Blue Harbor Limited Harvard Case Solution & Analysis

Blue Harbor Limited Case Study Solution

Introduction

Overview:

Blue Harbor Limited is a hotel business situated in South West Coast of England. The business is incorporated a couple of years ago and targets holidayfamilies as their customers 50% of these are from local while remaining 50% customers are from overseas.

The main revenuegeneratingsource of the company are the fees which they charged against providing bed, breakfast, and half board (breakfast, bed, and dinner) services. However, the main fixed expenses of the company arefollowed:

Lease payment over the furniture and fittings and salaries of the director, marketing and sales manager, general hotel manager, head chef and other kitchen staff. Along with this the company also has to pay cleaning and laundering fees to the outsource company.

Key Management Accounting Issue:

Management accounting is also known as cost accounting the information gathered under this accounting will help the management in making the decision so that they can maintain the overall goal of the organization.(Dr(. Nishikant Jha, 2015)

The management of the company noticed that in the winter months (i.e. from November to February) there is a low demand of their resortswhich drastically impact over the net earnings of the company. To resolve this issue management identify two alternatives first one is allowing discounted price for the rooms in thewinter season and thesecond one is converting dining area into the conference room and offer it at full room price to the business community.However,the management of the company is alittle bit confused about which option should be executed.

Planning

For the initialevaluation of the first option that either it will be beneficial for the company or not I willfirst analyze the industry norms and ascertain that either there are a high, low or moderate demands of theresort in the winter season. After that, I will consider the fees which is charged by the other competitors in this seasonthis will help me in determining the discount. From this analyze I can ascertain thaton the financial grounds either the option will be beneficial for the company or not.

Like the first option to evaluate the secondoptionthat either it is beneficial for the company or not I will first gather the industrial information such as demand of conference room in winter season along with this I will also gather information relating to the size needed by the business community. Afterthat, I will evaluate this option on the financial grounds such as either the cost which will be incurred on converting dining area into conference roomalong with the other expenseswill be recovered by this services or not.

Blue Harbor Limited Harvard Case Solution & Analysis

 

 

Decision Making

The decision-making process involves certain step such as identifying alternative, creating aconstructive environment, investigation of the alternatives, evaluation of the options, selection, and communication of the plan with the others. (Mind tools)

In this part, we will evaluate the two alternatives through analyzing their pros and cons and base on this analysis we willprovide a recommendation that which option should be chosen by the management...................

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