Canyon Ranch

Canyon Ranch

Case Analysis Write Up

ITI 5073-Management of Information Systems

Case Overview

Canyon Ranch is a place to relax, rejuvenate, and explore your potential for a happier, healthier, more fulfilling life. (Applegate, Austin, & Deborah, p.158). As of 2004, Canyon Ranch was unquestionably the health and healing services industry leader in the luxury spa industry. Despite an inefficient IT strategy, the lack of potential entrants in a niche market, scale of economies, and a strong US economy were just a few reasons why the company continued to thrive since 1979. Canyon Ranch was facing competitive pressure and had to turn to its 20-person IT department to provide the information needed to better understand its customers, create loyalty, and cross-sell its offerings. (Applegate, Austin, & Deborah, p.156) In 2004, new competitors and the emergence of substitutes was now a real threat to the company’s current position. If an industry did not distance itself from substitutes through product performance, marketing, or other means, it will suffer in terms of profitability and often growth potential. (Applegate, Austin, & Deborah, p.135) If Canyon Ranch wishes to remain the industry leader in their respectively market they had to begin to utilize IT as a competitive force.

Case Stakeholders

The major stakeholders in the case were Mike Randle, Corporate IT Director, Michael Tompkins, Aassistant General Manager at Lenox, and Simon Marxer, Spa Director. The minor stakeholders were Canyon Ranch customers. Randle took on the new position of IT Director in 1996. While the IT function was only used for managing reservations and spa and wellness scheduling, IT was now being used strategically. This change was a result of the need for business intelligence, decision support functions, and expected growth, as well as some turnover in senior management. Tompkins wanted to bridge the gap to eliminate substitutes to implement health and healing without...