Because it enjoyed a wide client profile, Merryweather had no problem filling its accommodations to capacity, especially since summer is a naturally busy time for vacation sites. With more income-generating opportunities available, the company tended to maintain a relatively large staff base, assigning each guest relations officer a maximum of eight clients at a time. As a result, visitors were provided high-quality, personalized service.
The firm promoted a culture of innovation among employees to reinforce its "customer is king" orientation. As such, its marketing-led business style and acute sense of customer service were, perhaps, Merryweather's most important contribution to the merger.
Tennyson Ski maintained a diverse mix of properties - from chalets and apartments to hotels - to serve the winter vacation industry. Because this is a mass market, it might have entailed high operating costs. Furthermore, the facilities were not full-staffed; one representative attended to as many as 30 guests. Therefore, clients did not experience the level of indulgence that they might expect from luxury accommodations.
According to Pate and Platt (2002), "a merger can only benefit a weak business if operating efficiencies, product synergies, or other marketing, financial, or managerial advantages are achieved". While not necessarily a "weak" company, Tennyson Ski certainly had more to gain from the merger. Meanwhile, Merryweather Sailing "should move cautiouslyconduct thorough due diligence investigations, and formulate realistic business plans for the combined organization" (Pate & Platt, 2002).
Tennyson Ltd. thought it best to move forward by (1) developing a new strategy (2) discarding products and services that no longer fit the new business. This was no mean task; the two companies had been targeting two completely different segments, albeit in the same general category.
Tennyson Ltd. started by adopting Merryweather Sailing's mission: "To be the best tour operator to go on holiday with and invest in."
There were other critical issues. The new conglomerate needed to set a direction for growth and identify the different lines of business that would best match the strategy.
Also, Merryweather catered to a specialist market, while Tennyson used a shotgun approach in its marketing. Post-merger, the company had to settle on a viable segmentation strategy, which would then guide the company in resource allocation decisions.
With the merger, who then would be the customer of Tennyson Ltd. This was not a simple either-or decision between the two market segments; it required careful consideration.
Need for Rationalization
To be able to move forward with a new strategy - and emerge with a