American football has surpassed baseball in recent years as "America's past time." It has become part of everyday life, with the NFL surpassing three billion dollars in revenue per year, more than one billion more than its closest competitor. It is thought of as gritty, physical, and all around fun just as most Americans like to be thought of. For decades the NFL has dominated the world of football, but despite all of this, it has come under attack in recent years because of the increasing mediocrity, cost to attend games, skyrocketing player and coaches salaries, squabbling owners, and lack of loyalty by players to their respective teams. With this, Vince McMahon, the founder of the WWF, saw an opportunity and took charge to introduce a new and controversial professional football league called the XFL. .
In looking at Porter's Five Forces, we conclude that the barriers to entry are high with the startup costs of the endeavor for the first year being roughly $100 million dollars. Next, in looking at the threat of substitutes, we can conclude that it is moderate because of the many different types of entertainment available, be it other activities or sports. There are also other football leagues available to the consumer such as the Arena Football League which was drawing over a million fans per season in 1999, college football, and the NFL. However, these other football leagues do not coincide with the XFL schedule. In addition, the XFL's strategy is to be a highly differentiated product therefore making the threat of substitutes lower. The buyer power in the industry is high, as the consumer can decide whether to attend or not to attend. There are may other segments of the sports industry that a consumer can enjoy.
An important step in analyzing the strategic plan is to create a SWOT analysis focusing on the internal (Strengths & Weaknesses) environmental factors as well as the external environmental factors (Opportunities & Threats).
