Harvard Case - Best Western International: One Global Brand
"Best Western International: One Global Brand" Harvard business case study is written by Richard Ettenson, Dennis Guthery. It deals with the challenges in the field of International Business. The case study is 24 page(s) long and it was first published on : Jan 1, 2003
At Fern Fort University, we recommend that Best Western International (BWI) adopt a transnational strategy to achieve its goal of becoming a truly global brand. This strategy will involve a blend of globalization and localization, leveraging the company's core competencies while adapting to the unique needs and preferences of different markets.
2. Background
The case study focuses on Best Western International's (BWI) efforts to expand its presence globally while maintaining its brand identity. BWI, a hotel franchising company, faced challenges in achieving consistency across its diverse network of hotels in various countries. The case highlights the complexities of international business and the need for a robust global strategy.
The main protagonists are:
- David Kong, CEO of BWI, who is tasked with leading the company's global expansion.
- BWI's franchisees, who operate individual hotels under the Best Western brand.
- The global hotel market, which is becoming increasingly competitive and diverse.
3. Analysis of the Case Study
To analyze BWI's situation, we can use the Porter's Five Forces Framework to understand the competitive landscape:
- Threat of New Entrants: High, due to the relatively low barriers to entry in the hotel industry.
- Bargaining Power of Buyers: Moderate, as customers have a variety of choices and can easily compare prices and services.
- Bargaining Power of Suppliers: Moderate, as hotels rely on various suppliers for goods and services.
- Threat of Substitute Products: High, as customers can choose alternative accommodations like vacation rentals or hostels.
- Competitive Rivalry: High, due to the presence of numerous established hotel chains and independent hotels.
BWI's core competencies lie in its strong brand recognition, its extensive network of hotels, and its focus on providing value for money. However, the company faces challenges in maintaining brand consistency across diverse markets and managing the expectations of its franchisees.
Key issues:
- Brand Consistency: Maintaining a consistent brand experience across different cultures and markets.
- Franchisee Management: Balancing the needs of franchisees with the company's overall strategic goals.
- Competitive Landscape: Navigating the increasingly competitive global hotel market.
- Emerging Markets: Adapting to the specific needs and opportunities of emerging markets.
4. Recommendations
To achieve its global ambitions, BWI should:
- Adopt a Transnational Strategy: This involves leveraging global scale while adapting to local market needs. BWI can achieve this by:
- Standardizing core brand elements: Maintaining the core brand values and brand identity while allowing for local adaptations.
- Developing regional marketing campaigns: Tailoring marketing efforts to specific regions and cultural contexts.
- Empowering franchisees: Providing franchisees with the autonomy and resources to adapt to local market conditions.
- Focus on Emerging Markets: BWI should prioritize growth in emerging markets like China and India, where the demand for hotel services is rapidly increasing. This requires:
- Understanding local market dynamics: Conducting thorough foreign market analysis to identify opportunities and challenges.
- Developing partnerships: Collaborating with local businesses and government entities to facilitate market entry.
- Adapting products and services: Offering products and services that cater to the specific needs and preferences of local customers.
- Invest in Technology: BWI should leverage technology to enhance its operations and customer experience. This includes:
- Implementing a robust IT management system: To streamline operations, improve communication, and enhance data analytics.
- Developing mobile applications: Providing customers with convenient access to booking, information, and services.
- Investing in online marketing: Utilizing digital platforms to reach a wider audience and target specific customer segments.
- Strengthen Brand Management: BWI needs to ensure consistent brand messaging and experience across all its hotels. This requires:
- Developing clear brand guidelines: Defining the core brand values and standards for all franchisees to adhere to.
- Implementing rigorous quality control measures: Regularly monitoring and evaluating the performance of individual hotels to ensure compliance with brand standards.
- Investing in brand training: Providing franchisees and staff with comprehensive training on brand standards and customer service.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies: The recommendations leverage BWI's core competencies in brand recognition, network reach, and value proposition.
- External Customers: The recommendations prioritize customer satisfaction by providing a consistent and relevant brand experience.
- Internal Clients: The recommendations empower franchisees and provide them with the tools and resources to succeed.
- Competitors: The recommendations position BWI to compete effectively in the global hotel market by leveraging its strengths and adapting to local market needs.
- Attractiveness: The recommendations are expected to drive growth and profitability by expanding BWI's reach into emerging markets and enhancing its brand value.
6. Conclusion
By adopting a transnational strategy, focusing on emerging markets, investing in technology, and strengthening brand management, BWI can achieve its goal of becoming a truly global brand. This will require a commitment to cross-cultural management, global marketing, and international business ethics.
7. Discussion
Other alternatives not selected include:
- Purely global strategy: This would involve standardizing operations and marketing across all markets, potentially alienating local customers.
- Purely local strategy: This would involve adapting to each market independently, potentially diluting the brand identity and increasing costs.
Risks and key assumptions:
- Cultural differences: Adapting to local cultures and preferences can be challenging and require careful consideration.
- Economic fluctuations: Emerging markets can be volatile, requiring careful risk management and contingency planning.
- Competition: The global hotel market is highly competitive, requiring BWI to continuously innovate and adapt.
8. Next Steps
BWI should implement the recommendations through a phased approach:
- Phase 1 (Year 1): Develop a transnational strategy, define brand guidelines, and prioritize emerging markets.
- Phase 2 (Year 2-3): Implement technology upgrades, enhance brand training, and expand into selected emerging markets.
- Phase 3 (Year 4-5): Monitor performance, refine the strategy, and expand into additional emerging markets.
By taking these steps, BWI can position itself for continued success in the global hotel market and solidify its position as a leading global brand.
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Case Description
Best Western (BW) is striving for global brand leadership in the broad worldwide mid-scale lodging market. Management must decide how best to strategically position the Best Western brand in an increasingly competitive lodging environment. There is also the need to provide direction and connection to BW's affiliates and members worldwide to ensure that marketing and business success in different markets is not isolated and random. How to achieve this goal presents management with many organizational, marketing, and branding challenges.
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