Club Mediterranee Harvard Case Solution & Analysis


Club med was founded in 1950 carrying out the concept that by offering “all-inclusive” holidays. Club Med welcomed around 1.7 million guests from all over the world, after sixty years. It had around 90 CM villages in seaside and mountain locations. It was founded by Gerard Blitz with the help of his friends. The idea came into his mind when he went to visit his sister in 1949 at Olympic Village of Calvi in Corsica (Gordon, 2003). So, Club Med was aiming for the volume high-end rather than a mass package holiday organization. Henri Giscard d’Estaing, Chairman of the Club Mediterranee, wanted to implement new strategy that was making the Club Med as a leader in the up market, convivial and multi-cultural, inclusive of holidays. As the business expanded the initiative was taken to turn it into a business in 1954. Trigano, identified the need of establishing it as an organization and by 1985, Clun Med was changed into a publicly traded company and emerged on the Paris Stock Exchange. (Anderson, 2009)Club Med style was better as there was a sense of closeness among the managers and all of the managers were knowledgeable of operations being conducted by the company. (Pavlović, 2007) Club Med targeted Asia as an emerging market of tourism (Rewtrakunphaiboon, 2004)

Asia was the market where the potential of customers was very high for Club Med. Asia was responsible for 15% turnover in 2006-2007, the total revenue was estimated to be 204 million Euros and the customer base was estimated to be around 211,000. Studies showed that out of 60 million loyal customers in Club Med worldwide, 26 million of the customers were in Asia-Pacific area (Alegre, 2006).The customer base was distributed among different cities of Asia such as; 12 million customers were from China and 6 million were from Japan. (Botti, 2007).

            Club Med started its operations in Asia in 1973, when it opened its first office in Tokyo. Whereas, it was satisfying eleven markets like Korea, Australia, New Zealand, China, Hong Kong, Singapore, etc.

Problem Statement

            The chairman of Club Med was having the challenge of repositioning Club Med as an upscale and providing multi-cultural option. Despite of the repositioning the company was facing serious trouble like generating the revenues. Through huge investments the brand image and recognition were developed among the customers, the firm was unable to generate revenues.

Case Analysis

Key Issues

            It was predicted that Club Med was supposed to have strong sales and growth through the successful market penetration in other countries of the world. The same expansion through which the firm was able to achieve high brand image and popularity, this was maybe because of its disadvantage for the firm in relation with its competitors. Club Med was struggling to achieve sales and growth and its sales were not increasing. The major reason behind its low sales was economic and environmental disasters in different countries where Club Med resorts were located. Club Med was facing a major problem in maintaining its beautiful resorts in countries in Asia due to natural disasters.

            Club Med faced numerous problems in Asia like Tsunami in 2004, SARS and terrorist attacks in Bali. Club Med had to carry out huge investments in Asia after Tsunami for the renovation of its resorts, which were damaged due to the Tsunami. Moreover, the firm had invested a huge cost for the purpose of upper scaling and that was the major problem for the firm as the expenses were rising for the company. The Asians were quite different from the Europeans in terms of spending the vacations (Hyde, 2003). This was a challenge for the firm as for penetrating the Asian market it was necessary to understand the way of living of the customers in Asia.

The Asians had the nature of spending the vacations for relaxing and the Europeans were used of spending the vacations for fun and as a luxury. Likewise, Asians used to spend the vacations of only 4 days, whereas, the Europeans used to spend the vacation for 7 days only. Moreover, Club Med was facing many challenges in generating sales in the Asian market. The main issue Club Med was facing was the environmental issues (Scanlon, 2007). Club Med was facing a series of problems due to the natural disasters......................

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The focus is on strategies Club Med on the U.S. market. Club Med experience mostly among Europeans, but the club attracts young, one of American tourists to the Caribbean resorts. If Club Med attempt to attract other market segments? What should its growth strategy be? "Hide
by Scott Ward Source: Harvard Business School 14 pages. Publication Date: 01 Oct 1978. Prod. #: 579061-PDF-ENG

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