Drowling Mountain is a community resort located just 45 minutes away from Syracuse, New York, a city with a population of 145,170 in 2010. It is situated in close proximity to several surrounding communities within Onondaga County, which has a population of 321,830. Drowling Mountain offers a range of snow-related activities, including snowboarding and skiing, and operates a full-service chalet providing equipment rentals, food and beverages, ski instructions, and lodging rentals for overnight guests.
Despite its close connection with the city of Syracuse and local businesses, Drowling Mountain has faced financial challenges in recent years.
The resort struggles to cover its fixed assets and operational costs, primarily due to lower top-line revenue sources. With 34 resorts in the state of New York competing for visitors, Drowling Mountain must establish points of differentiation and unique services to secure its sustainability in the face of rivaling resorts.
Objective
The primary objective for Drowling Mountain is to develop a new marketing plan focused on top-line growth. Increasing sales and implementing new pricing schemes will be crucial for the company as it aims to reduce its financial debt and bolster its cash flow to ensure long-term viability.
Porter’s Five Forces Industry Analysis
Before formulating a new marketing plan, it is essential to conduct a thorough industry analysis using Porter’s Five Forces framework to understand the competitive landscape:
- Threat of New Entrants: The ski resort industry presents minimal to no threat of new entrants. The high capital requirements needed to establish a new resort and the absence of suitable locations act as significant barriers to entry.
- Bargaining Power of Suppliers: Drowling Mountain maintains a close relationship with its suppliers, particularly local businesses. Suppliers demonstrate flexibility in accounts payable terms, given the positive economic impact Drowling provides to the city of Syracuse. There is limited threat of suppliers raising costs or compromising quality.
- Bargaining Power of Buyers: Buyers, particularly food and beverage suppliers, benefit from Drowling’s contributions to the local economy. The mutually beneficial relationship fosters leniency in the terms of their transactions, enhancing buyer-seller cooperation.
- Threat of Substitute Products: The threat of substitute products is low, given Drowling Mountain’s proximity to Syracuse and its positive economic contributions to the region. The strong relationship between Drowling and its local community reduces the likelihood of customers seeking alternatives.
- Rivalry among Existing Competitors: With 34 competing resorts in New York and 4 million visitors in 2008-09, competition is intense. Competitors often lower prices, citing differences in hill size and run difficulty. Some resorts offer year-round services, diversifying their offerings.
Based on this analysis, the ski resort industry is challenging to achieve growth in, necessitating unique product and service differentiation to stand out. Minimal barriers to entry make it essential for resorts to anticipate industry expectations accurately.
In 2010, snowsports’ participation rate was 7.5% of the US population, with a male-to-female ratio of 64:36. A significant portion of male skiers falls within the 13-34 age range. These demographics indicate an older population’s interest in snowsports, emphasizing the importance of attractive services for this age group.
Resources
Martin Cartier, the Chair of the Board of Directors, and Patrick Stanley, a long-time employee, play pivotal roles in Drowling Mountain’s revitalization. The involvement of local investor Peter Bass is crucial in preventing the resort from going into receivership and ensuring effective operations. The eight-member board of directors, designed for eleven members, shares a common goal of making Drowling Mountain profitable. However, a lack of available cash for operations sustainability remains a significant concern for all stakeholders.
Values
Drowling Mountain values its relationship with the city of Syracuse, local businesses, and residents. The resort is the preferred choice for locals planning ski adventures. Providing quality amenities for all patrons has been a central focus for the board’s decision-making. However, the shortage of available cash hinders capital improvements.
Alternatives
Three potential alternatives can be considered:
- Alternative #1 – Change the Price Structure for Lift Passes: Drowling can modify the pricing structure for lift passes, making them more competitive with other resorts in the area. This strategy aims to attract more visitors and increase top-line revenue.
- Alternative #2 – Open the Resort for Year-Round Activities: Drowling can extend its operational season to offer year-round activities, providing additional revenue opportunities and enhancing customer satisfaction.
- Alternative #3 – Expand Marketing Scope: Drowling can broaden its marketing campaign to attract tourists and position itself as a popular destination for travelers, emphasizing its unique amenities.
Recommendation
Among the alternatives, the most favorable option is to implement Alternative #1: changing the price structure for lift passes. Lowering prices will likely attract more visitors, as it is viewed positively by consumers. Increased patronage will bolster top-line revenue, benefiting both the resort and its customers. This change aligns with Drowling Mountain’s goal of achieving sustainability through higher visitor numbers.
Action Plan
The implementation of the new pricing scheme should occur within two months. The goal is to attract more skiers to Drowling Mountain, covering expenses for the ski hill. The resort should focus on casual skiers and non-skiers due to its geographic location, which may not draw experienced or frequent skiers. Additional services can be bundled with lift passes to enhance customer satisfaction and retention.
By lowering prices, Drowling Mountain can achieve a competitive edge, increase patronage, and ensure a positive customer experience, ultimately leading to improved financial stability.
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