Club Mediterranee - Case study

Résumé du document

In 1950, Gérard Blitz established the first Club Med village in Mallorca (Spain). In 1959, Gilbert Trigano became CEO of Société des Villages de Vacances, and in 1963, he became CEO of Club Med. For thirty years, he kept creating new "villages?, (the heavenly enclaves) surrounded by exotic landscapes. In the 1970's and 1980's, the company grew very rapidly. But, at the beginning of the 1990's, Club Med suffered due to the economic crisis as many of its villages had become quite outdated and needed refurbishing. In 1993, Gilbert Trigano nominated his son, Serge, to replace him as the CEO of the Club. But three years later, Serge Trigano, who was being held responsible for the losses of the Company, was evicted by shareholders. Since 1997, the former Euro Disney manager, Philippe Bourguignon, is in charge of Club Med.

Extraits

[...] Two types of strategies, somehow in contradiction, have been successively implemented : adapting services to current customers (creation of nurseries and children clubs designed to entertain children while their parents are resting) bringing a younger clientele to the Club (launching of Oyyo in 2001). An outdated concept Club Med had to face a situation where what was at the heart of its success in the 1970's was causing its decline in the 1990's. As Serge Trigano admitted himself[3] : “During 30 years, our customers have been taken care of and entertained at a 100%, with an almost non-stop collective life. [...]

[...] Actually, if we are not confident in the plan of the company's managers it is because we do not believe the brand Club Med is strong enough to bear such an extension. Such a strategy would be sound if the “Club concept” had a real power of evocation on consumers. But the whole Club Med idea seems to me very obsolete, and so does Gymnase Club. There has been a shift in values between the 1970's-1980's and the beginning of the new Millenium. [...]

[...] Lodging used to be only a place to sleep. Today, it is more complicated : customers feel at the same time a strong individualism and a search for conviviality”. To be sure, it was mandatory for the company to have its original concept adapted to the customers' need : letting the customer greater margins for manoeuvre in the choice of his activities developing different types of products : Club Med One (1990) and Club Med 2 (1992), two cruising ships, packages (Jet Tours, Forum Voyages, Club Med découvertes) . [...]

[...] But it may be a little bit of those three jobs. That is why it is difficult to decide whether the diversification of Club Med through acquisitions and mergers is an element of vertical or of horizontal integration. According to Serge Trigano, former CEO, Tour Operating is, indeed, a part of Club Med's core competence[1]. Actually, some of the acquisitions led by Club Med could be said to be mere horizontal integration (Club Aquarius), whereas others could be said to be partly horizontal and partly vertical integration (Jet Tours). [...]

[...] In 2001, the repartition of customers based on their country of origin was as follow : Although some of the “villages” are more dedicated to a certain type of clientele for reasons of geographical proximity the “village” product is designed to be international, with customers coming from different countries, and GO (Gentils Organisateurs, the Company name for entertainers) speaking fluently various languages. Club med is running 122 villages in 36 different countries. Nevertheless, the majority of its turnover comes from the “Europe-Africa zone” : Better value for money Seeking to enhance the value perceived by customers, Club Med has implemented a program of refurbishment of its resorts on a very large scale. This project called “Alcudia” ended in 2000 and was responsible for the renovation of 70 Club Med villages in four years. [...]