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Strategy – Is the NFL Too Big to Fail?

It was a great first day of class in the Winter Quarter. The weather was unseasonably warm in Evanston for early January and everyone in the program came back from the Break refreshed and ready to learn. I am taking the Communication Strategy and Competition course which looks at how and why firms make decisions.
We started with the definition of Strategy – the theory a firm uses of how to excel in their industry. We then learned a firm’s ability to compete successfully depends on its ability to deliver Consumer Surplus – the difference between what a consumer values a product/service at and the actual price of the product/service. If a firm can create more Consumer Surplus than its rivals, then it will have a competitive advantage in the industry.
Later on, we learned about the types of structures of industries such as monopolies, oligopolies, monopolistic competition, and perfect competition. When we started discussing oligopolies, the industry of professional sports arose. A question was asked about the NFL and whether it could fail or regress given its recent issues. These include the players’ domestic abuse cases, criminal cases, team relocation proposals and safety concerns. These are weaknesses within the NFL that can produce a negative effect on its performance in the industry.
It’s fascinating to see how the NFL is combating these weaknesses and changing its strategy to remain the premier firm in the professional sports industry. They have embraced Fantasy Sports Leagues and are offering more ways for consumers to view their product. But the question still persists – will consumers grow tired of the NFL’s product and go elsewhere for their sporting entertainment?
As Professor Aron said, nothing stays the same in an industry. Firms are always tweaking their strategy to gain a competitive advantage over rivals which means the premier firm must continue to tweak their strategy if they want to preserve their competitive advantage. From this point forward, I am going to look at the decisions firms and companies make in a different manner. I will see these decisions as part of a strategy to create a competitive advantage in their industry. Whether they succeed or not will be determined by us, the consumers.
Personally, I think the NFL will hold its position as the premier sport for a long time. Even with its current weaknesses, the NFL is still the most popular choice for consumers participating in fantasy sports leagues and gambling. I believe this is the leading factor in the NFL’s product differentiation from other sports. Until another sport can provide a more entertaining fantasy or gambling experience, I think the NFL will continue to hold a competitive advantage in the professional sports industry. Whether I’m right or wrong, thinking through scenarios like this should hopefully increase my vision and ability to formulate optimal strategies in whatever business I’m in.