Ski montst brunoanglais - strategy

Ski Mont Saint-Bruno
Copyright © 2001 Étienne Lapalme, Stéphanie Bell, and Martine Vézina
Case translated by Andrew Papadopoulos
2
Centre de cas
[Numéro du cas] Réservé au Centre de cas
Case originally produced by Étienne LAPALME, Stéphanie BELL, and Martine VÉZINA
Michel Couture, general manager of Ski Mont Saint-Bruno, is preparing to meet his father, Serge,
owner, to review the season that just ended. The past year saw major change with Serge
delegating the executive roles to his two sons, Michel and Steve. Under the father’s leadership,
the South Shore ski hill not only staved off bankruptcy but had become a leader in its sector in
Quebec. The operation, at peak, employs 700 persons of which 400 are ski monitors and
generates 40 year-round jobs.
At the beginning of the season when his sons took over, the operation was on solid footing.
Revenues were approaching $5 million and operations profitable, an exception in the Quebec
industry. There was very little debt compared with the competition. Financial risk and costs were
at a minimum, contributing to the operations superior profitability versus the competition.
The year of transition started off well. Growth was trending up as the winter provided exceptional
skiing conditions with a constant supply of fresh snow and mild temperatures. While the
objectives that Michel Couture laid out at the beginning of the season were being met, he knew
that the growth of the past few years would be difficult to maintain in the future without any new
ideas.
Michel and Serge discussed the season’s results and other avenues for growth:
Michel: We reached our objective of 250,000 day-skiers this year, even though we were
aiming for that in 2002-03. We need to think of other ways to grow, there is really not much
room left for expansion on the hill.
Serge: This pretty much represents the potential that I had estimated and hoped to develop.
You and your brother have injected a new dynamism to the operations and have surpassed
my expectations. It’s time for you to set new goals!

3
Michel: I have thought of a couple of options. Serge and Tony have some ideas to present,
including a golf school to serve the South Shore of Montreal. It’s not that related to what we
do now but it’s worth thinking about. We are well known for our ski instruction. I’ll meet
with them when I get back from vacation to evaluate all our options.
Serge: You have my complete support. Don’t forget that what you have built with your sweat
you may lose because of unrealistic ambitions. See what’s happening to the news industry—
Pierre Péladeau is likely turning in his grave.
A Changing Industry
The past five years have seen a strong growth in outdoor sports as new winter activities have
developed and people are more physically active. The ski industry after having lost some ground
has seen growth over those years. Times were especially tough in the early 1990’s when the
recession contributed to an annual decline of 5-7%. Activity dropped from 8.5 million day-skiers
in 1987-88 to 6.4 million in 1993-94 and 5.6 million in 1999-2000 (see appendix 1).
Ski operators were and are still in a financially precarious situation—costs have increased while
revenues have fallen (see appendix 2 and 3). Investments in infrastructure and snowmaking
equipment are required to attract and retain ever more demanding customers. Moreover, the high
turnover of personnel has not helped matters. These investments are difficult to undertake when
70% of the season is concentrated into the months of January and February, including spring
break (see appendix 4). As ski operators need to make investments into renewing their assets, the
government is cutting back aide to this sector. Profitability is elusive as operators are fighting
over fewer skiers and winters are unpredictable.
Quebec ski sector has faced numerous bankruptcies and a wave of consolidation as operators are
selling to foreign interests. The number of ski operations fell from 104 in the 1980’s to 86 in
2001, reflecting a rationalisation in the industry with many predicting the number to fall to below
80 in a few years. After many difficult years, well-known operators Ski Bromont and Mont
Orford went bankrupt. At the same time, in the St. Sauveur Valley, the activities of Mont Staint-
Sauveur, Mont Avila, Mont Gabriel, Mont Olympia and Mont Morin Heights were consolidated.
Intrawest, a Canadian west coast company, acquired Mont Tremblant.
Only 40 minutes from Montreal, the St. Sauveur Valley has an important presence in the lower
Laurentians with 93 runs spread over 5 mountains with each operation offering something
different. Mont Saint-Sauveur is known for its night skiing and for its 180 ski days record. Mont
Morin Heights is nestled in nature with its cross-country and downhill skiing as well as its snow
shoeing trails. Mont Olympia is known for its ski instruction making it a family destination. Mont
Gabriel is focused on “extreme” sports catering to skiers looking for some adventure. With multi-
sport facilities, Mont Avila offers snow rafting, tubing, skating, and other activities on top of its
downhill facilities.
The St. Sauveur Valley has become a tourist destination with many real estate developments.
There is a resort area for vacationers, fine dining, and boutiques to complement the winter
activities. With large investments in buildings and infrastructure, operators looked to increase use

4
over the summer months leading to a water park at St. Sauveur and golf and tennis schools at
Mont Avila.
After being acquired by Intrawest in 1992, Mont Tremblant has become a premiere resort
destination on the North American east coast. Located 90 minutes from Montreal, it offers 92
runs on a vertical elevation of 915 meters with 650 meters for skiing. It is the highest mountain
for skiing in Quebec and offers activities year-round. Mont Tremblant is known internationally
thanks to a billion dollars of investments by Intrawest. In the winter, downhill skiing, snow
mobile rentals, all terrain vehicles, dogsledding, ice fishing, tobogganing, and snowshoeing are
some of the activities. In spring and fall, cycling, fishing and golfing are the main activities.
Camping and water activities on Tremblant Lake attract crowds in the summer. This
unprecedented investment has benefited the region and its residents.
The Eastern Townships is also a region popular with skiers. Ski Bromont after going through a
bankruptcy found itself with new owners. Located 45 minutes from Montreal, Ski Bromont offers
25 lit runs. In the summer, its water park, walking trails, chair lifts and 100 kilometres of
mountain bike paths accessible with a mechanical lift attract a variety of clients. Unfortunately,
over the years, a number of other operators in the Townships pursued the same diversification
strategy leading them to bankruptcy and to bailouts by new investors who are now trying to
redefine their activity scope.
A New Owner for Ski Mont Saint-Bruno
Located in the heart of Montreal’s South Shore on land previously owned by the St. Gabriel
brotherhood, Mont Saint-Bruno is only 15 minutes from Montreal and a pool of 1.5 million
people (see appendix 6). In 1984, the Quebec government bought the land and converted it into a
conservation area. The ski operations are carried out on the conservation area. At the time, Serge
Couture negotiated a 50-year lease at a favourable rate. Numerous nature lovers and hikers
frequent the hill during the summer and autumn seasons. The government requires that the ski
operators limit their activities to the winter season while the government develops activities for
the balance of the year.
Until 1988, Ski Mont Saint-Bruno, then owned by Marcel Dulude, was a marginal player in the
ski business. Its obsolete equipment, lack of natural beauty, and no instruction turned off skiers.
With an average temperature 4 degrees warmer than the Townships or the Laurentians, Mont
Saint-Bruno had only 40 ski days available per year, making profits difficult to come by.
Moreover, given its seasonal nature, it was difficult to retain its best employees, adding an
additional element of instability to the operations. The teenagers in the region called the ski hill
“Mont Garnotte” («Gravel Hill»).
Moreover, other regions invested in tourism with the ski operations at the centre of the promotion
while Ski Mont Saint-Bruno did not benefit from any such support. Being located so close to the
city, it had to compete with other sport and cultural alternatives available for people to spend
money on.

5
Despite all these shortcomings, Serge Couture acquired the operations for next to nothing in
1988. Prior to that, he had spent most of the 1980’s developing Mont Saint-Sauveur. With his
partners, he turned St. Sauveur into an all year round vacation destination with modern outdoor
installations. As well, a real estate boom contributed to the dynamism of the region. He saw an
untapped opportunity to develop Ski Mont Saint-Bruno.
A Change of Vision
From the first day on the job, Serge Couture wanted to turn the ski hill into a winter and family
destination by focusing its activities on teaching, skiing, snowboarding, and other downhill
sports. With the proximity to Montreal (the nearest competitor was Ski Bromont 80 kilometres
away), Mont Saint-Bruno was an ideal location to introduce families to the joys of skiing and
other outdoor sports. His goal was to turn this urban ski hill into the best operation in Quebec.
He turned to his family, to people he could trust, to help him with achieving the goal. For him, it
was the first step into turning the ski hill into a family destination. His wife took over marketing
and custom services. His sons joined the operations at sixteen. With no college or university
education, they learn the business by rotating through various positions in the organization. The
eldest son Steve, a natural handyman, heads the technical operations at the ski hill. The younger
Michel inherited his father’s entrepreneurial spirit and “people skills,” having great relations with
staff and clients. Since taking over the operation, he has taken many courses to sharpen his
leadership skills.
The only member of the executive to not come from the family is Tony Dinelli, the head of the
ski school since 1989. He has the highest level of accreditation from PESA (downhill ski
instructor’s programme1
), an association of ski monitors that also trains snowboarding and golf
instructors. The management of the boutique and snack bar (the bar was done away with in 1994)
are subcontracted to Nature-Action. Appendix 7 shows an organizational chart of Ski Mont Saint-
Bruno.
All the members of the organization know each other well and communicate openly with one
another. The majority of the employees are in their early twenties and quickly integrate into the
work environment. The family ambiance encourages a better understanding of the target
customer to the point that recruiting and training of seasonal staff is centred on the notion of
family. Serge Couture makes it a point to be available to staff and customers: “My clients are my
guests. Our low number of complaints reflects our commitment to catering to the family and to
listening to their daily comments in improving our facility.”
New systems were introduced to reduce some of the common irritants found at larger ski
operations. For example, an information technology system was developed to integrate the ski
school, boutique, and ski instructors. When someone signs up for a lesson, their equipment and
the instructor are waiting for them at the boutique—no paper for the staff, no unnecessary waiting
for the client.
1
Programme d’enseignement du ski alpin

6
The site was organized to encourage teamwork among different departments to accelerate
customer service. Ticketing and customer service are on the same floor, allowing for employees
to move back and forth during rush hours.
Snowmaking
Snow is critical to a ski hill—a few centimetres more or less can make the difference between a
record season and skirting with bankruptcy. Serge Couture knew that Mont Saint-Bruno had a
challenge with snowfall in the area when he acquired the facility. However, he had mastered
snowmaking, developed in the 70’s and 80’s, and had no concerns about overcoming the areas
lower snowfall compared to other ski centres in the region. However, the water required to make
the snow came from the conservation area that was under the control of the government and local
citizen groups. The arm wrestling over water access has been going on for years. The two
previous owners had thrown in the towel in the struggle. However, without sufficient snow it
would be difficult to turn a profit.
Serge Couture overcame the problem: the quarry next door would do the job. He transformed it
into an artificial lake. Despite some technical problems with system installation, the project was
delivered on time. With this, the ski facility had the necessary supply for its snow cannons.
Results were immediate. Despite a poor first season, operations were now on track towards
profitability. Volume grew from 17,000 day-skiers, to 60,000 and finally to 250,000 in 2000-
2001 (see appendix 8). Days available for skiing grew from 40 per season to 100. In 1991, the
Association of Ski Centres of Quebec awarded Mont Saint-Bruno first prize for the quality of its
ski runs.
His expertise in snowmaking made him a regular contributor to films and special effects sets that
were filming in the Montreal area. This new business opportunity was developed by chance when
the producers of the film Agaguk used the ski centre’s expertise in snowmaking for a number of
scenes. The ski centre’s expertise is called upon when nature does not wish to cooperate when a
winter feeling is required. This side business became large enough to create a separate division
that caters to the ice sculpting competition in Montreal, snow for tobogganing runs, and even a
contract for a Celine Dion party. Serge Couture: “I was not very excited about this and even less
about going after this type of clientele. It was my son Michel that loved to party that made the
first contact. For my part, this just brings a lack of focus to the operation. Snowmaking on
demand is a business on its own.”
Changing the Image of Skiing
In an effort to attract families, the image that skiing was a luxury activity had to be changed. In
1990-1991 a new pricing plan was put into effect that was among the most competitive in the
industry. The strategy was simple yet revolutionary, time skied is time paid (see appendix 9). For
an industry where innovation is only a recent phenomenon, it allowed skiers to only pay for the
time they used. This was a great saving for the skier who could make a brief stop on the hill
before or after work but also profitable for the facility where the return per ticket was higher than

7
the industry average. This policy also allowed for a more even flow of volume on the runs,
cutting waiting times at the bottom of the hill without additional capital investments. With the
increased volume thanks to this new pricing policy, Mont Saint-Bruno was one of only two
profitable centres in Quebec while the other 70 had significant losses.
Creating a Ski Nursery
Serge Couture understood that in the long term a new client base was required for the future. The
young in the region that were now enjoying the facilities at Mont Saint-Bruno could easily pick
up and start frequenting the larger more challenging hills as they go older. Tony Dinelli brought
an additional perspective to the challenge: “There is a reality that many ski operators are not well
tuned into: the majority of skiers are beginners or intermediates. Many operators themselves
experts construct the experience around their own skiing preferences and not around their
clients.”
The effort was made to focus the operations of the Mont Saint-Bruno around teaching and the
novice skier; instruction was preferred to performance. A first in Quebec, the centre did not
renew its accreditation with the ski instructors association in 1992-1993 instead favouring to join
PESA. Born in Europe, this organization created ski and golf teaching program which
emphasized developing instructors and pedagogical skills.
The snowboarding boom offered an opportunity to diversify courses into not only snowboarding
but also other downhill sports as well. Instructors could specialize in snowboarding, telemark,
snowblade, and skiing for the physically challenged. The ski school is so successful that there are
more than 400 instructors today, more than British Columbia’s Whistler; as many lessons are
taught as in other large facilities in western Canada where the season is longer.
The school also developed a programme destined to the 12-16 year old group. With this
programme, the student gets six lessons at Mont Saint-Bruno and four others at Mont Orford in
the Townships or Mont Sainte Anne in the Quebec City area. Such a program addressed
effectively competition from itinerant ski clubs. By 2001, 40% of the Ski Mont Saint-Bruno’s
revenues came from the ski school.
Despite the success of the ski school, the operators were aware that once the student reaches a
certain technical level, their preferences are to turn to more challenging runs. It is well known
that many weekday skiers also have a weekend pass at other ski centres. These skiers are coveted
by the larger centres that are trying to re-establish profitability. Mont Saint-Bruno is known as a
development centre.
Faced with this reality and as president of the association that regroups Quebec ski centres in
1994-1995, Serge Couture proposes an alliance among seven centres. This alliance would allow
season pass holders of various centres limited free passes to other member centres and rebates at
other facilities. Serge Couture explains: “From our point of view, this policy allows us to retain
our customers but also attract a new client base that is likely to appreciate the accessibility of
Mont Saint-Bruno and the diversity offered by other partner centres. For us, like other centres,

8
this policy has allowed all of us to increase our season pass holder base. For us, group ski
lessons, often full for the season by early December, allow us to generate 20% of our revenue
before the start of the season.”
Marketing
Despite what competitors believe and the fact that the organization has a marketing department,
Ski Mont Saint-Bruno only allocates a small sum for advertising. Michel Couture sees it like this:
“It’s our success and our renaissance of sorts that has attracted media attention to our facility. Our
proximity to Montreal and TV stations allows for a steady, constant presence of media at out
centre when there is a story to do on skiing. It should be no surprise that we welcome them with
open arms. I make it a point to welcome them myself.”
Advertising is essentially a few billboards on the South Shore and a word of mouth campaign by
existing clients. For many young people, Mont Saint-Bruno is a cool place to snowboard.
Throughout the season, many events are geared especially for this group in mind. There is now a
website where activities and rates are publicized. There is discussion about offering the
possibility to purchase lessons and lift passes on line.
Ski Equipment Maintenance
When in the 1990’s a number of ski operators (Mont Orford, Mont Sutton, Ski Bromont and
number of other small centres) filed for bankruptcy protection, the Couture family purchased
some of their assets in hope of developing activities to minimize the seasonality for the business
and the workforce. Qualified employees were difficult to find and the industry, more generally,
could not offer competitive salaries to those found in the city. Thus competition for competent
mechanics, for example, was heavy. In an effort to attract and retain qualified mechanics, it
hoped that this bargain equipment purchase would allow them to offer maintenance to other ski
operators and municipal facilities like tobogganing runs. With a basic activity such as
maintenance, full-time jobs were made available to about 20 employees. The company now
offers equipment rentals, sales, and distribution, as well as training for equipment operators and
mechanics at different ski centres.
Having won numerous awards for its maintenance and snow grooming of its runs, Ski Mont
Saint-Bruno, along with Mont Tremblant, has the best expertise in Quebec. For Ski Mont-
Bruno’s management, having its own employees developing, running and maintaining the
equipment on a daily basis was a key advantage. In other ski centres, this activity was
subcontracted out.
Taking Centre Stage
At the end of his first year as head of the firm, Michel called a meeting with his two lieutenants,
his brother Steve, responsible for development, and Tony Dinelli, ski school director, to discuss
options available for growth.

9
Steve: Our mechanics are specialist on the BR400. Requests are pouring in from everywhere. In my
opinion, if we develop a complete sub-contracting division and go after more clients, we can create a
very profitable business for ourselves.
Michel is not against the idea as he too knows that sub-contracting is not being exploited to its
fullest. Small ski facilities and other outdoor centres do not have the means of purchasing such
equipment that is nevertheless essential to their success. The distance between Mont Saint-Bruno
and other centres does pose a problem for Michel.
Michel: Moving the equipment around from one centre to the next is expensive. We may need to
develop a network of local operators for each market.
Tony: The strength of our business is our teaching. Even our competitors know this; they hire our
staff to teach their staff during the summer. The problem is that every year we lose good instructors.
If we also taught golf in the summer, we would be able to employ them year round. I think there is
good potential on the South Shore to develop a centre for golf instruction. People have an interest in
the sport. The South Shore has 14 golf courses, two of which are here in Saint-Bruno.
In the past, the Couture family had taken steps to buy the lot located in front of the ski centre and
not part of the conservation area to develop other activities there. The owner, knowing all to well
the value of his land had an asking price of $2 million dollars. According to Michel, an
investment of that size would be very risky. Partners would probably be needed for such a
venture.
Michel: Governments have always refused to invest money in the ski facility as they see it as a lost
cause in a region that has little tourist interest and has never really known much success. Dad could
not even convince banks and other financiers that evaluated the facility too risky to invest in when we
were acquiring the business and thereafter. We assumed the $2.2 million investment to develop five
new runs, a quadruple chair lift, and a new building. I am not convinced that we are seen as less risky
today, despite our success.
Steve: Summer is already a busy period for management. We should keep our winter focus and
pursue activities that we understand. There are still opportunities to invest in other ski operators or
even to acquire some. With the experience that we have developed over the past few years, we can
turn around any ski facility! After all, it is what we know best.
Michel: It would be more difficult to be as successful elsewhere given the distance and cultural
difference among centres. However, if we invest in more snow making equipment, we may be able to
extend the season by another 30 days. We can then stretch out teaching over a longer period of time.
Tony, the ski school director, believed that this would allow for a more efficient use of his staff.
He also felt that more had to be done to attract skiers to the hill even though there was no snow
accumulation in the city.

10
Tony: We should think of increasing our client base to retired persons who are getting younger,
wealthier, and looking for things to do.
Michel: By all accounts there are lots of things we can do but we need a criteria to evaluate all these
possibilities. Steve, I would like you to make a list of all our actual and potential maintenance clients.
Tony, I want you to get me hard numbers on the turnover of our staff and the distribution of lessons
throughout the season.
The three men left the conference room with no decision having been taken as to the centre’s
future. A decision must be taken as to further investments in peripheral activities. With the
growth of the operation over the years, Michel began to question the family, even cottage
industry, approach to management. Roles and responsibility were never clearly set out among the
family members. Was it time to start putting non-family into management positions? Regardless
of the issues at hand, was it not perhaps time to fulfill Michel’s dream of erecting a second hill on
the land in front of the current facility from the fill of the adjacent quarry?
2005-11-14

11
Appendix 1
Evolution of Demand for Downhill Skiing in Québec
1993-2000
4800
5000
5200
5400
5600
5800
6000
6200
6400
6600
Total number of day-skiers
Volume 6448 6394 6090 5783 5892 5477 5695 5668
1993 1994 1995 1996 1997 1998 1999 2000

12
Appendix 2
Balance Sheet of a Typical Large Ski Centre in Québec
2000
($ 000s)
Assets
Short term 276 8%
Fixed assets 5484
Accumulated depreciation -2329
Net fixed assets 3155 87%
Other assets 209 6%
TOTAL 3640
Liabilities
Credit facility 126 3%
Other short term liabilities 218 6%
Current portion of debt 64 4%
Long term debt 1559 43%
Taxes payable -1
Other deferred government liabilities 11 0%
Other liabilities 232 6%
Shareholder equity 1431 39%
Total liabilities and shareholder equity 3640

13
Appendix 3
Income Statement of a Typical Large Ski Centre in Québec
2000
($ 000s)
Revenues 2377
Cost of goods sold 1415
Gross Margin 962
Administration 183
General expenses 198
Marketing 135
Operating income 446
Depreciation and amortization 237
EBITDA 209
Financing costs 115
EBT 94
Tax 17
Net income 77

14
Appendix 4
Distribution of Activity During a Ski Season
Québec Ski Centres
Averagefor1997-2000period
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
Beginning
Holidayperiod
January/February
SpringBreak
EndofSeason
%

15
Appendix 5
Cost Structure
Ski Centres, Québec
78%
16%
1% 1% 4%
Snowmaking
Snow grooming
Runs, buildings &
infrastructure
Lifts
Other

16
Appendix 6
Montréal and South Shore Population
(1991 and 1996)
1991 1996
Beloeil 18 500 19 300
Boucherville 33 800 34 990
Brossard 64 800 65 930
Chambly 15 900 19 720
Longueuil 129 800 128 000
Saint-Bruno 23 850 23 710
Sainte-Julie 20 630 24 030
Saint-Hubert 74 100 77 040
Saint-Lambert 20 980 20 970
Verdun 61 310 59 710
Montréal 1 017 670 1 016 380
Total 1 481 340 1 489 780

17
Appendix 7
Organizational Chart of Ski Mont Saint-Bruno
President
Serge Couture
General Manager
Michel Couture
Development
Steve Couture
Marketing &
events
Mélanie Gauthier
Ski school &
training
Tony Dinelli*
Machinery and
equipment
Ben Lamoureux
Human
resources
Renée Lajoie
*: Responsible for human resources at the ski school

18
Appendix 8
88-89 89-90 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01
17 000
60000
125000
170000
250 000
200000
0
50000
100000
150000
200000
250000
300000
Season
Ski Mont Saint-Bruno: number of day-skiers

19
Appendix 9
Pricing of Various Major Ski Centres
(2000-2001)
Adult Weekend Per 4-hour block
Mont Tremblant
55 $ 47 $
Mont Saint-Sauveur
40 $ 34 $
Mont Olympia 33 $ 28 $
Mont Gabriel 33 $ 28 $
Mont Morin Heights 33 $ 28 $
Mont Avila 33 $ 28 $
Mont Saint-Bruno
Day 5 years and less 6 to 12 13 to 54 55 +
2 hours 6 $ 12 $ 15 $ 12 $
3 hours 6 $ 15 $ 18 $ 15 $
4 hours 6 $ 18 $ 21 $ 18 $
5 hours 6 $ 21 $ 24 $ 21 $
6 hours + 6 $ 24 $ 27 $ 24 $
After 4 pm 5 years and less 6 to 12 13 to 54 55 +
2 hours 6 $ 12 $ 15 $ 12 $
3 hours 6 $ 15 $ 18 $ 15 $
4 hours + 6 $ 18 $ 21 $ 18 $

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