John Mashego's Endless Vacations

John Mashego and two colleagues started Endless Vacations when they bought a run-down hotel in the Hazyview area in 1989. They slowly converted it and within three years they were awarded a three star status and an increase in occupancy. In the early nineties, with the dramatic growth of the travel industry, there were many competitive resorts that were established in the surrounding area which put significant pressure on Endless Vacation's financial performance. In an effort to combat lost market share, Endless Vacations increased their advertising spend and they hired overseas agents to market their hotel. This strategy has not been as effective as they expected and they are struggling to make any profits. In an effort to regain the financial security they once had, they are considering two potential ventures. The first venture is to
The BCG matrix (see exhibit A below) is a tool that allows a user to plot a business's products, allowing the user to better understand where the product is so that they can determine where the product needs to be. The BCG matrix plots a product on two dimensions, the first dimension (vertical axis) is the industry/market growth rate and the second dimension (horizontal axis) is the products relative market share.

A user will need to identify the grow rate of the market that the product is in. The growth rate of any market or industry is the relative increase or decrease in overall size from a previous period. The BCG matrix uses the premise that the higher the growth rate, the more attractive the industry becomes and therefore there will be more customers entering than leaving the market. In the case of Endless Vacations, the travel industry was growing rapidly in the early nineties and there was a large influx of businesses entering the market to try capture the growing number of