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Moneyball Philosophy

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Moneyball The film Moneyball is not just about baseball, rather it is how two individuals, Billy Beane and Peter Brand, apply economic concepts to create an affordable, competitive team. The Oakland Athletics is a small market team with a limited budget. The general manager, Billy Beane, is faced with the challenge of replacing three key players: Johnny Damon, Jason Giambi, and Jason Isringhausen with a constraining budget. Furthermore, Billy states, “The problem we are trying to solve there are rich teams and there are poor teams and then there is fifty feet of crap and then there is us. It is an unfair game” (Moneyball). Consequently, he is forced to adapt and recreate the standard way of fielding a team. At the beginning of the movie, …show more content…

Since there is a low demand for these players and a large supply of them, he is able to pay less money for them. Players are undervalued for a variety of reason such as appearance, age, or personality (Moneyball). Pete states, “we can afford 25 players because everyone else in baseball undervalues them, like an island of misfit toys” (Moneyball). The philosophy is based on productivity. Billy invests the least amount of money, but the players produce the same output that allstar, expensive players would, by getting walked to base. This exhibits productivity, “the measure of average output per unit of input.” Billy uses the undervalued on-base percentage to determine if a combination of players can recreate big name athletes. Once the players become overvalued by other teams, Billy trades or sells them to make a profit, much like investing …show more content…

Creative destruction occurs when a company creates a new process or product, and other businesses do not adopt the new process or product, which destroys their business. Billy’s challenge of fielding a team with a constraining budget forces him to “adapt or die” (Moneyball). Billy tells his rigid scouts, “Think differently, we are the last dog at the bowl. You see what happens to the runt of the litter? He dies” (Moneyball). In other words, BIlly tells the scouts that if they do not change their way of doing business, they will not be able to compete. Billy continues to states, “If we try to play like the Yankees in here, we will lose to the Yankees out there” (Moneyball). Consequently, Billy innovates and changes the way scouts have created teams for 150 years (Moneyball). He finds a strategy, a way of doing business, that is more productive and cost effective. Henry, the Boston Red Sox’s coach, claims, “It's threatening their livelihoods, jobs, the way they do things… anyone who is not tearing their team down right now and rebuilding using your model they’re dinosaurs” (Moneyball). Many teams adopt Billy’s strategy after the season, because it is more cost efficient and they would be outcompeted if they did

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