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Institute of Sport: Future Strategy
Institute of Sport: Future Strategy
Client: Leading Institute of Sport
Location: All
Given recent changes in government funding of sport and the likely peak in activity for the 2012 Olympic Games, there was considerable uncertainty about the future of the Institute and its funding.

Our consultants developed and reviewed a number of potential future scenarios with the executive of the Institute and developed a marketing strategy that would ensure a sustainable future for the Institute post 2012.

Background
The Institute's funding model had evolved consistently funding model has evolved. The EIS was initially wholly funded by Sport England, where all services were provided free of charge (2002-2006) to NGBs (National Governing Bodies of Sport). This moved between 2006 and 2009 to a hybrid-funding model whereby the EIS was part funded by UK Sport and part funded by NGB investment in services. The current position (2009-13) sets the EIS as the ‘provider of choice’ model in which infrastructure and development is core funded and NGBs are funded by Sports Councils and the Lottery to purchase services.
The Changing Context
The Olympic Games in London in 2012 will represent a major milestone in the EIS’s life cycle and also catalyse a significant change in the context in which the EIS operates. The Games will provide a shop window for many elite athletes to perform in the world class, showcasing the outcome of years of commitment and conditioning. It will also probably mark the peak of investment by Government and their partners in elite sport.
Given this context, the Board of the EIS wished to review their current markets and identify the following:
  • Future target markets
  • Attractive propositions for identified markets 
  • EIS capabilities and competitive advantage, and
  • The resources required to deliver ongoing success for the EIS and its customers.Factors impacting current EIS Performance
In reviewing the wider UK SS&SM market we segmented the market into three key areas:
  • Olympic and Paralympic Sport
  • Professional Sport
  • Other alternative Markets. 
The estimated size of the UK SS&SM delivery market within Olympic, Paralympic and professional sport is greater than £78.3 million, of which EIS currently has a maximum 7.5% share. 
Market research indicates that the UK SS&SM delivery market is growing due to the recognition of SS&SM as being an integral aspect of performance sport.  It is clear that whilst the EIS has a significant share of the Olympic and Paralympic sports market, there is scope for growth to reinforce EIS’s position and secure a larger market share. In terms of the professional sports market, there is a significant opportunity to develop into this market in which the EIS currently has a minimal share. 
The EIS is well regarded in terms of the quality and value-for-money of the current service provision. The general perception is that the EIS provides an excellent, far-reaching service supported by expert practitioners, systems and facilities. There are no identified gaps in EIS provision or fundamental issues relating to the EIS service. The EIS has developed a formidable strategic capability over recent years. It can be defined as the ‘delivery of quality performance solutions to elite sport through integrated multidisciplinary services.’ An area for improvement relates to communication, both internally and externally, which will allow for a greater dissemination of information and strengthen relationships with users.
The Competitive Environment
Consultation and research indicates that the existing UK SS&SM industry is immature, highly fragmented and as a result, currently not overly competitive. The market is becoming increasingly sophisticated and is likely to result in greater industry competitive intensity in the future 
Of the five forces (bargaining power of suppliers, new entrants, substitute services, the industry itself and the bargaining power of buyers) only the bargaining power of buyers is regarded as strong. This is because of the finances available and higher level of procurement sophistication. This means that there is a need for the EIS to demonstrate its offer and added value relative to other competitors.
The EIS has no one main competitor and certainly none who offer a comparable integrated multi-disciplinary service. The majority of competition comes from individual practitioners who are employed directly by the sports (either NGBs or through professional clubs). Advantages of the ‘in-house’ offer are perceived to be a greater level of embedding within the sport i.e. working continuously with the sport meaning a comprehensive sport-specific understanding and also an opportunity to develop a rapport with the athletes. In addition, employing a practitioner directly is perceived cheaper due to the reduced on-costs, especially at lower skill levels. Conversely, being employed within one sport does not provide the personal development and knowledge sharing opportunities/benefits to practitioners (and therefore ultimately the sports) that the EIS can offer. 
Other competitors include universities who, with the budgetary constraints recently imposed, have a greater need to look at revenue generating and business development opportunities. Universities such as UCLH, St Mary’s and Liverpool John Moores all have the facilities and staff (albeit generally not at the same level of qualifications/experience as EIS) to provide SS&SM services to elite athletes and also to the more general sporting public.
Given this competitive advantage, the EIS is well positioned to consolidate its position as market leader for Olympic and Paralympic sports and also move into new markets and pursue numerous other prospects that would improve and grow the EIS as an organisation and as a brand.
Opportunities for Business Development
Our research informed the review of business development opportunities open to the EIS in terms of:
  • Service provision
  • End user market attractiveness
  • Degree of commercial or technical risk.
Further analysis of the potential portfolio enabled a number of conclusions to be reached as to the pointers for future business development. The focus for future business development should be to:
  • Consolidate and build on the EIS’s existing service portfolio. Develop those services that are highly attractive and where the EIS hold a high competitive advantage. These areas include the first and second tier ‘best invest’ service lines i.e. those deemed to offer competitive advantage opportunities while at the same time being attractive markets i.e.
- First Tier:  Sports Physician, Strength and Conditioning, Physiotherapy
- Second Tier: Performance Analysis, Biomechanics and Physiology
  • Target attractive end-users. The professional sports market and the current leading Olympic and Paralympic markets were deemed most attractive and as such a focus on tailoring various offers (services and products) to these end-users is recommended
  • Consider a range of new opportunities. Based on EIS strengths and favoured end-users a range of new opportunities should be considered such as developing partnerships (with Universities or other specialist organisations), products and potentially moving into non-traditional areas where performance is important. Examples include the performing arts (dance, music, theatre) as well as the military and emergency services.
  • Determine and work within an agreed risk strategy. Understanding the EIS’s risk appetite is essential to the organisation’s growth and the growth strategy adopted.   
Scenario Thinking and Option Development
The primary risk to the EIS succeeding relates to diluting focus. Diversification often dilutes strengths and exaggerates weaknesses, especially in young, relatively immature organisations. Other Institutes and research related institutions have diversified in a number of ways. Examples include:
  • Geographic expansion with other nations e.g. the AIS/Middle East, MIT/Insead/Singapore
  • Research as well as services e.g. McKinsey
  • New business model e.g. Winning Scotland Foundation
  • Professional services outside sport e.g. the AIS in fitness testing
  • Contracts with industry e.g. the BOA programme.
Of these McKinsey (a leading, global consulting firm) and the Winning Scotland Foundation have been the most successful in generating significant new revenue streams. 
Positive Marketing Strategy
The EIS could begin the process from a positive position, given the extent of client testimonials received and case studies in place.
The overall marketing strategy should be implemented each year through the development of a marketing plan with clear goals and objectives for success. We made a number of recommendations to increase the marketing capability of the EIS in line with a positive development strategyalong the lines of:
  • Significantly increased level of customer relationships management
  • New approach to pricing in line with good professional services practice
  • Developing revenues from non-fee based activity including sponsorship, grants funding and licensing
  • Increased capability in building and exploiting intellectual property
  • Good practice business development activity, supported by effective information systems 
  • Increasing the level of business development activity and planning, including the use of account management disciplines
  • Building greater business development capacity and capability in EIS staff, augmenting this where necessary with additional recruitment, without significantly increasing the level of overheads
  • Increased multi-channel promotional activity based primarily on thought and technical leadership.
We recommended the Board consider investing between 1% and 3% of annual revenue in marketing and promoting the EIS, depending on the extent to which a positive growth strategy is pursued. This investment to include the cost of staff time committed to business development and the acquisition of skills to succeed in this new and key area.



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