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Harvard Case - The Battle of the Alamodome: Henry Cisneros and the San Antonio Stadium

"The Battle of the Alamodome: Henry Cisneros and the San Antonio Stadium" Harvard business case study is written by Nancy Kates. It deals with the challenges in the field of Strategy. The case study is 14 page(s) long and it was first published on : Jan 1, 1989

At Fern Fort University, we recommend that Henry Cisneros and the San Antonio City Council pursue a strategic alliance with the San Antonio Spurs to develop a multi-purpose stadium that would serve as a central hub for entertainment, sports, and community events. This alliance would leverage the Spurs' brand recognition and operational expertise while providing the city with a state-of-the-art facility that could attract major events and generate significant economic benefits.

2. Background

This case study revolves around the decision-making process of Henry Cisneros, the Mayor of San Antonio, regarding the construction of a new multi-purpose stadium, the Alamodome. The city faced a dilemma: whether to invest in a new facility to attract major events and boost tourism or continue using the aging HemisFair Arena, which was no longer meeting the needs of the growing city. The case explores the political, economic, and social considerations surrounding the decision, highlighting the complex dynamics between the city, the San Antonio Spurs, and the community.

The main protagonists are Henry Cisneros, the Mayor of San Antonio, who is responsible for making the final decision on the stadium project, and the San Antonio Spurs, a professional basketball team that was seeking a new, modern arena. The case also features other stakeholders, including the city council, community members, and various business interests.

3. Analysis of the Case Study

Strategic Analysis:

  • Porter's Five Forces: The case highlights the competitive forces in the market for major events, including the threat of new entrants (other cities vying for events), bargaining power of buyers (event organizers), bargaining power of suppliers (construction companies, equipment vendors), threat of substitute products (other entertainment options), and rivalry among existing competitors (other cities with similar facilities).
  • SWOT Analysis:
    • Strengths: San Antonio's rich history, cultural attractions, and growing population.
    • Weaknesses: Lack of a modern, multi-purpose stadium, limited event capacity.
    • Opportunities: Attracting major events, boosting tourism, generating economic growth.
    • Threats: Competition from other cities, potential cost overruns, public opposition.
  • Value Chain Analysis: The case explores the value chain of the stadium project, including the inbound logistics (construction materials), operations (stadium construction and maintenance), outbound logistics (event ticketing and management), marketing and sales (attracting events and sponsors), and customer service (event experience).

Financial Analysis:

  • Cost-Benefit Analysis: The case explores the potential costs and benefits of building the Alamodome, including the initial construction costs, ongoing maintenance expenses, and potential revenue streams from events, concessions, and sponsorships.
  • Return on Investment (ROI): The city needs to assess the potential ROI of the stadium project, considering the projected revenue streams and the cost of construction and operation.

Marketing Analysis:

  • Market Segmentation: The city needs to identify the target market for the Alamodome, including potential event organizers, tourists, and local residents.
  • Marketing Strategy: The case highlights the need for a comprehensive marketing strategy to attract events and promote the Alamodome as a premier destination.

Operational Analysis:

  • Operations Strategy: The city needs to develop an operational strategy for the Alamodome, including event management, facility maintenance, and staffing.
  • Technology and Analytics: The case highlights the need for technology and analytics to manage events, track attendance, and improve the overall customer experience.

4. Recommendations

  1. Strategic Alliance with the San Antonio Spurs: Form a strategic alliance with the Spurs to jointly develop and operate the new stadium. This will leverage the Spurs' brand recognition, operational expertise, and strong local connections.
  2. Multi-Purpose Stadium Design: Design the stadium to be a multi-purpose facility that can host a variety of events, including sporting events, concerts, conventions, and community gatherings. This will maximize revenue potential and ensure year-round utilization.
  3. Public-Private Partnership: Utilize a public-private partnership model to share the financial burden and risk of the project. This will allow the city to leverage private sector expertise and resources while ensuring public accountability.
  4. Community Engagement: Engage the community in the planning and design process to address concerns and build support for the project. This will foster a sense of ownership and ensure the stadium aligns with the city's values.
  5. Sustainable Design: Incorporate sustainable design principles to minimize the environmental impact of the stadium. This will enhance the city's image and appeal to environmentally conscious event organizers.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  1. Core Competencies and Consistency with Mission: The strategic alliance with the Spurs aligns with the city's mission to promote economic growth and enhance the quality of life for residents. The multi-purpose design and sustainable features also support the city's commitment to environmental responsibility.
  2. External Customers and Internal Clients: The recommendations consider the needs of both external customers (event organizers, tourists) and internal clients (city residents, taxpayers). The public-private partnership model ensures financial accountability to taxpayers, while the community engagement process addresses the concerns of residents.
  3. Competitors: The recommendations acknowledge the competitive landscape and aim to position San Antonio as a leading destination for major events. The strategic alliance with the Spurs and the multi-purpose design will help the city stand out from competitors.
  4. Attractiveness ' Quantitative Measures: The recommendations consider the potential financial benefits of the project, including increased tourism revenue, tax revenue, and job creation. The public-private partnership model helps to mitigate financial risk, while the multi-purpose design maximizes revenue potential.

6. Conclusion

By pursuing a strategic alliance with the San Antonio Spurs and developing a multi-purpose stadium, the city of San Antonio can create a world-class facility that will attract major events, boost tourism, and generate significant economic benefits. This approach will leverage the strengths of both the city and the Spurs, while addressing the concerns of the community.

7. Discussion

Alternatives:

  • Renovating the HemisFair Arena: This option would be less costly than building a new stadium, but it would not address the city's need for a modern, multi-purpose facility.
  • Building a new stadium without a strategic alliance: This option would give the city more control over the project, but it would also require a larger financial investment and may not leverage the expertise of the Spurs.

Risks:

  • Cost overruns: The construction of a new stadium is a complex project with the potential for cost overruns.
  • Public opposition: There may be public opposition to the project, especially if it involves using taxpayer funds.
  • Competition from other cities: Other cities are also vying for major events, which could limit the success of the Alamodome.

Key Assumptions:

  • The Spurs are willing to enter into a strategic alliance with the city.
  • The city can secure the necessary funding for the project.
  • The public will support the project.

8. Next Steps

  1. Develop a feasibility study: Conduct a detailed feasibility study to assess the costs, benefits, and risks of the project.
  2. Negotiate a strategic alliance agreement: Negotiate a detailed agreement with the Spurs outlining the terms of the partnership.
  3. Secure funding: Secure funding for the project through a public-private partnership or other sources.
  4. Develop a design plan: Develop a design plan for the stadium, incorporating community input and sustainable design principles.
  5. Implement the project: Begin construction of the stadium, ensuring adherence to budget and schedule.

This comprehensive approach will enable the city of San Antonio to successfully navigate the challenges of building a new stadium and achieve its strategic goals for economic growth and community development.

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Case Description

Major government-funded public works projects are often touted both for the needs they will fulfill and the jobs they will provide. This case examines the assumptions underlying San Antonio Mayor Henry Cisneros' push for publicly financed construction of a domed sports stadium. HKS Case Number 896.0

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