Club Med Harvard Case

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Club Med (A) HBS Case- Strategic Audit in 1986

Club med provides cheap all inclusive and social holidays for costumers. These holidays are cheaper than what the customer could replicate by himself. The accommodations are simple, but localised in attractive holidays places. Everything is organised in order for the consumer not to spend any money outside the «club med village ».

-Financial aspects:
It is the 9th largest hotel company in the world. The stock was favorite on several Wall street analyst. The company makes $3 million of interest on prepaid holidays, which give confidence to potential investors. The return on Investment is 11,6%. All the data show the company is healthy and growing (see graphic 1):

-Competitors:
Competition is low and mostly based in Jamaica and the threat is slow from potential entrants and substitutes, as shows the Porter’s analysis. The two main competitors are: Jack Tar, which provides a even more all inclusive solution (including wine and cigarettes) and Super clubs in Jamaica. Even if the competition is growing, the Club Med position is very strong and unique on this market. The new competitors focus on « niche » markets or in totally all inclusive offers (eg: including cigarette and drinks in the package), which doesn’t attract the same clientele as Club Med. With a strong position and a low threat from competitors, even in a market where competition is growing, Club Med is an attractive company for investors.

-Package and Occupations
oTheir lodging performance is slightly higher than the industry one and much higher than the Air transport industry. This shows a great growth potential for packages including transportation. o60,9% of occupation in Asia with a slight decrease from in two years, 64,4% in America with a constant small increase since 1984. These figures show there is a margin for improvement and profit growth with only minor extra costs.

-Implementation
oExotic places, which...
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