The golf industry is a competitive industry. It is especially competitive for Islington Golf Club. Islington has a lot of competition, 30 other courses within a 30 minute drive from Toronto and several located within 5-10 minutes. Many of the courses located close to Islington Golf Club have recently undergone renovations or have more amenities to offer members. These factors make it hard for Islington to get new members because they do not have the extra money for renovations and upgrades.
Regulatory Islington Golf Club has a board that includes 10 members with 8 committees.
These committees include: Membership, Management, Building, Finance & Legal, Green, Nominating, Captain’s and Ladies’ Captain’s. Before the general manager Mr. Fox can go ahead and make any changes to the club he has to go through the committee first. The board will have to look at all factors for the change including environmental and legal laws before they can give the go ahead.
Economic Factors The economy plays a huge role in the survival of any business.
The golfing industry is one of the businesses that find it tough to survive during a recession. Golfing is a luxury, and many people do not have the time and money for the luxury items anymore. Job security is lower, making it hard for people to want to go out and purchase such large expenses like a golf membership.
Social Trends Social trends play a big part in the golfing industry. The way the economy is right now, usually only people with a lot of extra earnings can afford a membership at a prestige course like Islington.
The ones, who can afford to play at the top of the line courses, tend to lean towards the one that gives them more social ratings. This becomes a trend among their group of friends, co-workers and corporate partners.
Technological factors Technology keeps advancing and growing as the years go by. Depending on the business, sometimes having the up to date technology can make or break a business. Islington Golf Club does not have to worry about technological factors just yet, but they may have to in the future. As technology advances, someone may create a unique way to practice before you go out on the course through simulation. This may be a feature a lot of clubs want, but they have to be able to have the extra fund available to purchase it.
Natural Factors The environment plays a major part in the golfing industry. The courses have to be in great condition in order for people to play on them. Environmental factors like storms, hurricanes, tornados and even long winters can have a major effect on golf courses.
The Golfing Industry in Canada is a very lucrative and popular area of business to become involved in. It can be very profitable when the economy is heading in the right direction, but when the economy takes a turn in the wrong direction it can be difficult to have a profitable business. The obstacles are vast in the current economy; people are not willing to spend the money and time they use to on such luxuries like golfing.
Islington Golf Club located in Toronto, Ontario is a business with this dilemma. The recently hired general manager Mr. Dave Fox is trying to figure out the best way to keep/make Islington Golf Club a prestige and profitable business. The problem is he has many different members’ opinions/beliefs to abide by and the biggest problem is finances. He must take into account all of the information about the market and the counter effects of their actions. Weather he chooses to spend the money to do more renovations, allow more corporate tournaments, host more weddings and banquets, build a long-game practice facility or a combination of them all. Each choice has its opportunities and threats as well as many internal and external influences. The problem Mr. Fox has is deciding what will be in the best interest for not only Islington Golf Club but for the valuable members.
Situation Analysis Strengths
Islington Golf Club has many strengths. They have a beautiful Stanley Thompson designed course tucked in historic Islington Village, which is accessible to the high-end community. This gives Islington Gold Club the advantage of having the high-end community residents wanting to become members of the facility. This also gives them the potential to market towards the resident’s younger generation, potentially creating profit for the feature. Islington Golf Club has a unique feature, a walk-on tee time system. Not many golf courses use this type of system, most golf courses you have to book a tee-off time. This system gives members a chance to socialize and interact with one another, which many members valued. A lot of people in this busy economy would love to show up on a golf course whenever they wanted and have a tee-off in reasonable time.
There are also some weaknesses here that need to be addressed. Some of the facilities are not up to many members standards. The clubhouse underwent some renovations but still needs more to keep up with some member’s standards. Members found the clubhouse “tired” and lacked ambience, the formal dining room was closed due to that fact. Food and Beverage sales have a $103,379 loss. Islington Golf Club has a major weakness, the club lacked a long-game practice facility, which other clubs in the area have.
This problem is the most difficult for Islington Golf Club to fix, because of land constraints. This may drive potential members to another club because Islington does not have that feature and may not ever be able to provide it. Another issue is the staff, casual/summer help made it difficult to provide consistency, and the members demanded a high level of professionalism from the staff as they are paying the high cost of the membership. If they don’t get the proper staff it could reflect badly on the club. Finally Suzanne does not want to grow too large to jeopardize quality which may cause her demand to surpass supply.
The external opportunities are large in number. Fox’s goal is to increase profit while appealing to the members of the club. These days the consumers that are willing to pay a lot of money but they expect the most premium outcome for their dollars spent. Islington Golf Course has the potential to be one of the most prestige courses in the area. If they were to spend the right amount of money on upgrades, I believe Islington could accomplish being the most reputable course in the area. Sometimes look can be everything to some people, if they place is becoming run down members will not be spreading the word of mouth which in many cases can be a very profitable marketing source. With some extra funds spent Islington Gold Club has the opportunity to advance greatly in the market.
There are some weaknesses in this business as well. The golf industry in Canada is slowly declining due to economical threats. The competition is vast, in Toronto alone there are 30 courses within a 30 minute drive to Toronto. There are also several clubs located within 5-10 minutes of Islington. In order for them to be competitive in the market they will have to keep up with the competition. Islington Golf Club has a lot of competition just around the corner from them, St Georges Golf and Country club is another Stanley Thompson Course and it also has a curling club which Islington does not offer. Lambton Golf and Country Club has 3 clubhouses, best year-round tennis facility and the club also prides themselves on having one of the better cuisines of any club in Toronto, Islington does not have any of those features.
Islington’s biggest threat is the economy. The fears of a looming recession are are economic threats for the club. Golf is a luxury item to many people and most people in this economy cannot afford extra luxuries. The membership is a very high cost, many people in this economy have shortened how many times they play in a year and just pay the green fees each time. In the tough economy, the members and companies are hesitant to bring guests to the course which reduces green fees and cart revenue. It is hard for luxury businesses to survive in this economy.
The first alternative for the club is to spend the money on the upgrades to keep the members happy and possibly bring in more revenue. There have been many comments from the members that some of the parts of the club are dated. A group of members agreed that they were members of Islington because of the prestige association with the club. Members are paying the big bucks to play at Islington, so they expect the best, and a dated clubhouse is not up to their expectations. The upgrades could potentially bring in more revenue, the members would be so proud of their association to the club, they would want to bring people to the club to show it off, but with the way it is right now members may not want to do this. Some members believed that a revamped clubhouse would attract new members and heighten the social aspect of the club.
The second alternative would be to wait on doing the renovations, and hold more corporate tournaments. This way revenue from the corporate tournaments could help towards the renovations and that way the renovations wouldn’t be financed through debt. Some members may not be happy about having more tournaments at the course but they may have changed minds if they knew it was for the renovations to the club. This may be something the club would want to keep doing in the long run, once renovations were paid of it could help towards other debts, this is extra revenue the club has never had.
The third alternative is to raise the percentage given to capital improvements when new members join. The membership fee/annual fee could be raise slightly to accommodate for the raise percentage to the capital improvements. In the economy if people have the extra money to spend on the luxury of golf, they can afford a slight raise in the membership fee and annual fees. With Islington’s prestige name, I’m sure people would not mind paying the extra money.
Another alternative is Fox could leave the club as is and see how it does for a year. Fox believes since he has been there the club has been turned in the right direction. He could spend the year coming up with new ideas for improvements to the club and try to find the according revenue to do these improvements. During this year he could get all the members feedback on what they would like done to the club and what they think would improve Islington’s prestige club.
Criteria/evaluation What I would use to measure the first alternative would be the member’s comments and complaints. The renovations would be based on what the members feel needs to be done to keep Islington’s prestige name. For the second alternative I would use profit evaluation from previous year’s tournaments. I would see how much revenue that generated and see how much potential revenue they could bring in.
How I would measure the third alternative is through market share. I would have to do financial evaluating and planning in order for the plan to succeed. For the final alternative I would use the member’s feedback on what they would like done to the club and what they think would improve Islington’s prestige club. This would give me the information to take the next step in taking action towards these plans.
Analysis of the Alternatives With each alternative comes pros and cons. The first alternative has some good pros; the club spending the money on the upgrades to keep the members happy could potentially bring in more revenue. With the good comes the negative, the funds the club is spending on the upgrades could put them far in debt if not managed well.
The second alternative to wait on doing the renovations, and hold more corporate tournaments could have its advantages, and disadvantages. By hosting more corporate tournaments, Islington would generate more revenue and have the funds needed to keep up the club with the necessary upgrades and renovations. The disadvantage of this alternative plan is; members may not like that the there are more people taking up their playing time, these members may want to find a different club, resulting in loss revenue and status for Islington.
The third alternative also has its pros and cons. Raising the percentage given to capital improvements and having the membership fee/annual fee raised slightly to accommodate for the raise percentage to the capital improvements when new members join would give Islington more money for clubhouse improvements. This plan also comes with cons; people may not want to pay more for membership fee/annual fee when becoming a member. Also current members may not like the raise in annual fees; this may make them want to sell their membership.
The final alternative also has its advantages and disadvantages. By having Fox leave the club as is, and seeing how it does for a year could have its advantage by saving revenue and putting it towards improvements in the future. This plan also has it disadvantages, by waiting another year on upgrades/renovations members may get the feeling that Islington is not going to do any renovations and this could turn them towards another club.
The best way for this club to improve is by spending the money on renovations/upgrades. Even if the money is financed through debt it is necessary changes the club needs to survive in the future. With many members’ comments being known that Islington Clubhouse has seen better days, the changes to the facility are much needed.
First of all a budget would have to be set on how much is being spent on these renovations. A year of holding corporate tournaments would generate some extra revenue to help with the work that needs to be done. After the tournaments are held the work would be done over the next year, once members see that after a year of tournaments the club is completely renovated they may have changed minds towards the tournaments. Before starting the work, I would look around for lowest priced items; stuff can look good and be affordable. Also shopping around for the lowest priced laborers would help save money, the club could offer them so many passes to the club and perks for a percentage off the price of their work. Renovations need to be done for the club to survive; the social aspect of the club is the most important to members and with club seeing better days this is a necessary change.
If the action plan isn’t working out the way I had planned, I would leave the renovations for a year; gather all feedback from members and the community through surveys. These surveys would help in determining exactly what my next plan of action would be, and what priority they would come in. These surveys could be shown to the board when trying to implement change for the club.