Finance and Pensions & Investments Blog

Along with the knowledge base and resources of SMEs, the establishment of relations with other external actors will overcome the main difficulties of diversification, compete in new businesses and coping with market leaders, even those where the size least efficient is an essential variable. All this justifies the development of inter-networks, in which the activities of the value chain are divided among different actors involved, depending on the core competencies mastered.

Thus, the main research hypothesis of this study led by Dr. Fernando E. Muiña García, rests on the argument that the joint operation and external resources in a proper organizational context increases the chances of success in business enterprises with assets diversified limited. However, for a network to generate value in these processes and neutralize the risks of diversification must submit a number of characteristics, which so far have hardly been studied: the specialization of the partners, the complementarity of the same, flexibility relations, the use of information technologies and communications technology (ICT) systems or the establishment of efficient knowledge management.

A net having these features will allow the SMEs: direct and immediate access to the specific responsibilities of the partners, necessary to compete in the new business without having to develop them internally, reduce costs and problems of coordination and management of activities very varied from appropriating the benefits of economies of scale at the global network, take only part of the risk of new business and maintain relationships with partners presenting high levels of trust and commitment.

The current economic environment, characterized by increasingly competitive environments, explains that companies need to identify and exploit new business opportunities to survive. These diversification processes involve, among other challenges, the need to develop new expertise and expensive, slow learning, proper management and coordination of a large number of activities or to overcome different barriers to entry in certain industries. While these challenges always require a huge commitment and effort, small and medium enterprises (SMEs), fabric majority in Spain, are those that are more difficult to deal successfully with this process. These companies are mainly characterized by small size, insufficient financial resources and productive and commercial infrastructure and a lack of clear references on successful business models. Such characteristics make it difficult for such firms to carry out diversification processes independently and therefore require the development of new ways of organizing production.

This research has the support and funding of the Community of Madrid in different calls for competitive research, and has consolidated a team consisting of professors from the Universidad Rey Juan Carlos, who since 2007 examines the role of networks in competitiveness of Spanish companies.

Games played in competitions like the Copa del Rey, Champions League and UEFA Cup affect the actual performance of the players in the Football League, against what has traditionally been defending.

This consideration should be taken into account when assessing the work of teams in the league as football clubs are businesses “multi-product”, according to a study by Professor Francisco González Gómez, Department of Economics Applied University of Granada, in collaboration with Andrew J. Picazo Tadeo, University of Valencia.

The researchers, who have examined the performance of the Spanish teams in the Football League given that they also play in other competitions, they believe that the efficiency analysis of football teams in addition to measuring the league conduct- should not be overlooked that the teams also play in other national and international competitions.

The bias in the assessment of equipment performance is greater the larger the number of games played in other competitions. An important conclusion reached by the authors is that, really, to play in other competitions is an opportunity cost in terms of team performance in the league.

From the standpoint of managing the club, their results indicate that, when planning the strategy sports teams at the start of the season, should be considered to compete for all competitions is the existence of a trade-off between the results of each competition.

The weak teams in the league focus

“Therefore, depending on the potential of each team, clubs should look at the beginning of the season which is the best strategy. It may not be as competitive interest in the various championships. For example, probably the best strategy for the weaker teams, those who try to save the category, is focused solely on the league, “said González Gómez.

To carry out this research, the authors analyzed the efficiency of football teams participating in various competitions throughout the season, using a technique known as Data Envelopment Analysis (DEA).

Another result of the paper points out that computers display a different level of performance in each competition. Thus, the best performing sports in the first division is observed on average in the league and European competitions, while the worst performance corresponds to the Copa del Rey, “a competition where it is not uncommon for teams ‘small’ win the ‘great’, “the researchers note.

Research has recently published in the Journal of Sports Economics and Central European Journal of Operations Research, two scientific publications.