Oakmont Country Club

1. What are the facts of the case: Club services; types of members; club ownership; structure of fees paid by members; types of price discrimination practiced if any and why;

* The clubhouse was renovated in 1995 and it is spread across a vast area of 42,000 square feet.

* It has an 18-hole, 6736-yard golf course.

* Elegant reception area, formal dining room, private meeting & banquet halls, member’s grill, casual dining room, terrace grill are a few amenities.

* It also has a state-of-the-art exercise room and locker rooms for men and women.

* It also has a competitive short course swimming pool with a toddler pool.

* Uniform Price Policy was followed earlier.

* With introduction of float price they have moved to price discrimination

2. What is (are) the key problem(s) addressed by the case?

* One of the key problems addressed by this case is that many members want to leave the club or forgo their membership privileges because of the high fixed membership fee.

* Imbalance between number of members wishing to leave the club and the number of eligible candidates wishing to enter the club is also another problem.

* Very high club fee and extracting the benefit from the membership fee paid is difficult.

* Long waiting list of eligible candidates wishing to enter Oakmont is another problem even though it has a few pros.

* The weakening national and, especially, Southern California economy shrank the number of individuals with the discretionary income necessary to belong to a country club.

* Table 2 illustrates that the transfer fee is an important revenue source, constituting roughly 14 and 19 per cent of the club’s operating revenues in 1996 and 1995, respectively.

3. What quantitative analysis can you perform to assess the seriousness of the problem(s)?

* From Table 3, we can see that the number of people willing to sell the membership has increased from 1989-1996.

* After the implementation...