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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, technology disruption, geopolitical disruptions, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models,
there is increasing trade war between United States & China, there is backlash against globalization, 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 -
Operational resilience
– The operational resilience strategy in the Playa Dorada Tennis Club: Expansion Strategy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
Innovation driven organization
– Tennis Dorada is one of the most innovative firm in sector. Manager in Playa Dorada Tennis Club: Expansion Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Learning organization
- Tennis Dorada is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Tennis Dorada is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Playa Dorada Tennis Club: Expansion Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Diverse revenue streams
– Tennis Dorada is present in almost all the verticals within the industry. This has provided firm in Playa Dorada Tennis Club: Expansion Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, W. Earl Sasser Jr., Brent Kazan suggests that, Tennis Dorada is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Aligning sales with marketing
– It come across in the case study Playa Dorada Tennis Club: Expansion Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Playa Dorada Tennis Club: Expansion Strategy can leverage the sales team experience to cultivate customer relationships as Tennis Dorada is planning to shift buying processes online.
Interest costs
– Compare to the competition, Tennis Dorada has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Tennis Dorada has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Playa Dorada Tennis Club: Expansion Strategy, is just above the industry average. Tennis Dorada needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tennis Dorada is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Playa Dorada Tennis Club: Expansion Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
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 -
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tennis Dorada can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
Using analytics as competitive advantage
– Tennis Dorada has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Playa Dorada Tennis Club: Expansion Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tennis Dorada to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tennis Dorada in the consumer business. Now Tennis Dorada can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Buying journey improvements
– Tennis Dorada can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Playa Dorada Tennis Club: Expansion Strategy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Tennis Dorada has opened avenues for new revenue streams for the organization in the industry. This can help Tennis Dorada to build a more holistic ecosystem as suggested in the Playa Dorada Tennis Club: Expansion Strategy case study. Tennis Dorada can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
Stagnating economy with rate increase
– Tennis Dorada can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tennis Dorada needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
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 .
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tennis Dorada will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tennis Dorada in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tennis Dorada can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
