Cabalonga S. A.: Seeking Sustainability and Self-Sufficiency
(7 pages of text)
Cabalonga S. A. (Cabalonga) was a unique, low-cost hostel located in the small seaside town of Puerto Cayo, Ecuador. The beachfront land on which Cabalonga was established had been inherited by one of the two proprietors. In 2017, the company did little better than break even, but the hostel did provide the occasional weekend getaway for its owners. However, the weekend getaways had actually become hectic cross-country commutes for the owners, and too many hours were spent attending to guests’ needs. While the enterprise was financially stable, the owners wanted it to be a self-sustaining and less time-intensive investment.
This case is ideal for undergraduate- and graduate-level strategy capstone courses. Enough information is provided to conduct analyses of the company’s strengths and weaknesses, its asset utilization, and opportunities for growth and business process improvement. It also allows more advanced classes to connect the evolution of an emerging market economy with business characteristics and requisite shifts in strategy. The case is designed to provide a setting to not only exercise fundamental business strategy and marketing skill but also devise creative approaches to addressing opportunities and threats in domestic and international markets. Working through the case will allow students to do the following:
- Assess revenue streams and asset utilization.
- Assess options for growth and moving a business from start-up to self-sustaining, in an environment of greatly attenuated resources.
- Demonstrate the fundamentals of positioning a start-up to capitalize on emerging trends in the tourism industry.
Accommodation & Food Services
Ecuador, Small, 2017
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