Disruptive innovation – some lessons from Olympic snow boarding

Citation

Chadwick, S. (2014), "Disruptive innovation – some lessons from Olympic snow boarding", Sport, Business and Management, Vol. 4 No. 2. https://doi.org/10.1108/SBM-03-2014-0008

Disruptive innovation – some lessons from Olympic snow boarding

Article Type: Editorial From: Sport, Business and Management: An International Journal, Volume 4, Issue 2.

The 2014 Winter Olympic Games is Sochi was momentous for so many reasons, that it presented an almost immeasurable number of research opportunities to business and management researchers. From the amount of money spent on the Games (estimated to be $50 billion), through to the potential return on such an investment, to the management or risk and security at the event, to the role of commercial interests in moderating aspects of the Games, one hopes academic researchers are able to capitalize upon whatever research opportunities they perceived.

My attention was nevertheless drawn to American snowboarder, Shaun White, and some of the issues raised by the athlete and those who participate in sports White either competes in or is associated with. Although perhaps now dethroned as the king of 21st snow sports (after his unsatisfactory performance during the half-pipe competition in Sochi), the American snowboarder Shaun White is what a hero looks like in 2014.

White is a phenomenon: a two-time Olympic gold medallist and commercial behemoth. Estimated to be worth approximately $40 million, he is believed to earn up to $7 million a year from endorsement deals with companies including Target, Oakley, Hewlett-Packard and Ubisoft. Just as important though, The Flying Tomato (as White is sometimes known) is arguably the face of salvation, one of a group of sports people who some argue have saved the Winter Olympics.

In the 1980s, some argue that the Winter Olympics had become decidedly “uncool”, a poor relation to the summer Games; populated by a small number of often minority sports; and a commercial shadow of rival sporting mega-events. And then along came Douglas Copeland and Richard Linklater: unexpected and unintended godfathers of snow sports in the 21st century. Copeland was the author of Generation X: Tales for an Accelerated Culture while Linklater directed the film Slacker, both of which appeared in the early 1990s. Each accentuated a new age – Gen-X – populated by people born between the 1960s and the 1980s, and characterized by Professor Christine Henseler as “a generation whose worldview is based on change, on the need to combat corruption, dictatorships, abuse, AIDS, a generation in search of human dignity and individual freedom, the need for stability, love, tolerance, and human rights for all”.

Reflecting the identification of this new social grouping, US sport broadcaster took the decision to start the X-Games. This was set-up as an annual event that ran for the first time in 1995 and consisted of sports such as snowboarding, skateboarding and freestyle motocross. Participants can win gold, silver and bronze medals at the Games and its big stars have included Shaun White (as well as others such as Tony Hawk and Travis Pastrana). By 2002, it was estimated that 30 per cent of US households were tuning-in to watch X-Games.

The International Olympic Committee (IOC) began to respond to the emergence of Gen-Xers and their new found Olympic rival by adding what some might call “cool” sports to the roster of Winter Olympics competitions. Indeed, The Economist recently identified that of the 98 official events in Sochi, at least 20 of them can be labelled as being “cool”. While some observers think the likes of White have now gone main-stream, others have speculated about the potentially more fundamental implications of Slacker-induced generational change.

In a blog for the Harvard Business Review during the Sochi Games, Scott Anthony (2014) pondered whether the X-Games could have the same disruptive effect on the Olympics as digital cameras had on Kodak and Netflix had on Blockbuster. Anthony considered whether the X-Games might find a foothold among customers that are not served well by existing solutions, a view he confirms. Anthony then contemplated if the X-Games have broader market appeal, something he again believes is already happening and will continue. This assessment raises the possibility that we are on the cusp of disruptive change in the worlds of Olympic and winter sports. However, Anthony discounts this noting that the third constituent of common to such disruptive change is not actually manifesting itself. Effectively, Kodak and Blockbuster failed to respond to an incumbent rival and therefore ultimately perished.

With a sense of “cool” having infused the Sochi Games with long hair, tattoos and baggy clothes (think Shaggy from Scooby-Doo in a mountain setting), the same degree of disruption in winter sport as has taken place in the photographic and video industries is not expected – the IOC is clearly responding and, according to Anthony, is unlikely to succumb. Moreover, one has to question whether the X-Games is sufficiently different to affect real industrial change. As such, the revolution is unlikely to start with a pair of Vans and end with the downfall of the Olympic Games.

Shaun White, half-pipes and the writing of Douglas Copeland nevertheless do have some important lessons for sport. Global mega-trends have always been at the root of developments in sport; look no further than football, the product of socio-economic change and the need for leisure time activity. That we see such a diversity of so-called “cool” sports scheduled into the Olympics therefore reflects an adaptation of the IOC to broader global changes rather than an admission of defeat. Indeed, in spite of The Economist latching-on to the notion of snowboarding being cool, perhaps the bigger story is that we are now living in a new age of “cool”, with White et al. serving as its ambassadors.

In marketing terms, “engagement” is currently heralded as being the key to commercial success. That is, giving people a reason to take an interest in your product and then enabling them to convert this interest into actual purchase activity. Gen-X sports represent good business for the IOC, engaging not just today's slacker generation, but also contributing to building a line of succession that should see youngsters across the world contemplating the possibility of following their heroes such as White into participating in sport. There is also the issue of how to keep sport products (events, competitions, contests) fresh and relevant. F1 Grand Prix racing is grappling with similar issues at the moment and has changed its racing rules to reflect issues such as the intensity of competition, safety and environmental concerns.

The inclusion of sports like snowboarding in the Olympics is from the same school of “product management” – ensuring that there are new features are regularly added to an event to stimulate consumer interest and build a sustainable customer-base. Snowboarding may not therefore be the arch-nemesis of traditional winter sports, inducing disruptive and irreversible change. Rather, it represents more of a velvet transition (or should that be Gortex transition?), an adaptation to strengthening trends that ensures the relevance and accessibility of the sporting mega-events such as the Olympic Games.

Notes on papers in this edition

In the first paper in this edition, Walsh, Rhenwick, Williams and Waldburger examine team brand extensions and licensed products, focusing on consumer awareness of two distinct brand strategies. While brand extensions and licensing are two distinct brand strategies, recent literature suggests that licensing be treated as an “external” brand extension. As both of these strategies have the ability to have positive and negative effects on the team's brand it is important to understand if consumers are aware if they are purchasing licensed products or extensions. Therefore, the purpose of this study was to examine if consumers are aware when a brand extension or licensing situation is present. The research involved exposing participants to a total of 16 products (eight brand extensions and eight licensed products) and asking participants to indicate who developed the products they were exposed to. Results suggest that participants had a difficult time correctly identifying team-licensed products, while in general they were able to successfully identify team brand extensions. This study provides empirical evidence suggesting that licensed product should not be classified as brand extensions as has been previously suggested. As such, research on brand extensions may not be applicable to licensing and vice versa. As there is some confusion in regards to who is manufacturing team-licensed product, it is important that sport properties choose licensees that produce high quality products to limit potential negative effects on their brand. This is the first known study to examine differences in consumer awareness of team brand extensions and licensed products.

In the second paper – “Differentiating attitudes: team loyalty and attitude toward spectating behaviour” – Sumida, Fujimoto and Sakata differentiate between sport spectators’ attitudes, specifically team loyalty and attitude towards spectating behaviour by investigating the reliability and validity of the proposed model, and the influence of the attitudinal factors on intention to re-attend sporting events. In this quantitative study, data were longitudinally collected from five professional soccer teams of the J-League (Japanese professional soccer league) official surveys of 2008. The study was analysed in two phases by first examining the reliability and validity of the measurements and then the appropriateness of the model. Finally, a multiple group analysis was conducted to examine the applicability across the aforementioned five teams. Team loyalty conceptually and empirically differed from attitudes towards spectating behaviour. The proposed model indicated how attitudes have impacts on spectators’ future attendance at professional sports events, but the model significantly changed when parameters of the model were progressively constrained, suggesting that each team's uniqueness may influence spectators’ intention to attend future games. Sport spectators’ attitudes play a significant role in the decision-making process of deciding to attend an event, and an understanding of how spectators’ attitudes influence their intention to re-attend events could be of value to both scholars and sports team managers. Spectators of each team have their own characteristics and although this makes it difficult to generalize the results, this study contributes to an understanding of spectators’ attitudes.

Third, Voon, Nagarajah and Murray examine sports service quality (SSQ) for event venues using evidence from Malaysia. The purpose of the paper is to empirically test the proposed measure of SSQ and examine the relationships between emotional experience and user satisfaction for sports competitions/training venues (i.e. for the sport of badminton). Focus group discussions and related literature review were used to generate items for the SSQ. Structured questionnaires captured the perceptions of 240 users of sports venues in Malaysia. The relationships between SSQ, emotional experience and user satisfaction were assessed via structural equation modelling (SEM). Results show that the SSQ has five dimensions (peripheral, reliability, responsiveness, core and value). Core, peripheral and value have positive effects on users’ emotional experience whereas peripheral, reliability, responsiveness and core have positive effects on user satisfaction. The SEM analysis suggests that emotional experience mediates the relationship between SSQ and user satisfaction. The SSQ scale is developed using data from the badminton sport industry and is yet to be validated in other types of sports venues. In addition, measures of customer loyalty also need to be considered. Findings suggest that provision of quality service directly influences satisfaction with sports venues and enhances the emotional experience of customers. Sports venue managers should monitor the service management, particularly in terms of the physical environment and personnel. The SSQ scale, its effects on user emotional experience, satisfaction and implications will help the venue managers to improve service to the users. The quality of life of the users and public health of the community will be improved. The paper proposes a specific measure of service quality tailored for use in sports venues. It also provides further support for the mediating role emotional experience plays in the service quality-satisfaction relationship.

Fourth, Areni assesses home advantage (HA), rivalry and referee bias in representative rugby. The research examines whether HA, wherein a team is more likely to win, and by a larger margin, when they are playing at home versus away, exists in representative rugby competitions involving teams comprised of “all-star” players from several clubs. It also assesses whether referees are biased in favour of the home team, and whether this is the cause of HA. A complete consensus of matches from the State of Origin Rugby League and Tri-Nations Rugby Union competitions were analysed via hierarchical regression models estimating parameters for favourite/underdog status of teams, general home/away status, team-specific home/away status and rivalry-specific home/away status. Significant HA exists in both competitions, and within Tri-Nations, the size of the effect varies by team and specific opponent (i.e. rivalry effects). Although there is evidence of referee bias in favour of the home team, the penalty differential between the home and away teams does not mediate HA. This is the first study examining HA in representative rugby league, and shows a statistically significant effect. Further, the results reported here refute an earlier investigation of the Tri-Nations competition, which found little or no evidence of HA. By including a complete census of all matches rather than a small sample, this research finds a statistically significant HA effect, which varies by team and by specific rivalry.

In the fifth paper, Lee, Byon and Baker engage in a cross-cultural study of purchase intention of sponsored products based on American and Korean spectators of the 2010 FIFA World Cup in South Africa. The two main aims of this research are: to explain the relative influence of attitude, subjective norm and perceived behavioural control on purchase intention of the 2010 FIFA World Cup sponsored products; and to compare the purchase intention of American and Korean spectators towards sponsoring products of the 2010 FIFA World Cup. The SEM revealed that subjective norm and perceived behavioural control were predictors of purchase intention. Further, multiple group analysis revealed that the path coefficient between subjective norm and purchase intention for the two groups was significantly different. A self-administered questionnaire was developed to measure the four constructs of the TBP as well as demographic information. Upon completion of the psychometric properties test of the TPB, a SEM was conducted to examine the proposed hypotheses. The same fit indices as with the measurement model were adopted to evaluate the model fit. Finally, a multi-group analysis was conducted to examine if the proposed relationships are different based on nationality (American vs Korean samples). A comparison of χ2 value between unconstrained and constrained models was employed to assess whether the two groups are statistically different. SEM revealed that subjective norm and perceived behavioural control were predictors of purchase intention. In this study, a multi-group analysis was conducted to examine if the proposed relationships in the model are different based on nationality.

As a result, the authors found that two groups (i.e. American vs Korean) exhibited notable differences in subjective norms in determining purchase intentions of the 2010 FIFA World Cup sponsored products. As with other studies, several limitations of the current study should be addressed. First, this study was limited in sample selection choosing college students in the USA and South Korea. Convenience sampling was employed, which impedes generalizability of the findings. Thus, future attempts should be made for further replication using non-student samples. Sample discrepancy between the two groups used in the study was another limitation. In order to make two samples (Korea and USA) comparable, the authors eliminated some data points (i.e. 52) from the US group, resulting in smaller sample size for the US group. The potential contribution stemming from the cross-cultural comparison found in this study was somewhat threatened by the sample discrepancy. Therefore, it is suggested that future studies utilize a matched sample in terms of socio-demographics. The current study yielded interesting findings that may have marketing implications for the FIFA. As American viewers indicated that purchase intention of the 2010 FIFA World Cup sponsored products were influenced by their significant others’ opinions, the results revealed that it may be advisable to market products on the assumption that American audiences tend to be influenced by those groups close to them, like family and friends. Therefore, continued efforts between the FIFA World Cup organizers and sponsoring companies should be made to incorporate the reference group aspects into the promotional materials.

While individualists relatively feel comfortable to follow their own decisions, without others’ opinions or suggestions, subjective norms would provide a significantly stronger predictor for collectivists. This unexpected finding may have a significant implication in the TPB application as the effect of subjective norm on purchase intention may be comparable regardless of cultural differences (i.e. people in collectivism vs individualism society). To the authors’ knowledge, there are few empirical studies examining cultural difference on purchase intention through the application of TPB; thus, there exists a need to replicate this study in order to generalize its findings. Sponsors for mega sporting events, like the FIFA World Cup, must develop global marketing plans that appeal to worldwide audiences. Sport marketers, therefore, need cross-cultural marketing analysis on equivalence and bias so that they better understand how spectators from different cultures behave after consuming the same event. Thus, application of the TPB in cross-cultural studies aimed at understanding consumer intention after spectating the FIFA World Cup would provide marketers with valuable information for the formation of global marketing strategies.

In the final paper, Tong and Su explore the personality of sportswear brands, by identifying the personalities that are associated with sportswear brands and testing the applicability of them using Aaker's brand personality framework. This was empirically investigated based on data collected from 420 college students. Results revealed that consumers perceive seven distinct personality dimensions and 53 personality traits in sportswear brands: competence, attractiveness, sincerity, innovation, activity, excitement and ruggedness. The research has developed a valid and reliable scale that measures personality for sportswear products and confirms that consumers do associate particular brand personality dimensions with sportswear brands. Findings should help managers in the sportswear market better understand the image of their brand in the minds of consumers and better distinguish their brand from competing brands.

Simon Chadwick

Reference

Anthony, S. (2014), “Why the X games won’t dethrone the Olympics”, available at: http://blogs.hbr.org/2014/02/why-the-x-games-wont-dethrone-the-olympics/ (accessed 4 March 2014)