BEA19 Technologies Ltd: Opportunities in Sports Coaching

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Trackable Metrics Used in Sports Coaching and Use Cases

Essential GPS tracking devices are currently used in sports coaching to monitor athletes’ distance traveled and speed during a training session. These measurements are seen as reliable metrics of an athlete’s workload (Malone et al., 2017). Furthermore, more precise data describing an athlete’s sprint speed and time it takes to recover after a sprint allow a coach to prepare individualized training plans or game strategy that takes an individual athlete’s performance into account (Conners et al., 2018). This shows that an app utilizing the GPS capability available in most smartphones can be profitable to BEA19 Technologies without the need to source or develop specialized hardware.

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Other metrics that are relevant in the field of athletics and can be tracked by more specialized wearable devices include heart rate, temperature, breathing rate, and the body and individual joints’ positioning in a 3D space. While these measurements are possible, more complex devices and solutions implementing these are not as common (Goldberg, 2016). These measurements can be used to monitor a user’s performance in more detail, developing a more comprehensive model of their fatigue and recovery periods (Conners et al., 2018). Furthermore, this information can be crucial to ensure an athlete’s health and well-being by detecting signs of stress or training overload and adjusting his or her regimen accordingly (Jones, Marshall, and Denison, 2016). These findings point to the value of an integrated hardware/software solution intended to be used by sports coaches.

A distinction in the potential use cases for tracking devices in athletics and sports coaching exists that allows identifying three related, but separate areas of application for such devices. The first use is relevant to the general public who may not be directly involved in professional sports or athletics, but utilize such tracking devices to monitor their fitness-related activities and progress. These devices are generally affordable, use a bracelet-like device (fitness bracelet), only gather the essential metrics, and work with an extant smartphone.

The second use case is more directly related to coaching. A more advanced device can be used to gather more advanced metrics that can require advanced knowledge to parse. These devices can be of interest to professional coaches, whether associated with a professional sporting organization or a fitness club. Furthermore, it can be expanded to include the emerging field of remote coaching (Boratto et al., 2017). This use case requires a more involved software solution and specialized hardware.

Finally, a third use case is dedicated to professional team-based sports, including elite teams and leagues. This application requires gathering the most precise and comprehensive metrics from an entire team and presenting them to the coach in a manner that can be parsed to evaluate the team’s performance, which includes both their physical and strategic performance. This approach requires a comprehensive analyzing software solution in addition to precise hardware.

PESTLE Analysis of the Macro Environment Factors

When considering entering into the sporting goods and coaching sector, the legal demographic, economic, social, and technological factors of the environment need to be considered. A PESTLE analysis is a reliable way to determine a business idea’s feasibility as it allows to estimate the relevant factors that affect the environment that the firm seeks to enter. The information obtained in this analysis can be used to make decisions on the further development and implementation of the idea. For tracking devices intended to be used within UK’s sports coaching industry, the PESTLE factors can be described as follows:

Political environment

The UK is facing significant political uncertainty after formally leaving the European Union (EU) on 31 January 2020. The free trade and free movement of people conditions are likely to change after the transition period, which is due to end on 31 December 2020. These changes can affect import and export regulations, particularly between the UK and the EU. Furthermore, the scope of this political change makes other changes in regulation likely, and the particular consequences and their effects challenging to predict.

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The UK is planning to implement a digital service tax. Although it is primarily aimed at large global corporations, such as Google, it can affect digital service providers in general (Robertson, 2019). As other countries are implementing similar taxes, they can complicate international dealings or target multiple countries, which can create unexpected threats in the foreseeable future. A taxation-related opportunity exists in the UK’s Patent Box, a tax relief that applies to profits made from exploiting inventions that are patented in the UK. This relief lowers the corporation tax a firm must pay from 19% to 10% (HM Revenue & Customs, 2007; HM Revenue & Customs, 2020). It increases the UK’s attractiveness to a technology-based start-up, such as BEA19 Technologies’ sports coaching tracking devices.

Economic environment

Despite the ongoing political, social, and health issues currently affecting the UK, its economy is exhibiting a strong development. The country’s gross domestic product (GDP) has been increasing since 2009 to its 2019 Q4 value of £523,617 million (Office for National Statistics, 2020a). The gross value added (GVA) is following a similar trajectory, to £497,913 million in 2019 Q4 (Office for National Statistics, 2020b). At the same time, UK’s inflation rate remains low, with housing and household goods serving as the main contributor (Office for National Statistics, 2020c). These factors describe the UK as a stable and growing economy despite any setbacks. Such an economy constitutes a beneficial environment for business and competition, which makes it more attractive for new business initiatives.

The exchange rate for the Pound Sterling against the U.S. Dollar and the Euro has been falling since 2014 and 2016, respectively. Further significant changes to the exchange rate, especially against the Euro, are likely as the economy adjusts to the country’s departure from the EU. A lower exchange rate will negatively affect BEA19 Technologies’ ability to import components or finished devices, forcing the company to raise prices or lose its profit margins. Conversely, a stronger pound can reduce the total cost of importing devices or components, increasing total profits with the same retail prices. Whether the Pound to Euro exchange rate will increase, decrease, or remain the same following Brexit, however, is unknown, creating unpredictability.

Social environment

The UK’s social environment is favorable to goods and services related to sports, which includes the coaching industry. Team sports such as association football and rugby football are prevalent, with a significant percentage of the population engaging in these games in some capacity. In 2017, 23% of the population of England actively participated in sporting activities and an additional 19% actively participated in fitness activities (Audickas, 2017, p. 5). Furthermore, association football is a significant part of the UK’s culture (Gibbons, 2017). This suggests that a significant portion of the population may be interested in novel coaching and athletic goods. The prevalence of these sports in the country’s culture ensures that interest and demand are likely to stay high in the coming years.

Nonetheless, the popularity of team-based sports in the UK is decreasing in favor of individual sports. Notably, a significant increase in the participation in cycling is evident between 2008 and 2016, as well as smaller increases in boxing and athletics (Harris, Nichols, and Taylor, 2017). Cycling and athletics are sports in which people often participate informally and independently from professional clubs (Harris, Nichols, and Taylor, 2017). Despite the decreases, these changes and shifts indicate a total increase in interest and participation in sports (Harris, Nichols, and Taylor, 2017). Since professional and informal, as well as individual and team-based sports comprise different niches where tracking devices can be implemented, this represents another opportunity on which BEA19 Technologies can capitalize.

Technological environment

In the UK and globally, technology is rapidly adapting to the ongoing SARS-CoV2 (Covid-19) pandemic. These adaptations are increasing the value of any technical means of facilitating remote interactions as a response to social distancing and isolation measures. This increase in demand for methods of remote interactions creates an opportunity for innovation in this field. However, one can expect other firms to attempt to capitalize on this expanding niche, creating stronger competition and additional risks associated with it.

An important consideration for any digital, networking-dependant device such as a tracking device, is the availability and reliability of internet access. Currently, an estimated 96% of the UK’s landmass has current-generation (4G) coverage (Department for Culture Media & Sport, 2017). This fact suggests that there are few geographical limitations to providing tracking devices and services, particularly where sports that involve higher mobility, such as cycling, are concerned.

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Tracking technology can receive a significant benefit from utilizing the newly developed fifth generation of wireless networks (5G). This infrastructure is undergoing rapid development globally, as well as in the UK, where the first commercial 5G networks have been launched in May 2019 (EE, no date). The government guidebook outlines plans to deploy this technology in essential areas no later than 2025 (Department for Culture Media & Sport, 2017). However, the actual adoption of 5G devices, which may be required to utilize BEA19 Technologies’ tracking devices and services, will likely require additional time before the firm can take full advantage of the 5G technology.

The ongoing SARS-CoV2 pandemic is another factor to consider in relation to the deployment of 5G networks in the UK. Huawei, a major provider of crucial hardware, claims that the pandemic is certain to cause delays in the rollout of these networks (BBC, 2020b). Furthermore, controversies and conspiracy theories surrounding 5G technology can additionally slow down or limit its adoption (BBC, 2020a). Because of these ongoing issues, it may not be advisable for BEA19 Technologies to embrace 5G-related innovation immediately.

Legal environment

UK enforces the Data Protection Act (DPA), a specific implementation of the General Data Protection Regulation (GDPR). This legislation imposes requirements and limitations on the storage and processing of personal data by businesses. These requirements and limitations need to be considered when deploying the product’s software elements. Furthermore, biometric and health data are considered sensitive information and, as such, are subject to stricter regulations under the DPA. As the trackable metrics that are relevant to sports coaching applications fall under these categories, this creates an additional complication in the implementation of BEA19 Technologies’ devices and services.

Otherwise, few regulations exist in the UK relating to the sale of sporting goods or tracking devices. They primarily concern tracking vehicles, for instance, company vehicles used by employees. Otherwise, tracking is generally subject to the tracked party giving informed consent, which can be assumed with privately purchased devices and service subscriptions. Therefore, these regulations are tangentially relevant to BEA19 Technologies’ plans for producing tracking devices and services for the sports coaching industry. Nonetheless, the license agreements for these devices and services should include a consent clause to avoid unwanted litigation.

Environmental factors

Environmental — or ecological — factors are not directly relevant to BEA19’s business idea of providing tracking hardware and software solutions. All hardware manufacturing is likely to take place outside of the UK and by external sources.

SWOT Analysis of the Macro Factors

Based on the evidence described in the PESTLE analysis, a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis can be performed to establish specific, actionable information. Furthermore, this analysis can include internal factors of entering into a high-tech industry.

Strengths

  • Low manufacturing requirements
  • Components can be sourced from manufacturers

As a high-tech start-up that is primarily based on software solutions, manufacturing tracking devices for UK’s sports coaching industry can be heavily or entirely outsourced. Furthermore, individual components for these devices are likely to be available from their respective manufacturers. Therefore, it may not be necessary for BEA19 Technologies to directly invest in manufacturing components for its devices, allowing it to divert these funds towards researching and designing them. This approach will allow the firm to leverage its software development expertise.

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Weaknesses

  • Components must be sourced internationally

Manufacturing wearable electronic tracking devices or requires components such as GPS chips and accelerometers. These components may not be manufactured locally in the UK and, therefore, need to be imported. Due to this fact, parts of the production process must be arranged abroad, and the finished devices imported. These imports are subject to additional taxes and regulations, increasing the total costs of the project. Furthermore, these complex manufacturing and import requirements can involve more than one foreign source.

Opportunities

  • Increased demand for remote technology
  • Strong 4G coverage
  • 5G development
  • Multiple related niches
  • Patent Box offers a significant tax reduction
  • No restrictions on tracking devices

The consequences of the global SARS-CoV2 pandemic can create a favorable climate for consumer and professional-grade remote-tracking equipment as organizations and individuals have adjusted to using technology for remote interaction. The 96% 4G coverage of the country facilitates the implementation of devices that enable such interaction, as well as any electronic and networking-enabled devices. For the near future, the government’s commitment to developing 5G networks creates another opportunity for innovation.

Socially, the fact that sports constitute a significant part of the UK’s culture ensures a steady demand for coaching services and devices in the coming years. Furthermore, the UK’s sport and fitness environment offers several niches where wearable tracking devices can be used for team-based, individual, professional and amateur sports. Patenting technological solutions in the UK would allow BEA19 Technologies to benefit from a significant tax break. Finally, the technology for wearable tracking devices intended for use in sports coaching are relevant globally. Therefore, the technology, expertise, and information base developed by BEA19 Technologies for UK can be expanded to other countries.

Threats

  • Uncertain economic and political conditions
  • High potential for competition after the shutdown ends
  • Controversies regarding 5G can limit its adoption

Although UK’s economic and political conditions remain stable in the wake of Brexit and the Covid-19 pandemic, unpredictable changes in legislation, regulations, or public attitudes can occur in the coming years. The exchange rate for the Pound Sterling is particularly difficult to forecast. As BEA19 Technologies’ proposed tracking devices are likely to heavily rely on components sourced abroad, this can make profits generated by device sales unpredictable and unreliable, complicating budgeting.

The changes in the technological environment constitute potential threats, as well. Other firms are likely to find the remote solutions niche expanded by the social distancing measures lucrative, increasing competition. Although the deployment and development of 5G networks and public adoption of 5G devices can create a significant opportunity for profit, rising controversies surrounding this technology can slow its adoption. Therefore, developing solutions that require 5G should be seen as a necessary risk.

Analysis of the External Micro Environment

Stakeholders

Customers

The potential customers for BEA19 Technologies’ sports tracking devices can be divided into four broad categories. First are the individuals involved in sports or athletics in an informal or amateur capacity, who are not affiliated with a professional team or club. Second are private coaches or private organisations that offer fitness, physical training, or sports coaching. The third group is comprised of regional professional teams and clubs. The last category consists of people involved in elite, national level sports. A final distinction exists based on whether the potential customer’s sport is individual or team-based.

Each of these groups has different demands and expectations from the devices, which may necessitate a separate software or hardware product to fulfil. The first group, individual amateur athletes, is unlikely to spend a significant sum on hardware dedicated to tracking their physical progress. However, it is possible that they have existing third-party devices such as a fitness bracelet, as well as a smartphone. However, the size of this group of potential customers allows to utilise social and gamification features to increase motivation to exercise, and, therefore, use BEA19 Technologies’ hardware and software solutions (Zhao, Ali Etemad and Arya, 2015). A solution aimed at this group should focus on software that is accessible, convenient, and, if possible, compatible with existing third-party hardware. The hardware can have relatively limited functionality to achieve lower prices per unit. For this group in particular, fitness devices can be a form of expression, therefore, an investment into unique and creative designs can drive a distinction between BEA19 Technologies’ products and those of its competitors.

The second and third groups are similar in that they are more likely to use more expensive dedicated hardware that can be shared between multiple users. Particularly for devices intended to be rented out by individual coaches or small businesses, additional security features can be valuable. Furthermore, as local clubs are focused on a single specific sport, dedicated software and hardware tailored to the sport in question can be designed. With these two groups, the distinction between individual and team-based sports becomes relevant. In the latter case, BEA19 Technologies can develop a comprehensive team monitoring solution to compete with the Polar Team Pro.

Finally, the fourth group is comprised of elite, national level clubs and leagues, including the Premiership Rugby and the National League. These potential customers require specialised and comprehensive solutions which can include devices and software built to their specifications and long-term technical support. These requirements can necessitate a specialised R&D process and significant funding, but being associated with such a major stakeholder can be extremely beneficial to BEA19 Technologies’ brand visibility and appeal. As the number of potential customers in this group is limited, but the potential value of each of them can be extremely high, it is crucial to approach them with offers and pilot tests of its devices and software.

A proposed emerging fifth group of potential customers are individuals and organisations interested in developing remote coaching. As outlined in the PESTLE analysis of the external macro factors affecting BEA19 Technologies’ possible decisions, the aftereffects of the Covid-19 pandemic and associated isolation measures, as well as expected proliferation and adoption of 5G networks and devices are likely to increase demand for such services. Therefore, developing innovative solutions that fill this emerging demand ahead of the competition can be an opportunity for substantial profit for the company. However, these changes can be challenging to predict, as current research into the specific demands of remote coaching is insufficient.

Stakeholders

The Community

As mentioned previously, sports, particularly football and rugby, play a significant part of the UK’s culture. Members of the community who do not personally participate in sports, still engage with them through watching games. These non-participating people are involved and invested in their favourite teams’ performance. BEA19 Technologies can leverage this fact to improve its public image and the visibility and attractiveness of its tracking devices and services. To do so, it should integrate these devices and services into the public perception of the events and teams with which it cooperates.

Stakeholders

Investors and Shareholders

BEA19 Technologies can source potential investors and grants with UK’s government programmes. These programmes are ultimately aimed at improving UK athletes’ performance in the Olympic Games and other events through sourcing better equipment and improving the quality of coaching (UK Sport, no date). BEA19 Technologies can apply for such grant and funding programmes to attempt to secure funding for its initiatives, particularly if the company can argue that the metrics obtained through its tracking devices can be used to detect and attract promising athletes or improve coaching.

Otherwise, investors and shareholders have reasonable expectations of a return on their investments. These interests can conflict with those of the potential customers or BEA19 Technologies employees. For a technology start-up project, this conflict can arise between short-term profit concerns and long-term research, development, and innovation of the final product. These interests should be carefully balanced and BEA19 Technologies should be prepared to wait a significant amount of time before seeing a return on investment from this project.

Stakeholders

Suppliers

Sourcing high-quality components and assembly for BEA19 Technologies’ hardware solutions is crucial for creating a product of a quality sufficient to be desirable to potential customers. Therefore, additional research is necessary to determine which components are necessary for creating the devices during their design phase. Furthermore, ensuring reliable supplies is necessary to maintain a consistent quality of the finished hardware products. Additionally, as a significant number of manufacturers of semiconductor and electronic components such as GPS chips and accelerometers are located outside of the UK, international shipments and supply lines need to be established, subject to additional regulations and taxation.

The Competition

Multiple firms are competing in the sports tracking device market, most with a global presence. These firms generally target only some of the potential customer categories outlined above. Notable competing firms and products include Fitbit, a producer of fitness bracelets and tracking-enabled smartwatches in a price range of £100-200 and a subscription-based coaching and analytics software (Fitbit, no date). Samsung offers the Galaxy Fite fitness bracelet with a retail price of £35 (Samsung, no date). Garmin produces a broader range of trackers and smart watches between £60 and £1000 (Garmin, no date). Finally, the Apple Watch (£399) offers fitness tracking capabilities, although it requires buying into Apple’s broader digital ecosystem with the IPhone (Apple, no date) It is also important to note that several firms have gone bankrupt or stopped producing or supporting their tracking hardware, such as Pebble or Nike’s Fuelband tracker. These products primarily target the first group of potential customers, individuals and amateurs. The approximate price range appropriate for this group of potential customers, as well as general design principles, can be seen in the successful products

Firms that target professional teams and clubs generally offer solutions that are more specialised towards specific sports or locations, as well as more direct ongoing cooperations with their clients. Polar offers individual tracking devices as well as comprehensive hardware/software suites for team-based sports (Polar, no date). InMotio provides an example of an alternative approach to tracking used for sports coaching: external tracking hardware and cameras installed at a team’s venue that combine with wearable devices that provide detailed data about the team’s performance (Inmotio, no date). Both these companies work through an individualised contract with specific teams, which include national teams and associations. No other significant companies operating in this sector were found in the analysis. This, paired with the significant differentiation between the two companies’ products, suggests that competition in this sector is limited.

InMotio and Polar’s solutions focus on devices intended for specific sports: football, ice hockey, and, in Polar’s case, equestrian sports. This presents an opportunity for BEA19 Technologies to innovate by offering devices and analytics software intended for use in other specific sports, such as swimming or water polo. For water sports in particular, this will require designing waterproofed devices. However, if technically feasible and economically viable, they will allow to enter a niche without competition.

Notably, solutions aimed at fitness clubs, personal coaches, or intended for remote coaching were not found during this analysis. This suggests that these niches are unoccupied and constitute a significant opportunity that BEA19 Technologies can exploit. However, this is a high-risk opportunity as it is not clear whether demand exists in these niches. Additional specific market research and pilot projects may be necessary to determine whether investing into these fields is likely to be profitable.

Key Strategic Objectives

Based on the above observations, critical success factors (CSF) can be formulated, achieving which is necessary for BEA19 Technologies’ entry into the sports tracking devices to be successful. This tool allows to establish quantifiable, specific objectives that must be achieved to become competitive in the market and, subsequently, secure a competitive advantage. Deeper analysis into the feasibility of these objectives is required to measurably determine the ultimate feasibility of the business idea.

The first is the successful implementation of the software solution. This can be tested before investing into hardware development as many competing wearable tracking devices allow external developers access through application programming interfaces (API). Because of this, initial versions of the software can be designed, tested, and deployed for test audiences. Success in this objective can be measured by the successful gathering, collating, storing, and assessing of the available metrics and providing the user with a human-readable, relevant, and appropriate output.

The second objective is designing and sourcing the relevant hardware. As the supply chains for electronic devices can be complex and span multiple countries, process optimisation is crucial for this objective. A specific metric of success is the delivery of a prototype consumer device which can be shipped at a competitive price of approximately £60 for a fitness bracelet and £400 for a tracking-enabled smart watch. The former matches the prices of most other competitors, while the latter is based on the Apple Watch.

The third objective is related to innovation in the field. Both the software and the hardware solution need to differ significantly from those of the competition. These differences can involve the collection, analysis, or output of relevant metrics, or auxiliary features such as those in social, competitive, or gamification elements in the software. Furthermore, as different potential customer groups exist for the end product, systems analysts can propose specific innovation objectives for each: social features would likely be of more interests to individual amateurs, while professionals will likely demand more precise and comprehensive metrics and their analysis.

The fourth objective is the ultimate adoption of BEA19 Technologies’ tracking devices by customers. Sales targets should be set for consumer- and small business-grade devices to assess their attractiveness. Furthermore, the development of professional-grade devices and software will likely be impossible without the support of a professional sporting organisation.

Recommendations to BEA19 Technologies Ltd

Entering the highly competitive field of tracking devices and software for use in athletics and coaching is a risky proposition. Although the analyses performed indicate that there are few legal or economic barriers to entry, and the potential customers’ interest and participation in sports and athletics is high, it is a highly competitive field. As such, comprehensive research is required into the existing competing solutions, novel technology as well as the potential customers’ demands to develop a product with a unique competitive advantage. Furthermore, the diversity of potential users — from individuals interested in general fitness to professional team coaches and clubs — suggests that developing a range of products for different niches and marketing them appropriately is the key to entering this highly competitive field. Considering the influence of elite sports, securing the endorsement of some teams or individuals participating at this level can also create a significant marketing and advantage.

The current and expected shifts occurring in the UK caused by Brexit, proliferation of 5G networks and technology, and the SARS-CoV2 pandemic can be unpredictable. Some of these shifts — such as an increase in the interest in, and demand for, remote coaching technology and methods — can create a new niche in which a new company entering the market can innovate. However, it can be challenging to predict the long-term feasibility of such innovations. Similarly, changes in international trade regulations following UK’s separation from the EU can complicate importing components or finished devices, which is likely to be necessitated by the fact that these components may not be produced locally. Finally, adoption of 5G technology and devices can be slowed by ongoing controversies and world events, making innovation in tracking devices that utilise this technology a high-risk proposition.

Specific issues directly related to the product design and development include developing a software solution that has a competitive advantage, sourcing component parts, which is likely to involve multiple foreign manufacturers and be associated with complex international supply chains. Resolving these issues, as outlined in the CSF analysis above, will require significant investment into research and development before any commercial success of this start-up is possible.

The division of the potential customers for BEA19 Technologies’ hardware and software solutions into four current and one emerging groups suggests that the company’s strategy should be expanded to provide separate solutions to fulfil each group’s needs. Therefore, one can recommend assigning divisions to each of the three proposed branches: consumer fitness devices; devices for fitness clubs, individual coaches and regional clubs; and devices for elite sports. Additionally, a provisional task group can be assigned to researching the feasibility and specific demands of remote coaching.

The final recommendations to BEA19 Technologies plan of entering the UK’s market for tracking devices intended for use in fitness and sports coaching are focused on a gradual development of the business idea. Starting with the extant, albeit highly competitive, market for individual consumer devices and software to secure a competitive position in the market, the company should invest in the development of more specialised devices aimed at correspondingly more demanding customers. BEA19 Technologies should also be cautious of any changes brought by the aforementioned external factors, and quickly respond to opportunities, such as new research into remote coaching, or government grants for which it can apply.

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