Leisurenet : a strategic analysis with reference to corporate governance as part of company strategy

Cilliers, Andre (2002-12)

Mini-study project (MBA)--University of Stellenbosch, 2002.

Thesis

ENGLISH ABSTRACT: The rise of the health and fitness club, Health and Racquet Club, in the late eighties was spectacular and it came as no surprise that the company was listed on the Johannesburg Stock Exchange in 1994. The two founder members, Peter Gardener and Robert Mitchell listed a company within a short period of time and were not afraid to change their strategy and expand their operations into other sectors of the leisure industry in 1995. In the late nineties, after restructuring the subsidiaries of the group, management started to look at foreign markets for expansion of the core business, namely the Health and Racquet Clubs. The group's foreign expansion accumulated a vast amount of debt on its balance sheet and in retrospect was seen as one of the main reasons for its collapse. The company was placed under liquidation in the end of the 2000 financial year. This study will evaluate the different strategies management followed, and will identify some key strategic mistakes that was made and that led to the downfall of a seemingly financially strong organization that offered above average returns to it's stakeholders. It also aims to show that a business strategy has to rely on strong corporate governance and that the last say always lies with the stakeholders within that company.

AFRIKAANSE OPSOMMING: Die gesondheids- en fiksheidsklub, die Health and Racquet Club, het in die laat tagtigerjare ongelooflike opgang gemaak, wat uiteindelik gelei het tot notering op die Johannesburgse Effektebeurs in 1994. Die twee stigterslede, Peter Gardener en Robert Mitchell, het die maatskappy binne 'n kort tyd genoteer, en het nie gehuiwer om hulle strategie te verander en in 1995 hulle bedrywighede uit te brei na ander sektore in die ontspanningsindustrie nie. In die laat negentigerjare, nadat die filiale van die groep geherstruktureer is, het die bestuur oorsese markte begin ondersoek met die oog op uitbreiding van die kernbesigheid, naamlik die Health and Racquet Clubs. Die groep se uitbreidingsaksie het groot skuld tot gevolg gehad - een van die hoofredes vir die ineenstorting. Die maatskappy is aan die einde van die 2000 finansiële jaar gelikwideer. Hierdie studie evalueer die verskillende strategieë wat die bestuur gevolg het, en identifiseer die belangrikste strategiese foute wat gemaak is en wat gelei het tot die ineenstorting van 'n maatskappy wat oënskynlik finansieel sterk was en bogemiddelde opbrengste aan die aandeelhouers besorg het. Die studie poog ook om aan te toon dat 'n besigheidstrategie gebaseer moet wees op stewige korporatiewe beheer en dat die laaste sê altyd by die aandeelhouers van die maatskappy lê.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/52917
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