Canyon Ranch

1.Problem Statement:

Canyon Ranch has proven itself to be the undisputed leader in the destination segment of the spa industry. However, due to increasing competitive forces in the market, Canyon Ranch must address ways to sustain its business by maintaining its competitive advantage and further growing the business.

2.SWOT Analysis:

STRENGTHS:
•Proven market leader
o25 years in the business
oWidely recognized as gold standard in spa industry
•High attention to service with a 2.5:1 staff-to-guest ratio
•Multiple spa services and a heath and healing component all in centralized location (“under one roof”)
•Staff recruitment process focuses on finding prospective employees that fit needs and standards of company
•Strong client retention rates

55% of in-house guests had visited Canyon Ranch before
18% of customers returned more than once
WEAKNESSES:
•Poor marketing strategy – does not advertise heavily
•No formal reward or recognition program for repeat customers. •Decentralized IT infrastructure
CLS does not integrate well with Canyon Ranch’s other systems like Guestware oLack of Point-of Sale system in restaurant and salon, resulting in inability to track individual transactions •50% turnover rate for Program Coordinator position and 20% of Program Coordinator trainees do not complete preliminary 6 weeks

OPPORTUNITIES:
•Male audience appears to be a growing segment, which is attributed to the aging of the baby boomer generation and men’s increased attention to health and well-being •Advanced technological solutions can be utilized to expand and enhance direct marketing and communication o2 million unique visitors viewed Canyon Ranch’s website in 2003 •Spa experience still far from being mainstream

1% of U.S. population visited destination spa in 2002 and 2003
THREATS:
•Increase in convergence between medicine and spa services
Day spas aligning themselves with medical professionals
Some medical professionals beginning to include spa treatments in practice
Some hospitals including alternative treatments into portfolio
•Competitors offering services at lower prices