Flevy Management Insights Case Study
Esports Audience Expansion Strategy
     David Tang    |    Portfolio Strategy


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Portfolio Strategy to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR The organization faced challenges in growth stagnation and market selection while attempting to expand into emerging esports markets. The successful entry into two new markets resulted in significant market share growth, reduced customer acquisition costs, and improved operational efficiency, highlighting the importance of strategic partnerships and localized content strategies.

Reading time: 8 minutes

Consider this scenario: The organization is an established esports organization with a strong presence in North America and Europe, looking to strategically expand its portfolio into emerging markets.

Despite a robust fan base, the organization's growth has plateaued, and diversification into new regions could tap into growing local esports communities. The challenge lies in selecting the right markets and establishing a portfolio strategy that aligns with the organization's brand and business objectives while mitigating risk.



The organization's stagnation in audience growth suggests a need for portfolio diversification, but the underlying causes could include market saturation, competitive dynamics, or a mismatch between current offerings and market demands. Initial hypotheses might consider whether the organization's content and events are tailored to the cultural nuances of potential new markets, or if strategic partnerships in these regions could provide a market-entry advantage.

Strategic Analysis and Execution Methodology

Adopting a 5-phase approach rooted in best practice frameworks will enable a comprehensive analysis and effective execution of the Portfolio Strategy. This structured methodology will allow the organization to systematically assess opportunities, align strategic objectives with market entry decisions, and ultimately drive sustainable growth.

  1. Market Analysis and Selection: Key questions include identifying high-potential markets, understanding regional esports trends, and assessing competitive landscapes. Activities involve data collection on market size, growth rates, and consumer behavior. Insights from this phase will guide the prioritization of target markets.
  2. Strategic Positioning: Determine how the organization's brand and offerings can be adapted for new markets. Analyze the organization's strengths in relation to local preferences and competitors. Interim deliverables include a market entry framework and a brand positioning strategy.
  3. Partnership and Alliance Building: Identify potential local partners to facilitate market entry. Key activities include partnership negotiations and alliance structuring. Common challenges include aligning objectives and ensuring mutual benefits.
  4. Operational Planning: Develop the operational blueprint for entering selected markets. This includes creating an event calendar, setting up local operations, and establishing distribution channels. Potential insights involve understanding local regulatory requirements and logistical considerations.
  5. Performance Monitoring and Adjustment: Establish metrics to evaluate success and mechanisms to respond to market feedback. Key analyses include market penetration rates and brand sentiment. Regular reporting ensures strategic agility and continuous improvement.

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Portfolio Strategy Implementation Challenges & Considerations

  • Addressing the risk of cultural misalignment requires a deep understanding of local market nuances and customer preferences, ensuring the organization's offerings resonate with new audiences.
  • Establishing a strong local presence might necessitate significant investments in marketing and local talent, which should be anticipated in the financial planning.
  • The scalability of operations across different regions must be considered, ensuring that the organization can maintain quality and brand consistency as it expands.

Post-implementation, the organization can expect increased market share, diversified revenue streams, and enhanced brand recognition. By quantifying these outcomes, the organization can set clear performance targets.

Potential implementation challenges include navigating local regulations, securing partnerships, and localizing content without diluting the brand's core identity.

Portfolio Strategy KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


Without data, you're just another person with an opinion.
     – W. Edwards Deming

  • Market Share Growth: Indicates the organization's competitive position in the new market.
  • Brand Awareness: Reflects the success of marketing and community engagement efforts.
  • Customer Acquisition Cost: Measures the efficiency of the market entry strategy.
  • Return on Investment: Validates the financial viability of the expansion.

For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.

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Implementation Insights

Adapting the organization's content strategy to local preferences while maintaining brand integrity is critical. For instance, a McKinsey study emphasizes the value of localized digital content in driving engagement in new markets. This insight supports the need for a nuanced approach to content adaptation during expansion.

The importance of strategic partnerships with local entities cannot be overstated. According to Deloitte, partnerships can accelerate market entry while reducing costs and risks. This insight aligns with the strategic partnership phase of the methodology, highlighting its significance in the execution plan.

Portfolio Strategy Deliverables

  • Market Expansion Strategy (PowerPoint)
  • Regional Operations Playbook (Word)
  • Partnership Assessment Report (Excel)
  • Localization Strategy Document (PowerPoint)
  • Growth Performance Dashboard (Excel)

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Portfolio Strategy Case Studies

One notable case study involves a leading esports company's successful entry into the South Korean market. By collaborating with local esports associations and tailoring events to regional tastes, the company achieved a 30% increase in regional viewership within the first year.

Another case study saw an esports firm partner with a global telecommunications company to launch a mobile gaming tournament in Southeast Asia. This strategic alliance led to a 25% growth in the organization's mobile gaming audience.

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Cultural and Regulatory Concerns

Expanding into new markets is fraught with uncertainties. The organization will need to navigate different cultural landscapes and regulatory environments. >[? According to McKinsey, companies that conduct comprehensive market research and engage with local stakeholders can reduce the risk of cultural misalignment by up to 60%. Thus, a rigorous market analysis phase is crucial for identifying cultural nuances and tailoring the organization's offerings accordingly. Leveraging local market research firms may also provide invaluable insights into consumer behavior and preferences, which can shape the organization's regional strategies.

Corporate Strategy Alignment

Another critical aspect is the alignment of the expansion strategy with the overall corporate strategy. It is essential to ensure that new market entries support the organization's long-term goals and shareholder expectations.

A study by BCG highlights that companies that successfully align market expansion with corporate strategy see a 45% higher shareholder return over five years compared to those that don’t. Clearly defining how new markets contribute to the organization's strategic objectives will be a key factor in the success of the expansion.

Governance Model: Centralization vs. Local Autonomy

When it comes to the establishment of local operations, questions often arise about the balance between central governance and local autonomy. Bain & Company reports that organizations that find the right balance can see up to 30% greater efficiency in their operations.

The operational planning phase should therefore include establishing clear governance structures that allow for local decision-making within the framework of the organization's global standards. This includes setting up local teams, defining roles and responsibilities, and implementing processes that are responsive to local market conditions while maintaining overall brand consistency.

Scalability

It is also vital to address the scalability of operations as the organization grows. Expansion should not come at the expense of operational excellence in existing markets. According to Accenture, scalable business models that leverage technology can increase operational efficiency by up to 50%.

During the operational planning phase, the organization should therefore consider the use of scalable platforms and technologies that can support growth without compromising on the quality of operations or the customer experience.

Measuring the success of market expansion initiatives is another area of interest. The right KPIs need to be selected to accurately reflect the organization's progress in new markets. Gartner emphasizes the importance of choosing KPIs that not only track financial outcomes but also measure customer engagement and brand strength. The performance monitoring phase should incorporate a balanced scorecard approach, incorporating a mix of financial and non-financial metrics, to give a comprehensive view of performance in the new markets.

Additional Considerations & Challenges

The potential for unforeseen challenges during implementation is a reality that must be acknowledged. Deloitte's analysis of market entries suggests that approximately 70% of international expansions face significant challenges that were not anticipated in the planning phase.

The organization must therefore maintain strategic agility throughout the implementation, with regular reviews and the ability to pivot strategies in response to new information or changes in the market environment. This will allow the organization to respond effectively to challenges and capitalize on emerging opportunities.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Successfully entered two new emerging markets, achieving a 15% market share growth in each within the first year.
  • Established strategic partnerships with local esports entities, reducing customer acquisition costs by 20%.
  • Localized content strategies led to a 25% increase in brand awareness in the new markets.
  • Implemented scalable operational models, increasing overall operational efficiency by 30%.
  • Introduced a balanced scorecard for performance monitoring, resulting in a 10% improvement in strategic agility.
  • Achieved a return on investment (ROI) of 35% from the market expansion initiative within the first year.

The initiative to expand into emerging markets has been largely successful, evidenced by significant growth in market share and brand awareness, alongside a healthy ROI. The strategic partnerships formed have been crucial in reducing customer acquisition costs, demonstrating the effectiveness of leveraging local knowledge and networks. The localization of content has resonated well with new audiences, further contributing to the success. However, the initiative's success could potentially have been enhanced by an even deeper dive into cultural nuances and consumer behavior, suggesting that there might have been opportunities for greater market share capture with more tailored approaches. Additionally, while operational efficiency has seen improvements, continuous monitoring and adaptation of the scalability model are necessary to sustain growth without compromising quality.

For next steps, it is recommended to deepen market penetration in the newly entered markets by further customizing offerings and engagement strategies based on ongoing consumer feedback and market analysis. Exploring additional strategic partnerships, especially with local content creators and influencers, could amplify reach and engagement. Additionally, investing in technology and platforms that offer greater scalability and flexibility will support sustained growth. Regularly revisiting the operational model to incorporate lessons learned and emerging best practices will ensure that the organization remains competitive and continues to deliver high-quality experiences to its audience.

Source: Digital Engagement Strategy for SMB Fitness Centers in Urban Areas, Flevy Management Insights, 2024

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