How Do NBA Teams Differentiate Themselves ?

Chapter 7 discusses product differentiation. As stated in the book, product differentiation is a business strategy whereby firms attempt to gain a competitive advantage by increasing the willingness of customers to pay for the products or services.
Product differentiation of firms (teams) in the NBA is comprised of two key elements: star players and NBA championship wins. The more stars a team has, the more appealing that team is to fans aka consumers. This idea is the same involving NBA championship wins. Teams with the most fans are teams who are known for winning. The successfully differentiated teams such as the Los Angeles Lakers and Boston Celtics have gotten repeated business (sellout crowds) through the success they have had via star players.
A quote that I want to leave you with from the five forces analysis of the NBA is “teams are hugely differentiated as manifested by the personality and talent of their rosters of players, the strategy of play advocated by each team’s coaching staff and management, the team’s regional affiliation, and the team history and legacy all elements which enable a team to increase the switching costs for fans.” Teams in such cities as New York, Los Angeles, Chicago, and Miami will always be able to successfully differentiate themselves in the NBA. They have access to the most fans, biggest appeal to star players, better legacies, and ability to sign more talent.


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