Should Ricardo press on with or pull back from his international expansion plans? Ascendancy needs to take a step back and reassess its expansion plans. When and where is speed strategically necessary, and where is it not?
Some retail businesses pursue a predatory strategy — establishing footprints all over the place to thwart would-be competitors who could duplicate their offering — even if that means operating unprofitably for an extended time.
But if you feel that urgency, you’d better have something you know people in your new locations will get excited about. I’m told that this case study is based on one about trampoline parks, which makes sense. Everyone knows how to bounce, and kids love it, so it’s easy to pitch that as a leisure activity in many different geographies.
Ascendancy’s gyms could be a much harder sell, especially where the activity isn’t well-known or broadly practiced. Climbing is niche and requires far greater levels of skill and commitment. So as Ricardo and his team consider their expansion plans, they need to factor in not only basic criteria such as market size, core target demographics and the competitive landscape but also whether the population includes passionate climbers who will frequent the gym and perhaps encourage others, including novices, to do the same.
It’s critical to understand why people may or may not engage in an experience. Ascendancy might consider moving more cautiously — or not at all — in areas where generating enthusiasm may require substantial amounts of time.
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Climbing gyms have obviously caught on in the United States and, for whatever reason, in Singapore. But the U.K. is a different market. The Dave & Buster’s restaurant-and-arcade chain discovered that fact during its unsuccessful foray into the country: English people accustomed to intimate pubs may not have understood the massive entertainment venues it was opening.
At Boda Borg we are fortunate to have a product, Questing, that appeals across broad demographics and cultures. Before my investment group acquired the company and I became CEO, in 2008, I visited its location 150 kilometers from Stockholm and was shocked to see people from five countries. On another visit I saw two busloads of church ladies arrive. We work hard to understand why people fall in love with our product and to replicate its success in new locations.
Although Questing is brand new to most people and nearly impossible to fully explain, the percentage of our guests who are exhilarated by the experience and share their enthusiasm through word-of-mouth is extremely high. So a new Boda Borg location in a well-targeted geography easily serves as a massive marketing vehicle for new guests and future expansion.
Our strategy is long-term: We want to be sure that our product remains highly attractive today and in the future, and we believe it is hard for others to duplicate. So we have been extremely patient over the past 11 years in deciding where and how to grow. We now have seven locations in Sweden, one in the United States and one in Ireland. We want to ensure that Boda Borg is as strong everywhere as it is in our core locations. That means we take a good long look at new markets and partners before we act.
