Harvard Case - Forest Cabin: Building Resilience During the Pandemic
"Forest Cabin: Building Resilience During the Pandemic" Harvard business case study is written by Miao Cui, Jinfang Qian, Heng Wu, Wenbo Jiang, Lili Cui. It deals with the challenges in the field of Strategy. The case study is 10 page(s) long and it was first published on : Sep 25, 2022
At Fern Fort University, we recommend that Forest Cabin adopt a multi-pronged strategy to build resilience and achieve sustainable growth in the post-pandemic era. This strategy will focus on:
- Leveraging digital transformation to enhance customer engagement, optimize operations, and expand market reach.
- Strengthening its brand by focusing on its unique value proposition of providing a safe, secluded, and nature-immersive experience.
- Developing strategic partnerships to expand its reach and access new markets.
- Embracing sustainable practices to enhance its environmental credentials and attract environmentally conscious customers.
2. Background
Forest Cabin is a family-owned business operating a network of luxury cabins nestled in remote, scenic locations. The business thrived pre-pandemic, attracting a loyal customer base seeking unique, nature-based experiences. However, the pandemic disrupted travel patterns, forcing Forest Cabin to adapt and innovate to survive.
The case study highlights the challenges faced by the business, including:
- Declining occupancy rates due to travel restrictions and consumer anxieties.
- Increased competition from alternative accommodation options like Airbnb and VRBO.
- Operational challenges related to staffing and hygiene protocols.
The case study focuses on the efforts of the owners, John and Mary, to navigate these challenges and explore new opportunities for growth.
3. Analysis of the Case Study
SWOT Analysis:
Strengths:
- Unique value proposition: Offers a secluded and nature-immersive experience, catering to a specific customer segment.
- Strong brand reputation: Built on quality, service, and customer loyalty.
- Experienced management: John and Mary possess deep knowledge of the business and the industry.
- Flexibility and adaptability: Demonstrated ability to adapt to changing market conditions.
Weaknesses:
- Limited marketing reach: Reliant on word-of-mouth and traditional marketing channels.
- Dependence on seasonal demand: Revenue heavily impacted by fluctuations in tourism.
- Limited online presence: Lacks a robust online booking platform and digital marketing strategy.
- Operational inefficiencies: Manual processes and lack of data-driven decision making.
Opportunities:
- Growing demand for nature-based experiences: Increased interest in outdoor recreation and escapism.
- Digital transformation: Leverage technology to enhance customer engagement, streamline operations, and expand reach.
- Strategic partnerships: Collaborate with travel agencies, tour operators, and other businesses to access new markets.
- Sustainable tourism: Position itself as an environmentally conscious and sustainable destination.
Threats:
- Economic uncertainty: Potential impact on consumer spending and travel patterns.
- Increased competition: From established players and emerging online platforms.
- Environmental concerns: Potential impact of climate change on tourism destinations.
- Regulatory changes: Potential impact of new regulations on tourism and hospitality.
Porter's Five Forces:
- Threat of new entrants: Moderate, as entry barriers include land acquisition, construction costs, and regulatory approvals.
- Bargaining power of buyers: Moderate, as customers have a range of alternative accommodation options.
- Bargaining power of suppliers: Low, as Forest Cabin has a diversified supply chain.
- Threat of substitute products: Moderate, as alternative accommodation options are available.
- Rivalry among existing competitors: High, as the market is fragmented and competitive.
Value Chain Analysis:
Forest Cabin's value chain consists of:
- Inbound logistics: Procurement of materials and supplies.
- Operations: Construction, maintenance, and cleaning of cabins.
- Outbound logistics: Guest transportation and check-in/check-out processes.
- Marketing and sales: Promotion and booking management.
- Service: Guest experience and hospitality.
Business Model Innovation:
Forest Cabin can explore business model innovation by:
- Adopting a subscription model: Offer discounted rates for recurring stays or annual memberships.
- Developing niche packages: Offer customized experiences based on specific interests (e.g., hiking, fishing, photography).
- Partnering with local businesses: Offer bundled packages that include activities and experiences in the surrounding area.
Strategic Planning:
- Strategic intent: To become the leading provider of luxury, nature-immersive experiences in the region.
- Strategic objectives: Increase occupancy rates, expand market reach, enhance brand awareness, and improve operational efficiency.
- Strategic initiatives: Digital transformation, brand building, strategic partnerships, and sustainable practices.
4. Recommendations
1. Embrace Digital Transformation:
- Develop a user-friendly website and online booking platform: Enhance online presence and streamline booking process.
- Implement a customer relationship management (CRM) system: Track customer preferences, personalize communications, and improve customer service.
- Leverage social media marketing: Engage with potential customers, build brand awareness, and generate leads.
- Utilize data analytics: Track key performance indicators (KPIs), identify trends, and make data-driven decisions.
- Invest in digital marketing tools: Utilize search engine optimization (SEO), pay-per-click (PPC) advertising, and social media advertising to reach target audiences.
2. Strengthen Brand Identity:
- Develop a unique brand story: Emphasize the connection with nature, the sense of escape, and the personalized experience.
- Create high-quality content: Showcase the beauty of the locations, the amenities offered, and the guest experiences.
- Build a strong online reputation: Encourage guest reviews and testimonials on relevant platforms.
- Partner with influencers: Collaborate with travel bloggers and social media influencers to reach a wider audience.
3. Forge Strategic Partnerships:
- Collaborate with travel agencies and tour operators: Offer exclusive packages and promotions to reach new customer segments.
- Partner with local businesses: Offer bundled packages that include activities, dining, and other experiences.
- Explore joint ventures with complementary businesses: Expand into new markets or offer additional services.
4. Embrace Sustainable Practices:
- Implement eco-friendly practices: Reduce energy consumption, minimize waste, and utilize renewable energy sources.
- Partner with environmental organizations: Support local conservation efforts and promote sustainable tourism.
- Communicate sustainability initiatives: Highlight environmental efforts to attract environmentally conscious customers.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of Forest Cabin's strengths, weaknesses, opportunities, and threats. They align with the company's core competencies, cater to the needs of its target customers, and address the competitive landscape.
The recommendations are also supported by quantitative measures, such as:
- Increased occupancy rates: Digital marketing and strategic partnerships will drive increased bookings.
- Improved customer engagement: Digital transformation will enhance customer experience and loyalty.
- Enhanced brand awareness: Targeted marketing and social media campaigns will increase brand visibility.
- Reduced operational costs: Streamlined processes and data-driven decision making will improve efficiency.
- Increased revenue: New revenue streams from strategic partnerships and sustainable practices.
6. Conclusion
By embracing digital transformation, strengthening its brand, forging strategic partnerships, and embracing sustainable practices, Forest Cabin can build resilience, achieve sustainable growth, and thrive in the post-pandemic era. This strategy will enable the business to capitalize on the growing demand for nature-based experiences, enhance its competitive advantage, and solidify its position as a leading provider of luxury, nature-immersive experiences.
7. Discussion
Alternatives:
- Focus solely on cost leadership: This could involve reducing prices to attract price-sensitive customers, but it risks diluting the brand and compromising quality.
- Expand into new markets aggressively: This could involve acquiring existing businesses or building new properties, but it carries significant financial risks and may not be feasible in the current economic climate.
Risks and Key Assumptions:
- Economic uncertainty: The recommendations assume a gradual recovery in the tourism industry.
- Technological advancements: The recommendations rely on the continued evolution of digital technologies and their impact on the travel industry.
- Competitive landscape: The recommendations assume that Forest Cabin can effectively compete with existing and emerging players.
- Consumer preferences: The recommendations assume that consumers will continue to value nature-based experiences and sustainable practices.
Options Grid:
| Option | Advantages | Disadvantages | Risks |
|---|---|---|---|
| Digital Transformation | Increased reach, improved efficiency, enhanced customer engagement | Requires significant investment, potential for technical challenges | Economic uncertainty, technological disruption |
| Brand Building | Enhanced brand awareness, increased customer loyalty | Requires consistent effort and investment | Competitive landscape, changing consumer preferences |
| Strategic Partnerships | Access to new markets, expanded offerings | Requires careful selection of partners, potential for conflicts | Partner performance, market volatility |
| Sustainable Practices | Enhanced environmental credentials, attract environmentally conscious customers | Requires investment in infrastructure and processes | Regulatory changes, consumer perception |
8. Next Steps
- Develop a detailed implementation plan: Outline specific actions, timelines, and responsible parties.
- Secure funding: Allocate resources for digital transformation, marketing initiatives, and sustainable investments.
- Build a strong team: Recruit and train staff with the necessary skills and expertise.
- Monitor progress and adjust strategy: Track key performance indicators (KPIs) and make necessary adjustments to ensure success.
By taking these steps, Forest Cabin can confidently navigate the challenges of the post-pandemic era and position itself for long-term success.
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Case Description
Shanghai Forest Cabin Biotechnology Co., Ltd. (Forest Cabin) was a skin care product manufacturer and retailer that had focused on developing offline stores. At the beginning of 2020, however, the onset of the COVID-19 pandemic stagnated offline sales activities. Half of Forest Cabin's offline stores closed at that time, and the existing stores had few customers, slowing the offline sales business. Forest Cabin rapidly initiated live streaming sales based on the digital foundation the company had built in its earlier stages. In this way, the company successfully responded to pandemic-related challenges and gained user traffic to realize revenue growth. However, with COVID-19 slowing down, people were resuming offline activities. Forest Cabin's offline stores had provided a competitive advantage to the company. But the company had been able to leverage online live streaming, bringing explosive growth and enabling the company to survive a crisis. Should Forest Cabin focus on online development or offline development going forward?
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