Fragile nature of competitive advantage in an analytic driven market: SportVU in the NBA

Abstract

The increase in the use of analytic measurements and technology in professional sports has grown and is considered to be the future of business. The National Basketball Association has entered an agreement with STATS, LLC, an analytic firm, for the use of their SportVU technology to track games and provide data to the teams. This advancement in technology has been heralded to be the break through advancement in analytics as it provides accurate and complex data to teams. Through regression model testing it was displayed that teams who invested in the technology prior to the league wide deal did in fact gain a competitive advantage in the league. However, the competitive advantage did not last due to saturation of the technology in the market. While the shift of focus to analytics is still prevalent in the league the next step is to focus on how to integrate the data provided by SportVU in a manner that creates another competitive advantage. Human capital will most likely be used to generate this advantage through unique insights into the overwhelming amount of data available to teams.