Canyon Ranch Case Study
Canyon Ranch Health Resorts (or “The Company”) was created in 1979 to be an inspirational and motivational place where clients could relax, get away, and take control of their own healthier lifestyles. As of 2004, Canyon Ranch was unquestionably the industry leader when it came to the luxury portion of the spa industry. Lack of potential entrants in a niche market, scale economic practices (development of cosmetic line), and a strong US economy are just a few of the reasons why The Company has continued to thrive despite engaging in archaic, inefficient IS strategy. New competitors, economic downturns, and the emergence of substitutes are now a very real threat to The Company’s current position. Should The Company wish to remain the industry leader in their respective market, they must begin to utilize IT as a competitive force. In order to do this, The Company must undertake the following initiatives: 1. Upgrade existing IT architecture and infrastructure to a company-wide modular system. 2. Adopt and interface a hospitality oriented CRM system. 3. Use the information gathered from the CRM to initiate a targeted marketing campaign. The existing IT architecture and infrastructure is decentralized and inefficient. In fact, The Company is still using paper as means of transporting data from department to department. In addition to centralizing IT systems, The Company should add new modules to their existing system (POS, MIS, DDS, Reservation Interface, etc.) and upgrade their existing CLS system in order to promote two-way communication, and free flow of data. In doing this, The Company will move the IT strategy from that of a support function to a more aggressive, competitive function. The Company is not doing all it can to collect important customer information. Given their respective services (Spa, Medical/Nutritional, Cosmetics, etc.), The Company has access to very personal information about their customers. Many industries do not have access to such information or they must pay a lot for it. For Canyon Ranch, however, this information is part of their business. As such, they should be utilizing the best possible CRM solutions to gather and retain this data. In an attempt to thwart emerging competitors and cope with a down economy and substitutes, The Company must do whatever it can to maintain customer loyalty as well as appeal to a new demographic of potential clients. Armed with the sensitive information gathered from a new CRM system, The Company could launch a comprehensive marketing campaign aimed at increasing profits and maintaining their current market share. With the alternatives we set forth in the coming report, Canyon Ranch stands to provide a better customer experience, create new market opportunities, and be more efficient and profitable overall.
Canyon Ranch (or “The Company”) has long been at the top of the luxury spa marketplace. Their emphasis on quality and unique array of guest services has put them far ahead of competitors and helped them forge a solid block of repeat clientele.
In the 21st century, however, Canyon Ranch is facing two big challenges: a down economy and an onslaught of competitive forces in the luxury spa marketplace. The Company offers an array of services and luxuries that, at current, no other competitor can afford to offer. This will continue to be a competitive advantage for Canyon Ranch in the near term. In time, however, t competitors will equalize the playing field in regards to service amenities and, unless action is taken, The Company will begin to experience diminished returns as they hit the plateau of the “technological-S-curve.” In order to maintain their position as an industry leader, Canyon Ranch must take on new initiatives aimed at creating value to their existing and potential customer base. SWOT Analysis
Upgrade Existing IT
Analysis of current IT
As a result of the old IT...
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