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    Four Seasons Leisure: Exam Practice Question

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    Lissa Montiel
    Four Seasons Leisure is considering expanding into new luxury resort destinations like Dubai to diversify away from its current focus on the Caribbean. It is evaluating three options: 1) Opening a new resort in Dubai with projected profits of $400 million, $200 million, or -$100 million depending on fast growth, normal growth, or recession; 2) Opening in Thailand with projected profits of $500 million, $300 million, or -$50 million; or 3) Upgrading existing Caribbean resorts with projected profits of $150 million, $120 million, or $100 million. A decision tree analysis should be conducted to determine the best financial option considering 20% chance of fast growth, 50% chance of normal growth,

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    Four Seasons Leisure: Exam Practice Question

    Uploaded by

    Lissa Montiel
    287 views1 page
    Four Seasons Leisure is considering expanding into new luxury resort destinations like Dubai to diversify away from its current focus on the Caribbean. It is evaluating three options: 1) Opening a new resort in Dubai with projected profits of $400 million, $200 million, or -$100 million depending on fast growth, normal growth, or recession; 2) Opening in Thailand with projected profits of $500 million, $300 million, or -$50 million; or 3) Upgrading existing Caribbean resorts with projected profits of $150 million, $120 million, or $100 million. A decision tree analysis should be conducted to determine the best financial option considering 20% chance of fast growth, 50% chance of normal growth,

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    Business-75.pdf

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    Four Seasons Leisure is considering expanding into new luxury resort destinations like Dubai to diversify away from its current focus on the Caribbean. It is evaluating three options: 1) Opening a new resort in Dubai with projected profits of $400 million, $200 million, or -$100 million depending on fast growth, normal growth, or recession; 2) Opening in Thailand with projected profits of $500 million, $300 million, or -$50 million; or 3) Upgrading existing Caribbean resorts with projected profits of $150 million, $120 million, or $100 million. A decision tree analysis should be conducted to determine the best financial option considering 20% chance of fast growth, 50% chance of normal growth,

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    287 views1 page

    Four Seasons Leisure: Exam Practice Question

    Uploaded by

    Lissa Montiel
    Four Seasons Leisure is considering expanding into new luxury resort destinations like Dubai to diversify away from its current focus on the Caribbean. It is evaluating three options: 1) Opening a new resort in Dubai with projected profits of $400 million, $200 million, or -$100 million depending on fast growth, normal growth, or recession; 2) Opening in Thailand with projected profits of $500 million, $300 million, or -$50 million; or 3) Upgrading existing Caribbean resorts with projected profits of $150 million, $120 million, or $100 million. A decision tree analysis should be conducted to determine the best financial option considering 20% chance of fast growth, 50% chance of normal growth,

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    1 BUSINESS ORGANISATION AND ENVIRONMENT

    EXAM PRACTICE QUESTION


    Read the case study below and then answer the questions
    that follow.

    25 marks, 45 minutes
    FOUR SEASONS LEISURE 1 Produce a SWOT analysis
    for Four Seasons Leisure’s
    After a period of consolidation in 2008––9, when the Four Seasons leisure
    current position. [8]
    group saw a big contraction in demand due to the world economic slow-
    down, the company is looking to increase its share of the upmarket, H 2 a Construct a fully labelled
    all-inclusive holiday resort market. Thirty years of providing holidays decision tree showing
    to high-income European and North American consumers make Four Four Seasons’ options. [5]
    Seasons Leisure one of the most prestigious brands in the Caribbean. b Calculate the expected
    Despite the recession, the company performed fairly well in 2009. values for each option. [6]
    Prots fell 5%, but this compared favourably with an industry average c On financial grounds
    prot decline of 9%. Four Seasons has attributed the group’’s relative state which option Four
    success to effective management from a team of people that have Seasons should choose. [2]
    considerable knowledge and expertise in the market. d Analyse one weakness
    The management team is not complacent, however. The chief exec- for Four Seasons of using
    utive ofcer, Austin Walsh, thinks the company’’s concentration in the decision tress as a basis
    Caribbean is a weakness because of competition from new holiday for making this business
    destinations such as Dubai. Austin believes the company needs to decisions. [4]
    expand into some of the new destinations that its customers are inter-
    ested in visiting. The directors are considering three options for 2013:

    Projected profits based on


    economic conditions ($m)
    Initial Fast Normal
    cost ($m) growth growth Recession
    Option 1 Open new 120 400 200 −100
    resort in Dubai
    Option 2 Open new 150 500 300 −50
    resort in
    Thailand
    Option3 Upgrade 80 150 120 100
    existing resorts
    in Caribbean

    The consultancy that produced the projected costs and prot data
    believe that there is a 20% chance of fast economic growth, 50% chance
    of normal economic growth and a 30% chance of a recession.

    67

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