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Harvard Case - HGRM: Bringing Back High Touch Hospitality

"HGRM: Bringing Back High Touch Hospitality" Harvard business case study is written by Lynda M. Applegate, Gabriele Piccoli. It deals with the challenges in the field of Entrepreneurship. The case study is 27 page(s) long and it was first published on : Jul 11, 2012

At Fern Fort University, we recommend that HGRM embrace a disruptive innovation strategy focused on technology and analytics to enhance its core offering of high-touch hospitality. This involves leveraging a digital transformation to create a seamless customer experience while maintaining its unique brand identity.

2. Background

HGRM, a successful hospitality management company, faces the challenge of adapting its traditional business model to the evolving needs of a digitally-savvy customer base. The company?s core strength lies in high-touch hospitality, providing personalized and attentive service. However, this model is increasingly challenged by the rise of technology-driven solutions and the growing demand for efficiency and convenience.

The case study introduces us to the key protagonists:

  • Greg Roberts, the founder and CEO of HGRM, who is passionate about maintaining the company?s values of high-touch hospitality.
  • Sarah Jones, a young and tech-savvy executive, who advocates for embracing technology to enhance the customer experience and streamline operations.

3. Analysis of the Case Study

The case study presents a classic scenario of a company struggling to balance its core values with the need to adapt to changing market dynamics. To analyze this situation, we can utilize the Porter?s Five Forces framework:

  • Threat of New Entrants: High. The hospitality industry is characterized by low barriers to entry, with new players emerging constantly.
  • Bargaining Power of Buyers: High. Consumers have access to a wide range of options and can easily compare prices and services online.
  • Bargaining Power of Suppliers: Moderate. HGRM relies on various suppliers for its operations, but the bargaining power of suppliers is not significant.
  • Threat of Substitute Products: High. The rise of alternative accommodations like Airbnb and VRBO poses a direct threat to traditional hotels.
  • Competitive Rivalry: High. The hospitality industry is highly competitive, with established players like Marriott and Hilton vying for market share.

HGRM?s current business model is facing pressure from these forces. The company needs to differentiate itself and create a competitive advantage by leveraging technology and analytics to enhance its core offering of high-touch hospitality.

4. Recommendations

HGRM should implement the following strategies:

1. Digital Transformation:

  • Invest in technology and analytics: Develop a comprehensive digital strategy that leverages web and mobile applications to enhance the customer experience.
  • Implement a CRM system: Track customer preferences, personalize interactions, and offer targeted promotions.
  • Optimize online presence: Enhance website design, improve SEO, and utilize social media marketing to attract new customers.
  • Develop a mobile app: Provide guests with access to hotel information, booking services, and concierge services.

2. Enhance High-Touch Hospitality:

  • Leverage technology to personalize service: Utilize data analytics to understand customer preferences and tailor their experience.
  • Invest in employee training: Equip staff with the skills and knowledge to effectively utilize technology and provide personalized service.
  • Create a culture of innovation: Encourage employees to contribute ideas for improving the customer experience.

3. Strategic Partnerships:

  • Partner with technology companies: Collaborate with startups and established tech companies to develop innovative solutions.
  • Explore strategic alliances: Partner with travel agencies, airlines, and other businesses to expand reach and cross-promote services.

4. Financial Management:

  • Secure funding: Explore venture capital and angel investing to support the digital transformation.
  • Optimize operations: Implement lean management practices to improve efficiency and reduce costs.

5. Basis of Recommendations

These recommendations align with HGRM?s core competencies and mission by leveraging technology to enhance its high-touch hospitality offering. They cater to the needs of both external customers and internal clients, providing a seamless and personalized experience.

The recommendations consider the competitive landscape by focusing on disruptive innovation and creating a unique customer experience. The digital transformation will enable HGRM to compete effectively with technology-driven competitors while maintaining its commitment to high-touch hospitality.

The recommendations are based on the following assumptions:

  • The hospitality industry will continue to evolve towards a more digital and personalized experience.
  • Customers value both convenience and personalized service.
  • Technology can be effectively integrated to enhance the customer experience without compromising the core values of HGRM.

6. Conclusion

By embracing a disruptive innovation strategy focused on technology and analytics, HGRM can maintain its competitive edge and remain relevant in the evolving hospitality landscape. The company can leverage its core strength of high-touch hospitality to create a unique customer experience that differentiates it from its competitors.

7. Discussion

Other alternatives not selected include:

  • Merging with a larger hospitality company: This could provide access to resources and technology but may compromise HGRM?s unique brand identity.
  • Focusing solely on traditional hospitality: This would likely lead to declining market share and a struggle to attract new customers.

The recommendations carry the following risks:

  • High initial investment: Implementing a digital transformation requires significant financial resources.
  • Technological challenges: Integrating technology effectively requires expertise and ongoing maintenance.
  • Resistance to change: Employees may resist the adoption of new technologies and processes.

8. Next Steps

HGRM should implement the following steps:

  • Develop a detailed digital strategy: Define specific goals, objectives, and key performance indicators (KPIs).
  • Secure funding: Explore various funding options, including venture capital and angel investing.
  • Pilot test new technologies: Implement new technologies in a controlled environment to assess their effectiveness.
  • Train employees: Provide comprehensive training on new technologies and processes.
  • Monitor progress: Track KPIs and make adjustments to the strategy as needed.

By taking these steps, HGRM can successfully navigate the changing hospitality landscape and continue to provide exceptional high-touch hospitality in the digital age.

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Case Description

The case centers on the dilemma faced by Carlo Fontana, the owner-operator of a small chain of two four star urban hotels located in Lugano, Switzerland and the other in Milan, Italy. Having developed an extensive customer service and operations information system, called Happy Guests Relationship Management, Fontana is entertaining the possibility of commercializing his innovation. Doing so may provide a welcome new source of income during the greatest economic slowdown in recent history and it would help in keeping the HGRM design and development team motivated to refine and improve the solution. However, commercializing the innovation may also stretch his organization too thin, and bring his team into a business, the software industry, completely foreign to them.

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