Reference no: EM133174045

Analytics in sports was made popular by the book and movie, Moneyball. Statistician Bill James and Oakland A's general manager, Billy Bean, placed emphasis on crunching numbers and data instead of watching an athlete's style and looks. Their goal was to make a team better while using fewer resources. The key action plan was to pick important role players at a lower cost while avoiding the famous players who demand higher salaries but may provide a low return on a team's investment. Rather than relying on the scouts' experience and intuition, Bean selected players based almost exclusively on their on-base percentage (OBP). By finding players with a high OBP but with characteristics that lead scouts to dismiss them, Bean assembled a team of undervalued players with far more potential than the A's hamstrung finances would otherwise allow. Using this strategy, they proved that even small market teams can be competitive - a case in point, the Oakland A's. In 2004, two years after adopting the same sabermetric model, the Boston Red Sox won their first World Series since 1918. (Source: Moneyball, 2004).

Discussion questions:

1. What are the general business lessons from this story?