Blue Mountain Resource Limited Analysis

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BLUE MOUNTAIN RESORT LIMITED: THE NIGHT SKIING DECISION
Introduction
        The Blue Mountain Resorts in Ontario Canada was build in 1941 as the largest resort operated by a family. It offers activities that include skiing. The CEO has a problem of deciding whether to invest in night skiing by installing facilities necessary to support his ideas. The CEO also has the challenge of maintaining the capacity to make it comfortable for the visitors since it is a very crucial matter. The ability of the resort depends on factors such as the hill development, hill size, lift facilities, and lighting among others. To be able to provide the night skiing activity, the resort has to invest in lifts and hills. If he was to decide on investing, the CEO has to spend in the facilities and, therefore, has to decide on the prices of night lifts and season passes to be able to calculate the revenues generated. He conducted a survey, but he also has to determine the extent of which the data can be forecasted since many people always inaccurately optimize most of their habits for the future. The management intends to offer the skiers the best value and highest quality for their money so the CEO wants also to provide a competitive advantage of lighting the slope to offer the longest run, best snow conditions and highest vertical for night skiing.
Major issues
        The company has the opportunity of investing in the facilities created for night skiing can be used for other activities when not active. Another opportunity is that the resort attracts many skiers and; therefore, this business opportunity can generate profits. The company has a decision on whether to invest or not. The investment has to offer new opportunities. The investment would provide an extra source of revenue to the resort since it is popular in the region having a high customer base. The investment should attain off-season use of facilities. This is possible since it can be used for recreational or social activities. It should expand the earning power of the company that it will do. It should minimize risk (Saunders, Cornett & McGraw, 2006).
        Risk minimization is one of the important factors that have to be considered before investing. Results from the survey conducted do not form the basis for a safe investment. The results indicate that at least 15% of the visitors are sure about night skiing. This is a huge risk counting on the fact that there are competitors. During the season also, the number of people that would ski for a shorter number of days is smaller than those who would ski long. The CEO also has to consider the pressure from the competitors and factors such as loyalty (Saunders, Cornett & McGraw, 2006). The company would have to invest much for them to have a competitive advantage that in the end may deem risky if the expected number of skiers does not arrive.
External analysis
        The resort faces competition from other private resorts located around 80 miles away in radius. These resorts offer night skiing, so the resort has to have a competitive advantage. The CEO intends to light it up to have a competitive edge over others.
Internal analysis
        The resort will have to undergo changes in management, financial changes, and cultural changes. There will be additional operating costs that will be used in maintaining the facility during the evening hours. This cost will involve payroll for the ski patrol, cashiers, and maintenance and repair costs. There will also be printing costs for the tickets.
Alternatives
        The resort will have to invest heavily in the opportunity that seems like a risky venture. The resort may decide to invest in night skiing but try to minimize some of the operating costs due to lighting. It may install fewer lighting facilities. This may not fully provide it with a competitive advantage but will help minimize the costs of installation and operating. The resort also chose two sites; it may start with one and see the changes in customer turn out and if the project will meet their set standards. If it qualifies, then installing two sites will be appropriate. The biggest problem will however be, if the number of turn out exceeds the accommodation of the facility, they might miss profits.
Decisions and Implementation
        The best decision is to explore the opportunity in small bits. Since the CEO is not sure as to whether the investment will be profitable since it is a new idea, investing heavily in it could result in massive losses. One of the considerations that the CEO has to put in place are the capital requirements. Every night, the resort will have to part with $1000 for operational costs. This is minus the cost of installation and infrastructure. If the customer turns out to fail to meet their criteria, then they will incur losses. The market potential for the investment is not impressive (Saunders, Cornett & McGraw, 2006).
        The company will also spread its resources and expertise too thin meaning that it will not be able to perform very well in any area (Saunders, Cornett & McGraw, 2006). The company, in this case, will have to have adequate resources and people to cover the new areas that will be costly. Due to the uncertainty in demand for night skiing. Making slow and short investments will be less risky.
        To measure the results of the outcomes, the company might compare the anticipated outcome over the real outcome in the new investment. This will enable it to predict future performance and can, therefore invest more if it is positive (Macko & Tyszka, 2009). If the plan fails, the company will inquire from the customers about their needs and make necessary changes. In conclusion, setting up a new investment with market uncertainty is risky especially. The business may conduct thorough market research or start small to minimize risks of losses.