StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Basic Business Objectives of Ritz Carlton - Essay Example

Cite this document
Summary
This essay "Basic Business Objectives of Ritz Carlton" presents the perfect market structure for Ritz Carlton while they try to expand their activities in overseas countries. Such a market structure would help the company to implement price discriminations based on the peculiarities of each market…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.4% of users find it useful
Basic Business Objectives of Ritz Carlton
Read Text Preview

Extract of sample "Basic Business Objectives of Ritz Carlton"

? Business Economics - Microeconomic concepts Introduction According to Sloman and Sutcliffe (2004), Business Economics is “economic decision making by firms” (p.5). The primary objective of all organizations, irrespective of service or manufacturing, is to make profit. Taking proper decisions at the right time based on the demands or fluctuations in the market is extremely important for an organization to stay competitive Service industry is one sector in which competition is intensifying at present. Selection of suitable market structure is important for firms in service industry to stay competitive all the time. Headquartered at Atlanta, Georgia Ritz Carlton is one of the prominent hotel groups in the global service industry. It has one central office, seven international offices, 24 hotels in North America, 2 in Europe, 2 in Australia, 8 in Asia, as of 1999 (The Ritz Carlton Hotel Company at a glance, 1999). Ritz Carlton needs to adopt a suitable market structure to compete effectively in the global service market. This paper analyses various market structures prevailing in the service industry and recommend monopolistic competition as the suitable market structure for Ritz Carlton. Basic business objectives of Ritz Carlton Ritz Carlton is currently trying to expand to overseas markets. The increased readiness of overseas countries in recent times in attracting foreign direct investment is helping Ritz Carlton to think positively about market expansion. Since competition is different in different regions, the objective of Ritz Carlton is to identify less heavily competitive service markets across the world. Asia is the rapidly emerging region at present and Ritz Carlton is giving more attention to this region at present. Identification of proper market structure is necessary for Ritz Carlton to excel in emerging markets. Ritz Carlton and market structure Based on the competition in the market, market structure can be divided into four major categories such as Perfect competition; Monopolistic competition; Oligopoly and Monopoly. In markets with perfect competition, the market determines the price whereas in monopoly, instead of market, the company decides the price. For example, Microsoft is enjoying monopoly in OS market and hence they are able to set prices for their products. However, consumer electronics industry is experiencing perfect competition and hence it is impossible for companies in this market to fix prices for their products. On the other hand in market with Oligopoly, only few suppliers are there and it is possible for the firms in such markets to control the price and market activities in such market structure. For example, OPEC is enjoying oligopoly in oil market. In monopolistic competition, there could be numerous suppliers; however, only few enjoy monopoly. In smartphone market, APPLE and Samsung are ruling now. Even though companies such as Nokia, LG, Blackberry, and Sony Erickson are there, only APPLE and Samsung have the upper hand. Even though monopolistic market structure is the primary objective of all organizations, it is difficult to maintain supremacy in such markets for a prolonged time. It is almost impossible for Ritz Carlton to think about following a monopoly or oligopoly market structure at present because of the huge capabilities of competitors. At the same time, it is possible for Ritz Carlton dominate the hotel industry along with prominent competitors such as InterContinental Hotel Group, Marriott International Hilton Hotels and Global Hyatt. Key internal and external factors affecting Ritz Carlton Manpower cost is extremely high in American and European regions compared to that in Asian region. Moreover, global wealth is currently shifting from American and European is not so good for Ritz Carlton. Monopolistic competition helps companies to attain huge profits for a short period and a normal profit in the long run which is evident from the following illustrations. (Monopolistic competition, n. d.). From the above graph it is evident that the arrival of new players may cause damage to the demand for the products of existing firms. However, until the arrival of new firms, existing firms can enjoy more profits. However, the super normal profits would give way for normal profits when new firms arrive in the market which is illustrated in the graph below. (Monopolistic competition, n. d.) In a highly competitive global service market, it is desirable for firms like Ritz Carlton to think about the long objectives instead of short term objectives. Monopolistic competition helps Ritz Carlton to enjoy super normal profit for a short term and normal profit in the longer run, which is acceptable considering the current fluctuations in the market. Why monopolistic competition ideal for Ritz Carlton? “The concept of 'monopolistic competition' was originally defined by Edward Chamberlin and Joan Robinson in the 1930's” (Advantages and Disadvantages of Monopolistic Competition, 2013). “Monopolistic Competition is a market structure in which many firms sell products that are similar but not identical” (Monopolistic Competition, n. d., p.1). Service quality plays an important role in deciding the competitive power of an organization in hospitality industry. Tourists often visit a particular hotel repeatedly if they get good service from there. Moreover, they give mouth publicity to such hotels so that the brand value and reputation of the hotel could be boosted. It should be noted that hotels in hospitality industry is working hard to increase the service quality. They know very well that keeping existing customers is as important as finding new ones. In monopolistic market structure, “Each firm makes independent decisions about price and output, based on its product, its market, and its costs of production” (Monopolistic competition, n. d.). It is not necessary that the cost incurred for delivering a service item in Ritz Carlton is the same as that of the competitors. The ability to reduce overhead expenses would help an organization to reduce their prices of its products and services. It should be noted that the visitors forced to pay more than the actual cost of products or services while they purchase something from a hotel. It is not necessary that the room rents in Ritz Carlton and Marriot are the same even if they operate in similar locations and delivering similar standards. Since Ritz Carlton is operating globally, it faces competition from all corners. In some regions, they may face less competition whereas in other regions they may face huge competition. Based on the peculiarities of each market, Ritz Carlton should make adjustments in its service prices and outputs. The ability to set different prices to different markets (price discrimination) is one of the major advantages of having a monopolistic market structure. “Companies in a monopolistic competition have the option of determining which customers receive discounts or premiums on goods and services, such as senior citizens or students receiving discounts”(Capozzi,2013). For example, American service market is highly competitive whereas Asian service market is less competitive. Moreover, standard of living in America is extremely high compared to that in Asia. Based on such peculiarities in each market, Ritz Carlton can make adjustments in the prices of products offered to different parts of the world. “Firms operating under monopolistic competition usually have to engage in advertising. Firms are often in fierce competition with other (local) firms offering a similar product or service, and may need to advertise on a local basis, to let customers know their differences” (Monopolistic competition, n. d.). The advertisement strategies used in America may not be suitable for Asia because of the huge political, economic, cultural and environmental differences between these two regions. For example, Tiger Woods could be a good brand ambassador for Ritz Carlton in America whereas in India, Sachin Tendulkar would be an ideal candidate for the same post. Tiger Woods may not excel in India and Sachin may not excel in America as brand ambassadors since Golf is not so popular in India and Cricket is not so popular in America. In short, monopolistic market structure helps firms to market their products and services with the help of customized advertisement or marketing activities for each region. “One of the main positives to come out of a monopolistically competitive market is that in order to be a competitive firm within such a market place, a firm's primary goal is to differentiate itself from others in order to gain greater custom than its rival competitors” (Advantages and Disadvantages of Monopolistic Competition, 2013). In monopolistic market structure, consumers may not get an option to compare a product with other products. For example, Microsoft Windows is currently enjoying monopoly in the OS market. Consumers all over the world believe that this product is a superior one since they have no option to compare it with another product. On the other hand, in smartphone industry, even though APPLE is enjoying supremacy, consumers are getting opportunity to compare iPhones with Samsung Galaxy or Nokia Lumia. In short, market structure with monopolistic competition gives more comfort and flexibility to consumers while they take buying decisions. Conclusions Monopolistic competition would be a perfect market structure for Ritz Carlton while they try to expand their activities in overseas countries. Such a market structure would help the company to implement price discriminations based on the peculiarities of each market. Monopolistic competition helps Ritz Carlton to prove the worth of its products and services to the customers. Moreover, it helps Ritz Carlton to enjoy huge profits for short terms and normal profits in the long run. References Advantages and Disadvantages of Monopolistic Competition. 2013. [Online] Available at: http://www.infobarrel.com/Advantages_And_Disadvantages_Of_Monopolistic_Competition [Accessed 05 February 2013] Capozzi, C. 2013. The Advantages of Monopolistic Competition. [Online] Available at: http://smallbusiness.chron.com/advantages-monopolistic-competition-20585.html [Accessed 05 February 2013] Monopolistic Competition, n.d., [Online] Available at: http://www.econ.uiuc.edu/~seppala/econ102/lect15.pdf [Accessed 05 February 2013] Monopolistic competition, n.d. [Online] Available at: http://economicsonline.co.uk/Business_economics/Monopolistic_competition.html [Accessed 05 February 2013] Sloman J and Sutcliffe M. 2004. Economics for Business. Publisher: Financial Times/ Prentice Hall; 3 edition (25 Mar 2004) The Ritz Carlton Hotel Compnay at a glance, 1999. [Online] Available at: http://corporate.ritzcarlton.com/NR/rdonlyres/22E2CEC9-62A4-4EA2-9C3C-51628265E10E/0/rcappsum.pdf [Accessed 05 February 2013] Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Significance of Proper Identification of the Market structure for the Essay”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1467514-significance-of-proper-identification-of-the-market-structure-for-the-organisaition-using-the-example-of-the-ritz-carlton-company
(Significance of Proper Identification of the Market Structure for the Essay)
https://studentshare.org/macro-microeconomics/1467514-significance-of-proper-identification-of-the-market-structure-for-the-organisaition-using-the-example-of-the-ritz-carlton-company.
“Significance of Proper Identification of the Market Structure for the Essay”, n.d. https://studentshare.org/macro-microeconomics/1467514-significance-of-proper-identification-of-the-market-structure-for-the-organisaition-using-the-example-of-the-ritz-carlton-company.
  • Cited: 0 times

CHECK THESE SAMPLES OF Basic Business Objectives of Ritz Carlton

Operations Management Assignment in Ritz Carlton Hotels

The reporter casts light upon the fact that ritz carlton possesses a particularly trained team of effective quality management executives.... ritz carlton considers that the clandestine to efficient quality management stays to employ efficient staff which recognizes the guests' requirements and provides them immediately (Case Study, p.... ritz carlton has situated this seeming quality as its main target and also for achieving it stresses on predictability, veracity as well as timeliness....
5 Pages (1250 words) Essay

Management and Leadership of Ritz-Carlton Hotels

The focus of this paper "Management and Leadership of ritz-Carlton Hotels" is on the Ritz-Carlton hotels, a group of luxury hotels that operates in various areas throughout the world.... The chain of ritz-Carlton hotels operates 81 resorts and luxury hotels in various major cities around the world.... The parent company of the hotel chain is the Ritz-carlton Hotel Company, LL.... The company is one of the top luxury hotel chains in the world operating in 26 different countries all over the world (Ritz-carlton 2010)....
4 Pages (1000 words) Essay

Transformational Leadership and how used in the hospitality industry can increase profitablity

The role given to every single member of the team should reveal their individual strengths as much as possible to maximize each member's contribute to the fulfilment of the team's objectives (Bass& Riggio 2005 p45).... Leadership in today's globalization business world demands a special skill set of skills because of the fast changing pace of business environment, unstable market situations, raised competitions, and changes in the labour force....
16 Pages (4000 words) Essay

Organizational Behaviour of Ritz Carlton

The present paper aims to critically examine leadership and management styles adopted by the management of ritz carlton during the period of change, their nature of team motivation and policies to achieve high performance.... The view points and interviews of senior managers of ritz carlton Hotels have been collected for the purpose of this research to identify the management and leadership styles during the change , their strategies for employee and team motivation and policies to achieve better quality of service....
12 Pages (3000 words) Essay

The Twenty Basic Principles for Ritz-Carlton's Employees

The paper "The Twenty Basic Principles for Ritz-carlton's Employees" emphasizes the relationships between hotel customers and employees are the major way of creating the hotel's competitive advantage.... On the other hand, there are companies that we're able to successfully adopt empowerment strategies, such as the Ritz-carlton Hotel Company.... The Ritz-carlton Hotel Company was based on the ideals of innovative customer service and is widely known for pleasure-seeking comfort and luxury....
4 Pages (1000 words) Case Study

The Ritz-Carlton

The Ritz-Carlton is a brand under the management of ritz-Carlton Hotel.... Nevertheless, the paper will focus on assessing the culture of ritz-Carlton hotel culture.... The Ritz-carlton is a brand of a luxury hotel and resort, which owns seventy properties that are situated in the main cities and exclusive resort destinations in twenty-three countries around the world.... ritz-Carton focuses on offering quality services to customers and their leaders have the responsibility of running this icon in the luxury market (Basu, 2009)....
8 Pages (2000 words) Essay

The Analysis of the Ritz-Carlton Hotel Company

erve Humler is the President and Chief Operations Officer of ritz-Carlton.... ?? Genuine care and comfort of its guests is the highest mission of ritz-Carlton.... Ritz-carlton is well-known globally for its luxury hotels, private condominiums, fractional ownership, innovative retail sales, and golf communities.... Ritz-carlton has divided the countries in which it has properties into the following six geographic regions; USA & Canada,....
7 Pages (1750 words) Essay

The Ritz Carlton Organizational Behavior

Teamwork is encouraged in all the departments of ritz carlton Company.... This paper briefly explains the Leadership Style, Structure, Strategy, Environment of the ritz carlton which leadership and management styles are big talking points in the corporate world because of the rapid growth it has achieved even amidst difficult situation.... Moreover, training and empowerment programs are conducted in ritz carlton on an annual basis which may last minimum 21 days....
10 Pages (2500 words) Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us