Starwood Hotels and Resorts Brings Aloft to India - Case Study Example

Case Analysis Paper Case Analysis Paper Case Starwood Hotels and Resorts Brings Aloft to India The main drivers of India’s economic boom include service and industrial sectors. The country’s tourism and hospitality industries have particularly contributed to the tremendous growth that India has achieved in the recent past. Similarly, the country’s industrial sector has rapidly improved in the past five years, offering remarkable opportunities to the citizens (Enz, 2010). The growing domestic demand for jewelry products and gold is another key driver of India’s economic growth. The Indian government is more likely to continue being cooperative and welcoming to foreign investors. Apparently, foreign investments have immensely contributed to growth of India’s economy. The government of India is more likely to adopt or implement a more robust policy regime to lure more foreign investors into the country (Enz, 2010). Led by Narendra Modi (Prime Minister), the government has ultimately approved various economic reforms in the recent past in an effort to attract more investors into the country, especially those in the service industry. For instance, the government is likely to open doors to international hotel chains to join local establishments in the vastly competitive hospitality industry. The deeper pockets, such as cash and many other resources of international hotel chains are likely to give India competitive advantage over domestic chains (Dayal-Gulati & Jain, 2010).. The economy of India will particularly record a major growth as international hotel add a great deal to the revenues collected from the hospitality industry. The government of India has allowed foreign investors to invest directly in its economy, giving the country a competitive edge over its domestic chains (Dayal-Gulati & Jain, 2010). However, the advantage of the deeper pockets might not be sustainable in the long-run. Apparently, Indian government must protect its local established and infant chains. Although international chains significantly contribute to the growth in the country’s revenue, they (foreign/international chains) may eventually trigger collapse of local competitors. Growth in popularity of Indian market is likely to increase the aggressiveness of other global and domestic chains, posing enhanced or heightened competitive threats (Dayal-Gulati & Jain, 2010). However, domestic chains also play an integral role to stabilize India’s economic growth, as well as to give the economy a fairly systematic resilience. The Indian government, on the other hand, has to play its part not to let foreign corporations take advantage of the rapidly growing markets to obliterate domestic chains or attempt to monopolize certain markets or industries (Dayal-Gulati & Jain, 2010). Starwood Hotels and Resorts is expanding with Aloft, a newly created and untested brand, primarily because Starwood had established stable business relations locally. As a result, consumers will obviously associate with the unproven brand because a familiar brand (Starwood) is already rooting for newly created and widely untested brand. Consumers would find the less popular brand relevant and acceptable to them primarily because a more familiar or recognizable brand associated with it (Nagaraj, 2006). Meanwhile, the brand concept seems to work even outside the United States mainly because a majority of consumers, including those outside US, tend to associate certain brands with highly pertinent or relevant emotional experience(s). Besides, brand image will enable most consumers to demonstrate vast strength of association with particular brands, products or even services. The brand will arguably work in India with the emergence of a new generation of Indian customers. The new generation of Indian customers becomes enthusiasts or devotees of particular brands based on the brand image. They dedicate their time and other resources to consuming certain brands mainly due to the existing, strong association between them (the new brands) and the brand’s parent category (Dayal-Gulati & Jain, 2010). A consumer in this new generation would express familiarity and devotion to a specific brand whose parent brand category is well-known. However, the key elements of the Aloft brand that make it easy to bring it to India include brand association and brand image. Most consumers can readily associate with Aloft because it is highly recognizable and often associated with Starwood Hotels and Reports – a fully established brand (Nagaraj, 2006). Case 2: Building Capabilities at the Westward Hilton Westward Hilton has a considerable number of competitive advantages. For instance, Westward Hilton has adopted new strategies that have made it cope faster with the domestic market. The establishment has also invested huge capital and basically looking forward to advancing its promotion plans (OFallon & Rutherford, 2011). Also, Hilton is keen to improve its existing technologies amid heightened competition from domestic entities. Globalization, on the other hand, has facilitated rapid expansion into the global market. Finally, Westward Hilton has always remained a high performer for the entire seven years Hiller Hotel Group has owned and even operated it. Most of the Westward advantages are sustainable. However, the establishment requires effective strategic plan to enhance its productivity and ultimately ensure its sustainability of the widely competitive market. The corporate culture and human resources practices are comparatively difficult for competitors of Westward Hilton to imitate. Hiller, a prominent hotel business in Phoenix, implemented unique strategic approaches that competitors mat not imitate after all. Besides, Westward Hilton enjoys terrific employee loyalty and commitment to serve the establishment in their respective capacities. Some of the ramifications of choosing to sell Westward Hilton include loss of employment and flagship property, and a significant reduction of the Hotel Groups’ employee confidence as far as job security is concerned (OFallon & Rutherford, 2011). Therefore, Hiller group should carefully examine any decision to dispose property, especially the impact of such decisions on its share market value. On the other hand, the major consequences of choosing not to sell (choosing to retain) the hotel in the portfolio include attempts to wrestle the worries in relation to the impact of Hiller Hotel’s decision, especially on the hotel staff of Westward. In particular, the management tends to speculate about the impact of their decision on the establishment’s culture, as well as employee morale of the hotel group in entirety. Overall, the Hotel Group has invested in more effective strategic models to retain stakeholders’ confidence. Meanwhile, Hiller’s general business strategy, such as undervalued properties, buying distressed and turning them around for ultimate sale, and their HR strategy are generally compatible. Hiller Hotel Group has particularly invested in the strategic frameworks and tools to enhance the realization of their mission and goals. In addition, the company has employed services of a highly competent general manager to enhance smooth operations at the newly acquired establishments, such as Westward Hilton (Fraser, 2011). The Hotel Group has further invested substantial funding toward purchasing undervalued and physically undistinguished property. As a result, Miller has transformed underperforming establishments such as Westward Hilton into top performing midscale hotels in the Phoenix market, Arizona. The executive and HR management strategies are particularly embodied and espoused in the beliefs and values of the distressed establishments and later spread to other parts of the organization. For instance, “making people’s lives better through business” is a famous vision of Hiller Hotel Group that transformed Westward Hilton into a familial work environment. It has also fostered employee commitment to attaining the vision of the organization. Finally, the general business strategy and the mission statement are generally compatible. Peter Green (the GM –General manager charged with the turnaround) developed a reasonable approach and innovatively devised HR activities to successfully implement his mission and vision (Fraser, 2011). However, Hilton should focus more on approaching a different positioning stand rather than trying to match their program with that of Starwood. For instance, Hilton hotel’s decision to venture into the gaming industry came along with large aspects or elements of competition and risks. Accordingly, the sudden decline in gaming segment in 1994 was disastrous to the establishment considering the massive capital investment in the program (Fraser, 2011). In summary, the case for building capabilities at the Westward Hilton describes Hiller Hotels’ effort to turnaround the dwindling operating performance of Westward Hilton. Hiller Hotel bought Westward Hilton out of bankruptcy. References Dayal-Gulati, A., & Jain, D. (2010). Winning strategies for the Indian market. Evanston, Ill: Northwestern University Press. Enz, C. A. (2010). Hospitality strategic management: Concepts and cases. Hoboken, N.J: John Wiley & Sons. Fraser, C. (2011). Business statistics for competitive advantage with Excel 2010: Basics, model building and cases. New York: Springer. In OFallon, M. J., & In Rutherford, D. G. (2011). Hotel management and operations. Nagaraj, R. (2006). Aspects of Indias economic growth and reforms. New Delhi: Academic Foundation. Read More