Collaborate with students on the following exercise. In particular, consider using Google Docs, Windows Live SkyDrive, Microsoft SharePoint, or some other collaboration tool.
Singing Valley Resort is a top-end 50-unit resort located high in the Colorado mountains. Rooms rent for $400 to $4,500 per night, depending on the season and the type of accommodations. Singing Valley's clientele are well-to-do; many are famous entertainers, sports figures, and business executives. They are accustomed to, and demand, superior service.
Singing Valley resides in a gorgeous mountain valley and is situated a few hundred yards from a serene mountain lake. It prides itself on superior accommodations; tip-top service; delicious, healthful, organic meals; and exceptional wines. Because it has been so successful, Singing Valley is 90 percent occupied except during the "shoulder seasons" (November, after the leaves change and before the snow arrives, and late April, when winter sports are finished but the snow is still on the ground.)
Singing Valley's owners want to increase revenue, but because the resort is nearly always full and because its rates are already at the top of the scale it cannot do so via occupancy revenue. Thus, over the past several years it has focused on up-selling to its clientele activities such as fly-fishing, river rafting, cross-country skiing, snowshoeing, art lessons, yoga and other exercise classes, spa services, and the like.
To increase the sales of these optional activities, Singing Valley prepared in-room marketing materials to advertise their availability. Additionally, it trained all registration personnel on techniques of casually and appropriately suggesting such activities to guests on arrival.
The response to these promotions was only mediocre, so Singing Valley's management stepped up its promotions. The first step was to send email to its clientele advising them of the activities available during their stay. An automated system produced emails personalized with names and personal data. Unfortunately, the automated email system backfired.
Immediately upon its execution, Singing Valley management received numerous complaints. One longterm customer objected that she had been coming to Singing Valley for 7 years and asked if they had yet noticed that she was confined to a wheelchair. If they had noticed, she said, why did they send her a personalized invitation for a hiking trip?
The agent of another famous client complained that the personalized email was sent to her client and her husband, when anyone who had turned on a TV in the past 6 months knew the two of them were involved in an exceedingly acrimonious divorce. Yet another customer complained that, indeed, he and his wife had vacationed at Singing Valley 3 years ago, but he had not been there since.
To his knowledge, his wife had not been there, either, so he was puzzled as to why the email referred to their visit last winter. He wanted to know if, indeed, his wife had recently been to the resort, without him. Of course, Singing Valley had no way of knowing about customers it had insulted who never complained. During the time the automated email system was operational sales of extra activities were up 15 percent.
However, the strong customer complaints conflicted with its competitive strategy so, in spite of the extra revenue, Singing Valley stopped the automated email system, sacked the vendor who had developed it, and demoted the Singing Valley employee who had brokered the system. Singing Valley was left with the problem of how to increase its revenue.
Your team's task is to develop two innovative ideas for solving Singing Valley's problem. At the minimum, include the following in your response:
a. An analysis of the five forces of the Singing Valley market. Make and justify any necessary assumptions about their market.
b. A statement of Singing Valley's competitive strategy.
c. A statement of the problem. Recall from Chapter 2 that a problem is a perceived difference between what is and what ought to be. If the members of your group have different perceptions of the problem, all the better. Use a collaborative process to obtain the best possible problem description to which all can agree.
d. Document in a general way (like the top row of Figure 3-10), the process of up-selling an activity.
e. Develop two innovative ideas for solving the Singing Valley problem. For each idea, provide:
• A brief description of the idea
• A process diagram (like Figure 3-11) of the idea. Figure 3-11 was produced using Microsoft Visio; if you have access to that product, you'll save time and have a better result if you also use it.
• A description of the information system needed to implement the idea
f. Compare the advantages and disadvantages of your alternatives in part e and recommend one of them for implementation.