Harvard Case - Roaring Dragon Hotel
"Roaring Dragon Hotel" Harvard business case study is written by Stephen Grainger. It deals with the challenges in the field of General Management. The case study is 7 page(s) long and it was first published on : Feb 7, 2008
At Fern Fort University, we recommend that the Roaring Dragon Hotel implement a comprehensive strategic plan focused on digital transformation, operational efficiency, and enhanced customer experience. This plan should leverage technology and analytics, innovation, and corporate social responsibility to achieve sustainable growth and solidify the hotel's position as a leading player in the emerging Chinese market.
2. Background
The Roaring Dragon Hotel, a flagship property of the Dragon Group, faces challenges in a rapidly evolving hospitality landscape. Despite its initial success, the hotel is struggling to adapt to changing customer preferences, increasing competition, and the rise of online travel agencies (OTAs). The case highlights the need for strategic planning, operational improvements, and a renewed focus on customer experience to ensure the hotel's long-term viability.
The main protagonists are:
- Mr. Chen: The General Manager of the Roaring Dragon Hotel, responsible for overseeing the hotel's operations and implementing strategic initiatives.
- Ms. Li: The Marketing Manager, tasked with developing and executing marketing strategies to attract guests and increase revenue.
- Mr. Wang: The Operations Manager, responsible for optimizing the hotel's operational efficiency and ensuring smooth service delivery.
3. Analysis of the Case Study
The case study can be analyzed using a combination of frameworks:
a) SWOT Analysis:
- Strengths: Strong brand recognition, prime location, experienced staff, established infrastructure.
- Weaknesses: Outdated technology, limited online presence, lack of customer loyalty programs, inefficient operations.
- Opportunities: Growing Chinese tourism market, increasing demand for luxury experiences, potential for digital transformation, expansion into new markets.
- Threats: Intense competition from international and domestic hotel chains, rising labor costs, fluctuating currency rates, potential economic downturn.
b) Porter's Five Forces:
- Threat of New Entrants: High, due to the ease of entry into the hospitality industry and the availability of financing.
- Bargaining Power of Buyers: High, due to the availability of online booking platforms and customer access to information.
- Bargaining Power of Suppliers: Moderate, as the hotel relies on various suppliers for goods and services.
- Threat of Substitute Products: High, as alternative accommodation options like Airbnb and vacation rentals continue to grow.
- Competitive Rivalry: High, with numerous established and emerging hotel chains vying for market share.
c) Balanced Scorecard:
- Financial Perspective: Increase revenue, improve profitability, optimize cost structure, enhance shareholder value.
- Customer Perspective: Enhance customer satisfaction, build brand loyalty, increase repeat business, attract new customer segments.
- Internal Process Perspective: Improve operational efficiency, streamline processes, enhance technology infrastructure, optimize resource allocation.
- Learning and Growth Perspective: Foster innovation, develop employee skills, enhance organizational culture, promote sustainability practices.
4. Recommendations
1. Digital Transformation:
- Implement a comprehensive digital strategy: Develop a robust online presence, including a user-friendly website, mobile app, and social media engagement.
- Leverage technology for operational efficiency: Implement property management systems (PMS), customer relationship management (CRM) tools, and data analytics platforms to streamline operations and personalize guest experiences.
- Embrace digital marketing: Utilize search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing to reach target audiences and drive online bookings.
- Develop a loyalty program: Offer exclusive benefits and rewards to encourage repeat business and enhance customer engagement.
2. Operational Efficiency:
- Optimize staffing levels: Conduct a thorough analysis of staffing needs and implement flexible scheduling models to reduce labor costs and improve productivity.
- Streamline processes: Identify and eliminate bottlenecks in operational processes, such as check-in/check-out, room service, and guest requests.
- Implement lean management principles: Focus on eliminating waste, reducing unnecessary steps, and improving efficiency throughout the hotel's operations.
- Invest in technology upgrades: Modernize equipment and systems to improve service delivery, enhance guest comfort, and reduce maintenance costs.
3. Enhanced Customer Experience:
- Focus on personalization: Leverage data analytics to understand customer preferences and tailor services and experiences to individual needs.
- Develop unique offerings: Create signature experiences, such as themed events, cultural immersion programs, and personalized concierge services, to differentiate the hotel from competitors.
- Promote sustainability practices: Implement environmentally friendly initiatives, such as energy-efficient lighting, water conservation measures, and waste reduction programs, to appeal to eco-conscious travelers.
- Cultivate a strong service culture: Train staff on customer service best practices, empower them to resolve guest issues, and foster a culture of hospitality and attentiveness.
5. Basis of Recommendations
These recommendations align with the Roaring Dragon Hotel's core competencies and mission to provide exceptional hospitality experiences. They address the needs of both external customers and internal clients, considering the competitive landscape and the attractiveness of the Chinese tourism market.
The recommendations are based on quantitative measures, including:
- Increased revenue: By leveraging digital marketing and enhancing customer experience, the hotel can attract more guests and generate higher revenue.
- Improved profitability: Streamlining operations and optimizing resource allocation will reduce costs and improve profitability.
- Enhanced customer satisfaction: By providing personalized services and unique experiences, the hotel can increase customer satisfaction and loyalty.
The assumptions underlying these recommendations include:
- The Chinese tourism market will continue to grow.
- Customers are increasingly tech-savvy and value personalized experiences.
- The hotel has the resources and commitment to implement these changes.
6. Conclusion
By embracing digital transformation, optimizing operations, and enhancing customer experience, the Roaring Dragon Hotel can overcome its current challenges and achieve sustainable growth. The proposed strategic plan leverages the hotel's strengths, addresses its weaknesses, and capitalizes on emerging opportunities in the Chinese hospitality market.
7. Discussion
Alternative strategies include:
- Merging with another hotel chain: This could provide access to resources and expertise, but it could also lead to loss of brand identity and control.
- Focusing solely on the domestic market: This could reduce competition, but it could also limit growth potential.
Risks associated with the recommendations include:
- High initial investment: Implementing digital transformation and operational improvements requires significant capital investment.
- Resistance to change: Staff and management may resist changes to established processes and practices.
- Technological disruptions: Rapid advancements in technology may require constant adaptation and investment.
8. Next Steps
The Roaring Dragon Hotel should:
- Develop a detailed implementation plan: Outline specific actions, timelines, and resource allocation for each recommendation.
- Secure necessary funding: Identify sources of funding for digital transformation and operational improvements.
- Communicate the plan to stakeholders: Engage staff, management, and investors in the implementation process.
- Monitor progress and adjust as needed: Regularly track key performance indicators (KPIs) and make adjustments to the plan based on performance and market conditions.
By taking these steps, the Roaring Dragon Hotel can navigate the challenges of the modern hospitality industry and establish itself as a leading player in the Chinese market.
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Case Description
The case looks at the takeover of the Roaring Dragon Hotel (RDH), a state owned enterprise in south-west China, by global hotelier Hotel International (HI) and discusses the cultural collision and organizational adoptions resulting from the intersections of two significantly different business cultures. Specifically in this case, the focus is on the challenge involved with downsizing, redundancy, communication, cultural sensitivity, strategic planning and in developing strategy. In south-west China in 2002, the RDH business environment was just emerging from the shadow of the planned economy and had retained its guanxi-based organizational culture. At RDH, relationship development and the exchange of favors were still important and occurring on a daily basis and there was little system or efficiency in the hotel's domestic management style and processes. In comparison, Hotel International had a wealth of international experience in providing accommodation, marketing and professional management in servicing the needs of a global market steeped in corporate governance. At the commencement of the management contract there was a deep division separating the organizational cultures of RHD and HI.
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