CASE ANALYSIS: BIG SKY OF MONTANA, INC.
The purpose of this case analysis of Big Sky of Montana, Inc. is to develop recommendations for pricing policies for the next winter season. The results of the case analysis are in five sections, as follows: (1) problem/decision statement; (2) alternative strategies; (3) critical issue identification; (4) analysis of alternative strategies; and (5) recommended pricing policies.
The primary problem faced by the Big Sky resort is that it is operating in the red. During the 1977 1978 season, the resort posted a net loss (before taxes) of $66,981 (refer to Table 1, which may be found on the following page.
The principal problem underlying the operating loss which is faced by the Big Sky resort is that, while it defines itself as a destination resort, it has not pursued strategies most likely to exploit its mission of providing high quality, high value complete ski resort facilities and services for both individual and group destination skiers. Rather, the Big Sky resort management has placed too great an emphasis in its
Operating Performance: 1977 1978 Season===============================================================
Profit Center Revenues Operating Before Tax ($) Ratio (%) Profit(Loss) Profit(Loss) ($)
Skiing 1,340,795 11.9 159,555
Lodging 1,106,156 7.1 78,370
Food/Beverage 905,037 (25.2) (304,906)
Total 3,351,998 ( 66,981) ========= =========
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