Harvard Case - ASEAN Basketball League: Game On or Game Over?
"ASEAN Basketball League: Game On or Game Over?" Harvard business case study is written by Muralee Das, Susan Myrden. It deals with the challenges in the field of Strategy. The case study is 28 page(s) long and it was first published on : Jun 30, 2022
At Fern Fort University, we recommend the ASEAN Basketball League (ABL) pursue a multi-pronged strategy focused on strategic alliances, digital transformation, and market expansion to secure its future. This strategy will leverage the ABL's existing strengths, address its weaknesses, and capitalize on emerging opportunities in the Southeast Asian basketball market.
2. Background
The ASEAN Basketball League (ABL) is a professional basketball league operating in Southeast Asia. Founded in 2009, the ABL aimed to elevate the level of basketball in the region and create a platform for talented Southeast Asian players. However, the league has faced challenges in recent years, including financial instability, inconsistent attendance, and competition from established leagues like the NBA. The case study focuses on the ABL's current situation and explores potential strategies for growth and sustainability.
The main protagonists of the case study are the ABL's management team, who are tasked with finding a way to revitalize the league and secure its future. They are facing pressure from investors, players, and fans to improve the league's performance and create a more sustainable business model.
3. Analysis of the Case Study
To analyze the ABL's situation, we can utilize a combination of frameworks:
1. Porter's Five Forces:
- Threat of New Entrants: Relatively low due to high capital investment required for establishing a professional basketball league.
- Bargaining Power of Buyers: Moderate, as fans have limited options but can choose to follow other sports or entertainment.
- Bargaining Power of Suppliers: Moderate, as players have limited bargaining power due to the relatively small market, but can negotiate better contracts with successful teams.
- Threat of Substitute Products: High, as fans can choose to watch other sports, attend other entertainment events, or engage in other leisure activities.
- Competitive Rivalry: Moderate, as the ABL faces competition from other sports leagues and entertainment options, but also from rival basketball leagues within Southeast Asia.
2. SWOT Analysis:
Strengths:
- Unique regional focus: The ABL provides a platform for Southeast Asian players and fans.
- Growing basketball popularity: Basketball is gaining popularity in Southeast Asia, providing potential for expansion.
- Established infrastructure: The ABL has a network of teams and venues across the region.
- Potential for sponsorships: The ABL can attract sponsorships from regional and international brands.
Weaknesses:
- Financial instability: The ABL has struggled to generate consistent revenue, leading to financial challenges.
- Low attendance: Games often have low attendance, impacting revenue and fan engagement.
- Lack of marketing and promotion: The ABL has not effectively promoted itself to potential fans and sponsors.
- Limited player talent: The ABL lacks the star power and talent of established leagues like the NBA.
Opportunities:
- Growing middle class: The rising middle class in Southeast Asia offers a potential market for ABL games and merchandise.
- Digital media growth: The ABL can leverage social media and streaming platforms to reach a wider audience.
- Strategic alliances: The ABL can partner with other leagues, organizations, and businesses to expand its reach and resources.
- Government support: Governments in Southeast Asia are increasingly supportive of sports development, creating opportunities for the ABL.
Threats:
- Competition from established leagues: The ABL faces competition from established leagues like the NBA, which have a larger fan base and more resources.
- Economic uncertainty: Economic downturns could impact fan spending and sponsorship revenue.
- Talent drain: Talented players may be lured away by opportunities in other leagues or international teams.
- Lack of infrastructure: Some countries in Southeast Asia lack the necessary infrastructure to support a professional basketball league.
3. Value Chain Analysis:
The ABL's value chain includes:
- Inbound Logistics: Acquiring and managing player contracts, securing venue rentals, and sourcing equipment.
- Operations: Organizing games, managing player salaries, and maintaining facilities.
- Outbound Logistics: Distributing tickets, merchandise, and media content.
- Marketing and Sales: Promoting games, attracting sponsorships, and selling tickets.
- Service: Providing a high-quality fan experience, managing player relations, and engaging with sponsors.
4. Business Model Innovation:
The ABL needs to innovate its business model to address its weaknesses and capitalize on opportunities. Key areas for innovation include:
- Digital Transformation: Leveraging digital media, streaming services, and social media to reach a wider audience and enhance fan engagement.
- Strategic Alliances: Partnering with other leagues, organizations, and businesses to expand its reach, resources, and brand recognition.
- Market Expansion: Targeting new markets within Southeast Asia and exploring opportunities in other regions.
- Diversification of Revenue Streams: Exploring new revenue streams beyond ticket sales, such as merchandise sales, sponsorships, and media rights.
4. Recommendations
To achieve long-term sustainability and growth, the ABL should implement the following recommendations:
1. Strategic Alliances:
- Partner with established leagues: Form strategic alliances with established leagues like the NBA to gain access to resources, expertise, and brand recognition.
- Collaborate with regional organizations: Partner with regional sports organizations, government agencies, and businesses to promote basketball development and expand the ABL's reach.
- Cross-promotion with other sports: Collaborate with other sports leagues in Southeast Asia to create joint marketing campaigns and events, attracting a wider audience.
2. Digital Transformation:
- Enhance online presence: Develop a comprehensive digital strategy, including a user-friendly website, mobile app, and active social media presence.
- Invest in streaming technology: Stream games live online and on mobile devices, reaching a wider audience and generating new revenue streams.
- Leverage data analytics: Utilize data analytics to understand fan preferences, optimize marketing campaigns, and improve player performance.
3. Market Expansion:
- Target new markets: Expand into new markets within Southeast Asia with high basketball potential, such as Vietnam, Myanmar, and Cambodia.
- Explore international expansion: Consider expanding into other regions with a strong basketball culture, such as China, India, and Africa.
- Develop a targeted marketing strategy: Implement a tailored marketing strategy for each new market, considering cultural differences and local preferences.
4. Business Model Innovation:
- Diversify revenue streams: Explore new revenue streams beyond ticket sales, such as merchandise sales, sponsorships, media rights, and fan engagement activities.
- Develop a tiered subscription model: Offer different subscription packages to cater to diverse fan needs and preferences, generating recurring revenue.
- Create unique fan experiences: Develop innovative fan experiences, such as meet-and-greets with players, behind-the-scenes access, and interactive events.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with the ABL's core competencies in organizing basketball games and promoting regional talent. They also support the league's mission to elevate the level of basketball in Southeast Asia.
- External customers and internal clients: The recommendations address the needs of external customers (fans, sponsors) and internal clients (players, teams).
- Competitors: The recommendations consider the competitive landscape and aim to differentiate the ABL from other leagues and entertainment options.
- Attractiveness ' quantitative measures: The recommendations are expected to generate positive returns on investment (ROI) through increased revenue, fan engagement, and brand recognition.
Assumptions:
- The ABL's management team is committed to implementing these recommendations.
- The Southeast Asian basketball market will continue to grow.
- The ABL can secure the necessary funding and resources to execute its strategy.
6. Conclusion
The ASEAN Basketball League faces significant challenges but also holds immense potential for growth and success. By embracing a strategy of strategic alliances, digital transformation, and market expansion, the ABL can overcome its weaknesses, capitalize on emerging opportunities, and secure its long-term future.
7. Discussion
Alternatives not selected:
- Mergers and acquisitions: While mergers and acquisitions could provide access to resources and expertise, they may not be feasible due to the ABL's financial constraints and potential regulatory hurdles.
- Focusing solely on domestic markets: This approach would limit the ABL's growth potential and expose it to greater competition from established leagues.
Risks and key assumptions:
- Execution risk: Implementing the recommendations requires significant resources, expertise, and commitment from the ABL's management team.
- Market risk: The Southeast Asian basketball market may not grow as expected, impacting the ABL's revenue and profitability.
- Competition risk: The ABL may face increased competition from other leagues or entertainment options, impacting its market share and fan base.
8. Next Steps
- Develop a detailed implementation plan: Outline specific actions, timelines, and resources required for each recommendation.
- Secure funding and resources: Seek funding from investors, sponsors, and government agencies to support the implementation of the strategy.
- Build a strong team: Recruit experienced professionals with expertise in marketing, finance, operations, and digital media.
- Monitor progress and adjust strategy: Regularly assess the effectiveness of the strategy and make adjustments as needed.
By taking these steps, the ABL can position itself for long-term success and become a leading basketball league in Southeast Asia.
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Case Description
The case focuses on the ASEAN Basketball League (ABL), one of Asia's major regional professional basketball competitions. Launched in 2009, the league struggled to become financially viable in its first decade, and quickly encountered many challenges including multiple leadership changes, a high team turnover rate, weak fan engagement, and poor take up of its broadcasting rights. When COVID-19 derailed its 2019-2020 season, the ABL abruptly suspended all games and never resumed competition. There was even a launch of a rival league called the East Asian Super League (EASL) during the pandemic that had detrimental ramifications for the league's fan base. Further, as a regional league, international air travel COVID-19 restrictions and quarantine requirements made it impossible to have the existing ABL competition format resume. These moves had a major impact on the future sustainability of the ABL. As the case concludes, students are put in the shoes of the ABL founder, Fernandes, who must decide from three strategic options: to re-start the league now, keep the league suspended, or make the difficult move to discontinue the league.
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