Drowling Mountian free essay sample

As a community resort, there are massive pressures to cover fixed assets and operating costs, this is a result of not being able to attract â€Å"big city† customers. New York City is roughly five hours away from Syracuse and three hours away from Albany. With no out of the norm marketing plan, Drowling Mountain falls into the states clutter of resorts when skiers decide where to ski or snowboard, when visiting in the Syracuse area. With commonality in the resort industry, Drowling Mountain is in bad financial disposition. Ownership has change a various number of times, as well as there is a lack of top ranking leadership, and the complete absence of customer loyalty is affecting the mountains potential. Ultimately, the resort is experiencing declining revenues, high levels debt and increasing losses. While management attempts to create a solution, the lack of understanding the actually problem seems to be a bigger issue for management. Problem Definition: What innovative strategy will enable Drowling Mountain Resort to increase market share as well as loyalty to skiers of all experience, given the downward trend that the mountain experienced from 2006 to 2010? Analysis: Drowling Mountain is facing many threats from internal and external pressures. Below is an analysis that will help understand what issues are most vital to the resort as well as which issues are and pushing down on management. External Environment: Demand: Snowsports Industries America ranks the U. S. participation rate for snow sports at about 7. 5% of the total population (2010). Participants in the age of 6+ have slowly but steadily increased in the three years. Demand for Drowling Mountains, offering has steadily decreased since 2006, from 64,000 visitors to 46,000 in 2010. Overall decline in state level tourism and the recent economic recession has also affected the industry. A survey in November of 2010 shoed the average customer only visiting Drowling Mountain twice each season. The ski resort offers challenging terrain as well as some of the tallest ski hills in the state (NY State). Demand was sought by experienced, casual, and non-skiing individuals. With 34 other resorts to choose from, the state has a clutter of offerings; demand for the particular mountain is volatile to all other offerings available to the state of New York. Trends: * Drowling Mountain seems to still capture local support, which is essential to the bottom line success of the resort. * Nationwide; slow but steady increase in participation. * Downward trend: losing market share over time (2006-2010). * Price sensitivity by participants it has steadily declined over time. * Overall decline in state level tourism and the recent economic recession has also affected the industry. * Declining dollar influenced international travel to ski reports (mainly destination establishments) Competitors: It is important to use Porters Five Forces as a tool when assessing an existing firm; it provides a relatively subjective framework which helps show important values that help depict strategic direction, as well as aids in allocating resources accordingly. This industry is very complex, when it comes to competitors, on one hand all 34 resorts in state of New York are competing for market share. Each resort does target different geographical segments as well as classify its’ self by what type of establishment they are (destination or community resort). On the other hand, at a local level, slow growth and aging facilities create a highly competitive industry for community resorts that are neighboring. As an industry there seems to be an industry wide understanding that the more people ski the better off all resorts will be. More locally, Drowling Mountain competes for market share with Timber Valley which is known for its upscale resort, its’ challenging slopes, winter horseback riding trails and dog sledding, and its summer offerings of zip-lining. Although a higher price, consumers seemed to justify higher prices with the numerous offerings and quality of the mountain. Drowling Mountain also competes with Devils hill, although a smaller resort its slow are much easier and a more diverse offering. The prices levels are smaller and its offering is attractive to families and groups as well as beginners. 1. Barriers to Entry: The threat of new entrants is minimal to the resort industry. With high startup cost, the cost of continuous maintenance to facilities, and the cluster of mountain destination options there is little room left for another offering. 2. Bargaining Power of Suppliers: Drowling Mountain has low bargaining power relative to its suppliers. It is harder to define the bargaining power to the suppliers for a mountain resort because the resort main offering is not a tangible product. The resort does rely heavily on generosity of local suppliers allowing overdue accounts, and still allowing the account to be labeled as good standing. The company does however; rely on snow (real or man-made) to help fill the slopes of the hills. With snow only being optimal roughly four months out of a total year it give better position to the resort, but the state wide fragmentation allows consumers to make other choices, thus there is a presence of substitute inputs. The importance of volume to supplier is also crucial to the success thus knowing what point break-even is crucial to price setting. 3. Bargaining Power of Buyers: Satisfied customers are vital to the success of the resort, long term and short term. The resort depends highly on the volume of customers to satisfy its fixed cost. With no demand the resort must lower prices to stay competitive. 4. Threat of Substitutes: As a winter sport, the ski resort relies heavily on consumers who are looking for a winter activity. As the market grows new offerings will affect the resort. Some new variations or new offerings will positively affect the resort (think snowboards when skiing was popular). 5. Existing Rivalry: As previously mentioned the tourism and a free market system, allow consumers to choose between offerings. But the industry wide understanding that more skiers or snowboarders help the industry as a whole Technology: The required and continuous amount of money to keep equipment and lifts up-to date is a huge factor in most resorts success. Staying ahead of the game is always a factor for companies especially when consumers are looking for low prices as well as diverse and competitive offerings. Internal Environment: SWOT: Strength: * The resort is relatively close to the third largest city in New York * High mountain peaks allow for competitive courses * Positive support from local businesses Weakness: * Far from 2 largest cities in New York * No clear advantage offering * Minimal summer time offerings Opportunities: * Use Competitive slopes as a marketing advantage * Rework pricing packages * Allow the restaurant to be ran by an external company Threats: * Local competition * No cash, back-up support * Limited by budget Strategy Options: The resort has a lot of potential but capturing its potential is what the management is having problems with. Although the resort is performing low there are a number of strategy options available. * Differentiating the mountain is a must; it has continual been lost in the clutter of offerings. * Offering the same activities but in different ways would also be a creative an impactful offering. Recommendation: I recommend creating a new marketing plan that would enable Drowling Mountain to stand out and ahead of other resorts. It uniqueness is a feature that must be exploited to capture market share. Challenging terrain should be, literally challenging those that ride the course. Creating tournaments and weekly competition that would draw positive attention to the resort. Also offer similar snow activities for free or on discount if participants already have a pass for the mountain, such as snow tubing or zip-lining. If the resort offered higher end food, by an external restaurant, it may be able to capture consumers’ wiliness to pay for quality food. The resort does need to take time to plan this out, since it is working with a limited budget.