Club Med Essay

500 Words2 Pages
Assess the Strategic Health of Club Med: How is the company performing? State Clearly whether you would recommend investing in this company and why or why not. Club Med was the first company in the sector of all-inclusive vacation packages. It was performing very well and there were good prospects for future growth, specially, in the North American Market. They capitalized on its strengths such us the GOs, the company spirit, the all-inclusive concept, their marketing and distribution strategy, their experience and so on. Club Med was also in a strong position with respect to buyers (they could not find the same price for a similar formula), suppliers (airlines sold seats to Club Med at volume discounts), and labor (young people eager to work with them and bargaining position in negotiating wages of local village workers). However, by 1986, Club Med was no longer the only successful chain of all-inclusive, club-style resorts. There were new competitors who were appearing on the scene at an alarming rate (Jack Tar Village company or SuperClubs organization, for instance). The Club Med concept was not anymore unique. The company’s performance started to slow down during the year 1986, with some data, as the net income/sales or the net income/guest, confirming this tendency. Some measures were taken in order to reestablish the dominant position of Club Med, and a lot more could be taken in the near future. For example, after a market survey completed in September 1986, Club Med started to work hard to change the swinging-singles, sex-oriented image. Due to that, the ongoing market showed the success of these efforts. I would recommend investing in this company. They are not only in a good market position, but their strengths and potential growth are very important. Their profits in the Lodging industry and Air Transport industry sectors are higher than the

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