region in order to do so they might opt to sponsor the team or advertise their product or services through the team, this will further again boosts the team's revenue base.

Secondly, the fact that Stanford University and University of California, Berkeley both have women's basketball teams that have great fan support means that the new Oakland's women team will have an already established source of indigenous players who are already famous in the region. Hence, instead of the new team having to sign in and pay high amount of salaries to star players coming from other regions of the country, it will tap into the local talent that is cheaper and equally skilled.

Weakness

The major weakness of the new Oakland's women team will be the inexperience in playing in the WNBA league championship and since they will be the newest member of the league they will be considered inferior to the other teams which have played in the league for several years. However, this weakness can be overcome if the new team hire a well qualified and highly experienced coach, secondly it will also have to sign in only the best women basketball players from the region to ensure that their game is at par with other experienced teams in the league.

Threat

The new team will only have two threats that include; the high competition in the WNBA league and the accessibility of adequate resources. The team will be threatened by the high level of competition from other teams in the WNBA which have highly skilled and experienced players, at first it will be a challenge to match their level of playing or overall quality of the game, but after proper training the new team will be expected to not to feel threatened by any other team in the WNBA league.

Accessibility of necessary resources such as finance which will enable the team to acquire state-of-the-art training kits, qualified staff, proper training court and highly valuable players from the region will be a major threat to the new Oakland's women basketball team. And since it is a new team with no recorded rate of performance, investors will not be willingly free to invest in the team and it may take a lot of persuasion to get necessary resources.

Opportunities

The team has a great opportunity of becoming very wealthy and highly profitable with the only condition being that it performs well in the WNBA league championship. Already the new team has a wide fan support from the region and it they perform well in the league, it is widely expected that the team will be able to attract more supporters from other regions. Consequently this will transpire to high ticket sales, high sales of the team's merchandise products and more corporate endorsement and sponsorship deals.

Value proposition

With the establishment of a new WNBA team in Oakland, California there are three main parties who are set to gain value or enjoy the benefits of this establishment and they include; the team itself, the whole Oakland community at large and the Women National Basketball Association (Bernard, 1981).

With regards to the team there are investors involved, the team players, the coaching staff and other technical assistant staff who work for the team. Team players who will be basically recruited from the Stanford University and the University of California Berkeley will gain with the establishment of this team because they will be able to play in a highly reputable league, which will be a "dream come true" for many. Secondly, the team players will also be paid much higher salaries, in addition to bonuses that are also much higher than what they were previously been paid by their respective teams.

As for the team's coaching and non-coaching staff, this will be an employment opportunity that will be highly appreciated considering the fact that the city of Oakland has a high rate of unemployment. The staff will also have a sense of pride as being the first employees of the newly created Oakland's women basketball team.

Investors will also gain value from their investments, when the only WNBA team in Oakland starts receiving sponsorship deals, endorsements, advertisement deals from local-based companies who would like to be associated with the new WNBA team. Investors will also receive good returns from ticket sales and sales of the team's merchandized products.

The establishment of the new WNBA team in Oakland, California will bring value to the entire Oakland community. Since it has already been noted that the bay area is very popular with women's basketball and that both the Stanford University and University of California Berkeley women's basketball team have a great fan support it will be a great joy to offer this local fans an opportunity to support one of their own women's basketball team in the superior WNBA league. The 'girl-child' in Oakland will also be positively impacted since she will be empowered to play in a game that was previously dominated by men.

The Women National Basketball Association will also gain with the addition of a new team from Oakland. This will further increase the popularity of the WNBA league and it is also set to gain from additional fan base, which will increase its viewership across television networks and also ticket sales will further increase mostly during the WNBA league championship matches. Similar, to the investors, the WNBA will also gain in terms of financial benefits such as increased sponsorship, more advertisement and endorsement deals, and also increased revenues from sale of merchandised products (Vandermerwe, 2000).

The Oakland's women basketball business strategy

For this particular business plan, the report will look into the business strategy of a B2C (business to consumer) type of business organization. This is because the new Oakland's WNBA team will largely focus on providing entertainment to their consumers through their matches.

The "attack" business strategy

According to Yip (2004) this strategic decision is to approach the market in a competitive manner which will involve ensuring that new Oakland's women basketball team wins almost all of its matches against rival teams. This strategy is easily applicable and attainable since it only requires proper training and adequate resources for the team. Once this strategy is in place the team will be able to generate more income and it will also attain all the values proposed for each concerned party.

The "defensive" business strategy

This is a strategic decision that is usually applied as a response or to counter attack the "attacking" business strategy. This strategy according to Porter, (1985) involves using the product differentiation technique based on other factors expect price. The application of this strategy is justified by the findings of a research carried out by the IDC research, and the Forrester and Gartner Group which showed that consumers are not totally drawn to goods and services that are merely cheaply but rather by other factors.

Under this current business plan, the new Oakland's WNBA team has no intention of reducing its prices on its tickets, merchandise products or even prices quoted on contract deals, but rather it aims at incorporating the entire community and investors into the team's activities so as to ensure that fans as well as investors' expectations are fully meet.

Open-source value creation

This strategy requires that organizations should utilize more of their external resources in order to resolve their internal difficulties. The best example of the success of this strategy is the Linux operating system which was created by over three hundred collaborators around the globe who worked hand in hand.