Scoring A "Hole-in-One" With Confidential Information Case studies - Learning from Local CompaniesOAAG“The major benefit of intellectual property for OAAG is to give ourselves and our members a peace of mind … an understanding that the system will work well; that all information will be kept confidential and that OAAG will deliver what is promised,” said Mr Nicklaus D’Cruz, CEO and Founder of the Organisation of Amateur Asian Golfers (OAAG). OAAG is based on a simple but unique concept. By acting as the ‘middle man’ between its 4 million members and over 6,500 golf clubs around the world, OAAG has allowed the exclusive game of golf to become more accessible and affordable to the masses. The company provides its members with the choice to play at a wide range of international golf clubs without having to pay multiple exorbitant club membership fees. It also allows the golf clubs to generate additional revenues as well as maximise their capacities. This concept has allowed OAAG to grow into the world’s largest golf club that does not own real estate, reaching profits of some $2 million in 2005. “OAAG acts as a one-stop-shop, to help our members play their game of golf in a convenient manner. Our tagline is ‘Anytime, Everywhere’, and we operate 24/7 in 15 countries around the world,” explained Mr D’Cruz. “We have just started operations in South Africa and Brazil, which represents our first foray outside of Asia. Our goal is to set up throughout Europe, Africa, Latin America and the Middle East.”
Building Knowledge, Creating IPOver the years, OAAG has built up significant knowledge and expertise to ensure its operations proceed smoothly. This involves a number of different processes that together form a complete business system which consolidates all dealings with OAAG’s members. This represents the company’s main form of IP. For example, a typical business process would start with the first phone call made by a member, followed by numerous steps such as discussing rates, venues, times and bookings. The process is finally completed with the completion of the member’s golf game. This information is updated at every step into OAAG’s proprietary Customer Relationship Management (CRM) system, which acts as a huge “booking engine”. The system is able to show which bookings are pending, how much money has been collected, profits or losses made and all other information necessary to manage the customer effectively. This CRM system began as a simple programme and soon developed into a tailor-made system, specific to OAAG’s needs and encompassing multiple aspects of OAAG’s business including a global Intranet platform. Protecting OAAG’s IPBeing a computer programme, OAAG’s CRM system is protected under copyright. It is also physically protected in a locked room with limited access and is constantly under camera surveillance. This is because there is a significant amount of confidential information contained within the CRM platform that must also be kept secured; such as customer databases and credit card numbers. In addition to the confidential information, OAAG has developed trade secrets related to the way that the company builds partnerships with the various golf clubs.
“Private clubs are always keen to protect the exclusivity of the club for its own members. The way we build up relationships with these private clubs is kept as a trade secret as it takes a great deal of effort for us to get our members into these clubs without having to pay the membership fees,” said Mr D’Cruz.
Documentation of its processes is something that OAAG takes seriously and the way each department works is explicitly stated in its comprehensive training manual. For example, the way that the Product Team approaches the clubs remain consistent and systematic. Management ensures that all staff understands that what is created within the company belongs to the company, and employees sign Non-disclosure Agreements and Non-competing Clauses when they join the company.
Expanding through FranchisingThis training manual has allowed OAAG to quickly expand into new regions by selling its business as a franchise. In return for providing franchisecompanies with the full knowledge of how to set up and run the business as well as access to its CRM system, OAAG receives a one time franchise fee and annual royalty fees. Currently, OAAG has franchisees in Brazil, India, Korea and South Africa. The company plans to continue with its internationalisation effort through acquisition-led growth and it is focused,knowing where it wants to expand to.
“On a global scale, there are no other companies that are really competing with us. We have the first mover advantage, and we aim to stay ahead of the competition by ensuring full coverage in the major markets around the world. One significant barrier to entry for potential competitors is that they cannot provide the same global support as they are not plugged into our extensive network,” explained Mr D’Cruz.
OAAG’s major IP asset currently lies in its confidential information or proprietary knowledge, of which it has successfully commercially exploited thus far. Yet it also recognises the potential for other forms of IP protection such as registering its trade marks and possibly even patent applications in future. “Moving forward, we will focus on protecting our IP more vigorously, from applying for patents to registering trade marks,” he continued. “We are currently undergoing an IP audit to better understand how we can do this, especially as we are branching into new international territories.”