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CANYON RANCH CASE STUDY SOLUTION
By :- Mohammad kaml
Adan elayan
Dr – Ismail romi
CANYON RANCH CASE STUDY SOLUTION
Canyon Ranch is presently one of the greatest food chains worldwide. It was established
by Kelloggs in 1866, a German Pharmacist who initially launched "FarineLactee"; a mix
of flour and milk to feed infants and decrease death rate. At the very same time, the
Page siblings from Switzerland likewise discovered The Anglo-Swiss Condensed Milk
Business. The 2 became rivals at first however later on combined in 1905, resulting in
the birth of Canyon Ranch.
Business is now a global business. Unlike other multinational business, it has senior
executives from various countries and tries to make choices thinking about the entire
world. Canyon Ranch presently has more than 500 factories around the world and a
network spread throughout 86 countries.
Purpose
The function of Business Corporation is to improve the quality of life of individuals by
playing its part and providing healthy food. While making sure that the company is
prospering in the long run, that's how it plays its part for a better and healthy future
Vision
Canyon Ranch's vision is to provide its customers with food that is healthy, high in
quality and safe to eat. It wants to be ingenious and simultaneously understand the
requirements and requirements of its clients. Its vision is to grow quick and offer
products that would satisfy the needs of each age. Canyon Ranch envisions to develop a
well-trained labor force which would help the company to grow
.
Mission
Canyon Ranch's mission is that as presently, it is the leading business in the food
industry, it thinks in 'Excellent Food, Great Life". Its mission is to supply its consumers
with a variety of options that are healthy and best in taste too. It is concentrated on
providing the very best food to its consumers throughout the day and night.
Products.
Canyon Ranch has a wide range of products that it provides to its clients. In 2011,
Business was noted as the most rewarding company.
Goals and Objectives
• Remembering the vision and objective of the corporation, the business has actually set
its objectives and objectives. These objectives and objectives are noted below.
• One objective of the company is to reach zero land fill status. (Business, aboutus,
2017).
• Another goal of Canyon Ranch is to squander minimum food during production.
Frequently, the food produced is wasted even prior to it reaches the customers.
• Another thing that Business is working on is to enhance its product packaging in such
a way that it would help it to minimize the above-mentioned complications and would
likewise ensure the delivery of high quality of its products to its clients.
• Meet global standards of the environment.
• Develop a relationship based upon trust with its consumers, service partners, staff
members, and federal government.
Critical Issues
Just Recently, Business Company is focusing more towards the method of NHW and
investing more of its profits on the R&D innovation. The nation is investing more on
acquisitions and mergers to support its NHW technique. The target of the company is
not attained as the sales were expected to grow greater at the rate of 10% per year and
the operating margins to increase by 20%, provided in Exhibit H. There is a requirement
to focus more on the sales then the innovation technology. Otherwise, it might result in
the declined income rate. (Henderson, 2012).
Situational Analysis.
Analysis of Current Strategy, Vision and Goals
The present Business method is based on the principle of Nutritious, Health and
Wellness (NHW). This strategy deals with the concept to bringing change in the
consumer choices about food and making the food stuff much healthier worrying about
the health problems.
The vision of this strategy is based on the key approach i.e. 60/40+ which simply
suggests that the products will have a score of 60% on the basis of taste and 40% is
based on its dietary worth. The items will be manufactured with extra nutritional value
in contrast to all other items in market gaining it a plus on its nutritional content.
This method was adopted to bring more delicious plus nutritious foods and drinks in
market than ever. In competition with other companies, with an intent of retaining its
trust over customers as Business Business has actually acquired more relied on by
costumers.
Quantitative Analysis.
R&D Spending as a portion of sales are declining with increasing actual quantity of
spending reveals that the sales are increasing at a greater rate than its R&D costs, and
permit the company to more invest in R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This
indicator also reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its costs on mergers, acquisitions and
R&D development rather than payment of financial obligations. This increasing debt
ratio pose a risk of default of Business to its investors and could lead a declining share
rates. Therefore, in terms of increasing debt ratio, the firm ought to not invest much on
R&D and ought to pay its present debts to reduce the risk for financiers.
The increasing danger of financiers with increasing debt ratio and decreasing share
prices can be observed by substantial decline of EPS of Canyon Ranch stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions
due to slow perception building of consumers. This slow growth likewise prevent
company to additional spend on its mergers and acquisitions.( Business, Business
Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Graphs given up the
Displays D and E.
TWOS Analysis
TWOS analysis can be utilized to obtain different methods based on the SWOT Analysis
offered above. A short summary of TWOS Analysis is given in Exhibit H.
Strategies to exploit Opportunities using Strengths
Business should present more ingenious products by big quantity of R&D Costs and
mergers and acquisitions. It could increase the market share of Business and increase
the earnings margins for the company. It might likewise offer Business a long term
competitive benefit over its rivals.
The worldwide expansion of Business ought to be concentrated on market recording of
developing countries by growth, attracting more customers through client's loyalty. As
developing countries are more populous than developed nations, it could increase the
consumer circle of Business.
Strategies to Overcome Weaknesses to Exploit Opportunities
Canyon Ranch should do cautious acquisition and merger of organizations, as it could
impact the consumer's and society's understandings about Business. It needs to obtain
and combine with those business which have a market reputation of healthy and
healthy companies. It would improve the perceptions of consumers about Business.
Business must not just spend its R&D on innovation, instead of it must also focus on the
R&D costs over examination of expense of different nutritious products. This would
increase expense effectiveness of its products, which will result in increasing its sales,
due to declining prices, and margins.
Strategies to use strengths to overcome threats
Business should move to not just establishing but likewise to industrialized countries. It
should widen its circle to various countries like Unilever which runs in about 170 plus
countries.
Strategies to overcome weaknesses to avoid threats
Canyon Ranch ought to sensibly control its acquisitions to prevent the danger of
misunderstanding from the consumers about Business. It needs to obtain and combine
with those nations having a goodwill of being a healthy company in the market. This
would not only enhance the perception of customers about Business however would
also increase the sales, earnings margins and market share of Business. It would
likewise enable the business to utilize its prospective resources efficiently on its other
operations instead of acquisitions of those organizations slowing the NHW technique
growth.
Segmentation Analysis
Demographic Segmentation
The group division of Business is based on four elements; age, gender, earnings and
profession. Business produces a number of items related to babies i.e. Cerelac, Nido,
and so on and associated to grownups i.e. confectionary items. Canyon Ranch items are
rather cost effective by nearly all levels, but its major targeted clients, in terms of
income level are middle and upper middle level consumers.
Geographical Segmentation
Geographical division of Business is composed of its existence in nearly 86 nations. Its
geographical segmentation is based upon two primary elements i.e. typical income level
of the customer as well as the environment of the region. For example, Singapore
Business Business's division is done on the basis of the weather condition of the area
i.e. hot, warm or cold.
Psychographic Segmentation
Psychographic segmentation of Business is based upon the personality and lifestyle of
the client. Business 3 in 1 Coffee target those customers whose life design is rather busy
and do not have much time.
Behavioral Segmentation
Canyon Ranch behavioral division is based upon the attitude understanding and
awareness of the consumer. For instance its highly nutritious items target those clients
who have a health mindful attitude towards their intakes.
Canyon Ranch Alternatives
In order to sustain the brand in the market and keep the customer undamaged with the
brand name, there are 2 alternatives:
Alternative: 1
The Company needs to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total properties of the company, increasing the wealth of
the company. Costs on R&D would be sunk cost.
2. The business can resell the obtained units in the market, if it fails to implement its
method. However, amount spend on the R&D could not be revived, and it will be
considered completely sunk cost, if it do not offer possible outcomes.
3. Investing in R&D offer sluggish development in sales, as it takes long time to present
a product. Acquisitions offer fast outcomes, as it supply the business already developed
product, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's worths like Kraftz foods
can lead the business to face misconception of customers about Business core values of
healthy and nutritious products.
2 Big spending on acquisitions than R&D would send out a signal of business's
inefficiency of establishing ingenious items, and would results in consumer's
discontentment.
3. Large acquisitions than R&D would extend the line of product of the business by the
products which are already present in the market, making business unable to present
new ingenious products.
Option: 2.
The Company needs to invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the company to produce more ingenious items.
2. It would supply the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted customers by
introducing those products which can be provided to a completely new market
segment.
4. Ingenious products will offer long term advantages and high market share in long
term.
Cons:
1. It would reduce the earnings margins of the company.
2. In case of failure, the entire spending on R&D would be considered as sunk expense,
and would affect the company at big. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might provide a negative signal to
the financiers, and might result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Pros:
1. It would permit the business to introduce brand-new ingenious products with less
threat of converting the costs on R&D into sunk cost.
2. It would provide a favorable signal to the investors, as the total assets of the company
would increase with its substantial R&D spending.
3. It would not affect the earnings margins of the business at a big rate as compare to
alternative 2.
4. It would provide the company a strong long term market position in regards to the
company's total wealth along with in regards to ingenious items.
Cons:
1. Danger of conversion of R&D spending into sunk expense, higher than option 1 lower
than alternative 2.
2. Threat of mistaken belief about the acquisitions, higher than alternative 2 and lower
than alternative 1.
3. Introduction of less variety of ingenious items than alternative 2 and high number of
innovative items than alternative 1.
Canyon Ranch Conclusion
It has institutionalized its strategies and culture to align itself with the market
modifications and client behavior, which has actually ultimately allowed it to sustain its
market share. Business has established substantial market share and brand name
identity in the urban markets, it is recommended that the business ought to focus on
the rural areas in terms of establishing brand name loyalty, awareness, and equity, such
can be done by creating a specific brand name allowance technique through trade
marketing methods, that draw clear distinction in between Canyon Ranch items and
other rival items
Canyon Ranch In need of implementing CRM strategy Case Study
Solution
Introduction
Canyon Ranch, with three Spa Clubs & two Destination Resorts, was
undoubtedly the leading destination for thousands of visitors, seeking for a un-
match luxury spa vacation & health [Link] early 2004, Canyon Ranch
remains to be the leading destination for people who want to have a high quality
of spa & health services for themselves, it also manages to be among the top
three most preferable destination within the US & around the world according to
‘Travel & Leisure Magazine’, it has a large number of highly satisfied
members/customer base.
The resort offers some personal services ranging from Spa, Health &Healing,
and Canyon Ranch currently present in both land & oversea, it also had been
awarded by some International awards in acknowledgment for its unique
&outclass services to its members back from 1979. It is backed by a very enrich
history and relevant knowledge and experience of business that distinguishes it
from other big giants in the Resort & Vacation Spa [Link] other
multiple outdoor activities and unique services, it provides access to some
lectures and fitness classes to the guests with no additional cost to them.
It secures profits from all the existing three business [Link] the primary
source of contribution has received from Hotel followed by the resort, although
the growth for Health & Healing department is relatively high, the input to the
overall profit has relatively low due to use of expert and trained professionals in
this area that cut a major portion of the revenue earned.
Spa clubs located at Venetian Resort, fulfill the fitness, salon, and spa needs of
guests visiting the Resort & Conventional Centre, Florida, Canyon Ranch had
recently opened their third spa at Cruise Liner Queen Mary [Link]’s a very bold
initiative that plays a very significant role in uplifting the brand image of Canyon
Ranch, they also aimed to use the spa as a platform to introduce their other
services like Destination Resort, but they need to go a long way to achieve these
objectives.
Spa Industry in the US is expanding at a rapid pace this could be witnessed
through the increasing number of companies that entered the market, (1,374
resorts, from 1990 to 9,632 resorts, in 2002), consisting of many small
organizations to a few large [Link] spite of highly competitive market
CanyonRanch manages to secure gold standards. Moreover, it has a different
Health & healing department that provides it a competitive edge over its
competitors.
However, many big resorts having big Spas are now considered developing
wellness component along with Medical Centersto support their Core activities;
some other new entrants are also trying to enter into the business such as
Hospitals by introducing spas & wellness component into their business
[Link] all these competitive factors Canyon Ranch also committed to
competing even for five grand of discretional income.
Implementation of Customer Relationship Management Strategy
Following are the analysis of Implementing CRM strategy for Canyon Ranch to
improve its customer service operation.
CRM it is a combination of three small letter that consists of three core concepts,
Customer, these are the heart of any profit making business because without a
large, loyal & commented customer base the company cannot continue its
operations for the foreseeable future. The relationship,it plays a vital role in
retaining & satisfying existing customers,stakeholders and even suppliers, also
with an excellentcustomer management the business can increase its current
customer base. Managementmeans these business stakeholders. In a service
sector industry, especially like the Canyon Ranch, CRM strategy is of particular
importance as it results in increased profitability, revenue and customer
satisfaction. Good CRM strategy focuses on individual client needs, their
preferences, helps in tracking customer behavior pattern & suggests
recommendations accordingly.(The Wheel)
There are many reasons for the idea of implementing CRM strategy for Canyon
Ranch as they are in the Destination Resort & Spas business for an extended
[Link] have a reasonably good number of customers database, as they are
in the luxury service business segment & usually their clients are of the high-
income group who like personalized marketing, product & service
recommendations. CRM helps in better understanding the individual customer
needs. Therefore, Canyon might consider implementing CRM strategy (Arthur,
2001)
Personalization & CRM Strategy for Canyon Ranch
Canyon Ranch possessesreal substantial knowledge about 17,000clients who
they manage over an extended period,& these used to visit multiple times a
year, the customer base comprises of about 75 % Women, with a high-income
group & wanting best & uncompromising service. Men represent a growing
market segment with increased focus on physical health &fitness; thisstipulates
the growing number of customer in Health & Healing Department followed by 6
% package purchased, senior management willing to rationalize the growing
trend. For this management needs to add more value to customer experience,
understand their requirements, communication is crucial to monitor
expectation.
