Business of Golf: Islington Golf Club Harvard Case Solution & Analysis

Alternatives

First alternative can be the substantial renovation of Clubhouse which will attract new members and allow opportunities to host weddings and other events. Patio was built in 1988 and requires renovating, furniture needs to be replaced and the floor of clubhouse needs work so that formal dining room can be opened again. Islington is considered to be a prestigious club and status of the club can be maintained by updating clubhouse. This in turn will also affect the F&B revenue of 40%, which depends on banquets and other events held in the clubhouse.

Second alternative can be to hold corporate tournaments and upgrade the clubhouse with one tournament generating revenue of $42000. This revenue can then be used to finance the upgrades and Islington will not require any debt financing in this regard. This arrangement will become extra revenue for Islington and will also help in debt repayments for the Water Management Project. Having more tournaments will upset some of the members because they consider Islington as a private club, but they will understand once they get to know that it is best for the future growth of the Golf Club.

Third alternative is to raise the membership and annual fee and increase the percentage given to capital improvement. Being an equity club, members can hold shares at $40000 investment per member. The share structure enabled only 15% of the membership cost to be available for capital improvements. With Islington’s prestigious name and reputation, members will be able to afford a slight raise which is in turn best for themselves because they will be getting more qualitative services at the club.

Decision Criteria

Decision criteria

Renovation of Clubhouse

Hold Corporate tournaments

Raise the membership and annual fee

Increase profitability

1

1

0

Maintain member satisfaction

1

0

0

Increase in potential members

1

0

0

Be consistent with the mission or strategy

1

0

0

Retain flexibility

1

0

0

Score

5

1

0

Analysis of the Alternatives

Each alternative has its own advantage and disadvantage. The first alternative which is the substantial renovation of clubhouse will potentially bring in more revenue and will also keep the members happy. But spending on the upgrades would lead Islington into worse debt position if not managed properly.

The second alternative for Islington is to hold more corporate tournaments before making upgrades to clubhouse. Islington will yield more revenues by hosting these tournaments and will have the funds required to do necessary upgrades and renovations to clubhouse. The drawback of this plan is that members will not approve of more people taking up their playing time, and this will result in loss of revenue, reputation and members to competitors.

The third alternative also has its advantages and disadvantages. Increasing the membership fee/annual fee in order to raise the percentage given to capital improvements will provide Islington more funding for clubhouse improvements. The cons of this plan include dissatisfaction among members because current members may not like the raise in annual fees and potential member not willing to pay more for membership fee/annual fee.

Recommendation

Renovation of clubhouse gains the highest score in decision criteria chart than and raising membership/annual fee. The decision criteria depicts that the best way for Islington Golf club to improve is by renovating clubhouse, this will result in increased profitability, attract potential members and will retain the confidence of the members. Even if Islington finances the money through debt it is necessary that renovation and changes to 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.............................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.

Business of Golf: Islington Golf Club Case Solution Other Similar Case Solutions like

Business of Golf: Islington Golf Club

Share This