Business strategy and planning for Drowling Mountain Company
Introduction
Drowling Mountain is a skiing company located 45 minutes from Syracuse, New York city. It boasts of having the best skiing hills in the state.
The Drowling company board of management has eight members instead of eleven; they are often unable to come up with solutions for the problems that affect the company. They are unable to make choices on which strategy to adopt in order to increase their revenue. Would a reduction of price, operations or selling the naming right help?
The company’s main aim is to increase their revenues, pay their debts and be able to provide employment local residents (Kotler, 2000). However, they are incapacitated to achieve their objectives due to stiff competition, lack of finances and lack of accurate prompt decision making on problem solutions.
The Drowling Mountain Company was a leading ski resort back in the years. It provided ski services at a community level and also provided other secondary services like food and beverage sales, equipment rentals, ski instruction and lodging as alternative resources. Its high skiing hills were the best in the New York state and welcomed a lot of customers (Kotler, 2000). Syracuse was a home for its employees including the management and held close relations with the local businesses.
The successful trend changed and the company started experiencing a decreasing visitors turn over and it began to rely on the government for aid. The grant was partially sufficient but could not be a sustainable long term solution. The decline in profit is associated with change in ownership over the years and a reduction on customers among other strategic reasons.
The company’s major drawbacks were;
- Competition; the company was unable to compete favorably with three of its main competitors in terms of pricing, location, size and market operations.
- Finances; the company’s continuous loses had decreased its capital reserves and left it with a lot of debts. This made it difficult for the company to initiate any productive project.
- Marketing; the company’s financial constrain could not provide sufficient marketing around New York. The board does not know where to advertise and to whom.
- Pricing; the company charged more than its competitors. The prices attracted less customers and the board had no solution to the problem due to the fear of the customers' reaction to a decrease in prices and an increased in future.
- Operation; though it had six operational sectors, Drowling company operated seasonally during the winter period. The other time of the year was barely utilized for economic purposes. Operational costs were a problem y=to the company due to the persistent losses.
These five components are the major contributors of the poor performance of the Drowling Mountain Company. The solution to these problems would be to look for the appropriate ways of addressing them. Since the main problem is finances, the first step is to put in place measures that address financial constraints.
Recommendations and plan of action
Martin Cartier should initiate the process of turning over the company by cutting on the operational expenses. Seemingly, the company is spending more than it’s earning and may soon lose the support of financiers. Reducing the cost of labor to a level lower than the current level will demoralize the employees and this will have an adverse effect on their productivity and the general productivity of the company (Drucker & Maciariello, 2008). However, the miscellaneous expenses are so high and needs to be reduced by ensuring that expenses are incurred only on the very rudimentary needs. The pricing model needs to be revised accordingly so that it keeps pace with the current trends in the market. Martin Cartier should devise a pricing model that keeps into consideration the current trends in the market and the present needs of the company.
The company can generate additional income if it creates a skiing culture in the population. The management should allocate enough funds for the purpose of enlightening the public on the importance of skiing. The competition in the industry is stiff. This therefore calls for the management of Drowling Mountain to launch a serious advertising campaign beyond Syracuse. The advertisement will increase the sales and apparently the profits will increase (Kotler, 2000). Drowling Mountain should also consider reducing the cost of their services for a short spell so as to attract more customers. The quality of the services it provides is substantial. However, improving the quality further will be an auxiliary advantage as the company will be a notch high than its close competitors and clients are likely to seek its services.
The ski industry in New York employs quite a large number of people. It also generates a good amount of income whose general effect is an economic growth. The vast industry is a source of livelihood to many and the alternative of firing employees should not exist as this might discourage them from spending and this may have an adverse effect on the industry as a whole.
Martin Cartier should also consider investing in other commercial activities as a potential source of income. For instance, the company may invest in the stock market the little revenues that it raises from its meager sales. This will enable it raise additional capital which can in turn be used to finance other important activities such as marketing.
The board members and the entire management might be the source of failure for the company. It is therefore mandatory that their skills and experience be re-examined to ensure that the right people are in the right positions (Drucker & Maciariello, 2008). They need to possess the skills and knowledge that is relevant in solving management issues in the contemporary business world.
The credit sales should be tried as much as possible as most customers delay in paying and therefore inconvenience the company’s operations. The credit period should considerable be reduced so that customers pay for services as soon as possible.
If the above recommendations are put into action, the company’s performance may improve considerable whipping most of its competitors. The competition in the ski industry will also increase and the general economy of New York is bound to grow. The company has the potential to grow. However, the right strategies, measures and policies need to be put in place.
References
Drucker, P. F., & Maciariello, J. A. (2008). Management. New York, NY: Collins.
Kotler, P. (2000). Marketing management. Upper Saddle River, N.J: Prentice Hall.
