Creating competitive advantage in the Winter Olympics: strategic positioning in sports disciplines

Research into the sporting competitiveness of nations is an evolving field, particularly where the study of the high performance management of elite sport systems is concerned (Sotiriadou & De Bosscher, 2018). However, few studies have referred to the strategic management of business firms as a means to analyse the competitive advantage of nations in international sport (e.g. Robinson & Minikin, 2012; Truyens, De Bosscher, Heyndels, & Westerbeek, 2014). Such studies tend to adopt the resource-based view (RBV), which is commonly applied in mainstream management studies, when investigating the specific resources and capabilities that create a competitive advantage (e.g. Barney, 2001; Klein, Mahoney, McGahan, & Pitelis, 2013). Others have argued that managers should combine the RBV with the market-based view (MBV) when competing in dynamic economic environments to build a sustainable superior performance (e.g., Ali, Peters, He, & Lettice, 2010; Hooley, Broderick, & Möller, 1998; Hooley, Greenley, Fahy, & Cadogan, 2001). The analysis from a MBV facilitates the examination of competition in the industry by identifying markets to be strategically targeted (e.g., Porter, 2008a, 2008b; Slater & Olson, 2002). The present thesis will use mainstream strategic management studies to analyse the competitive advantage of nations within the Winter Olympics.The model of Hooley, Piercy, Nicoulaud, and Rudd (2017), which combines the RBV and the MBV to identify and target markets within a dynamic industry, is transferred to the Winter Olympics, because they are particularly dynamic in terms of an increasing number of events and competing nations. This model considers how firms position themselves in identified markets by prioritizing their financial and non-financial resources (e.g. human resources) accordingly. To strategically identify a target market, a firm combines an internal analysis of its resources and capabilities and a market-orientated analysis of its competitive environment. The continuous evaluation of the target markets allows a firm to adjust its competitive position relative to its rival competitors within the industry. This research perspective is adopted in this thesis to analyse the decision-making of National Sport Agencies (NSAs), when they allocate national-level resources to target Olympic winter disciplines. The relevant overall research aim is to examine, if and how National Sport Agencies position their nations in sports disciplines at the Olympic Winter Games. The research approach is based on two underlying assumptions: firstly, that the knowledge base derived from strategic management literature of businesses provides a valuable and insightful research perspective on the prioritisation approach of NSAs. This assumption is reinforced by other studies that applied such perspectives to analyse the prioritisation of resources in public and non-profit organisations (e.g., Bryson, 1988; Todnem & Macleod, 2008). The second assumption holds that NSAs allocate their resources with the primary aim of increasing their nation’s Olympic success. To address the abovementioned research objective in a structured and methodical manner, this thesis shall consist of the following four complementary studies examining different components of the positioning model by Hooley et al. (2017).The first article (i.e. section 5) introduces an industrial economic perspective to evaluate the development of the Olympic Winter Games. This study aims at defining the relevant markets and competitors in the context of the Winter Olympics and to test different economic indices as a proxy for examining the outcome of competition between nations. It follows the argument that markets and competitors must be defined before a strategic analysis can be conducted (e.g. Porter, 2008a; Scherer & Ross, 1990). Economic techniques are used to rationalise the market for Olympic medals (i.e. top 3 places) and diplomas (i.e. top 8 places) awarded by the IOC of six disciplines (i.e. alpine skiing, biathlon, cross-country, speed skating, freestyle skiing and short track). The ‘markets’ in question are analysed by considering the number of Olympic medals, number of competing nations and the market domination by nations of the disciplines between 1992 and 2014. The Herfindahl-Hirschman Index (HHI) is applied to measure the concentration of success for every edition of the Games under investigation, while the Przeworski Index quantifies instability of domination compare to the previous edition. Important variability in terms of how success was distributed are identified in biathlon (2010) and short track (2014). In biathlon, this change in domination is consistent with the substantial increase in events by the International Olympic Committee (IOC). The change in short track can be attributed to athletes changing their nationality. By applying an industrial analysis to international competitiveness in the Winter Olympics, NSA and IOC policy-makers can benefit from a methodical monitoring of competition in sporting disciplines.The second article (i.e. section 6) examines the positioning of nations in the sports disciplines of the Winter Games by comparing the prioritisation of national funding across the seven Olympic winter sports (i.e. skiing, skating, biathlon, bobsleigh/skeleton, luge, ice hockey and curling). The aim is to compare the performance of competing nations in the Winter Games by analysing the distribution of financial resources amongst Olympic winter sports in relation to medal and diploma success in the respective sports. National policies are analysed at two levels: (a) the concentration of funding among the supported sports is measured using the HHI; and (b) the Spearman’s rho coefficient is used to examine the correlations between the distribution of funding (2010/11) and success per sport at specific periods in the past (1992–2006), recent past (2010) and future (2014) at that time. The results provide empirical evidence regarding different investment strategies in either a focused or a diversified portfolio of targeted sports. For example, South Korea demonstrates the most equal distribution of funding between the different disciplines, while Switzerland’s funding allocation is more concentrated, with a strong focus on skiing. The resulting positions of the examined nations differentiate depending on the most prioritised sport, be it skiing (Australia, Canada, Finland and Switzerland), skating (Japan and the Netherlands), skiing and skating (South Korea) or bobsleigh/skeleton (Great Britain). Meanwhile, high correlation values between the distribution of funding and success per sport were found in every nation, which indicate the important relation between distribution of funding and success in elite sport (e.g. De Bosscher, Shibli, Westerbeek, & Van Bottenburg, 2015; Houlihan & Zheng, 2013; Sam, 2012; Zheng & Chen, 2016). Reflecting on portfolio management (e.g. Purnus & Bodea, 2014), this study supports national decision-makers by comparing the prioritisation policies of their rivals according to success in the medals table. This analysis relates to the strategic positioning of firms in an industry (i.e. Olympic Winter Games) and the targeting of markets (i.e. sports) that differentiate from their rival competitors (e.g. Hooley et al., 2001; Porter, 2008b).The third article (i.e. section 7) aims to identify the different factors that are assessed by NSAs when deciding upon the allocation of national resources to specific Olympic winter sports. This paper models the targeting approach of NSAs during an Olympic cycle and applies considerations on the competitive positioning of firms (Hooley et al., 2017) to high performance sports management. The data are collected through semi-structured interviews with decision-makers of NSAs representing 11 medal-winning nations at the Sochi 2014 Games (i.e. United States [28 medals], Norway [26], Canada [25], the Netherlands [24], Germany [19], Sweden [15], Switzerland [11], Finland [5], Great Britain [4], Australia [3], and New Zealand ). The data shows that NSAs identify sports disciplines to be targeted by combining an internal analysis that reflects the RBV (e.g. athletes’ performance per sport or sport-specific elite sport system) with an external analysis of the medal markets that reflects the MBV (e.g. medal market size per discipline, number of rival nations competing per discipline, intensity of competition at Games over time). These findings can support policy-makers in distinguishing internal from external factors to be analysed and combine the strategic intelligence derived from the RBV and MBV to create competitive advantage. The research outcome of this article may support the implementation of a more strategic decision-making model in NSA resource allocation.The fourth article (i.e. section 8) applies an analysis of the market potential to the Olympic winter disciplines to monitor the development over time. This allows decision-makers to take more informed investment decisions based on strategic evidence from a MBV on the Winter Olympics. An exemplary analysis of alpine skiing, biathlon, cross-country, speed skating, freestyle skiing, short track and snowboarding between 1992 and 2018 is conducted. The concept of market potential analysis, commonly applied in mainstream management studies, is proposed as a method to enable NSAs to better identify relevant changes in the medals and diplomas markets to be strategically targeted. The most notable changes are identified in cross country (2002), biathlon (2006), freestyle skiing (2014), snowboarding (2006 and 2014) and speed skating (2018). The strategic evidence of these findings is highlighted through a discussion of the role of the IOC and the relevant International Federations (IF). These organisations govern the competition in the Olympic awards’ markets by introducing new events and altering qualification rules. With reference to principles of the MBV as described by Porter (2008b), decision-makers need to understand the underpinning governing mechanisms of the competition in each discipline’s market. They can then strategically exploit this intelligence to develop a sustainable superior performance over their rivals at the Olympic Games. In summary, the research demonstrates a number of similarities between the targeting approach of sports disciplines by NSAs and the positioning approach of firms in markets as described by Hooley et al. (2017). Similar to firms, the NSAs’ targeted prioritization of resources is based on combining an internal analysis of their disciplines / National Governing Bodies (i.e. RBV) and an external analysis of their competitive environment at the Winter Olympics (i.e. MBV). However, this study revealed no decisive evidence that NSAs of competitive winter sports intentionally position their nation to create competitive advantage relative to their rivals. This finding draws attention to certain peculiarities involved in producing international sporting success, which limit the application of mainstream business theories to examine the positioning approaches of nations in multi-sport competitions such as the Winter Olympics. These peculiarities include the national elite sport context in which an NSA is operating and the related underlying production costs per discipline (e.g., Du Bois & Heyndels, 2012; Tcha & Pershin, 2003), as well as the involvement of numerous national stakeholders in the systematic production of elite sporting success (Houlihan, 2013) and related path dependency in national decision-making (De Bosscher, Shibli & Weber, 2018). While these peculiarities determine the governing role of NSAs to implement national elite sport policies, they limit the application of business techniques derived from the business world. Nonetheless, this research contributes to the literature that compares national elite sport systems (Andersen & Ronglan, 2012; De Bosscher et al., 2015; Robinson & Böhlke, 2013, Robinson & Minikin, 2011, 2012; Truyens, De Bosscher, & Sotiriadou, 2016) by adding a strategic perspective to the discussion on how to invest national resources. The strategic management angle of this study contributes to the existing body of evidence that professional sports organisations apply business techniques in their decision-making (e.g., Nagel, Schlesinger, Bayle, & Giauque, 2015; Shilbury & Ferkins, 2011). This research approach also mirrors the literature that proposes traditional business tools to improve the management of public and non-profit organisations (e.g., Bryson, 1988; Todnem & Macleod, 2008). Finally, the theoretical and practical contribution of this study delivers the means to empower decision-makers in NSAs to improve their nation’s prioritisation strategy in the context of the Winter Olympics. In particular, it is submitted that an analysis of the Winter Games from the MBV is likely to become more significant in the future because of the projected development of the Olympic programme in the Agenda 2020 (IOC, 2014). The proposed movement from a sports-based to an events-based programme promises to allow the Olympic programme to become more flexible: a development, which outlines the challenge for nations to stay competitive in the future.

ISBN:9789057188640

Publication year:2019

Keywords:Competitive advantage, Positioning, Olympics, Market based view