Wyndham Adopts a Stakeholder Orientation Marketing Strategy - Case Study Example

Wyndham worldwide adopts a stakeholder orientation marketing strategy Introduction Among the world’s largest hotel group Wyndham Hotel Group is the largest group because of the huge number of properties that the company has. The group looks to get maximum profit mostly by franchising, which accounts to about 84% of the total profit earned by the company. The company was been founded in 1981 by Trammel Crow. The company grew at a fast pace and merged with Patriot American hospitality in 1988. This new company was named as the Wyndham International Inc., this company started to implement new aggressive strategy of acquiring hotels and companies across the globe in different parts of different countries. In 2005, Cendant Corporation took over Wyndham hotel brand and started its lodging, vacation and also in the retail business and was able to create the worldwide presence of Wyndham Worldwide and it replaced the name Cendant. This report is related to the analysis of the strategy that the company Wyndham Worldwide has implemented to become the world leader in the hotel market across the global market and have a continuous competitive edge over the other competitors. Situation analysis Porter’s 5 forces Porter’s five forces are generally used for the industry analysis and for understanding the business strategy. It includes the five major factors that help to determine the competitive intensity and the competitive edge that the co0mapny has in the market. The three of the porter’s five forces are related to the external sources that affect the business strategy and also results in either success or failure of the business strategies. While the other two are generally the internal factors the influence the business operations. The five respective forces that affect the business strategy explained by Michael porter is been shown in the blow diagram. (Source: Porter, 2008) These five forces are respectively been listed below and been studied in respect to the company Wyndham Worldwide. Threat of New Entrants- This threat with respect to Wyndham Worldwide is very Low as the company has a huge capital and also a good chain present across the globe. For a new hotel company to come up newly and compete with Wyndham Worldwide is very difficult as it is difficult to have such a huge capital in the starting and also it will be difficult for them to create a good market image in the global market (Porter 87-92). Bargaining Power of suppliers- This threat for the company is quite low. The various suppliers for Wyndham Worldwide are the suppliers of furniture’s, lights, foots items etc. The company has chosen its suppliers very carefully and also looks to enhance their process so that they can supply good quality products. The suppliers look to maintain their relation with Wyndham Worldwide to get a good market image and also good recognition. Because of this reason the bargaining power from the suppliers is quite low in this case. Bargaining power of Buyers- This threat is moderate for the company. Wyndham Worldwide has looked to have hotel facility targeting all the customers of every scale. Thus it looks to provide the best facility to the customer’s at the most affordable price of the customer’s choice. The company has huge number of hotel chains with all the hotels different from each other in the respect that the customer gets maximum satisfaction. Because of this the bargaining power of the customer is moderate as they do get other options from other companies and hotels also. Threat of substitutes- This threat for the company from the main substitutes which are majorly the small dormitories and the small roadside hotels is high. These substitute dormitories are present in every location and are very cheap thus they are a big threat to Wyndham Worldwide. Threat from rival competitors- The threats from the competitors is very high as the competitors present in the market for Hotel industry are very high. There are many hotel chains which are also present in the global market and also have strong strategies to capture the market share. The threat for the company from its competitors is a big concern for the company. Environmental scanning, Political and Social factors Environmental Scanning relates to the way the company helps in the betterment of the environmental conditions. The company has a belief that using eco-friendly products will help them in serving the environment but also help the company to save money by saving energy. The company has certain procedures which it looks to implement for serving the environment and also save money. Few of the processes that are been used by the company with respect of serving to the environment are been listed below. Reduces the energy consumption and also have a continuous track over the performance. Reduces water and energy usage and also bring the process of recycling. Improves the air quality by disposing less gas from its kitchen. Brings in the sustainable procurement process. Helps the local communities for environmental protection and also participate in the activities. More than 300 Wyndham facilities have received green certification from the governments of different countries across the globe. Political factors are really important factor for the company to set their business operation in a particular location. The company also follows lot of ethical rules for its business operations in all the hotels. It has a strong compliance for the ethical rules to maintain a good corporate culture in the company. The various governmental related factors are been kept in mind based on the various locations and the business operation is been pursued based on those factors been set by the local and central governments. Social factors are related to the company’s help and the corporate social responsibility of the company towards the society of a particular location where it has its presence. Wyndham Worldwide does focus a lot on the well being of the employees. The company also looks to have a strong relation with the stake holders and also the people in the surroundings. It does take part in various activities which helps in betterment of the local society, it also creates a lot of employment opportunity for the people of that particular location thus helping the society to grow and develop as well (Henry 123-127). SWOT analysis Strengths The company has a diverse business operation with different types of hotels present in various locations across the globe. The company does provide a variety of services for different customers of different standards. Strong brand image in the market. Global presence and following ethical culture. Weakness Company does have price option for the customers by providing them facilities at different prices which are affordable for customers but because of the huge brand name customers consider it to a luxury segment hotel. Opportunities Diverse the business into other business models as required in the market. Expansion in other parts of other countries which are yet to be explored. Threats The huge threat from the rivals. The political risk and the governance of various locations. Small hotels Currency fluctuations affect the pricing of the facilities provided by the company (Böhm 56-63). Recommendations  Looking at the SWOT analysis for the company Wyndham Worldwide which is the world’s largest hotel the opportunities for the hotel chain, the threats for the company and the weakness that affect in the business operations of the company can be seen and certain recommendations can be made. The company needs to promote every hotel under it in a different way based on the category and the price of the facilities available in it so that customers can understand clearly the exact price of the facilities. It must look to expand more in the global market and explore the new markets and try and gain advantage of those markets also by providing the best quality service to the customers better than the other competitors. Potential outcomes This will help people to remove the perception in the mind of customers who think that hotels under Wyndham Worldwide are luxury and charge high price. The expansion in the new global markets will help the company to know new markets and also open new path for expansion and also grow the business more. This will help the company to attract more customers and will increase their profit of margin in a huge way. It will also help the company to create a huge and good brand image and understanding among the customers across the globe in different countries. Conclusion This particular study does show how the hotel giant Wyndham Worldwide has gained its brand image in the global market and has a huge reputation. This also shows how the company faces problems from its competitors, substitutes and also because of the wrong promotion. There is a wrong perception that is been created in the mind of the customers because of the high brand image of the customers. These problems are to be tacked properly so that the company gets more customers and also increase its revenue by increasing the profit margin across the global market and grow its business to become bigger. Work Cited Böhm, Anja. The SWOT Analysis. Munich: GRIN Verlag. 2009. Print. Henry, Anthony. Understanding Strategic Management. London: Oxford University Press. 2011. Print. Porter, Michael. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York. Simon and Schuster. 2008. Print. Porter, Michael. The Five Competitive Forces That Shape Strategy. Harvard business review, January. 2008. Web. 31 March 2014.< http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1>. Read More