The Concept of Hospitality Strategic Management - Essay Example

Case Q Industries like the cruise industry are less competitive as compared to the fragmented industry. The reason behind this is because in fragmented industries there are numerous small players whereas in the consolidated industry there smaller numbers of players and big firms which share the market. A high number of small players in the fragmented industry mean that each player competes for every niche in such as a market. In a consolidated industry, the major players such as Carnival Cruise Lines, in the market usually share all the resources themselves and make decisions and agreements. This therefore, divides the market into different influential spheres. The fragmented industry allows all its players to create niches and the market shares where each one of them can work in, unlike in the consolidated industry where there little or no niches for the small players (Enz' 514). Q.2 In the cruise industry the cruising market is a single and segmented entity where products are differentiated mostly by the preferences of consumers and the assumption is that there is an increase in the overall sustainability and completion. Therefore, the cruise industry can be characterized as an oligopoly. The market structure of the Cruise industry is noticeable by the fact that there are few large firms such as the Carnival Corporation, which dominate this market, which all offer identical services that have a significant barrier when making entries in this industry. The cruising industry is widespread in the world and diverse in all ways. It dominates most of the modern landscape today and the economics. Each of the firms in the cruising industry keep a close eye on what other firms in the industry are doing. Thus, a firm’s success in the cruising world is not entirely dependent as a sole entity. The cruising industry can also be classified under the oligopoly as the prices are mostly rigid and competition is not involved through the change in prices. Q.3 Carnival Corp brands are the most recognizable in United Kingdom, North America, among other states. The brands offer numerous customer base products which are highly based on customer cultures, languages and other preferences. Numerous brands that are operated by Carnival Corp usually have synergies (Enz' 516). A synergy is a merger of two or more firms and produces an effect. For example, if one of Carnival Corp’s brands has excellent services and products but has poor distribution channels, and the other brand has an excellent channel of distribution but offers poor services and products, the two could form a synergy and benefit from each other. The firm’s brands range from the carnival cruise lines, Cunard line, Princess Cruises and the Holland American Line. A combination of these brands forms a synergy that is usually more than the sum of the sum value of these brands. Forward-looking statements of Carnival’s annual costs savings can be identified through the estimates made on synergies and the cost of time that is taken to implement the synergies in the brands. Q. 4. Brand strategy: The existing customer information can influence the brand strategies at Carnival Corps in the future by increasing the firm’s profitability and stock price. Customer information promotes the use of effective brand strategies for up-coming organizations. More information influencing the brand strategies is a guarantee of the future ability of Carnival Corp to compete strongly in this competitive market. Additionally, there is a guarantee that the firm will not introduce any defective products to its customers, thereby reducing the risk of making of future losses. Information from the customers predicts on the firm’s future performance and increases the chances of the firm identifying its faults. Information from regular customers who have cruised in the same routes may remind Carnival Corps that they have to provide new port destinations and products (Enz' 516). Q. 5.Carnival’s existing customer perceptions of its brands: Carnival Corps can only change its existing perceptions of brands by the customers only in the future. Increasing of ports destinations in the future counts as an expensive activity to undertake. However, there is no need for Carnival Corps to change its existing perceptions. This is because the firm has been expanding its businesses over the years and its brands of cruises are different and can accommodate most of the customer’s diverse perception. Case 2: Q. 1 Some of the competitive merits that Westward Hilton has over it competitors include its high quality management, the hotel offers training to its staff members, advertising and lastly it is strategically located in an area where customers appreciate its highly priced services. West ward provides excellent service levels to its guests based on their preferences, membership status, among other characteristics. The Westward Hilton hotel is the only hospitality firm that utilizes the integrated and single technology platforms across and it tends to share information about regarding where all its guest points are located (Enz' 453). The corporate culture at Westward Hilton is easy to imitate by competitors because the corporate standards in the Hotel can be applied similarly to other hotels in the industry. The staff members who are in Front-line desks tend to be more professionally dressed as compared to those who have little or no connection with the guests at the hotel. The office staff members at the back do not have to be in professional business attires. However, it would be difficult for competitors to compete with the human resource practices at Westward Hilton (Enz' 453). The staff members tend to be extremely friendly and the management takes its time to ensure that its workforce is adequately trained. Q. 2 There would adverse ramifications if the Westward Hilton Hotel was sold. The hotel was luckily brought out of its bankruptcy problems by the Hiller Hotels. The Westward Hotel is in collaboration with the Hiller hotels and its management, customers and employees work with the owners to maintain it to its top and profitable position. The Westward Hilton hotel has had numerous managers coming through but there has never been one such as Peter Green (Enz' 456). When Peter Green was the executive vice president, the hotel increased its profits to be more than 200%. However, when it came to the selling of this hotel, it was relatively hard for Green to make the sale since the hotel was one of his key investments and he had worked so hard to maintain it to its current level Green and his family had ensured that the hotel’s vision was entirely based on customer service and employee loyalty. He worked hard to promote the hotel to have it own identity and reach the level where it would attract international customers. Selling the hotel would therefore mean that Peter Green’s efforts and those of the Hiller Hotels would go to waste. The Hiller hotels had Westward Hilton hotel turned around in its operations and performance when they purchased it due to bankruptcy. Q. 3 Hiller’s general business strategy which includes the buying of undervalued properties and turning them into valuable businesses for sale is compatible with its human resource strategies. Hiller’s vision is to make the lives of its customers better through the business. The vision was originally crafted by Green himself and got transformed by the Hiltons into an environment where every employee was committed to the vision. The human resource management at Hiller Hotels ensures that Westward Hilton has a familiar work environment similar to that of the Hiller hotel (Enz' 455). After Peter Green left the corporation, the general managers also went away but Westward Hilton’s high performance and its vision remained the same. Hiller’s strategy ensures that it remains one of the largest hotel firms in the world. Hiller hotel uses certain business models of the third party ownership to ensure that it grows globally to compete successfully against its competitors. The general business strategies of Hiller hotels and its mission statement are compatible because before Green left the firm he ensured that the staff members would follow his strategic guides on planning. Case 5: Q.1 When it comes to an experimental brand, one such as the Banyan tree usually delivers beyond the usual services and products. The brand connects its customers with the desired lifestyles, and emotions which when combined as one they result to the total experience and outcome of a brand. The propositional value of such an experimental brand usually aims at offering consumers with the functional and emotional values where their interactions with consumers are conceptualized and combine them as one. This ensures that they can clearly remember it and experiences that are felt with it in the future. The Banyan tree usually offers its customers with more than the usual places of luxury for their holidays (Enz' 529). It incorporates a combination of features provided by the hotel such as the spas in the tropical hotel gardens. This is usually a crucial tool in ensuring that the brand delivering is experienced through different methods of its services and products that are offered. In addition to this, Banyan tree can be said to be delivering its value propositions to most of its customers when they are guests at the hotel for retreats, rejuvenation and holiday intimacy. Additionally, the Banyan tree usually focuses on the campaigns of the CSR, which is usually one of its key building strategies. Thus, this is how the banyan tree value is created; as the inspirational brand in the customers’ eyes. As a result of this, most customers are more willing to make payments of premium prices to the Banyan tree, which ensures the enhancement of customer loyalty in the value of Banyan tree. Q. 2 The Banyan Tree is used in evaluation of how the new locations have expanded, which is entirely based on the crucial criteria of natural beauty and other features of Banyan tree. The Banyan Tree also involves uncontrollable risks which are instabilities in the political side. A political situation of a state can tremendously affect the profitability any business and in this case the Banyan Tree in the long run. Given the fact that Thailand market has political unrests, this has caused more tourists to fear the industry of hospitality. Inconsistency in the quality of standards and the cultural diversity in different states in the world have led to the Banyan Tree having various challenges such as maintaining its quality standards (Enz' 529). Presence of manpower in numerous locations has led to customers having different believes, values and attitudes. It is vital for the banyan tree to have different locations of the cultural context provided in a way that the staff members understand what entailed. Allocating larger portions on sale investments of properties because of low fluctuation of different businesses in the environment may result to the decline of units in business. If more sales of investment properties were allocated, this would increase Banyan Tree’s financial security. Diversity of culture can be regarded as a risk and at the same time a benefit. The Banyan tree usually operates in different locations in the world and can rotate its front desk staff members from China to markets that were emerging. Q. 3 The trend in the world of tourism and travel industry has increased continuously from the years 1995 to 2005. Therefore, this has an impact on the micro-economics of the financial crisis in Asia and other terrorist activities in SARS and T-sunami areas (Enz' 530). The Banyan tree runs its expansion plan in the pacific Asian markets, and the overall trend can be noted to be growing by 2.5% in the year 2000-2005. A huge drop in the year 2005, led to the Tsunami having an impact on the Indian Ocean in the year 2004. Revenues from the resorts in Phuket reduced by a percentage of 40.1%, and revenues decreased in Maldives by 15.7%. Increased revenue in the Banyan tree also depends on investments and sales of properties by 57% based on the figures in the years 2003 and the 2005. The recommendation of growth in the Banyan tree is based on perspectives of the finances. Being the fastest growing market, Africa has a market growth of 10%. As the first mover in discovering locations, Africa has become a destination that is popular. With costs that are low in labor, the Banyan Tree benefits and as a result there is a possibility that high price ratio is achieved. There is room for the Banyan tree to have the premium niche hotel established in markets that are in Africa (Enz' 530). The Banyan tree can mitigate its risks in different geographical areas, but also in property development of the portfolio. Case 6: Q. 1 The drivers of India’s economic boom are numerous and it can be noted that India is among the bright spots that are now a hit for the global economy that is upcoming. This year India has forecasted a growth in its economy from 5% to 6%, a number that is far much more than the one which was recorded in the early 1990s. One of India’s driving force is the middle average income earning group, which lives above the line of poverty but has yet to attain the true level that is usually depicted in the modern societies. This group is surprisingly resilient and has been able to counterbalance its slump in the global export where the Indian state emerges as the key player. The Indian government has to continue being welcoming to its investors because despite its economic boom, it still has high levels of unemployment and a slowly growing economy (Enz' 552). To pull itself out of these problems, India has to strategize ways in which investors will continue flocking. Q. 2 Availability of resources and finances can be said to be a factor that gives the international hotel chains a competitive advantage over chains in the domestic market. The international hotel chains were established years ago when entry barriers in the market were not as restrictive as they are today. International hotel chains have the advantage of recruiting employees from other states, making it easier and cheaper for them as compared to domestic chains that have to hire a demanding workforce. International hotel chains have the ability to sustain minor glitches and can get assistance from other partnerships. Having a larger consumer base also makes it easy for these hotels to be more advantaged as compared to the domestic chains. Q. 3 Growth in India’s different industries has lead to its economic boom and a key player among the giants in the world. India’s organized retailing of its goods in the market can be said to be adopting new ideologies that are in the retailing market. India can face competitive threats from states like China and Japan, because their economic front is better than that of India, thereby making them investment locations than India (Enz' 552). Q. 4. Starwood is expanding with its newly launched product; aloft because after its launching, this brand has proven to be highly consistent, thereby reflecting on its achieved success in the long run. Aloft’s success reports on its vibrant designs and improved guest experience thereby promoting itself as a worthy brand in the market. Aloft continuously blazes its trail of promoting the adaptation and conversion of projects. As a result there is a ferocious loyal following of this brand, and its well deserved technology and design. The trick used by aloft is that it grabs the market share wherever it get opened and the next generation has taken advantage of this to embrace it who heartedly. Q.5 Introducing Aloft in India will definitely be a success especially if it is introduced to the new generation. It would not be a mistake to introduce the aloft brand in India. Being global is one of the most profound strategies to employ, for a firm like Starwood (Enz' 553). India has a growing market of hospitality which does not have so many resources that are readily available. This may pose as a problem for an entrant product such as aloft. However, this does not mean that aloft cannot be successful in the untapped Indian market of hospitality. Despite the cultural differences and lack of a skilled labor market, aloft would be successful because the new generation group in India forms a large customer base than other states, therefore, a guaranteed success. Aloft brand building is no doubt an easy task and a crucial role which ensures that there is the successful functioning of other hotel chains and competition from other brands. Case 7: Q.1 Avoiding brand commoditization such as the case in Starbucks is not an easy step to take. These are different steps which can be taken. Use of stronger brand/product positioning of strategies: To avoid delivering low quality products and brands in the future, Starbucks has to define its competition widely and differentiate its brands (Enz' 564). If the brand is properly positioned in the market, it is most likely to provide a roadmap for Starbucks future growth. Authenticity: Authentication is the other way that Starbucks can use so as to avoid commoditization. Premium products and brands in the firm have to be well-conceived. Brand experience: If the firm is reputable and constantly reminds the employees that they are ladies and gentlemen who are offering their services to other ladies and gentlemen, there is no doubt that the experience of brands in such as firm becomes successful. Delivering brand experience: Starbucks has to ensure that its employees deliver the brand know-how if commoditization has to be avoided. Showing employees how to make such deliveries promotes their performance impact, thereby being strongly competitive against competitors. Communicate with the non-customers and customers: Talking to both parties can promote Starbuck’s knowledge of how its customers and those who are not customers view the business and that of the competitors. Promotion of brand differentiation: It is crucial for Starbucks to communicate clearly the different forms of brands. This can be done by shifting from the usual brand building advertising techniques to use of promotional programs. Q. 2. There are numerous strategies that Starbucks can implement so as to compete with McDonald’s. Use of its Customer base: Taking advantage of its customer base is one way in which Starbucks can increase its customers, their loyalty and revenue in the business (Enz' 564). Starbucks hold around 33% of the coffee market share and this translates to a net income of $945 million only in the years 2010. Its high quality of brand: Starbuck has a brand value that is of high quality and its coffee stores are exceptional examples of care that should be accorded to brands. Since Starbucks prides itself in the brands that it offers to its wide customer base, this can be used as a solid strategy against McDonald’s to maintain the customers. Q. 3. The decision to fire the CEO, Jim Donald was justified because Starbucks has in the last few months been struggling with a decreased customer base due to the customers cut backs on their spending amid the high prices of fuel and increased value on home shopping. In addition to this, most competitors such as McDonald have ensured that Starbuck’s customer base has decreased by launching their own gourmet lines of coffee (Enz' 565). This read to some of the analysts questioning whether Starbucks had completely exhausted all the markets and stated it was now the time for the firm to face its challenges by making changes. This struggle led to the board members of Starbucks to say that it was returning back its chairman; Howard Schultz to be the new CEO, for their restructuring of the firm. This move was justified because a new CEO comes with new changes and this is what Starbucks needed. Advantages of changing senior managers: a) It becomes easier for the firm to restructure all its operations b) There are new transitions in the firm c) Old business strategies get to be changed and implemented abruptly d) New managers come with new ideas and views which can be applied in cases of firms like Starbuck. Disadvantages of changing senior managers: a) Old cultures die hard and therefore it can be difficult for the new manager to cope or change the existing culture in the firm b) Bringing innovation in a firm that does not welcome change is not an easy task. c) Most managers tend fail in their new places of work because of the “success syndrome”, where they stick with particular ways of conducting activities despite knowing that they are using the old plans and strategies. Q.4 Starbucks has not lost its competitive advantages yet and it can still regain its customer base. Starbucks sustains its competitiveness by having a constant look at the new experiences and products, for its guests. An excellent example is that the firm hires professional designers to take care of the artwork on the mugs. Starbucks has also incorporated other features such as coffees that are differently flavored; a feature that is hard to get from its competitors or any other firm. The market trends are monitored regularly by Starbucks which makes it easier to identify and problems (Enz' 564). The firm takes it time to study the city that it will venture into and how its products can fit in such a society. The corporation has been around since the early 1970s and a slight glitch in its operations does not mean that it is headed for doom. It has premium coffees and products which are related, personnel policies that are progressive and company ideal for the environment and the society where it is based among other strong points. Starbucks has an intangible brand value and this is how brand loyalty gets to be created thereby promoting their competitiveness leading to the future sustainability. Q. 5 Starbucks can focus on the international operations despite the failing of U.S. in its performance. The reason behind this is because Starbucks provides brand experiences which extend beyond the products that are usually offered to the customers. Case 8: Q.1 Extensive training of agents can be done to ensure that there is fluency in communication with customers. Training programs can be introduced so as to train customers’ in the future on product training and sales. In the positioning of call centers, it is recommended that hotels should consider the implementation of market strategies that do not solely rely on awareness of brands and reputation (Enz' 582). Marketing through calls is invaluable if this is the only strategy that is employed. There is need for aggressive marketing so as to ensure that there is diversification. It is also recommended that hotels should broaden their focus from only the usual high end pricing and come up with an economic package that can last through the rough economic times. Q.2 The efforts of the hotels to shift the bookings to a website that they owned was a success because the hotel could design its website according to how it wanted the customers to access it and products that it had which were readily available could now be accessed without problems. The costs incurred when using another website that was not their own was also avoided. Cruise lines should do more online bookings because it saves on time and the booking process can be made easy if the matter was to be looked into closely (Enz' 582). Most customers fear booking online because for the regular users, they may fear that there might be complications in the whole process despite knowing the exact thing that they want. At the same time those who are first timers may fear booking online because they may want face to face communication with the staff members for advice before taking the step of parting with money. Q. 3 Are the acquisitions and mergers wise strategic moves for DSPs? Why or why not? What possible future partnerships would you recommend? Acquisitions and mergers are a strategic move that the DSPs took because they have more advantages than demerits. Having a merger thus means that there will be international competition and the threat of local competitors reduces. A merger would make it easy for there to be more investments because a new firm is likely to make more profits if it is successful. This also prevents the industry from shutting down in the event of bankruptcy. Q. 4 Companies like Google should enter the online travel services since it is a merit that Google has over the other firms is that it has a global customer base unlike any other firm in the same industry. This move can challenge the markets that are established and would most definitely generate serious profits unlike any other firm. To make entry in this industry, it would be recommended that Google acquires the ITA software. The ITA software assists in developing systems of reservations that are used by most airlines as well as other services. If Google would take ownership of the ITA software, it would not just get into this business or the travel business only, it would also strategize ways in which it would control other systems that its competitors use. Almost half of the airlines are sold via the online booking system. This is one of the grand chances that Google would have over all the other competitors (Enz' 582). Google would be the guarantee to most customers of improved results in the travel research engine. Additionally, the most targeted destinations would be indicated alongside the search results. Conclusively, this would make the process of online booking to be extremely easier and accessible for most customers who may be using the site. Work Cited: Enz', Cathy A. Hospitality Strategic Management: Concepts and Cases. 2nd ed. John Wiley and Sons, 2009. p. 1-676. Print. Read More