Competitive Strategy of the Global Corporation - Case Study Example

Corporate social responsibility and the hospitality industry Name Professor Course Institution Date Introduction Founded in 1987 by chip Conley, Joie De Vivre is a hotel management group based in San Francisco. The group has grown to manage over 36 boutique hotel properties in California. By the year 2010, Joie De Vivre was the second largest boutique hotel operator in the United States after the pioneers of the boutique concept in San Francisco Kimpton Hotel and Restaurant group. Boutique hotels are different from branded chain hotels and motels through their mode of service they offer. They are sometimes referred to as “lifestyle or design hotels” because of their type of service, and this concept emerged in the early 1980s in main cities such as San Francisco, New York, and London. These hotels provide their clients with personalized services. For example, the facilities at the hotels are furnished in a themed, aspirational, and stylish manner; the accommodation offered is excellent. Among the many property hotels, Joie De Vivre manages is the “Good Hotel” (Flinn, 2008). This was as a result of JDV combining two of its properties, Best Western Flamingo and Best Western Hotel Britton. Good Hotel officially opened in November 2008, with a capacity of 117 rooms. The Good Hotel’s environmental friendliness, philanthropy, and positive attitude have seen the hotel being branded as a “hotel with conscience” (Brooks, 2009). The hotel believes in conservation and care for the environment. Pam Janusz was the general manager of the hotel together with two other properties under Joie De Vivre. Since her allocation in 2009, she and her staff of 130 both full-time and part-time worked hard to achieve guest loyalty. They as well ensured employee satisfaction to which she had achieved during her six months on the job. On April 15, 2010, Joie De Vivre decided to sell off Good Hotel and two other properties, Best Western Carriage Inn and Best Western Americania. Since Janusz had been the general manager of the three properties, she was requested to carry out an evaluation to the business and offer her recommendation. The properties were to retain their staff but under new management. Joie De Vivre Strategy on Good Hotel The Good Hotel branding strategy can be characterised as inventive, hip, and conscious. Joie De Vivre’s founder and CEO, Chip Conley refer to the hotels strategy as relating to Abraham Maslow’s “Hierarchy of Needs”. He emphasizes on trying to make the customer feel and see the product on offer as an extension of customer himself. This way one manages to refresh the identity of the customer making them feel as they are becoming more of that aspirational self. Conley describes the hotel’s branding strategy as a unique transition that creates original hotels granting them customer loyalty. The hotels draw their inspiration from magazines leading to a unique product for each hotel that inspires each hotel branding concept. The Good Hotel brand is an inspiration from Ode and ready-made magazines (Flinn, 2008). According to the general manager of the hotel Janusz, it embodies five key concepts; these are humble, inventive, hip, conscious, and happy. These five concepts are certain to ensure that it maintains its customer base. This is through the provision of unique services and product giving the customer a unique personality while in the hotel. The hotels’ branding is a unique way of keeping Joie De Vivre’s hotels geographically focused and product –line diverse. This strategy is opposed to other hotel brands such as Holiday Inn that is geographically diverse and product line focused. The hotel has a unique commitment to conserving the environment by ensuring that it provides a green business environment to its customers. This gives the hotel a commitment towards social responsibility that ensures that its hotel facilities and products are all eco-friendly. This component is an important aspect to the hotels competitive strategy. This because there is a growing demand for the green lodging by a certain demographic segment that consists of consumers described as “cultural creative” by American Sociologist Paul Ray. The hotel is also likely to boost its market share by over 60 per cent on leisure travellers and 28 per cent on business travellers. This is according to the 2008 Travel Industry Association report. It was stating that 60 per cent of United States leisure travellers were willing to pay extra for services from environmentally friendly travel providers. Another survey by Deloitte in the same year 2008 showed that 28 per cent of the U.S. business travellers would agree to pay for an extra 10 per cent premium for them to stay in eco-friendly lodging facilities. Ray describes this segment of travellers as “Lifestyle of Health and Sustainability” (LOHAS). He refers to them as a segment that is after making the world a better place for them and their children. They are an ecologically, practical understanding, sophisticated and economically aware customers that believe the society has neglected environmental and ethical practices. Estimated to be around 17 per cent of the United States adult population this segment can make an impact in the hotel industry. It is, therefore very important for hotels to incorporate social responsibility as a part of their competitive advantage strategy. It is also a strategic move to curb the growing market because the survey also stated that, among all ages of consumers, the age bracket of 14 to 24 appeared to be more concerned with environmental protection and climate change. This translates to a future market where these young consumers will become the main consumers of the hotel industry, meaning that it is very important for the hotels to incorporate social responsibility in their strategies to maintain a current and future competitive advantage. Good Hotel competitive strategies Good Hotel has major competition in the hoteling industry with the likes of Kimpton and Hyatt posing a major competition because of their acknowledged reputation in the market. Kimpton is known to be the pioneer of the boutique hotels in San Francisco, which is the home ground for the Good Hotel. Hyatt, on the other hand is a global hospitality company that has spread its recognition through its leading industry brands. It also has a traditional innovative development over its fifty-year history (Kyly, 2009). Good Hotel’s strategies are supposed to keep it on the forefront in the US hotel market despite the competition. It has managed to maintain a large market share especially in San Francisco and California. Hyatt Hotels’ has a string of strategies that give it competitive strengths that it uses to maintain and gain more market share in the industry. These strategies include taking advantage of economies of scale to provide global expertise and operational efficiency (Hyatt International Corporation, 2012). The hotel focuses on product superiority by designing the product to reflect an individual’s culture and spirit of each location. The Good Hotel also ensures to have product superiority through using magazine themes to entice the customer with a unique product. The hotel is also consistent on ensuring that all its products associate with environmentally and socially cautious features. For example, the hotel’s lobby includes a vending machine that that is branded by readymade magazine as well as a bench made of recyclable felt blankets. These features are meant to compete with Hyatt’s brand strength and brand awareness strategies. Hyatt strategies are an association a powerful and distinctive combination of property quality and marketing among high-end consumers. The Good Hotel, however still maintains its market share with prospects to grow despite the competition. Kimpton Hotels and restaurants are the centre of the trend that brought about the boutique hotels. The hotel is focusing on building more boutique hotels that are worthy over $800 million in the next three years (Penton Media Inc., 2008). The hotels expansion strategy is a major threat to Joie De Vivre Good Hotel, which is undertaken by new management with no plans to expand in place. To counter the Good Hotel social and environmental friendly unique products, Kimpton also has its unique programs that range from being eco-friendly to pet-friendly (Penton Media Inc, 2008). The hotel however, does not emphasize on this strategy as much as the Good Hotel, which has made social and environmental responsibility a key concept in its products and services. Unlike Good, Hotel’s strategies, Kimpton hotel are focusing on aligning its properties from a financial and technological standpoint (sas Company, 2012). The hotels competitive edge is, therefore to focus on establishing a stronger revenue management culture. Good hotel’s strategy is focusing on being unique in terms of their product and close association with their customers in a move to ensure customer loyalty. Social conscience generally refers to the understanding or awareness of things and actions that are morally acceptable to the society (Porter & Kramer, 2002). On the other hand, this can refer to the realisation of the problems and adversities of a society. Every hotel at one time or the other must understand and apply this concept. Without factoring in its activities social conscience, the hotel has a high probability of undergoing certain challenges such as criticisms and customer loss. One of the reasons for the growth of the Good Hotel is its belief to be a hotel with a conscience (Flinn, 2008). The hotel emphasizes on environmental sensitivity and positivity. This in return ensures that the hotels customers feel at ease and see themselves contributing to saving the environment. The strategy worked well for Good Hotel because, in a span of six months under Janusz’s management the hotel had management to maintain a steady growth in their guest services and most importantly bet the hotels financial forecasts (Flinn, 2008). Incorporating social conscience into the hotel business has both advantages and disadvantages however, the fact remains that the advantages outweigh the disadvantages. When a hotel incorporates social conscience as one of its growth strategies, the hotel connects with the society, which comprises of its customers (Porter & Kramer, 2002). There is a high tendency for maintaining customer loyalty once a hotel makes the customer feel a sense of belonging. The hotel is also guaranteed to experience positive feedback and reviews from its operating environment, which is a sure way of creating a new customer base while maintaining the existing customers. Social conscience associates with philanthropic ideas and environmental consciousness (Brooks, 2009). Currently the whole world is into conserving the environment and just like the Good Hotel customers, more people are adapting to eco-friendly lifestyle. Therefore, a hotel that neglects the basic concepts of social consciousness then is likely to face a major fall in its customer base over the following years. This does not only apply to the hotel’s customers but essentially the hotel staffs that are the driving force for sustainability of the hotel. It is a plus for any hotel that incorporates awareness and acknowledgement for its staff’s efforts. The other side of the idea is still possible where hotels believe that they can save on more by ignoring the social consciousness of the activities. Such hotels either have a ready-made or steady magazine and source of all the mishaps of the society. Some of the disadvantages of social consciousness include spending a lot of time taking care of the environment, as well as a customer and employee needs. The hotel i s unlikely to exploit new and various economic strategies for fear of violating the acceptable terms and conditions of the society it is located. Social consciousness does not comprise of many disadvantages, therefore to be applied by numerous hotels as opposed to those that do not. Conclusion Strategy is an important aspect that all hotels in the industry need to embrace. A proper strategy is likely to see a hotel company gaining momentum in sales. It helps in maintaining recognition even during tough times as long as the hotel maintains unique services for its customers. Another emerging important issue in the hotel industry is ethics, social consciousness, and responsibility. Most hotels are using these important aspects for competitive purposes and in designing their products and specialising their services. Every hotel now want to appear unique and associate itself with the customer, this does not only attract the customer but also ensures loyalty despite the economic conditions. Works Cited Read More