Case Study Description of Playa Dorada Tennis Club: Expansion Strategy
When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.Playa Dorada Beach & Resort in Boca Raton, Florida, faces a growing seasonal demand for tennis services. The number of guests is expected to double in the next few years, and while the tennis facilities are a popular and well-promoted amenity at the resort, court space is limited. The director of tennis operations analyzes court capacity, usage history, pricing, and other factors as he assembles a plan for expansion. He must also consider how his strategy affects other divisions of the Playa Dorada Corporation, including finance, operations, marketing, and sales. Can he transform the resort's tennis operations into a profit center? To prepare for case discussion, students complete a quantitative analysis of past and expected future usage of the tennis facilities and formulate a growth strategy. Subjects Include: Service Management, Operations Management, Aggregate Planning, Capacity Planning, Pricing Strategy, Production Controls, Seasonal Demand and Resort Management
Swot Analysis of "Playa Dorada Tennis Club: Expansion Strategy" written by W. Earl Sasser Jr., Brent Kazan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tennis Dorada facing as an external strategic factors. Some of the topics covered in Playa Dorada Tennis Club: Expansion Strategy case study are - Strategic Management Strategies, Manufacturing, Pricing, Strategic planning and Technology & Operations.
Some of the macro environment factors that can be used to understand the Playa Dorada Tennis Club: Expansion Strategy casestudy better are - – technology disruption, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing commodity prices, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Playa Dorada Tennis Club: Expansion Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Playa Dorada Tennis Club: Expansion Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tennis Dorada, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tennis Dorada operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Playa Dorada Tennis Club: Expansion Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Playa Dorada Tennis Club: Expansion Strategy case study
2. Improving business portfolio management of Tennis Dorada
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tennis Dorada
Strengths Playa Dorada Tennis Club: Expansion Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tennis Dorada in Playa Dorada Tennis Club: Expansion Strategy Harvard Business Review case study are -
Highly skilled collaborators
– Tennis Dorada has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Playa Dorada Tennis Club: Expansion Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Tennis Dorada has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Playa Dorada Tennis Club: Expansion Strategy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Technology & Operations field
– Tennis Dorada is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Tennis Dorada in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Tennis Dorada is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by W. Earl Sasser Jr., Brent Kazan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Tennis Dorada is one of the leading recruiters in the industry. Managers in the Playa Dorada Tennis Club: Expansion Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Tennis Dorada has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Tennis Dorada
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tennis Dorada does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Technology & Operations industry
– Playa Dorada Tennis Club: Expansion Strategy firm has clearly differentiated products in the market place. This has enabled Tennis Dorada to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Tennis Dorada to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Tennis Dorada in the sector have low bargaining power. Playa Dorada Tennis Club: Expansion Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tennis Dorada to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Tennis Dorada digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tennis Dorada has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Tennis Dorada has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tennis Dorada has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Tennis Dorada is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Playa Dorada Tennis Club: Expansion Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Playa Dorada Tennis Club: Expansion Strategy are -
Capital Spending Reduction
– Even during the low interest decade, Tennis Dorada has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As Playa Dorada Tennis Club: Expansion Strategy HBR case study mentions - Tennis Dorada takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Playa Dorada Tennis Club: Expansion Strategy, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Tennis Dorada is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Tennis Dorada needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tennis Dorada to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Tennis Dorada needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Playa Dorada Tennis Club: Expansion Strategy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tennis Dorada 's lucrative customers.
Need for greater diversity
– Tennis Dorada has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Tennis Dorada has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Tennis Dorada even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Tennis Dorada products
– To increase the profitability and margins on the products, Tennis Dorada needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Playa Dorada Tennis Club: Expansion Strategy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Tennis Dorada has relatively successful track record of launching new products.
High cash cycle compare to competitors
Tennis Dorada has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Playa Dorada Tennis Club: Expansion Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Playa Dorada Tennis Club: Expansion Strategy are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tennis Dorada can use these opportunities to build new business models that can help the communities that Tennis Dorada operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Loyalty marketing
– Tennis Dorada has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Tennis Dorada can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Manufacturing automation
– Tennis Dorada can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tennis Dorada to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tennis Dorada to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tennis Dorada in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Tennis Dorada to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Tennis Dorada can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tennis Dorada is facing challenges because of the dominance of functional experts in the organization. Playa Dorada Tennis Club: Expansion Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tennis Dorada can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Playa Dorada Tennis Club: Expansion Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Tennis Dorada can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Tennis Dorada to increase its market reach. Tennis Dorada will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tennis Dorada can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Playa Dorada Tennis Club: Expansion Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Playa Dorada Tennis Club: Expansion Strategy are -
Increasing wage structure of Tennis Dorada
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Tennis Dorada.
High dependence on third party suppliers
– Tennis Dorada high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Tennis Dorada demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tennis Dorada with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tennis Dorada business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tennis Dorada can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Playa Dorada Tennis Club: Expansion Strategy .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Playa Dorada Tennis Club: Expansion Strategy, Tennis Dorada may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Environmental challenges
– Tennis Dorada needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Tennis Dorada can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Tennis Dorada in the Technology & Operations sector and impact the bottomline of the organization.
Regulatory challenges
– Tennis Dorada needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Tennis Dorada is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Playa Dorada Tennis Club: Expansion Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Playa Dorada Tennis Club: Expansion Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Playa Dorada Tennis Club: Expansion Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Playa Dorada Tennis Club: Expansion Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Playa Dorada Tennis Club: Expansion Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Tennis Dorada needs to make to build a sustainable competitive advantage.
