Overview of the Ritz Carlton Hotel Company - Case Study Example

Table of Contents Introduction Hospitality industry is one of the industries facing stiff competition in the current global market. The competition occurs due to the varied consumer demands and technological advances that enhance the need for quality service provision to the clients. The success of the hospitality industry not only depends on attracting new clients to the organization but, retaining the existing clients to enhance the organizations existence (Webber & Wallace, 2011). This is achieved through the adoption of the most effective operational techniques and policies that aim at satisfying the consumer needs. Therefore, the performance of the hospitality industry is largely influenced by various factors including maintaining customer loyalty, adopting the most effective leadership style and ensuring customer satisfaction among other interventions. Like any other industries, the hospitality industry has adopted various business philosophies to enhance their productivity and performance. This includes adopting business philosophy focusing on consumer satisfaction and employee responsibility to enhance the industry’s reputation and customer satisfaction. Therefore, this essay will analyze in detail the operation management at the Ritz-Carlton Hotel Company, one of the most luxurious hospitality industries. The essay will also give an overview of the organization and evaluate the ways in which the organization manages its capacity, demand, and supply of this organization. Furthermore, the essay will evaluate some of the interventions that developed in the organization to manage various hospitality challenges including queuing, customer satisfaction, quality assurance measures, and some of the recommendations that can be adopted in the organization to enhance the effectiveness of their operations. Overview of the Ritz Carlton Hotel Company Founded in the year 1983, Ritz Carlton Hotel Company has grown to be one of the world’s most known luxurious companies due to its provision of high quality hospitality services to its clients. The organization is based in Atlanta, Georgia and operates various luxurious hotels and resorts in 26 countries globally. In addition to the high quality services provided to its clients, the organization provides employment opportunities of people globally. This organization’s success is attributed to its founders who include Cesar Ritz and Auguste Escoffier (The Ritz, 2006). The high quality of the services provided by this organization is evidenced by the various numbers of awards the organization has received in the past. One of these awards is the Zagat award where the organization was among the top global hospitality companies providing the best dinning and hotel services. Additionally, the organization has received other awards which include the Malcolm Baldrige National Quality Awards and Zagat Award for being the best strategically situated organization (The Ritz, 2006). The organization’s reputation is also highly linked to its dedication to its great influence on other services providing industries through the establishment of the Ritz Carlton Learning Institute. The institute provides training on hospitality knowledge and skills to other hospitality professionals from other hospitality industries worldwide. Apart from the provision of the hospitality services, the organization engages in community empowerment and environmental sustainability programs. This includes engaging itself in the organization of community awareness programs such as those aiming at environmental protection and provision of scholarship opportunities to best performing employees and students in the various countries of their operation (The Ritz, 2006). The organization’s excellent performance is evidenced by its $2.94 Billion revenue in the year 2009. The organization expects a 40% increase in its revenue collection in the next five years which will enhance the organization’s performance and enhanced nature of the services provided by the organization. Some of the properties owned by this organization include the Ritz Carlton Hong Kong, Shanghai, Los Angeles and San Francisco among other properties. Like any other hospitality industry, the organization faces challenges which impacts negatively on its performance. The challenges include Great Economic Depression which affected various organizations globally, technological advances, ever changing consumer demands and stiff competition from other hospitality organizations (The Ritz, 2006). Ritz Carlton Capacity and Demand The organization’s demand and capacity varies depending on the season of the year, its positioning and the number of clients utilizing the organization’s services. One of the factors that influence this organization’s capacity and demand for its services is the organization’s ability to provide services taking into consideration various input elements such as clients, information provided and the quality of the services provided to the consumers. Additionally, this organization’s capacity is influenced by the condition of the above input elements and the amount of actual output influenced by the constant supply of factors over which value is being added. Other factors that cause shift in demand of the organization’s services include technological advances, competition and economy status (Ford et al 2012). In response to the capacity and demand changes, the organization adopts various interventions to manage their capacity. One of the interventions adopted in the organization during its high capacity demand is the Chase strategy that aids the organization to adopt a state of balance in the organization’s capacity. The strategy enables the organization achieve state of balance by transferring resources across the organization’s departments, sharing capacity between the different organization’s service delivery systems and encouraging the clients to provide extra resources by introducing self-service (Jones & Robinson, 2012).  Additionally, the organization adopts the level strategy in cases of low capacity demand of its services to manage equilibrium between the demand and capacity for their services. The organization employs the use of the level capacity principles such as changing their prices, focusing on their services advertising and promotion, coming up with off peak demand, using reservation and appointment systems and making clients queue for them to be provided with the services. Furthermore, the organization uses the principles of the coping strategy to manage and maintain a state of equilibrium of their capacity demand. This includes improving the organization’s forecasting techniques, clearly understanding possible points of failure in their service delivery, coming up with clear human resource productivity targets and evaluating their critical and hygiene perspectives of their quality service delivery (Evans & Lindsay, 2014). Moreover, the organization uses the simulation modeling to enhance the demand of their services during the low seasons when the consumer turnover is low. The organizational management uses simulation modeling to understand their clients’ perception towards the organization adopted strategies. Through this, the organization is able to provide services that meet and attract new clients such as implementing measures that enhances employee-client participation and interaction (Zenoff, 2013). Other techniques used to manage demand in this organization include involving premium policing, monitoring promotional and pricing activities of the organization’s competitors, determining current economy status, incorporating diverse marketing interventions, market segmentation, managing relationships with previous clients and coming up with long-term strategic objectives to manage future shifts in the demand and capacity of the organization’s services (Inghilleri & Solomon, 2010).  Queuing and Customers in the Ritz Carlton Organization Queuing is one of the factors that influence the consumers’ ability to utilize the services provided by an organization (Mccollum, 2004). Prolonged queuing affects the organization’s reputation, subsequent use of the organization’s services by the client and overall performance which influence organizations performance. This negatively influences consumers’ satisfaction towards the services provided by these organizations (Lal, 2008). Therefore, the Ritz Carlton Hotel Company has come up with various interventions aimed at minimizing consumer queuing and enhancing consumer satisfaction. One of the interventions which have been adopted in the organization to minimize queuing and enhance the degree of consumer satisfaction is the establishment and adoption of an appropriate queuing model. This has been done by adopting the principles of the queuing theory. Through this model, the organization has adopted a queuing model that enables it gain all the necessary consumer indexes reflecting the organization’s character. Additionally, the organization has developed customers’ service supplies aspect that takes into consideration client’s positive reception. This includes coming up with interventions such as enlarging service offering ability through increasing the number of employees required for service provision, strengthening their employees’ capacity by providing training opportunities and updating the organization’s intrinsic establishment. Through these interventions, queuing has been minimized hence, consumer satisfaction (Martin, 1993).  Additionally, the organization has taken into consideration the development of tourist demand section. This section takes into consideration the need for building effective information sharing systems that enable the organization understand the demands of their clients. Through this system, the organization has been able to provide necessary service information to its clients in time, establish effective service booking mechanism, and develop price policy that meets the employees’ diverse needs by employing seasoned employees. The section has also enabled the organization ascertain the accepted clients’ waiting time and come up with less queuing period for their clients (Wylie, 2009).  Moreover, the organization has embraced the use of techniques that enable the consumers optimize the organization’s queuing system. The techniques adopted minimize the wastage of human resource facilities, and reduces the clients waiting time hence, reduced queuing time. The organization has also established concrete methods that enhance clients’ sensational management. This involves ensuring that the service rule related to clients queuing is fair, candid and publicized. The methods ensure that strong surveillance is enhanced to promote fairness among the queuing clients (Ford et al 2012). In addition, the organization has developed an operation of the CLASS Database. This database is used by the organization to remember the returning guests and come up with a schedule minimizing the number of clients likely to queue for the organization’s services. By doing so, the organization is able to minimize queuing and enhance consumer satisfaction (OH, 2009). Apart from these, the organization has developed an online system of booking various organizational facilities such as lodging and conference halls. Online booking helps to reduce the incidences of prolonged consumers queuing hence, their satisfaction. The clients are provided with entertainment while queuing. This helps reduce boredom among the clients promoting their satisfaction on the nature of the services provided in the organization (Talluri & Van Ryzin, 2005).  Managing Quality in the Ritz Carlton Organization The success of the Ritz Carlton Organization is highly attributed to its successful adoption of the most effective quality management techniques. Quality management allows the organization achieve the desired market competition enhancing its competiveness. This occurs through the increased organization’s ability to utilize the available resources effectively maximizing the output (Webber & Wallace, 2011). Effective quality management allows the organizational members adopt the desired organizational culture. The cultures adopted include provision of quality services to the customers and promoting employee ownership of the organization’s culture and practices (Mccollum, 2004). Quality management allows the employees benefit from the organizational incentives. The employees receive rewards for their performance leading to their motivation and innovation hence, improved performance in the organization. Other benefits the organization gains from effective quality management include reduction in resource wastage and inventory, increased revenues secondary to the increased performance and effective monitoring of organization’s activities (Bhattacharya, 2001). The organization has adopted the principles of Total Quality Management (TQM) to enhance its performance, productivity and provision of services meeting the consumers’ needs. The adoption of the TQM theory and its principles has enabled the organization appreciate the role played by the consumers in contributing to its success. Therefore, the organization has been able to come up with interventions that focus on understanding the consumer current and future needs. The organization has also been able to ensure that it provides high quality services that aim at exceeding their clients’ expectations. Through this, the organization has been able to formulate organizational objectives that are in alignment with its consumer needs and expectations. Consequently, the organization has realized benefits such as high consumer index rates and increased productivity (Jones & Robinson, 2012).  Additionally, the organization has been able to maintain its provision of high quality services through the adoption of effective leadership style and skills. The organizational leaders employ the use of transformational and transactional leadership to supervise the running of organizational activities. These leadership styles promote client-employee participation in decision making, enhances freedom and autonomy in the organization. Consequently, the employees are motivated to provide quality services to the clients hence, maintaining quality services provision (Gross & Gross, 2008).  The organization involves the employees and the clients in various organizational activities as a method of managing and enhancing quality service provision. This leads to employee motivation and innovation that result in their quality services provision. The organization embraces the use of process approach to enhance its performance and production effectiveness. This enables the organization achieve consistent and predictable outcomes alongside prioritizing effective utilization of the prevailing opportunities (Talluri & Van Ryzin, 2005). Furthermore, Ritz Carlton Organization uses systematic approach system of management as a method of enhancing its quality of services provided to their clients. This management system enables the organization understand and effectively manage organization’s interrelated processes to improve the quality of the services provided (Jones & Robinson, 2012).  Furthermore, the organization has adopted the culture of continued service quality improvement to enhance the management and enhancement of the quality of its services. This includes aligning improvement across all organizational levels and embracing performance flexibility to ensure effective utilization of organization’s activities and quality of services provided. Culture of continued improvement has enabled the organization gain performance advantage secondary to improved organizational capabilities and enable it attain great flexibility in reacting to the prevailing market opportunities (Gross & Gross, 2008).  Finally, the organization has adopted the principle factual decision making as a strategy of managing quality of services provided to its clients. This has enabled the organization make effective decisions basing on the principles of analyzing client data and information. Additionally, factual decision making has enabled organizational management have an increased ability to review, challenge opinions and adopt the best decisions that enhance the quality of services provided to their clients (OH, 2009). The organization’s management uses the principles of establishing mutually beneficial employee-client relationship to enhance quality of its services. This is achieved through the establishment of open communication systems and sharing information on the organization’s future plans. Consequently, these quality management techniques have contributed greatly to the organizations ability to provide high quality services hence, its competitiveness in the tourism industry (Ford et al 2012). Operational Improvement Recommendations The Ritz Carlton Organization like any other hospitality organization is facing stiff competition from its associated organizations. This is attributed to the ever changing technological advances in this sector and the constantly changing consumer demands. Therefore, the organization should embrace various interventions to enable it overcome these threats brought about by the external threats. One of the recommendations which the organization should adopt is increasing the use of the social media to market itself. This includes using the social networks such as the Facebook and Twitter to market the nature of the services it provides alongside the associated benefits. This will benefit the organization through creating massive awareness among the users of the social network leading to increased consumer demand of the organization’s services (Wylie, 2009).  The organization should strive to further improve the nature of services provided to its clients. This includes ensuring that the clients are provided with world-class customer care services unique from the services provided by other organizations. Providing unique and world-class services will enhance the quality of the services and organization’s competitiveness. Consequently, this will lead to high consumer influx, increased performance and overall heightening of the organization’s visibility (Martin, 1993). The organization should effectively embrace the adoption of strategic planning to resolve various challenges affecting the organization. This will enable the organization solve challenges facing it such as risk of future decline in the number of visiting clients, lack of effective strategic location and inadequate training facilities to its employees (Lal, 2008).  Additionally, the organization should come up with interventions aimed at improving organization performance and standards across the organization levels of service provision. This includes coming up with mechanisms that can be used to determine organization capabilities in issues related to service delivery, employee responsibility and staff management (Zenoff, 2013). The organization should strive to equip its new employees with the desired skills and knowledge required for running different organizational responsibilities. The organization should come up with new interventions aiming at penetrating markets which have not been utilized. This involves conducting critical and comprehensive evaluation of the unexploited markets to identify the available conditions that can be exploited. Through this, the organization will increase its operational branches and increase its performance and productivity hence, its competitiveness (Inghilleri & Solomon, 2010).  The organization should consider providing adequate training to its employees on various issues related to quality service provision. This will equip the employees with the necessary knowledge and skills required for ensuring that they provide the customers with the desired high quality services. Additionally, providing training to the employees enhances their capacity building and sustainability of the organization’s chosen interventions (Evans & Lindsay, 2014). The Ritz Carlton Hotel Company should shift its focus on investing more resources in conducting researches on issues related to quality services provision and consumer satisfaction. Through researches, the organization will be able to identify different consumer needs; client satisfaction on the quality of services provided and will enable the organization to understand its employee’s needs. Therefore, the organization will be able to develop plans aimed at providing services that meet consumer needs and satisfying employees’ needs (Wylie, 2009).  Conclusion From the above analysis, it is evidently clear that the success of any hospitality industry largely depends on the quality of services provided to its clients. Adoption of the best quality management techniques contribute greatly to the organizational performance. Effective adoption of quality management techniques enables the organization come up with goals and objectives that are in line with the consumer needs. However, it should be recognized that the above analysis has not dealt with the issue of analyzing hospitality industry to its full depth. 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