The BCG of Sports

In recent years, fitness enthusiasts had hit upon a new craze Cross Fit. While it was essentially set of training and fitness exercises, there were numerous competitions that were organized for these enthusiasts. One integral feature of these contests was they were kept a surprise in terms of events that one had to crack in order to win the contest. It might have been more of a fitness or recreation or play to borrow from Suits rather than a sport in its purist sense, but nevertheless functional fitness as in CrossFit might be considered a sport. Recent news items seem to suggest that craze is now slowing down and the fitness enthusiasts are moving on towards other exercises. In many ways, this seemed to be a fad which is now yielding constant returns if not decreasing returns. There is of course a thrill or what economists would term as seeking marginal utility by cracking at these fitness fads. Over a period of time, they lose novelty and fade away. This implies the presence of diminishing marginal utility or more precisely it in essence would be an application of equimarginal utility wherein the participants have to devote their resources on multiple fitness formats. If the marginal utility on every unit of resource spent on CrossFit let us say is more than the marginal utility gained from expending each unit of resource on other fitness formats, there would be a tendency to allocate more resources towards Cross Fit and vice versa.

Sports in general are form of leisure though in many instances, they have an instrumentalist objective. Sport of course is work for professionals across sports domains but in generic terms it is an outcome of leisure. There are sports which attract considerable following and interest but with passage of time fade away giving rise to new sports. Many sports turn extinct and some might function in an endangered way. An instance that can be cited would be of croquet. Lewis Caroll made it legendary in Alice in Wonderland but there was a time in England and France and other places where croquet was very popular but today it is virtually extinct. It might be noted thatWimbledon is better known and All England Croquet and Lawn Tennis Club. This brings us to the question on how sports evolve and fade off. There is primarily an application of what economists theorize as marginal utility and its diminishing returns something noted above.

Yet, one can go little beyond this and seek to examine sports through the perspective of management literature. In present times, sports are often products being consumed by the audience and players alike. Therefore, it would in fitness of things to decipher the sports through the market share they command in the people’s leisure and the market growth they are prospected with. This relation between market share and market growth is well known to management theorists and popularly known as Boston Consulting Group (BCG) Matrix. BCG Matrix is often the instrument used to understand the dynamics of product portfolio in firms. The same model can be applied into understanding the way sports evolve and pass on in the scheme of cognitive surplus of the audience and players alike.

The relationship as one understands is plotted through four different quadrants, the question marks, the stars, the cash cows and the dogs. Each sport like any other product would undergo through these four quadrants. Something like soccer might be a star or perhaps a cash cow and would remain for fairly long time. Something like rugby had to reinvent itself to expand its market. It might have been a star in niche market but a question mark for the mass market. Through the introduction of rugby sevens it might have lent itself to be a star for the larger markets. Cricket could be a good example. if one examines the market for the Indian subcontinent it remains a star evolving into a cash cow and will likely to be so for the foreseeable future. Yet it remained a question mark in most countries barring a few traditional ones which it is now attempting to morph into a star through the introduction of newer formats.

Sports like croquet morphed themselves into the dogs thus placing them on the verge of extinction. There are numerous such sports which went out of existence. Another example that could be cited would be of jeu de paume or real tennis which gave way to lawn tennis. Today, the real tennis is something that is rarely played with a handful of courts available through the world. Similar was the fate of racquets which gave way to squash and racquetball. The racquets courts too perhaps are handful. Even a sport like jai alai which had its popularity in the US is struggling. Yet there would be sports that would perhaps make the transformation from dogs back to question marks and then may be to stars. One instance would be of lacrosse. It was all but dead for long but revival is in progress over the last couple of decades or so. It has attracted increasing popularity and is reinventing to be a star in some niche markets. It might remain question mark in many marks but the direction seems to be unambiguous.

In the meanwhile there are new sports which could be question marks in the broader sense but slowly turning into stars in niche markets which they are targeting around. An instance that could be cited would axe throwing or even for that matter competitive cheer or parkour. In fact, the evolution of sports like skateboarding, snowboarding, surfing all outcomes of user driven innovation seeking novelty satiating increased marginal utility are all examples where question marks have evolved into stars and perhaps might turn into cash cows in select markets. As in the case with any product, there is a possibility of increasing returns to scale which later turns into constant returns something synonymous with cash cows finally turning into decreasing returns. Sports in no exception. As one seeks to understand the metamorphosis of sports over centuries, the BCG matrix gives a good instrument or a diagnostic tool to understand the phenomenon of evolution of sports.