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Strategic AnalysisOctagonOrganizational Strategy in Sport and Recreation (STHM 2211 Section 001)1.Nikki Green, 9151963192.Harry Newman, 9143064893. Cole Lew, 9152638304. Tyler Oliveti, 915140823Executive SummaryThis report is a strategic analysis on Octagon, the sport, entertainment, lifestyle marketing and talent representation agency. Octagon was founded in 1983, and now represents 900 personalities around the globe. Octagon has 800 full time employees in 68 offices across 22 countries. Octagon works with clients at all stages of their careers starting with negotiating contracts, building their personal brand, securing marketing opportunities, and providing support in their profession and community. Octagon is responsible for the branding and execution of 15,000 events a year (). Octagon is an international agency that has achieved long standing success across the world.?The external environment was analyzed using a PEST analysis and Porter's Five Forces. Based off our PEST we determined the political and legal issues surrounding the sports marketing industry are the trademarking & merchandising laws, regulations of sport governing bodies, contract negotiations, and television rights. The Economic issues are creating revenue for events, athletes, and endorsement deals. The socio-cultural factors affecting Octagon would be falling behind their other competitors in becoming a more sustainable company. A technological factor that Octagon is dealing with is the steady climb of athletes using their personal social media accounts to advertise themselves and promote other companies that they are sponsoring. In the Porter’s Five Forces analysis, competitive rivalry is at an all-time high due to the many different agencies that compete for the same clients as Octagon and a main rival of Octagon would be the Creative Artist Agency. We have concluded that the bargaining of suppliers is low while the bargaining power of buyers is high. The threat of new entrants is at a medium risk. As we internally analyzed Octagon, we used the Value Chain Analysis to achieve our results. This showed that the inbound logistics are their relationships and partnerships with their clients. Their current operations show that manage their athlete’s daily activities and evaluate the best sponsorship opportunities. Their outbound logistics include their second-to-none services that can benefit their clients to gain sponsorship deals. For their marketing and sales, Octagon maximize their clients value, which creates new opportunities and more money. Lastly, Octagon’s service is first class, promoting their clients through unique marketing strategies. The most tangible resource of Octagon is that they span across the globe with sixty-eight offices across twenty-two countries. Since Octagon has an established track record of providing incredible service for over thirty years makes that an intangible resource. Organizational capabilities of Octagon include their outstanding relationships with their clients and the wonderful customer services they provide. We conducted a SWOT analysis as well and we discovered ways Octagon can improve internally as a company and grow externally and outcompete their direct competitors. A key strength for Octagon is that they are located internationally and have offices around the globe. A main weakness for Octagon is there lack of presence on social media. A serious threat Octagon should recognize is they have a lot of other firms competing to represent the same players that Octagon wants to, so they will have to give each prospective client the resources to make them want to sign with Octagon over any other firm. In the next five years, some opportunities we want Octagon to take into consideration and we have strategically recommended for them include improving their social media presence, use their services to help develop start-up companies, promote brand awareness of non-sport related companies, become a corporate sponsor of a NBA or MLS team, and build an international venue that will host all of Octagon’s international events and put on sporting and entertainment events as well. Table of Content1 ???Organization Overview 2 ???PEST Analysis3 ???Internal Analysis. 3.1 ????Value Chain Analysis.3.1.1 ??Primary Activities. 3.1.2 ??Support Activities. 3.2 ????Resource Based View Analysis. 3.2.1 ??Tangible Resources. 3.2.2 ??Intangible Resources. 3.2.3 ??Organizational Capabilities. 3.3 ????Financial Ratio Analysis. 3.3.1 ??Current Ratio. 3.3.2 ??Long Term Debt Ratio. 3.3.3 ??Profit Margin Ratio. 4 ???Strategy Analysis. 4.1 ????Business Level Analysis. 4.2 ????Corporate Level Analysis. 5 ???Strategic Recommendations. ReferencesAppendixOrganization OverviewOctagon is the global sport, entertainment, and lifestyle marketing and talent representation agency. Octagon was founded in 1983 after 32 (bloomberg, 2015) years and Octagon is the world’s largest sponsorship consulting practice and a pioneer and leader in athlete and personality representation and management. () Octagon operates with 800 full-time employees in 68 offices across 22 countries on six continents. Octagon manages over 15,000 events a year well representing over 900 personalities across the globe. () Octagon have represented the top picks in the NBA, NFL, and NHL draft all in different years and Octagon has represented a gold medalist every year in the Olympic games. () Octagon has built partnerships with BMW, Home Depot, Sprint and many other corporate, sponsors. Octagon developed a global football consulting divisions which have grown from the success of FIFA and popularity of the World Cup. () Octagon promoted the first LPGA event, coined the term Grand Slam, and negotiated the largest sponsorship deal in sports history with NASCAR Sprint Cup series. Octagon created “Passion Drivers,” a proprietary research that looks at sports fan engagement and passion for their team. () Octagon was named Sponsorship Agency of the Year in 2008 (UK) and Agency of the Year according to the Sports Business Journal. Octagon branched into the entertainment industry launching Octagon Music. In the last few years, Octagon acquired FRUKT a music entertainment firm. Octagon has dominated the sports industry for years and is currently having similar success in the entertainment industry. (Octagon, 2015)?Octagon has only 10,000 Twitter followers, 35,000 LinkedIn followers, and 1,000 likes on Facebook. The company does not have a very large social media presence. Octagon manages the social media accounts for many of their athletes. Octagon represents many big name athletes: Seattle Seahawks running back Marshawn Lynch, Golden State Warriors point guard Stephen Curry, and 18-time Olympic gold medal winner Michael Phelps. (, 2012) Octagon has sustained long term success by promoting their athletes and strategically getting them the best sponsorship deals available.2. PEST Analysis2.1 Political/Legal There are many political and legal aspects that Octagon may face in today’s global market. Understanding the trademarking and merchandise laws in each professional sports governing body on the national and global level. Knowing the logistics of each client's contractual agreement with their league and team of employment. Another example would be respecting the integrity of the collective bargaining agreement for each professional sports league. Also, cooperating with the free agency contractual agreements of each individual player and abiding by the public television rights of all the major networks.2.2 EconomicThe major economic factors that affect Octagon and other sports marketing agencies have to do with the long-standing growth of the sports market. The sports market is booming, between 2009 and 2013 revenues increased 7% annually. Well accounting for 1% of the global GDP (Winning in the Business of Sport). Having knowledge on the merchandising agreement between professional sports teams and their chosen brand, while also creating economic opportunities for athletes to be represented by different brands in the business. Developing relationships with different companies to ensure their athlete is being offered a variety of endorsements. 2.3 Socio-culturalTo understand the marketability of our professional athletes, Octagon must understand the social and cultural issues surrounding society. Getting on board with the “green” and sustainability movements (Benson, 2011). There are many people in the world who work tirelessly on living a healthier lifestyle and teaching others how to do the same (Forbes, 2016). Having a growing knowledge on society around will help Octagon create stronger more meaningful sport and entertainment marketing efforts. 2.4 TechnologicalTechnology has become a major outlet for Octagon’s sport and entertainment marketing departments. A majority of athletes, teams, and leagues have started using social media for advertising events, sharing team news, and improving the overall fan experience. (Parkson, 2015) There are major media outlets all over the world that cover athletic news from stats, to personal information, reactions and live updates. There are outlets available for athletes to write their own stories to their fans, such as the new website, The Players Tribune (Pelberg, 2015). The use of data for sports analytics has become a trend in the industry, especially in Major League Baseball. Having high power technology available at sports events has become an underlying principle for many arenas. The creation of apps that relate to the sporting experience has taken off. Having knowledge of all the different types of technology out there can improve the athlete's image and the fan experience is huge because the marketing capacities our endless. 3.Porter’s Five Forces 3.1 Competitive Rivalry - HighThere are many different agencies that athletes and entertainers can choose. One of the main obstacles Octagon needs to overcome is becoming more desirable. The competition with rival competitors is extremely high as there are many firms that share similar credentials. They want to have the most events, the biggest clients, and the most innovative firm. The global market for athletic and entertainment marketing promotion is characterized by an intense global rivalry (Belzer, 2013). There is a changing market based on the preferences of the participants and spectators. Social media and new marketing strategies are some ways to get an advantage. Octagon has strategic relationships with sponsors and makes strategic acquisitions to help them compete (). Each agency is expanding their reach into the market of professional soccer, which is a relatively new and unexplored field. Octagon could benefit if they get a head start signing players from the MLS, Barclays Premier League, etc.3.2 The Bargaining Power of Suppliers - Low The bargaining power of suppliers is low because not every company has the same connections in the entertainment and global market. Octagon does not offer any physical product, but they supply the representation of athletes. There are not many substitutes that exist on the scale that Octagon does, therefore the buying power of suppliers is low (). Capital is supplied through athletes and personalities as well as companies or organizations that want representation. 3.3 The Bargaining Power of Buyers - Medium The buyers that exert bargaining power are the athletes, coaches, management, and sponsors of the company. The athletes who have the largest contracts have the most power to Octagon Worldwide. The athletes who have the talent on the field and have a positive image in the media have what agencies want. Athletes who want to get their name on the map have the lowest bargaining power as they are not yet established. Coaches who have been known figures have a large buying power because spectators already know who they are. Sponsors have the largest bargaining power because they have the financial incentive to influence clients and get their image into the media (Burrow, 2013). 3.4 Threat of New Entrants - MediumThere will always be other agencies so a requirement for signing big profile employees is having strong relationships with sponsors and others in the industry (Mooney, 2014). The younger agencies have a high barrier ahead of them because they will not have long standing relationships with investors. These lack of connections will make it difficult for new agencies to be successful.3.5 Threat of New Substitutes - Low There are many different ways athletes and entertainment can brand themselves, but they can not always do this as well as Octagon or another agency can. With social media athletes can grow their own brand without necessarily needing the representation of an agent. The worldwide demand for athletes and entertainers is expected to grow in the future so there are no obvious substitutes (Burrow, 2013). One obstacle that could affect all agencies is the growth of the players association giving players another outlet.4Value Chain Analysis4.1 Primary Activities4.1.1 Inbound Logistics (Partnering with Clients)Octagon, partners with different athletes and entertainment personalities all stages of their careers by, negotiating contracts, building their personal brand, securing marketing opportunities, and providing support in their lives. ()4.1.2 OperationsOctagon operates in a variety of ways. They will manage their athlete’s daily activities and evaluate the best sponsorship opportunities for their client. They will create a marketing strategies that will maximum their worth. Octagon is responsible for running over 13,000 events yearly. Partnering with business such as the Make-A-Wish, The North Face, and the PGA Tour they build grassroots marketing events. ( 2016)4.1.3 Outbound Logistics (Sponsorship)Octagon’s services are used heavily by their existing clients, expanding their marketability into new heights. With proven the industry, their services are second-to-none which makes it an obvious choice for blue-chip companies to rely on Octagon to sponsor their corporate events. (Sports Business Daily, 2012)4.1.4 Marketing and SalesOctagon matches their athletes to the right sponsor or advertising opportunity. By doing so they maximize their clients value, which creates new opportunities and more money. Octagon understand the value of expansion reaching into new markets domestically and international. “We are committed to the sport of surfing and believe in its growth potential on a global scale a combination in the marketing and management of action sport athletes.”(Sports Business Daily, 2016)4.1.5 Service Octagon’s employees are never “off duty.” Octagon will always have to be ready to adapt to any change that their clients may face. Octagon’s value increased with the signings Stephen Curry, Michael Phelps, and Daniel Sturridge () Octagon has first class service promoting their clients through unique marketing methods experiential to traditional.4.2 Support Activities:4.2.1 Procurement A leader in sport marketing, Octagon seeks to represent the best talent in the world; they provide their clients the services they need to drive their businesses and keep their brands thriving in today’s marketplace.4.2.2 Human Resource Management Octagon employs over 800 employees worldwide. Octagon has an internship program which allows sport professionals to get their foot in the door. Their website states, “The diversity of our employees and service offerings provide a richer work experience, but also enable us to create content and experiences that reach an increasingly diverse fan base.” (, 2016)4.2.3 Marketing Research Team Octagon has seen the change in sport the globalization of international sport. Octagon has done research “Dos a Cero: An Exploratory of the ‘Millennial Effect’ on the Future of Soccer in the U.S.” is an example. Having a younger staff allows the company to understand the trends and adapt. (Octagon Case Study, 2013) ?4.2.4 Sponsorship Development- ?Octagon consults for many events in the industry well at these events getting to know the sponsors and build their campaigns is a priority. Having long term relationship is important for today and the future of the company.5Resource Based View5.1 Tangible Resources: (VRI)Octagon’s most tangible resource is that they have firmly planted themselves across the globe with sixty-eight offices, across twenty-two countries, and in six continents ( 2016). They have accumulated 94.5 million dollars in terms of commissions as of September 2015 and have 2.2 billion dollars in terms of contracts under management (Forbes, 2016). Since 1983, Octagon has been serving their clients with the best possible service that is hard to imitate. Another tangible resource is the incredible leadership they have heading Octagon. Rick Dudley, who is the Chairman and CEO of Octagon Worldwide, has decades of experience in the industry which has empowered him with the knowledge and resources to do what it takes to be a pioneer in the industry ( 2016). Their top agents include Scott Pucino, Allan Walsh, and Mike Luit (Bruns, 2014). ?Octagon has also linked with the Interpublic Group, which has continued to finance Octagon’s recent and future endeavors ( 2016). 5.2 Intangible Resources: (Valuable Resource Information)Octagon’s strongest intangible resource is there established track record in the sports industry. Octagon has been a force in the sports industry for over thirty years. Their reputation is a powerful intangible resource and has allowed a successful transition into the entertainment industry. (Kapraun, 2016) ?The contract agreements between players and agents are intangible. Octagon has over 800 clients many in different avenues of the industry.????Octagon is using their long-term industry experience to research and promote sports that could be popular in the future and can be seen as an intangible resource. Octagon promotes 13,000 events a year, which allows them to establish relationships with different venues in all sectors of entertainment. “Octagon, is the world’s largest sponsorship consulting practice, managing and influencing some $3 billion in sponsorship-related spending annually” (Chung, 2015). Having knowledge on the industry in the past to understand the present industry well looking towards the future is irreplaceable. ????Their relationships with current superstars such as Michael Phelps, Stephen Curry, and Jose Bautista are just a few of their intangible resources. Other intangible resources include the domain names of each website, licensing of their name Octagon, their contract agreements with other companies, and joint ventures. 5.3 Organizational Capabilities: Octagon has delivered excellent customer service to the clients that they serve. They have the ability to aid any request of their clients because of their global reach and aim to provide the most up-to-date and innovative services to reach peak performance among their clients. Aside from contractual advice to their clients, they also provide top-notch services to aid clients in finding proper housing, event management, legal representation, etc. (Business., 2016) Octagon has a well-diverse staff of over 800 employees worldwide who “enjoy dynamic careers in an environment that reinforces our guiding principles of Passion, Engagement and Results.” () With a large number of employees, Octagon is able to hire and train an enormous amount of young employees and motivate them to go beyond their potential and make an impact in their respective industry. Michael Phelps is one of Octagons largest superstars, the marketing of Olympic swimmers previous to Phelps was almost unheard of. Octagon spent six years building its strategic plans. “Phelps and Carlisle are building on Phelps' flashes in the limelight in the pool with appearances atypical for swimmers, such as an eight-city tour, endorsements in fast-growing markets like China and a stepped-up presence online (, 2008). Octagon built Phelps brand by making him a public figure using social media to relate him to “Phans.” Using the web to gain exposure helped gain the support of fans and then the industry.6. SWOT Analysis: Octagon’s SWOT test (Strength, Weaknesses, Opportunities, and Threats) shows there are a number of elements that affect their organization both internally and externally. As the Best Consulting firm we found certain opportunities that will help Octagon gain a competitive advantage. We also showcased their internal strengths and weaknesses and the external threats that need to be mitigated.Octagon’s Strengths:Successfully uses the corporate strategy of diversificationDelivering high quality responsive service to clientsBrand management of 800 clients Strong financial position within the industryBusiness model cannot be imitated by competitorsProven business model that can be replicated into different marketsStrong geographical dominance (66 offices across 22 counties and 6 continents)Acquisition of FRUKT brand to expand into entertainment industryStrategic alliances and joint ventures with brands (BMW, MasterCard, Sprint, and Home Depot)A strong reputation among athletes, sponsors, and overall industry Stephen Curry & Michael Phelps (Recognizable athletes)Octagon’s Weakness:Lacks brand recognition to non-clients and general publicSocial Media is not engaging Website is not informative or interactive ?Cannot communicate formally and informally, both cross-functionally and within departmentsDespite success globally, still not as well-known as competitors in the United StatesWork in network with organizations trying to create brand identity and sales opportunities (TV- ESPN, NBC, etc.)Matrix- two managers at the top to answer to (uncertain on who is in charge)Octagon’s Opportunities:Growth in popularity of Major League Soccer in United StatesInteractive social media accounts The increase of public social media uses on Twitter, Facebook, LinkedIn, snapchat etc.Growth of online marketing for athletes and events including (experimental and traditional) Increasing knowledge of corporate sponsorship amongst professional sport franchises Major music festivals and sporting events such as Made In America, FIFA World Cup or 2020 Summer OlympicsOctagon’s Threats: ?Creative Artist Agency, Relativity Sports, Wasserman Media Group are currently leaders in the sports industry (Forbes, 2016)Roc Nation- growing threat Competitors in the market with similar servicesThreat of change in management of Interpublic Group of CompaniesProfessional athletes deciding not to sign with agenciesCrisis management of company and clients 7.0 Strategic Recommendations7.1 Year 1: Incremental Change in Octagon Tech Development We believe that Octagon has the ability to turn one of their main weaknesses into an opportunity to grow as a company. We would recommend to Octagon that in order to establish a following and build brand recognition, the most effective and efficient way to accomplish that would be to build a stronger presence on social media to show potential clients what services Octagon provides for its current clients. Currently, Octagon’s twitter following is at a disappointing 10,000 followers which compared to ROC Nation at 384,000 followers shows there is a lot of work to be done in this area. Our plan for them is to reach 150,000 followers after a twelve-month period is completed. We have a two-pronged strategy in place to achieve this goal. The first strategy is to create a promotional video that advertises the daily services that Octagon provides for its clients whom they represent. Essentially, we are trying to get the word out about what Octagon does around the world. Our second strategy is to use their social media accounts as a conversationalist between their company and people who are interested in learning more about Octagon. To initially get the ball rolling, we want Octagon to use their more notable clients, such as Stephen Curry and Jose Bautista to tag them in their tweets using hashtags #Octagon or #OctagonFamily. This way people who follow the athletes will be intrigued to find out more what the athlete is talking about and be inclined to learn more about the company.7.2 Year 2: Lateral DiversificationThe relationships, reputation, and connections Octagon has around the world makes them an interesting and strategic partner for startup companies. Octagon can tap into their resources and create a business on connecting startup/ smaller companies to the right contacts. In the business world it is all about who you know by using Octagons long standing relationships for a price they can connect smaller companies into a new market to help their business flourish more effectively. ?Octagon has global connections with athletes, entertainers, advertisers, and sponsors. When startup/ smaller companies have a good idea but lack the capital and contacts to grow they can reach out to Octagon. Octagon will match the company with one of their many contacts for a large fee or a small fee but be allotted a stake in their company. Octagon will help find them business partners or business professionals to build their brand, pay for advertisement space, find them sponsor entering into a new marketplace. Octagon could be helping smaller business met their goal well becoming a partial stakeholder in growing companies. Octagon could potential be a part of the next Twitter, Facebook, Snapchat, or Fitbit. One of the companies that they hold stake in could become the next big thing and Octagon would profit of that because their connections helped get them the startup money, relationships, or planning they need to grow. If Octagon does this consistently one of these companies will be successful generating more revenue for Octagon and helping penetrate new markets, more business, and younger connections.7.3 Year 3: Service Development Campaign Octagon is a world leader in the sport and entertainment industry, but what they are lacking is awareness from people who are only just learning about the company. What people do not know about Octagon is that they are heavily involved with non-sport related businesses and they work to promote each company’s brand image. For example, Octagon has partnered with companies such as The Home Depot, Equifax, Talen Energy, MasterCard, and Novartis Pharmaceuticals. () They have also consulted with nonprofit organizations like Autism Speaks and Susan G. Komen (). Octagon does a ton of work with non-sport related organizations, but their issue is that most people about their involvement do not as well know them with these companies. A way for Octagon to develop their services and what we believe is a possible necessity for Octagon to take further action would be to expand the awareness of their marketing department outside of their strategic partnerships with organizations in the sport industry and promote the brands that people would not expect Octagon to be representing. We believe this is a way Octagon can enhance their market development by moving into an entirely different side of marketing companies and nonprofit organizations. The more they are able to branch themselves out to other non-sport related organizations, they will be more capable to represent more companies and become more involved with operating any of their corporate events they choose to have.7.4 Year 4: Market Development and Corporate Sponsorship The NBA has recently agreed to allow small patches on each team’s uniforms. By the NBA allowing companies to sponsor themselves on the team’s jersey, this has created a huge opportunity for Octagon to enter the realm of corporate sponsorship. They can strategically partner with an NBA team and put their logo on the team’s patch. This would help Octagon because they are developing their market in a completely different and unique way. Octagon striking a sponsorship deal with an NBA team is a step in the right direction to gain awareness and brand recognition from people who have not heard of Octagon or even players and coaches who wish to seek further information about what services Octagon can provide for them. Octagon could also look into being a corporate sponsor for a professional soccer team in the MLS (Octagon, 2015). In a rapidly growing sport in the United States, becoming a corporate sponsor for a predominantly known MLS franchise will quickly promote the company’s awareness as well, especially if it is a team in a bigger market like NYCFC, New York Red Bulls, LA Galaxy or LAFC.7.5 Year 5: Market PenetrationIn the next 5 years Octagon should open up a multipurpose international venue. The building will be located in Rome Italy but will be a platform for all sports and events globally. ?Octagon has a global following by creating their own venue they could earn more revenue, hold a larger market presence, and still represent their current clients. Hosting international sports competition, concerts, political events, and possibly become the home of a rugby team, cricket team, or soccer team. This venue would be the official home to all of Octagons international events and clients. Octagon could hold a yearly festival focusing on their own artists and possibly gaining sponsorships deals for events and their stadiums. Octagon could host a variety of international sporting competitions from the Olympics, soccer championships, international American football events and displaying alternative sport. Having their own venue would allow them a level of freedom on the events they host, allow their clients to use a space without paying entertainment taxes, and earn revues off sponsorship fees and advertisements. ?Octagon cannot legally purchase a stake in a team so building a venue would be a creative way to gain the attention of more clients, host worldwide events, and be a platform for all their business across the globe. The building would be aesthetically pleasing with a retractable roof allowing for flexibility on whether as well as the ability to convert the space from a sport field to an arena. Works CitedBelson, K. (2011, October 25). Sports Rally Around Green Projects. From , J. (2013, June 24). The World's Most Valuable Sports Agencies 2013. Retrieved March 30, 2016, from , M. J. (2014, December 19). Octagon CSO Simon Wardle Lives At The Intersection Of Fan Passion And Sports. Retrieved from , G. (2013, July 09). Not Just a Game: The Impact of Sports on U.S. Economy - EMSI | Economic Modeling Specialists Chung, C. (2015, December 9). Octagon Marketing North America Announcing Several Promotions. Retrieved from , B. (2016, January 17). Octagon catches surfing wave with addition. Retrieved from Kapraun, C. U. (2009, June 30). Sponsorship Intangibles. Retrieved from , J. (2016, March 28). In The Office: Octagon. Retrieved March 30, 2016, from , L. 2014, April 28. Five Key Trends That Are Driving the Business of Sports Mullen, L. (2014, June 23). College sports' legal battleground. from , Inc.: Private Company Information. (n.d.). Retrieved March 30, 2016, from Sports Marketing. (2016, January 24). Marketing North America Announces Several Promotions. (n.d.)., from talent representation pioneer and world's largest sponsorship consulting group. Octagon. (2015) Octagon Launches North American Soccer Business with the Addition of Eddie Pope and Mike Senkowski Prominent and highly respected former “MLS Player Union executives will lead agency’s soccer representation practice”[Press Release]. Retrieved http//pdf/Soccer_101315_Octagon_Launches_NA_Soccer_Business.pdfOctagon - talent representation pioneer and world's largest sponsorship consulting group. (2016). Retrieved from , G. (2015). 3 Sports Marketing Strategies To Engage Fans With Fresh Content - ScribbleLive - Your Content Marketing Software. Retrieved April 25, 2016, from , S. (2015, December 3). Players' Tribune Gives Kobe, Other Athletes a Route Around Media. Retrieved January 24, 2016, from ................
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