Control management focuses on events in the past, at present, and in future processes within a firm. Management control systems utilize the data obtained from a business, to evaluate its performance on various resources of the organization which includes physical, human, and financial. The evaluation is done with the strategy of the firm in mind. The management control system is therefore used to inform the behavior of the resources within an organization in the implementation of the enterprise's strategy. For instance, in our case study, the approach of Red Spruce runs on six months and intend to capture families visiting the resort in July and August. Its strategy also aims to offer quality resort services to corporate clients in May, June, September, and October. However, through the evaluation of its performance in the Canadian hospitality industry, Red Spruce performance has been dwindling. The general manager at the resort has been thinking of a solution to improve its performance.
Red spruce it at the verge of collapsing by consistently making losses due to the outdated rooms and appliances they offer to the customers. They operate six months a year while other competitors operate all year round and have relatively superior room designs and in number as well. The general manager has been thinking on strategies to recover the performance at Red Spruce and has developed a compact solution. However, the situation is worsening, but the manager has decided to write a proposal to Venere which is the company that owns 35 resorts one of them Red Spruce, to fund a renovation program for rooms. Elias, the general manager, realizes that the idea may be unsuccessful since it requires over one million dollars. Venere has invested some money in renovating some resort from the western side in the past, but have not been able to show the value for their money. This occurrence makes it difficult for a pitching over financial support on renovations to go through.
However, the general manager remains optimistic that his plea will be heard, and his idea financed to improve the competitiveness of Red Spruce in the industry. The solution to the problem would be to pitch for the financial support, accompanied by a strategy to recover the money spent on renovations within the shortest period possible. The first option for recovery of the amount invested is to increase the charges in every room and increase the operation time from six months to 10 months or even the whole year just like the competitors. Another strategy could be to reduce the charges on rooms, to attract more customers. With time, it is important to improve the onsite recreational facilities which Red Spruce seem to have neglected, an idea that the competitors have banked on massively. The manager can embark on aggressive social media promotion of the resort, to ensure more potential customer get and share the information. Discounts could be applied to attract more customers. Now after drawing target number of the client through various means, the prices of food and drinks could be raised a little to cover for other costs and discounts incurred in the offering of the rooms. A management control system should be in place to ensure activities run on the Red Spruce strategy.
In conclusion, Red Spruce is facing a critical challenge and renovation of the rooms enviable. However, only through a convincing proposal can they access the financial backup from Venere. Elaborating on the period it will take to recover the money based on a sound, and realistic strategy is necessary. Red Spruce solution is to improve their efficiency and quality of service including being operational throughout the year or more than six months.
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