Cultural Turnaround at Club Med - Essay Example

?Cultural Turnaround at Club Med Table of Contents Analysing Club Med’s Culture before 2000 3 Major Factors for Club Med’s Success between the Year 1950s to 1990s 4 Value Creation Strategy 4 Innovation 4 Organisational Culture 5 Analysing Difficulties Faced by Club Med in the Early 1990s 6 The Reason behind the Failure of Bourguignon’s Plan and Justify Success of the Giscard’s Estaing’s plan 7 References 9 Analysing Club Med’s Culture before 2000 ‘Club Mediterranee’ (Club Med) is as one of the largest and highly recognised travel and tourism companies. It is well-known for its exceptional offering of inclusive vacation packages to the global tourists. Club Med is a French company and was founded by Gerard Blitz in the year 1950 with the concept of offering all-inclusive packages to the potential clients. Sooner, it was able to achieve a considerable growth in the competitive tourism business industry. During the year 2000, the company was highly focused on developing its brand image due to the fierce competition prevailing in the global hospitality industry (John Wiley & Sons, Inc., n.d.). Before the year 2000, the business performance of the organisation has been recognised to achieve substantial growth due to its wide range of tourist villages along with targeting potential clients through its exceptional business strategies. The strategy of maintaining festive atmosphere during all the seasons and maintaining adequate culture within the organisation has been widely accepted, which enabled Club med to attain a competitive advantage in the rapidly flourishing tourism industry (Sheth & et. al., 2010). The strategic reposition along with emphasising on building relationship has significantly facilitated the company to accomplish its desired business goals. In this context, Gracious Organisers (GO) responsible for maintaining effective relationship with clients has been identified to play a crucial role by maintaining festive culture throughout all the seasons within the tourist villages. Moreover, the integration of different events for targeting the youths such as cultural shows, sports along with village dances have significantly helped the organisation to obtain a wide attention of the global clients. In addition, the continuance of cooperative relationship between the employees along with their families has also been proven to play a major role for Club Med to maintain its organisational culture (Verdure, 1993). Major Factors for Club Med’s Success between the Year 1950s to 1990s With reference to the case scenario, a set of key success factors can be identified that led Club Med to play a dominant role in all-inclusive resort industry during the years 1950s to 1990s. In this regard, few of the key success factors during those years have been briefly highlighted in the following discussion. Value Creation Strategy The strategy of increasing value of different tourism activities performed by Club Med can be considered as one of the major successive factors that led to provide adequate support to the organisation between the years 1950s to 1990s. With regard to the major functional attributes in the value proposition of Club Med, it has been widely accepted that transportation, food, accommodation along with sports and entertainment events are the four major pillar of the company’s value creation strategy. Innovation The continuous innovation across the major key factors for the global tourists can also be considered to play as essential role in increasing value of its range of tourism services. Moreover, the innovative strategy of integrating exceptional tourism products and/services have act as a shield for the organisation against various potential threats from the global tour operators along with hotel chains within the period of 1950s to 1990s. Few of the remarkable innovative business operations analogous to Club Med during these periods have been demonstrated in the following table. Source: (Marom & et. al., 2003). Organisational Culture With regard to the study of the case, it has been recognised that the organisational culture of Club Med is one of the major success factors during the years 1950s to 1990s. In relation to the organisational culture, building strong relationship by the GOs has often enabled the customers to make new acquaintances during their vacations. Moreover, the formulation of organisational culture with rich symbols along with various ritual and mythical aspects within the tourism packages have also been identified to play a major role for the organisation to build its prominent position in the tourism industry during the span of 1950s to 1990s (Frery, n.d.). Analysing Difficulties Faced by Club Med in the Early 1990s Although the business strategies since the 1950s to the early 1990s have been radically oriented towards developing and improving the organisational functions but the business operations of the Club Med have been recognised to experience significant challenges arising from various internal and external influencing factors. In relation to the case scenario, it has been further identified that various influencing factors caused significant difficulties in the business operations of Club Med during the early period o 1990s. With regard to the external influencing factors, the company had suffered a loss of 17 million francs in 1991 due to the Gulf War, which can be stated as the beginning of financial failure faced by Club Med with respect to its business operations (Segreto & et. al., 2011). With reference to the statement of the Serge Trigano, the company has faced a dramatic financial loss of 290 million francs due to the great financial breakdown in the global economy resulting in adversely affecting the tourism industries in Germany, France and Italy (Cooper & Hall, 2005). Moreover, the increasing numbers of rivals along with threats of losing customers across its different market segments have also been recognised to render a major financial loss for Club Med to achieve its desired financial goals. In the similar perspective, the political unrests in different geographical regions have also been identified to result in severe loss for the company. In this context, the political unrests in the major tourism areas including Turkey, Egypt, Haiti and Senegal have unpleasantly impacted on the financial performance of different tourism villages of Club Med (Walker & Walker, 2011). The Reason behind the Failure of Bourguignon’s Plan and Justify Success of the Giscard’s Estaing’s plan With reference to the overall study of the case of Club Med, it has been identified that various external factors had severe impact on the operational financial and management functions of the organisation. Correspondingly, the political unrest, global economic recession along with various other external influencing factors were apparently observed to negatively impacting on the financial performance of the company (Boniface, 2013). In accordance with the strategic plan of Philippe Bourguignon, the transformation of the vacation villages into an effective service providing organisations can be considered as a major breakdown that has adversely impacted on Club Med to maintain its growth prospect in the all-inclusive resort industry. Moreover, the implementation of growth strategy through introducing low cost tourism village for the young travellers has as also unfavourable impact on the conventional strategy of the organisation. Subsequently, strategy of taking over tour operators and gym club chain has also been attributed as major cost-cutting plan that led the company to involve various issues within its conventional tourism business (Frery, n.d.). Therefore, it can be stated that the business strategy of Bourguignon have adversely contributed towards reducing the potential of Club Med to maintain its culture of providing exceptional tourism services to the global travellers, which further conveyed different challenges to the organisation. However, Mr Henri Giscard then acting Chairman and CEO of the company has been identified to incorporate the conventional business process of Club Med. The business strategy of Giscard is highly complied with repositioning and rebranding of different cultural based tourism services to the global travellers. The repositioning strategy of Mr Giscard enabled the company to effectively deal with the major external threats faced by the organisations in tourism industry. The upscale repositioning strategy of Mr Giscard was highly focused on closing down the low-end villages, renovation of infrastructure along with opening of new prestigious establishments with a higher pricing strategy (Frery, n.d.). Thus, from the above represented logical justification it can be stated that the repositioning strategy especially involved closing down the low-end villages and opening of new prestigious establishments has enabled Club Med to regain its culture of providing exceptional tourism experience to the global travellers. Moreover, the strategy of restructuring infrastructure facilities and increasing price of the services had further led the organisation to recover its financial breakdowns and maintain its dominant position in the global all-inclusive resort business industry. References Boniface, P., 2013. Managing Quality Cultural Tourism. Routledge. Cooper, C. & Hall, C. M., 2005. Oceania: A Tourism Handbook. Channel View Publications. Frery, F., No Date. Cultural turnaround at Club Med. Case Example, pp. 187-189. John Wiley & Sons, Inc., No Date. Club Med: Making a Comeback. Case 1: Club Med: Making a Comeback. 622-627. Marom, N. & et. al., 2003. Club Med: From Value Innovator to Follower. High Tech and Entrepreneurship Strategy. [Online] Available at: http://faculty.insead.edu/adner/PREVIOUS/Projects-Jan03/Club%20Med.pdf [Accessed October 29, 2013]. Segreto, L. & et. al., 2011. Europe at the Seaside: The Economic History of Mass Tourism in the Mediterranean. Berghahn Books. Sheth, J. & et. al., 2010. Consumer Culture. “Global Consumer Culture,” in Encyclopaedia of International Marketing. [Online] Available at: http://www.uwyo.edu/sustainable/recent-research/docs/global%20consumer%20culture%20arnould.pdf [Accessed October 29, 2013]. Verdure, M., 1993. Diving Club Med. Aqua Quest Publications, Inc. Walker, J. R. & Walker, J. T., 2011. Tourism Concepts and Practices. Pearson Education India. Read More