Ansoff

Strategies
by Andrew Pearson

Ansoff and its application to the growth and

expansion plans of a Tennis club
A tennis club offers a range of facilities including tennis lessons, court hire, a function room and fine
dining in the club restaurant. Lately the club owners have decided to expand their offer and have
purchased a piece of wasteland next to the car park; they have the idea of transforming the area
into a purpose built BMX/Skateboard and Scooter facility.
Quite a proposition you might say!
The Ansoff Growth Matrix is a wonderful tool. Its value lies in the support it offers managers to
decide their market objectives and strategy. The basis of such decisions is in effect determined by
choices that are dependent on four vectors of existing as well new product and market
development.
The framework though offers additional benefits. These concern the degree of risk associated with
each choice, the extent to which each choice leverages a companys core competence and offers
synergies in resource and capability utilisation. Thus the market planner is provided with a number
of devices to help think through the choices.
The club appears to have taken the decision to diversify and develop facilities in an unrelated sport.
Diversification, one of four vectors of strategy development offered by Ansoffs model, is an
inherently high risk strategy. The reason for this is that in moving into markets in which the business
has little or no experience. For a tennis club, or for that matter any business, to adopt a
diversification strategy it is vital that the management team has a very clear idea about what it
expects to gain from the strategy and how it intends to manage it given an honest assessment of the
risks involved.
Risk may be minimized by organising resources, skills and capabilities around a separate business
committed to a different user group yet tied by the guiding principles of the companys vision
mission and business purpose.
The three remaining alternatives for expansion and growth offer lower levels of risk. For example
the tennis club might consider:
1. Market Penetration
Gaining more of its competitors customers. This may be achieved via exceptional
communications, as well as social and conventional networking,
Attracting new-users to the club and convincing current customers to use more of the
companys product or service,
Improving the service provision and benefits and/or level of service to increase sales to
existing customers.
2. Product Development
Developing significant new products-services. These might include other racket sports
including badminton, squash and fives
Creating minor changes to the existing products-services, for example in coaching, catering,
competitions.

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3. Market Development
Selling existing products-services to new customers in. There are two possibilities
here.
The first is to sell in different regions within the UK and international markets to
attract tennis enthusiasts today away events and competitions with special rates
and
The second is to sell to different and new segments of a market. One for example
might be tennis for the paraplegic market, or business, or fitness markets for which
there might be different uses for the companys facilities.
Thus these last alternatives offer less risk and opportunities to leverage competences and synergies
within the business. However, it is not unknown for companies to pursue strategies in each of these
areas so as to develop unique strategic positions with which to maximize sales and profits
While diversification might be deemed risky there are great benefits to be derived from such a
strategy. One is that the acquisition of new competencies and capabilities required to develop new
business, may not only benefit the new business but will sharpen and build up the companys
existing skills. Moreover, experience in diversification will provide the business with the necessary
skill sets to enable it to diversify into yet further markets.
An allied issue concerns the companys core competence and capabilities. Ultimately if these are
unique, can prompt benefits to customers and are transferrable to different markets it may well be
advisable to enter the skateboard-scooter market.
A question arises as to the overall purpose of the business. This is not clearly given in the case. All we
know is that the club wishes to expand into a relatively unknown field. If the purpose is sport and
leisure then the decision makes sense. But if it is tennis then the decision might be considered
questionable. Thus it would be helpful to have an insight into this very important question.

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T: 01280 844966 - E : info@uniquebusinessstrategies.co.uk
W : uniquebusinessstrategies.co.uk