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From internal service to booming business: Plan for transformation of Sports and
Adventure Group of XYZ Ltd.
XYZ Limited, a large company of about 24,000 employees in a manufacturing sector, is a member of the
large and reputed business house in India. It has a small unit: “Sports and Adventure Group” (SAG), within
the human resource department. The unit is an offshoot of the attempt of the company to carry out
recreational activity of its own employees. In the 1970s, when the company was much smaller in size, SAG
was started with a small group of two executives and a staff team of about five members, to organize
picnics and annual events in the company. It gradually developed into a full‐fledged event management
team organizing trekking and mountaineering, river rafting, parasailing, for employees of different age
groups. In addition, it also started organizing regular training in boat and yatch racing, horse‐riding, rock
climbing, disaster management and likewise.
Through the 1980s, with the prosperity of XYZ, SAG also expanded. Its work was appreciated by the higher
management which considered such employee welfare activities as important to maintain the cordial
relationship with employees and develop a sense of pride among employees about their company. Soon
a mountaineering program became a mandatory part of the induction program of newly recruited trainee
officers. With increasing success, the management allocated more and more funds. In the late 1980s and
early 1990s the group offered their training and adventure services to local population at highly subsidized
rate. This extension was also considered an important step towards maintaining a good relationship with
the society in general.
The economic liberalization in the 1990s ushered in a new era in the Indian economic landscape. Opening
of imports and foreign direct investments escalated the competitions from foreign companies with
advanced technologies and management skills. Domestic companies were forced to relook into making
their operations more competitive by rationalizing their resources and focus on customers. XYZ went
through a phase of technological upgrading accompanied with retrenchment of less productive physical
and human resource. As a part of this restructuring, the budget allocation of SAG were cut drastically. The
unit’s operations shrunk. It carried out limited events for its employees and started collecting fees at
market rate for their service provided to external stakeholders. In the next two decades the unit size
reduced to four executives and a handful of staff members. Most of the activities were outsourced.
In a recent meeting one of the top executives of the marketing department observed that Adventure
Sports has become very popular in India over the years. The company had a long history of carrying out
such activities as a service. Why not transform this unit into a new business? Further deliberations threw
a few constraints like, (a) its experience has been for a captive set of customer and therefore has not
developed any skill in sales and marketing, (b) the customers were from the same city and so SAG has
little knowledge of the preferences of Indian and foreign tourists in general, the segments of customers,
the types of services which are popular/new and especially ignorant about the mindset of generation Y
and Z. The primary strength were its long experience in the operation and network of relationships with
local tourism agencies, guides, hotels and event operators.
The company also followed some strict moral and ethical standards. For example during any of the events
the participants were not allowed to take any intoxicants including tobacco and alcohol. Events were
rigorous – a typical routine day in a training camp started at 4.00 am in the morning. The executive team
was divided on this – some stood firm on this conditions as they aligned with the core values of XYZ, while
other opined that relaxing these standards is a pragmatic approach towards transforming an internal
service to the self‐sustaining business.
The CEO of the company, got interested in the possibility and asked a consultant to come out with a plan
for launching this business. He promised a total capital outlay of Rs.6 crores and wanted the new company
to break even latest by five years. Imagine your group is assigned with consultancy project. The report
should cover (but need not be limited to):
1) In depth study of the market for adventure sports – covering the opportunities and areas of concern
and uncertainty
2) A conceptual plan of the business which exploits some or all of the opportunities; avoids or addresses
the areas of concern; through leveraging the existing strengths and developing new strengths; and
making up or avoiding the weaknesses.
3) A phased/stage/long term plan approach to building the business and achieving breakeven, along with
a financial/cash flow plan.
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