Bear Creek Golf Range Executive Summary

The Company

     Bear Creek Golf Range is a newly established golfing business, as of May 1993, in the Dallas/Forth Worth area.  Owned and operated by two former PGA professionals, and long time friends, Dan Shay and George Platton.  The vision of Bear Creek is to become the premier golfing range in the area for the serious golfer.  The owners want to establish a reputation of being “the professional golfing center.”

The Challenge

     Bear Creek is in a tough situation as their goal and vision was incomplete for various reasons.  They failed to be profitable within their first year of operation.  During the construction, Bear Creek was faced with multiple obstacles which led to the poor performance of the golf range.  With the delays and lack of funds available, Dan and George were unable to build their dream of the first-class golfing center.  Many of the amenities that were planned were put on hold with hopes of finishing the project after Bear Creek opened.  Bear Creek is dealing with four other golfing centers in the area.  It is essential that Dan and George act quickly for year two to attract potential customers.

The key issue is:

Who should Bear Creek be targeting to increase market share and profitability?

SWOT Analysis

Strengths

- Owners have strong backgrounds and contacts in the golf world

-  Excellent instructors available on-site

- Great location, right of route 183 and close the international airport

- Pristine hitting areas and fairway

Weaknesses

- Limited funding and cash flow

- Minimal amount of market share

- Delay in facilities (snack bar, practice putting green, and gravel parking lot)

- Achieving only 20 percent of a 33 percent usage goal

Opportunities

-  Golfing industry is 42 billion dollar business growing at 3 percent/year

-  The population of the market area is 777,000

-  Women are the fastest growing segment

-  Option to expand on 10-acre adjoining property

Threats

-  Four competitors within a 10 mile radius

-  Two competitors are established and successful full-service facilities

-  Customers are being turned off by postponed improvements

-  Lack of advertising

- Private Country Clubs

Alternative Solutions

1. Keep target market the same and add additional partners/investors for capital:  Dan and George can look to take on additional partners or investors to increase funding.  By doing this, they will be able to complete the facility like they originally vision.   A pro of this solution would be that Dan and George do not have to expand their dream and vision.  They will be able to accomplish their initial project.  This will allow Bear Creek to start out with an excellent reputation.  A con of this solution is that Dan and George will lose equity of their company if they look for additional investors to fund the project.

1. Expand target market:  Bear Creek can get away from the serious golfers only and target other golfers.  They can go after the frequent and occasional golfer.  They can also target the female gender of golfers as well.  However, by expanding the target market, it would take away from the vision of the “professional golfing center.”  A pro of this solution is that it would bring in additional customers that the company needs to survive and gain capital.  The con of this solution is that they would it would take away from their vision of the serious golfers only.  This solution has the potential to lose out on the customers that they currently have.  Bringing in other target markets will bring their image of “the professional golfing center” down.
2. Exercise option on additional land and expand as an entertainment facility:  Bear Creek can look to compete with its two biggest competitors, Greenbrier Golf Range and Golfarama Golfing Center.  The adjacent land could be used to add on entertainment features such as a mini-golf course, restaurant, bar, arcade, batting cages, etc. This strategy would prove to be costly and would require seeking significant funding which may be difficult to find.  Bear Creak would enjoy a great increase in market share and profits but would have to give up on their overall dream of serving serious golfers with a world-class facility.  The pro of this solution would be that it would bring in families looking for a night out and golfers who may be interested in learning the game.  The con of this solution is that it would require additional capital.  Being in a financial hole already, purchasing land and adding the additional amenities would put you even more in debt.

Recommended Solution

Keep target market the same and add additional partners/investors for capital:  This approach is the best solution for the owners to accomplish their original plan.  With the owner’s reputation in the industry and contacts in the golf community finding additional investors should not be difficult.  For Bear Creek to survive, they need immediate funding to stay the course of their plan.  The company needs to have a competitive advantage over its competition by improving its facilities and amenities to the first class level it originally intended on providing. These enhancements are necessary for Bear Creek to attract the serious golfers that they intended and also increase the demand for the experienced golf instruction that they can provide. By having a completed facility, this will increase the word of mouth they heavily rely on which will correlate to higher customer traffic and increased usage.  Starting off as an first class golf facility, rather than becoming one over time, will generate greater market share and profitability for Bear Creek Golf Range and also have Bear Creek have a much better image and reputation around the area.

Marketing Mix Impact

Product:  Bear Creek would have the newest improved facilities in the market.  The owners would be in-line with the vision and dream they started off with.  The company would be clearly viewed as looking to provide a first class golf facility specializing in professional instruction.

Price:  Pricing strategy would be consistent with current plan and relative to competition.  Price may increase depending on costs increasing, which may occur if additional capital were gained through financing.

Promotion:  The owners should start utilizing their golf contacts in creating awareness and attracting first time customers.  This should be done in conjunction with increased advertisement in local papers, airports, and hotels.

Place:  The new and improved location would serve the Dallas/Forth Worth area.  Depending on the amount of additional funding and capital, Bear Creek could utilize the adjacent 10-acres if needed for future expansion.