International Expansion Strategies for Wycombe Wanderers Soccer Club

This report discusses the different methods and strategies for international expansion of Wycombe Wanderers Soccer Club, including Ansoff Matrix Model, strategic methods of merger and acquisition, joint venture, greenfield investment, and wholly-owned subsidiary. It also evaluates the financial risks associated with international expansion and the financial instruments that can be used to fund global corporate strategy.

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Soccer Club: Wycombe Wanderers

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Table of Contents
Introduction......................................................................................................................................3
Company Background:....................................................................................................................4
Methods or Strategies of International Expansion:.........................................................................4
Financial Risks Associated with the International Move:...............................................................8
Evaluation of financial instruments to fund global corporate strategy of Soccer Clubs:................8
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

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Introduction
The purpose of designing this report is to develop theoretical knowledge about different concepts
related to international expansion of a business. The organization that is chosen in this report is
Wycombe Wanderers. This is a soccer club or football club of UK. This report will help to
develop understanding about different methods that can be used by an organization in order to
establish itself in the international market. This report will evaluate that what are different
financial risks that are faced by a company while moving into the international market place.
Final section of this report will provide the knowledge about different financial instruments that
can be used by a multinational sports organization for maximizing the shareholder’s return and to
minimize the risks exposed to shareholders.

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Company Background:
Wycombe Wanderers is selected as the soccer club in this report. The full name of Wycombe
Wanderers is Wycombe Wanderers Football Club. It is a food well known soccer club of UK.
This soccer club was founded in 1880 town of High Wycombe, Buckinghamshire, UK. The team
of this club plays league one that is the third tier of England Football (Wycombe Wanderers,
2018). The nicknames of this football club are “The Chairboys” and “The Blues”. The color of
uniform that is wear by team of this club while playing any league is pale blue and quartered
shirts of navy blue.
Methods or Strategies of International Expansion:
Ansoff Matrix Model:
The Ansoff matrix model is quite helpful to determine appropriate methods for the international
expansion of an existing business of an organization.

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(Source: Bachmeier, 2013)
Market Penetration: Under market penetration, a company can decide to grow its business in the
existing market and with the sale of existing products and services. Under this strategy, the
growth of business is possible through investment in marketing and promotional strategies.
Many companies design/ launch special discount offers; cash back offers and other promotional
schemes for generating extra ordinary demand from customers (Fortin, 2017). This strategy is
quite effective for the companies in order to generate superior sales growth.
Product Development: Under this strategy, an organization can decide to design and launch the
new products and services within the existing market already served by it. This option will
contribute in revenue growth of company (Bachmeier, 2013). In context of Wycombe Wanderers
football club, the new soccer teams for specific age group can be designed as a new product, new
leagues and trophies can be designed in order to serve the existing market through its products
and services. This strategy is effective to improve financial performance of company.
Market Development: Under marketing development strategy, a company plans to enter into a
new market with its existing products and services. This strategy can be used by administrative
board of Wycombe Wanderers soccer club in order to establish its presence in the international
market place. Under this strategy, the organization can plan to make presence of its existing
products and services into countries other than UK across the world (Fortin, 2017). The existing
teams of this soccer club will play in the international markets for the company (i.e. club).
Diversification: Diversification is also an important strategic method that can be adopted by an
organization for investing in an international business expansion. In this method, the company
can decide to expand into new market places or countries with new products and services. In this
context, administration of Wycombe Wanderers can decide to make presence of its club into new

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countries with new teams and leagues (Bachmeier, 2013). This strategy can positively contribute
in the achievement of competitive revenue growth in the industry.
Strategic Methods of Merger and Acquisition:
Merger and acquisition are also two important strategic choices in order to opt for international
expansion for a company. Merger stands for the process of combining business of two existing
companies in order to form a third integrated company. Acquisition strategy is different from this
option. Under acquisition, a company takes over or acquires another existing company. The
merger and acquisition strategies are also effective to overcome competition existing in a market.
In other words, a larger company purchases another existing company under acquisition strategy
(Dringoli, 2016). In context of international expansion of Wycombe Wanderers, the acquisition
strategy will be a better choice for company. Under this strategic method, the administrative
board of Wycombe Wanderers may plan to acquire some already existing soccer club of a
country, in which it wants to expand its business by making the payment to the owners or
sponsors. This would provide an already existing business platform to the club. Both bank loan
and equity financing can be used as sources of finance for the international expansion.
Joint Venture:
Under Joint venture, two or more companies develop cooperative business agreement to run
business collaboratively. Before commencement of such venture, the companies involved in such
venture finalize different decisions like delegation of operational responsibilities, consignment of
potential risks and rewards in business, and allocation of resources (Trost, 2011). Joint venture
can be established for a fixed period of time or permanent in nature. Joint venture method is very
effective in context of international expansion of business, as it can enable Wycombe Wanderers
to make marketing presence in the abroad with the help of local foreign business partner.

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In other words, the business partner under joint venture strategic method will be highly
supportive for Wycombe Wanderers, as the management of club would be able to use knowledge
and expertise of local foreign partner in different business areas in the local market like internal
markets, regulations, government policies and the distribution know-how. This knowledge can
be highly beneficial for the Wycombe Wanderers, as the foreign territories would be new to the
administration of club (Shishido et al., 2015). There are different benefits of joint venture
strategy such as sharing of risk with the partner, safer than full scale acquisition specifically in a
host country with hostile government legislations, and the presence of knowledge, experience of
foreign market of the local partner. At the same time, limitations or challenges may be faced in
the form of sharing of control and profits and the emergence of conflicts with the partners.
Example of a proposed joint venture in foot club includes the joint venture of City Football
group with Goal soccer centers of USA and Canada (David Hall, 2018).
Greenfield Investment:
The Greenfield investment is also an important business strategy that can be adopted by an
organization for establishing presence of its business into an international market place. This
strategy is characterized by highest involvement of the company in business in the international
business unit. Under this method, the company purchases land, develops property/ infrastructure
and operate business by its own staff. This strategy is attributed by highest risk and cost as
compared to rest of strategic methods (Lorenzen, 2011). The risks and costs of skilled labor,
technology access, transportation and the government regulations are undertaken by company.
Wholly-owned Subsidiary:
Under this method, a company purchases an existing company in the foreign market but keeps its
existing management for operating the business operations. The owned company is known as

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subsidiary company and the purchaser company is known as parent company. Under this
strategy, Wycombe Wanderers can plan to purchase the foreign football club or soccer club by
purchase of its all common stocks (Welch et al., 2010).
Financial Risks Associated with the International Move:
There are different financial risks that may be faced by Wycombe Wanderers football club with
the international expansion of business. Example of these risks includes foreign exchange risk,
interest rate risk, inflation risk and accounting regulatory risk. The unfavorable movement in the
foreign exchange value can adversely affect the profitability of club. The currency hedging
instruments can be used by management of Wycombe Wanderers for mitigating the foreign
exchange risk. Interest rate risk may be the risk of increase in interest by central bank of host
nation (Jacque, 2013). This can increase the financial cost to company due to increased cost of
interest on the loan. Due to increase in inflation, the cost of different resources may become
more expensive for the company. This can hamper the profitability of company. Wycombe
Wanderers may also face the challenge of new accounting and financial regulations that are
followed by companies operating in the host country. The management of Wycombe Wanderers
may need to invest in training of existing staff to learn the application of new regulations for
financial reporting.
Evaluation of financial instruments to fund global corporate strategy of Soccer Clubs:
Only a few soccer clubs in United Kingdom are effectively dealing with the rapidly changing
economic and financial conditions. In this context, the funding solutions of Wycombe Wanderers
significantly contribute to the successful soccer achievements and corporate strategies. Since
Wycombe is one of the large professional association soccer clubs in UK, it becomes important
for the financial managers to choose the relevant financial instruments to fund its corporate

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strategies, through big investors (Stewart et al., 2018). Although Wycombe uses the similar
funding and credit rating as other associations, in addition to this, Wycombe also uses own and
patron financing. The club also identifies and considers various potential risks before using any
financial instrument, such as cost of capital, opposition among agents and owners, and market
value.
Wycombe attempts to recognize its critical financial threats as a part of its strategic approach to
successful corporate governance. These risks are analyzed by the senior managers first every
quarter, then scrutinized and communicated by the Audit Committee for ensuring timely actions.
In the situations of significant intangible and economic results, the reliance of Wycombe for the
funds on sports significantly declines (Wycombe, 2017). For certain periods, such revenues are
considered fixed, and as a result the growth opportunities become highly limited during these
contracts. In the case of uncertain success of new media elements, the revenue growth is attained
as an outcome of sports results. Therefore, the revenues from media rights are taken by
Wycombe as a particular situation depending on the past season, and it does not indicate that the
club should not try to make more revenues just because media revenue becomes the enough
sources for to fund corporate strategies (Wilson, and Plumley, 2017). It can be observed that the
professional soccer clubs in United Kingdom have been able to increase the funding rate by 40%
in the recent seasons as compared to the past seasons.
Another financial instrument used by Wycombe to finance its corporate strategies is the sale of
its different assets. In today's contemporary soccer, parties usually conclude transactions together
with the options of lease back because the assets are disposed out of requirement are important
for the smooth operation of the club. Although such transactions are appealing from the taxation
perspective, the major considerations are the fact that Wycombe parts with the assets only for the

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short term for the purpose of obtaining funds (Nagy, 2012). The contracts typically contain the
right to re-acquire the assets at the closing of lease. Moreover, Wycombe also arranges the
significant funds by raising capital or going public. However, the complicated preliminary tasks
must be carried on by Wycombe and other soccer clubs in UK in order to exploit the available
options in better way, along with incorporating the clubs as a stock corporation. Wycombe is
also required to produce other information after the initial public offer, from time to time so as to
present fruitful results in the areas of economic, sports, and intangible results (Bridgewater,
2016). Meetings with the analysts are also helpful for the club to obtain capital funds. In addition
to this, various circumstances that limit the decisions of Wycombe Club have been observed,
such a relying on different legal forms of activities. These limitations are required to be
addressed so as to meet out the outside expectations in context of yield, share price, and dividend
expectations (Wilson, and Plumley, 2017). This following info-graphics and table presents the
capital project and revenue funded by the club to meet its Corporate Strategy Priority.
(Source: Wycombe, 2017)

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Wycombe also adopts success-circle strategy in order to attain the financial results, that
comprises of appealing new consumers, prize for triumph, and contacting big sponsors. As a
result of this strategy, the club has been able to take new investments for reinforcing the team
value. This has also made the club to develop more effective corporate strategies. However, it
has been found that when the groups restrict this strategy by limiting the number of international
winners, the strategy becomes problematic. The revenues then fail to compensate the increasing
labor costs of the strong players frame. As a consequence, many a times the Wycombe has to let
its top performers go due to heavy losses, and it ultimately leads to inefficiency. Wycombe also
adopts transfer-strategy in order to retain financial as well as sport success of the club however,
the club earns high amount of revenues mainly from the sale of the players. Apart from this, the
other Soccer Clubs such as Uttoxeter Town, Tower Hamlets, Swallownest, and St Francis
Rangers employ commercial strategy so as to clearly decide in the support of profitability access
and conservation of the financial balance. Currency hedging is also used by these clubs for
managing, controlling, and eliminating the risks they come upon while undertaking business
abroad. The Currency hedging instruments include the use of a mixture of financial instruments,
such as Forward Contract and other Derivative contracts.
From the evaluation, it can be suggested that the revenues from sponsorship and advertising can
be a great source for Wycombe in the future, particularly for the club's development, and
designing strategies. The key components of this revenue source could be t-shirt, jersey, and logo
applications, along with banner adverts. Moreover, many other clubs like Smethwick Rangers,
Romsey Town, and Potton United have experienced failing contracts that are required be
replaced. In a complicated financial state this could bring serious issues. Professional financial
agencies could also be appointed that are involved in closing sponsorship agreements and

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identifying sponsors. The agreements between the club and sales generally include warranty
clauses for cases where the search for sponsors does not become effective or is not attained at all.
In such cases, the revenues can be increased and losses could be minimized by Wycombe to a
great extent. The way of the future is that Wycombe Wanderers shall plan to enlarge the
intangible outcomes through certain targeted promotions like by planning loyalty promotions and
managing member recruitment.

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Conclusion
On the basis of above analysis, it can be concluded that there are different strategic methods that
can be adopted by an organization like Green field investment, joint venture, wholly owned
subsidiary, merger/ acquisition etc. Ansoff Matrix model is helpful to understand different
choices of international expansion such as market penetration, product development, market
development and the diversification. The market development and diversification strategies can
be appropriate for selected soccer club (Wycombe Wanderers). One of the sources of funding
that can be suggested to Wycombe Wanderers soccer club is the sponsorship of companies. This
would prove to be a source of additional revenue generation for the club.

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References
Bachmeier, K. (2013) Analysis of Marketing Strategies Used by PepsiCo Based on Ansoff's
Theory. Germany: GRIN Verlag.
Bridgewater, S.(2016) Football management. Germany: Springer.
David Hall (2018) City Football Group announces joint venture with Goals Soccer Centres in
US and Canada. [Online]. Available at: http://stadiavision.co.uk/city-football-group-announces-
joint-venture-with-goals-soccer-centres-in-us-and-canada/ (Accessed: 30 October 2018).
Dringoli, A. (2016) Merger and Acquisition Strategies: How to Create Value. UK: Edward Elgar
Publishing.
Fortin, F. (2017) Ansoff Matrix Essentials. USA: CreateSpace Independent Publishing Platform.
Jacque, L.L. (2013) Management and Control of Foreign Exchange Risk. Germany: Springer
Science & Business Media.
Lorenzen, A. (2011) Volkswagen's Way East - Brownfield or Greenfield Investments: Business
Location Decisions. Germany: GRIN Verlag.
Nagy, z.I. (2012) Financing Methods in Professional Football. [Online]. Available at: http://uni-
obuda.hu/users/vecseya/RePEc/pkk/wpaper/1201.pdf (Accessed: 30th October, 2018).
Shishido, Z., Fukuda, M. and Umetani, M. (2015) Joint Venture Strategies: Design, Bargaining,
and the Law. UK: Edward Elgar Publishing.
Stewart, B., Nicholson, M., Smith, A.C. and Hoye, R. (2018) Sport management: principles and
applications. UK: Routledge.
Trost, T. (2011) Joint Ventures: The Benefits and Perils - Why Some Are Successful and Others
Fail. Germany: GRIN Verlag.

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Welch, E.P., Turezyn, A.J. and Saunders, R.S. (2010) Folk on the Delaware General
Corporation Law: Fundamentals: 2011 Edition. USA: Aspen Publishers.
Wilson, R. and Plumley, D. (2017) Different shaped ball, same financial problems? A holistic
performance assessment of English Rugby Union (2006-2015), Sport, Business and
Management: An International Journal, 7(2), pp.141-156.
Wycombe (2017) Wycombe District Council Statement of Accounts 2016/17. [Online]. Available
at: https://www.wycombe.gov.uk/uploads/public/documents/About-the-council/Council-budget-
and-spending/Wycombe-DC-Statement-of-accounts-2016-to-2017.pdf (Accessed: 30th October,
2018).
Wycombe Wanderers (2018) Wycombe Wanderers: Meet the Chairboys. [Online]. Available at:
https://www.wycombewanderers.co.uk/teams/player-profiles/ (Accessed: 30 October 2018).