Quentin GARNIER, Simon PHILIPPON, Ugo SCHURIG

Cultural turnaround at Club Med ?

By Frdric Frry

Analyse Club Meds Culture before 2000.

Club Meds culture, since its creation in 1950, is based on how to see the world of Gilbert
Trigano and Gerard Blitz. In fact, they wanted to "change people's lives". So they defined
some values for the Club Med: Resting, stop thinking about the stressful life of society,
cutting the "world".
Thus, they created a kind of relaxing atmosphere, forcing customers to be open minded, but
not to deny the relationship (on arrival at the restaurant, there were tables of 8 people in
order to be forced to meet new people). The organizers were nicknamed the GOs and
customers, the GMs. The GOs maintained that kind of proximity, these connections between
each person in the Club Med. they were guaranteeing effective compliance rituals Club Med
(the songs on arrival, the different activities, good relationship, and more ...).
Originally, there were very few facilities in the Club Med, the camping spirit was dominant
(shared bathrooms, no electricity). They even introduced the use of a currency (plastic pearl
necklaces) instead of money. Entry to Club Med was affordable for all.
All these rules, symbols, rituals and myths that have shaped the culture of the Club Med
until the 2000s. In the collective imagination, at the Club Med, everything was possible,
everything was achievable, one of its creators called this concept "antidote against
civilisation" they wanted to influence the present and future lives, to a place peace so that
people can relax and smile again.

Explain the reasons for Club Meds success between the 1950s and
the 1990s.
Reasons for the success of Club Med can be explained by several factors :
Indeed, first of all, and Blitz Trigano are precursors. They invented the concept of "vacation
club" and therefore are at the beginning only on the market. This monopoly partly explains
the reasons for success. The nonconformist side has also attracted many people in the
1950s.
We must not forget that at that time the world saw a post-war period, with a fall of
"dictatorships", like dominoes. People want to let go more and embrace the world. This is
where the culture of the Club Med pays off and helps to increase more and more the
reputation of the company.
Trigano & Blitz have managed to create an image that is anchored in the collective
imagination. (nonconformist, freedom, cut off from the world, living from day to day).

How do you explain Club Meds difficulties in the early 1990s ?

In the early 1990s, Club Med has experienced serious difficulties and suffered heavy financial
losses. These difficulties can be explained by external and internal factors.
First, many other tour operators have entered the market and make a lot of competition at
the Club Med. In 1991, Operation Desert Storm has totally impacted the tourism market by
weakening it seriously.
That same year, within the company, this is one of its creators, Blitz, who dies. He was one of
the main guarantors of Club Meds culture. Two years later, the other creator, Gilbert
Trigano, resigns from his position as CEO and his son, Serge, takes his place. In two years
time, Club Med has lost its two precursors.
At the same time, the concept of the company is being undermined. Community life as
conceived Blitz and Trigano is no longer in line with the social changes. The promiscuous
became innaceptables for families, villages were increasingly seen as ghettos, with no
contact with local cultures. Another important point to the arrival of his problems is the
excessive familiarity between GO and GM, which has pushed some customers, and the
obligation to participate in all activities, which was seen as indoctrination.

Why did Bourguignons plan fail ? Do you think that Giscard

dEstaings plan will be more successful ?
In 1997, Philippe Bourguignon becomes the new CEO of Club Med and replaces Serge
Trigano, who had failed to rectify the bad situation of the 1990s. Bourguignon's ambition
was to "transform a vacation village company into a service company."
So he turned villages into a services company, based on a growth strategy, internal (villages
at low cost for young people) and external (acquisition of Tour operators and gyms).
Moreover, he wanted to reduce costs by replacing employees by the local workforce and
also implemented a real infrastructure. The early years of taking office, the results were
positive (increasing profits each year until 2001), his strategy seemed viable. But external
factors have upset his plan, such as the unfortunate events of 9/11 in 2001 or even the 2004
tsunami in Asia, which created a catastrophic collapse of the tourism market.
Because of this, its volume strategy was not viable at all, there were many fewer consumers
with purchasing power, the clubs were less satisfied, the priority for the people was no
longer all holidays and tourism, and strategy Bourguignon has been directly impacted.

Strategy Giscard d'Estaing is likely to be more effective because he chose to reposition and
rebrand at the Club Med.
Repositioning wants upscale. So it closes 50 villages, most cheap, renovate existing
infrastructure, opens Most Luxurious facilities and services increases significantly. And
therefore, it also increases the cost.
At a time when the economic crisis is dominant in many countries, where people with a large
enough purchasing power are the only afford to go on holiday, a high-end repositioning
seems to be a viable solution. This plan is an important snub to the culture of Club Med
introduced by Blitz & Trigano.