The paper 'Factors behind the Success of Invercargill Licensing Trust " is a good example of a management case study. New Zealand has a long-standing culture of liquor consumption dating back to the 1770s. Stevan Eldred-Grigg novel Pleasure of the Flesh provides a detailed account of the role played by alcohol in New Zealand’ s entertainment industry. Jock Phillips in his article A man’ s Country reinforces a readable history of the role played by alcohol in the lives of New Zealand men. These two illustrations give a clear preview of the events that dominated in New Zealand cities.
In line with this, prohibition movements have a long history since 1936 when the Bay of Islands was declared as an Island of wild drinking which subsequently prompted the formation of the New Zealand Temperance society. Invercargill was not left out in the movement to regulate alcohol consumption among the people of New Zealand; prohibitions in the city began in 1906. During this period, many beverage and entertainment facilities including hotels and restaurants were closed down, demolished or changed for other use.
Noting a sudden dullness in the city, the people of Invercargill voted out the prohibitions in 1944. The Invercargill Licensing Trust (ILT) was proposed by the prime minister of the time and was established by the Invercargill Licensing Trust Act 1944. The trust was established with the intention of facilitating reselling of liquor. The trust, however, operates under the Sale of Liquor Act 1989. Constant consideration of the trust is that all its activities are geared towards the ‘ interests of the public well-being’ . Its fundamental principle is to ensure that profits accrued for the sale of liquor are distributed to the community for philanthropic, recreational, cultural and charitable purposes.
ILT has been appraised as the most successful Licensing Trusts in New Zealand ranking first in employment, total donations, total assets and returns on equity, profits and revenue (Anheier and Leat, 2002). This report basically gives an analysis of ILT case study. 2.0 Factors behind the success of ILT Since its inception, ILT has experienced upstream success. In actual fact over 30 other licensing trusts have been successfully established throughout New Zealand as prompted by the success of ILT.
Even with the increasing number of licensing trusts, ILT has demonstrated outstanding competitive strength and has emerged victorious in major economic downturns relative to its rivals. This has been contributed by a number of factors as discussed below. 2.1 Location of ILT facilities The core mandate of ILT is to provide high-quality food, beverage and entertainment facilities as well as accommodation for its customers. As such, the trust operates about 25 facilities in the hospitality industry in Invercargill including retail liquor outlets, bars, restaurants, motels and hotels.
In addition, the trust owns one motel in Christchurch and another in Dunedin. Being the largest towns in the Southern Island, Dunedin and Christchurch attract a significant portion of the population and thus the establishment of motels in these towns would tremendously increase customer turnover. Unlike other local licensing trusts, ILT has obtained exclusive preferential trading rights over the historical boundaries of Invercargill, Dunedin and Christchurch cities. This, therefore, implies that it can enjoy reduced tariffs on the products and services it offers which consequently lead to increased revenues. The trust’ s district towns are also tourism destination sites and thus the trusts accommodation and entertainment facilities play host to the vast number of tourists.
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