...Back to Hotel Strategic Management 101: An examination of hotels’ implementation of Porter’s generic strategy in China Yin-Hsi Lo, Assistant Professor of Hospitality Management, Southern Taiwan University, Taiwan ABSTRACT The market-position view (MPV) of the firm in Porter’s generic strategy hypothesizes that the exploitation of differentiation and cost-leadership can create competitive advantage for a firm, which then has a better chance of outperforming other firms in a homogeneous industry. However, this notion has not been tested in the Chinese hotel industry. In response to this gap, this study empirically examines the relationships between the generic strategies of differentiation and cost leadership and hotels’ organizational performance. The results suggest that differentiation is the only significant generic strategy that influences customer satisfaction in the Chinese hotel industry. These findings have important academic and practitioner implications, which are then discussed. Keywords: Competitive Strategy, Customer Satisfaction, Hotel Performance, Market Positioning INTRODUCTION There has been a great deal of discussion in the literature about the impressive hotel development in China in the past 20 years (Derbaix & Pham, 1998; Devonport, Biscomb, & Lane, 2008; Echtner & Ritchie, 1993; Fakeye & Crompton, 1991; C Fornell, 1992; Foxall & Goldsmith, 1994; Pine, 2002; Yu & Gu, 2005). Specifically, many interesting issues have become the favorite topics...
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...travellers3. Increase the service levels to lead to customer satisfaction and retention4. Training program 5. Reward system for employees6. Increase in price to standard New York levels7. Hire middle managers | Threats1. High competition in New York2. Low employee satisfaction3. Constant management turnover4. Employees may join union5. Rise in customer complaints6. Lack of training may cause problems | Strengths1. Low employee turnover2. Great location3. Ample amenities in area4. Highly experienced management5. Cheaper prices than competitors6. Non-Unionised employees7. High Class chef and restaurant | Strength and opportunity1. Expand Asian market (O1, O2, S2,S5, S7)2. Increase the service levels through proper training (O3,O4, O5, S1, S6)3. Expand business market (O2,O3, S2, S3,S7) | Strength and threat1. Great location being overshadowed by poor service (S2,S3,T1,T5)2. Improve employee satisfaction (S1,S6,T2,T3)3. Need to keep management at hotel (S4,S6,T3)4. Top chef and restaurant but staff not trained well causing complaints(S7,T5,T6)5. May become involved in price war if competitors lower prices (S5,T1) | Weaknesses1. Poor customer service2. Poor financial condition3. High management turnover4. Lack of proper training5. Lack of business facilities6. Paying high wages but still poor employee satisfaction7. Marketing not working (Bressner had never heard of hotel) | Weakness and opportunity1. Develop customer retention through improving service levels (O3, O4, O5, W1,...
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...characteristics Low visitor retention rate Five porters: Supplier: High, heavily dependent on few airlines & hotels, possibility of withdrawal and cancel of flights Buyers: High, buyers can easily switch to competing suppliers, several other Asia-Pacific countries in which to enjoy a tropical vacation. New Entrants: Low, high capital requirements, difficult to enter market and high cost to create a new tropical island/country/city Substitutes: Switching cost are low, 193 other countries to visit for vacation Intra-Industry Rivalry: High Guam’s main source of income is from the tourism industry, which they built from scratch. Position the target markets, countries with the BCG model An amalgamation of American, Chamorro, Japanese and Filipino cultures in one. Case Abstract: The general manager of the Guam Visitors' Bureau, a destination marketing organization, faces the challenge of running the island's tourism industry. There are strong interest groups, who have structured the competitive field in Guam, and the island's mature industry faces ever-increasing competition from rival destinations. The general manager must formulate a realistic strategy that acknowledges the internal and external constraints his organization faces and safeguards the competitive position of Guam. Instructors will find this case useful in strategy, marketing strategy, tourism industry, hotel management or service industry courses. The...
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...Porters 5 forces analysis for hotel industry BARGAINING POWER OF SUPPLIERSThe term 'suppliers' comprises all sources for inputs that are needed in order toprovide goods or services.The high class hotels are operating by few hotel chains like-TAJ, EIH, ITC&THELEELA PALACE so they have a control over the industry.There are no substitutes for spas and five star hotels.The hotels customers are fragmented, so they have to reduce their bargaining powerto attract the customers.The Taj, ITC& Oberoi are having various rates and tariffs. Because they are havingtheir own brand image.The hotel chains are operating different services like Spas, Boatels, Resorts, CityCenters, Heritage HOTELS, etc.2 . BARGAINING POWER OF CUSTOMERSSimilarly, the bargaining power of customers determines how much customers canimpose pressure on margins and volumes.The hotel industry is one of the most invested in its fixed assets. So they are tryingto recover their amount quickly.The suppliers are providing better information about them to attract the customersHere the buyers are highly informed.If the hotel price changes are moderate, the Customers have low margins and areprice-sensitive.Some unseasoned timings the hotels are offering discounts and incentives toreduce the bargaining power of buyers.3. THREAT OF NEW ENTRANTSThe competition in an industry will be the higher; the easier it is for other companies toenter this industry. In such a situation, new entrants could change major determinants of the marketenvironment...
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...of Contents: Introduction….………………………………………………………………………………..p. 3 Five Forces Model in Hospitality Industry…………………………………………………..p. 4 Top three companies in Hospitality Industry (Hotels)………..…………………………….p. 5 Marriott International, Inc. Comparative Strategy, Value Chains..……………………....p. 7 Differentiation Strategy of Marriott International, Inc……………………….…………...p. 7 Cost Leadership Strategy of Marriott International, Inc…………………………………..p. 8 Value Chains of Marriott International, Inc………………………………………………p. 8 Primary Activities…………………...……………………………………………….p. 8 Supporting Activities………………………………………………………………...p. 9 Business processes………………………………………………………………….p. 10 Conclusion………………………………………………………………………………….…p. 11 References……………………………………..………………………………………………p.11 “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency”. (Bill Gates) Introduction. In the today’s world of competitive markets, information technology has a huge impact on the success of the companies. “The role of IT is constantly evolving and has changed significantly from the days when the IT organization was often referred to as “data processing.” Today, in many industries, IT enables some businesses to differentiate themselves from their competitors. Those companies that...
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...ECONOMIC AND BUSINESS REVIEW | VOL. 15 | No. 1 | 2013 | 33–56 33 ICT AS A NEW COMPETITIVE ADVANTAGE FACTOR – CASE OF SMALL TRANSITIONAL HOTEL SECTOR Tanja Mihalič1 Dimitrios Buhalis2 Received: 12 December 2012 Accepted: 6 March 2013 ABSTRACT: This paper studies the information and communication technology (ICT) in a small hotel sector at a point in time when the transition towards a full market economy is coming to the end and competitiveness and ICT implementation is gaining on importance. Its main purpose is to study a business potential of this new competitive advantage resource and its productivity paradox. A competitive advantage factor model (CAF model) has been proposed and the structural modelling (SEM) has been performed on the case of a small transitional Slovenian hotel sector. The study contributes to knowledge on ICT competiveness and ICT productivity paradox in hotel sector. Further, its results hold practical implications for the strategy for hotels operating in small-sized hotel industries in transitional or ICT developing environments. In more concrete terms, research findings indicate that such hotel sectors need to speed the ICT implementation. ICT as such doesn’t directly increase the firm’s profitability, yet there is an indirect positive impact of factor ICT on a firm’s financial performance that emerges through other competitiveness factors, such as differentiation, qulity or image, which helps firms to stay competitive on the...
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...revenue. By providing people seeking accommodation with an alternative to hotels, Airbnb’s platform also directly competes for a chunk of the hotel hospitality business. In this essay, we will argue that Airbnb will continue being a successful business, possibly at the expense of incumbents focused on price differentiation, such as Premier Inn1. In order to support this argument, we will start by analyzing Premier Inn and it’s competitive environment using Porter’s2 article as a main point of reference. We will then focus on Airbnb, and why the company will continue being successful in the next years. First we will see how the company has advantageously positioned itself to ride current economic and technology trends, setting up its future success. We will also look at Airbnb’s disruptive innovations on both the supply (opportunistic, non-professional hosts) and demand side (price conscious over-served guests), and how these were stepping to access to higher customer segments. Finally we will argue that Airbnb has found a distinctive set of activities that has put the company in a place of it’s own, although competition is rapidly growing. * * * Let us start by looking at one of the UK biggest budget hotel chains: Premier Inn. Premier Inn is one of four hotel chains that hold 80% of the budget hotel market, making it a concentrated and therefore high-barriers to entry market. What’s more, as any hotel it is a very...
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...International Journal of Arts and Commerce Vol. 2 No. 11 December, 2013 EFFECTS OF STRATEGIC MANAGEMENT DRIVERS ON ORGANIZATIONAL PERFORMANCE: A SURVEY OF THE HOTEL INDUSTRY IN KENYAN COAST Uzel Jean Mzera Mutindi 1 PhD Candidate at JKUAT, MSA CBD, Kenya. Contact: jeanmzera@yahoo.com Prof. G.S. Namusonge, PhD 2 Full Professor, EPD JKUAT, Kenya. Contact: gsnamusonge@yahoo.co.uk Dr. J. Obwogi, PhD 3 Technical University of Mombasa, Kenya. Contact: Josephobwogi@yahoo.com ABSTRACT This study seeks to examine the effects of Strategic Management drivers on the performance of classified hotels in Kenyan Coast. The specific objectives are the effects of: customer relationship management strategy, strategic planning, competitive positioning, information communication Technology and organizational learning on the performance of the hotel industry in Kenyan Coast. The study seeks to determine the conceptualized Strategic Management Drivers’ influence on the performance of hotels in Kenyan Coast. The study will adopt a mixed research design which will be both quantitative and qualitative. The target population of the study will be 180 managers of classified hotels in Kenya’s Coast. The sampling technique to be used will be stratified random sampling. Secondary and primary data will be collected using a self administered questionnaire. The questionnaire will be piloted in order to check for validity and reliability. Questionnaires will be administered through...
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...Task 1 answer Diversity of sectors Hospitality industry includes a range of businesses that relates to provision of products and services. It is a multi-billion dollar industry that depends on leisure and disposable income. There are several sectors under the term hospitality industry which are as the following: 1. Hotels 2. Restaurants 3. Contract services 4. Pubs, Bars, casinos and nightclubs 5. Event A hotel is a place that has rooms in which people can stay when they are traveling where they can get food, shelter and other services. Hotels are divided into several categories such as boutique hotel, business hotel and motels. It is also classified into different star-rating, usually from one to five stars when one star hotel is much worse than a 5 star hotel. For example, Hilton hotel is a five-star hotel, and Euston Square Hotel is a three-star hotel (https://www.expedia.co.uk/3Star-London-Hotels.s30-0-d178279.Travel-Guide-Filter-Hotels) . These hotels are classified according to the different level of quality of service and products that each brand offers. However star-rating is different in every country. (http://www.businessdictionary.com/definition/hotel.html#ixzz46jZ6gtGl) Restaurants A restaurant is a place where people pay and sit to eat food that are cook and served. http://www.merriam-webster.com/dictionary/restaurant Restaurants are also classified into several groups as the following: 1. Fast food 2. Fast casual 3. Fine dining ...
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...Exploring consumer attitude and behaviour towards green practices in the lodging industry in India Kamal Manaktola and Vinnie Jauhari School of Hospitality & Tourism Management, Institute for International Management & Technology, Haryana, India Abstract Purpose – The study seeks to explore the factors which influence the consumer attitude and behaviour towards green practices in the lodging industry in India and also to explore the consumers’ intentions to pay for these practices. Design/methodology/approach – A quantitative and qualitative research methodology using a questionnaire along with secondary research has been proposed. A structured questionnaire has been used using convenience-sampling techniques from National Capital Region in India. Correlation and factor analysis has been used to explore consumers’ attitudes and behaviour towards green practices in the lodging industry. Findings – The consumers using hotel services are conscious about environmentally friendly practices in India. They patronise the hotels that have adapted green practices though not compromising on service quality. The consumers would prefer to use lodging that follows these practices but are not willing to pay extra for these services. Indian hotels have the competitive advantage over similar products if they follow green practices. Practical implications – The hotels would have to invest in environmentally friendly practices and look at long-term gains. The government...
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...profiles Hotel manager If you can manage staff, and you want to get into the hospitality industry, this job could be ideal for you. Hotel managers oversee all aspects of running a hotel, from housekeeping and general maintenance to budget management and marketing. In this job will need strong business skills. You will need to communicate well, with a sensitive and diplomatic approach. You will also need to think on your feet to solve problems quickly. To get into this job you could enter at a junior position and work your way up to management. Or you could do a higher education qualification in a subject like hospitality management and go straight in as a manager. An Apprenticeship in hospitality and catering can also be a route in. The work Large hotels may have a manager for each department, reporting to the general manager. In smaller hotels, the manager is more involved in the day-to-day running of the hotel, often dealing directly with guests. As a hotel manager, your tasks would typically include: * setting annual budgets * analysing financial information and statistics * setting business targets and marketing strategies * managing staff * organising building maintenance * making sure security is effective * dealing with customer complaints and comments * making sure the hotel follows regulations such as licensing laws * securing corporate bookings for entertainment and conference facilities. In larger hotels you will spend...
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...HR Manager 3 3. The overall business strategy 4 4. The adopts reference to the employment relationship 5 Reference 5 Procedures 1. Introduction of Sheraton Located in the Centre of Sydney's, Sheraton on the Park (formerly known as Grand Park) was purchased and changed the name by Sheraton Hotel in 1994. Public areas of the hotel include two restaurants, a lounge-style glasses and a lobby lounge. The facilities include 24-hour business services center as secretarial support and access to computers. At the same time, a ballroom, capable of sitting 550 people, and nine smaller function rooms. The occupancy rate of the hotel (often used as a measure of commercial viability) exceeds 95%. Overlooking Hyde Park, the hotel building has 559 rooms and including 49 suites. All are equipped with marble bathrooms, three International Direct Dial telephone, executive writing desk, and on-demand movies in room, walk-in closet, room safe, and mini-bar and control individual air conditioning. Guests can use the health club, heated indoor pool, gym, beauty salon, massage, sauna, steam room, 24-hour room service and laundry service. The occupancy rate is, however, depending on the severity of the season in June, July and August are traditionally the quietest periods Sydney hotel. On holidays, such as Easter and weekends tend to be quiet as well. At the time of the hotels offer special packages to attract the additional customizations in an effort to maintain occupancy rates. ...
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...corporate parent to use its core competencies in an effective and efficient manner to help its multi-domestic strategy to earn above-average returns. WHITBREAD ENVIRONMENT ANALYSIS 1. INTRODUCTION Established in 1742, Whitbread is one of the UK’s oldest and well-respected companies. The story really begins in August 1720 with the birth of Samuel Whitbread, who began his brewing apprenticeship in 1736, then founded his first brewery six years later. In 2001, Whitbread become the company it is today. They sold their breweries and left the pub and bar business, refocusing on the growth areas of hotels and restaurants. Their reinvention as the UK's leading hospitality business naturally coincided with the ending of this country’s brewing and pub-owning tradition, started by Samuel Whitbread over 250 years earlier. Now Whitbread is the UK’s biggest hospitality company, it has got the UK’s no. 1 hotel brand, Premier Inn and the no.1 coffee shop brand, Costa. Also very proud of their much-loved restaurants, Brewers Fayre, Beefeater...
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...Porter's 5 forces analysis on Air Asia Porter's 5 forces analysis on Air Asia Threat of new Entrants The extent of barriers to entry depends on the strength of: Customer has little brand loyalty. If consumers of Air Asia do not have brand loyalty, then the strength of the threat of new entrants is very high. The high numbers of competitors in the industry also decrease Air Asia customer loyalty. Most of the travelers prefer low cost. New competitors which want to come in the industry have to spend little to compete with Air Asia. High capital requirement. The industry of airline needs large volume of start-up capital. The cost of setting up of offices, buying or leasing aircraft, hiring pilots and other staffs like air stewardess and etc incur a high start-up cost. Thus, the threat is low for Air Asia. Different product offered. Air Asia offers different product compared to other competitors in Asia like Bangkok Airways, Tiger Airways, and Air Philippines. Other than the passenger sales ticket, Air Asia also include holiday packages which is affordable around Asia. Air Asia has good connection with hotels and tourism companies around Asia, which it is hard for new competitors to compete. Low switching costs. Customers do not need to spend more on switching to another airline. The price would not be very significant in differences, which it depends on the availability of competitor’s services and suitability of the flight time that prompts them to switch. Moderate...
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...Ones and Dilchert’s article: the creation of organizational cultures. Here, we will develop the idea of how culture, value creation, and competitive advantage are linked to environmental sustainability. We will briefly illustrate our arguments with findings from our case-study research in the hospitality industry in 13 Iberoamerican countries.1 1. Ours is research in progress, based on qualitative and mixed research methods. It aims to analyze the role of sustainability in the hospitality sector in Iberoamerica: Spain, Portugal, and Latin America (concretely, in Chile, Brazil, Peru, Argentina, Mexico, Colombia, Venezuela, Uruguay, Costa Rica, Nicaragua, and the Dominican Republic). Organizational culture and sustainability Sustainability and Organizational Culture There is a nascent body of literature that aims to understand how companies can embed sustainability in their organizational cultures (Howard-Grenville & Bertels, 2012). For these authors, culture has been conceptualized as shared norms or values (reinforced through the role of leaders and ‘‘champions,’’ the allocation of resources, the use of incentives, and the existence of corporate policies), as a frame or filter (that is, as recursive connections between people’s day-to-day actions and the meanings associated with them), and as a toolkit (made malleable by individual actors who use cultural resources in new ways). Among the myriad of conceptualizations available, Ulrich and Brockbank...
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