Vail Resorts – Case Study Example
Vail Resort Vail Resort Vail Resorts (VR) operates in hotel and tourism sector. Despite many challenges, VR continues to maintain their command in the market by launching new developments and competition hence, this become its market strength. Differences in location describes the strategic groups of VR for example there is Colorado, Grand Teton summer resort and Rock resorts among other resorts focused mostly along coastal US (Boschken, 2007). The greater variety of demographic factors within the region provides another strength for Vail Resort and this in turn determine the customer demand, service quality and pricing.
In terms of business lifecycle, VR is an established business operation in the hotel and tourism market sector. However, it is expanding its operation to take care of the competition from other hoteliers and market demand that continue to grow as asserted by Boschken (2007). The business environment favours the growth of VR because its location is both demographically and geographically strategic and this gives VR an opportunity to open its market to its customers (Boschken, 2007). VR do not have a stiff market competition parse but it dominates much of the hotel market in the Colorado region. The less number of rivalry explains the reason for VR expansion to other areas indicates that it is has established in the market. However, the fact that VR is expanding poses some weaknesses in its market capture. Besides, VR has threats such as terrorist as posited by Boschken (2007). Terrorist affects Average Daily Rate (ADR) by reducing sales received from the hotels hence result into low profit.
Porter’s force of threat of new entry increases the rivalry in the region. VR may not do well in the business if other investments in hotel enters the same market region with VR. On the other hand, Porter’s force of buyer power decreases the rivalry. This is because VR offer high-quality services at low prices hence the cost of the customers switching from VR services to other hoteliers is high, hence buyers always dictate terms for service (Boschken, 2007). VR business complements influence demand and rivalry by targeting the same customers. Therefore, the recommendable business model would be by first planning a strategic action for example increasing room occupancy and implementing it to make profit from operations.
The table below show SWOT analysis of Vail Resort and its business environment.
Boschken, Herman. (2007). Vail Resort incorporation. A Strategic Management Case. San Jose: San Jose Sate University Press.