Does your golf club have a strategy? Most owners would probably say so, but is it actually true? In order to answer that we first need to understand what strategy is. Simply defined, strategy is the overall plan to utilise resources to establish a competitive position in the market. The strategic plan is a document which should define your course’s purpose and major goals, such as where you strive to be in the upcoming few years in terms of membership, competitive position. It should also set out how are going to achieve these goals through a defined set of actions.
Is strategy important for a golf club? Without doubt solid strategy and implementation are vital for survival and provide a club with the best chances for success. In today’s unstable economy, the main risk for club owners is financial instability. Demographic dynamics are changing, golfers are ageing rapidly, there are difficulties attracting a younger audience, both represent a major challenge for the industry.
In such conditions, carefully defined strategic plan helps clubs to stay afloat in times of financial turmoil and shrinking demand. Trying to establish a competitive position without a clear understanding of your club’s strengths, weaknesses and external environment, as well as clear direction of where the club is moving and what it is trying to achieve, is as good as trying to cross a storming ocean without navigation.
Despite the perceived simplicity of the strategic planning process, it is often much more complex to develop. One of the main issues is that it is frequently confused with budgeting. Some club owners edit their budgeting goals for the year based just on gut feeling, equating that to strategic planning, discarding non-financial aspects of performance and with disregard to analysis of the competitive environment.
It is important to realise that strategic decisions involve a significant commitment of resources and are not easily reversible. Therefore, careful analysis preceding decision making and rigorous implementation are stepping stones towards successful strategic planning. A variety of analytical tools can be used to evaluate your club’s position in the market, such as SWOT analysis – strengths, weaknesses, opportunities and threats, scenario analyses and market segmentation.
In order to develop a sound strategic plan, it is important to evaluate strategy from two perspectives: strategy as positioning and strategy as direction.
Strategy as positioning is concerned with where and how questions of competition, including location of your course vs. location of competitors and the basis of club’s competitive advantage.
Strategy as direction specifies what we want to become, to achieve and the ways to get there, in particular specifying mission and vision statements, performance goals, growth modes and capital expenditure priorities.
Strategic analyses is an essential first step in the strategic planning process. Initially, goals should be analysed, identifying mission and performance and establishing consistency between them in the key areas of analysis. Furthermore, the competitive environment should be evaluated. It is important to have a clear idea of who our competitors are, how they differ from us and what their strategies and expansion plans are. Then, resources and capabilities need to be analysed, identifying and exploiting them to design strategies that create competitive advantages. Last but not least, strategy requires thorough implementation. Therefore, all major decisions made with regard to club management should be tested against strategies, timelines and priorities outlined in the plan.
It is not completed overnight and usually requires 3 to 4 months to produce. However, despite being the major anchor for a company’s decision making, a strategic plan should not be set in stone and ought to be adjusted regularly for changes in environmental and economic conditions, such as change in number of players, consumer preferences or fashion.
The major benefit of strategic planning is that it serves as a source of superior profitability for companies who implement it successfully. It improves the quality of decision making, creates consistency and unity and improves performance by setting high expectations. It therefore helps your club to become the best in class in a specific market segment, putting your business in a beneficial competitive position. Clubs which are not the best shift to the middle of the market, which is a poor and costly place to compete in.
To conclude, strategic plan helps club managers to understand competitive position as well as its members’ priorities and financial situation. It specifically outlines club’s vision, mission and aspiration and sets out the steps required to achieve these goals. Proper preparation and execution is an elaborated and time consuming process which requires a high degree of strategic thinking and analysis. In unstable environmental conditions, it is strategic planning which gives the club the best chance to succeed and gain the most beneficial market position.
By Kamila Ishalina – Communications Intern