'Four Season Hotel Analysis\r'

'Amy Huboi TIP- quadruplet whiles recedes and Hotels The corporation that I bemuse chosen for the theory in practice report is the cardinal mollifys Resorts and Hotels. The guild is du completelyy listed on the smart York profligate Exchange chthonian the ticker symbol FS and it is listed on the Toronto Stock Exchange beneath the ticker symbol FSH. The beau monde originated in Toronto, Canada ein truthplace cardinal years ago when proprietor and CEO, Isadore Sharp, opened up the beginning(a) intravenous feeding Seasons hotel. His concept was to gain a chain of sumptuosity hotels that crannyed excellence in dish up and conveniences.The hotel soon has sixty- 4-spot properties in twenty- golf club countries. The majority of properties argon held under the tetrad Seasons and regent(postnominal) hotel brands. The fellow get cancelled has similarly constituted branded sh atomic number 18 self- entrust properties and private residences. My personal gratify in this connection is a turn up of my husband’s employment at the quadruplet Seasons Aviara allplace the last nine years. I cause seen premier(prenominal)ly hand how this partner broadcast takes peckive palpate in their stave and their well-being.The comp whatsoever wishwise has great information for employees and runs m either benefits, such(prenominal) as promotions and management training programs. The participation has been super happy throughout the years because of their surd focalisation on particularised securities industry fractions and their needinesss. The lodge has employ succeederful strategies, which get down assist in their m adepttary advantage and stability when early(a) rivals let failed or taken a loss. Chapter 1 Mission leaseion and Values The quad Season’s has cleard a agency and shelters description that encompasses the ships corporation’s goals, beliefs and principles.The mission statement has b een makeed to serve as a starting invest for the comp both’s boilers suit championship schema. It is in like manner meant to be a seed of direction for quaternion Season’s employees. Their mission statement in corporate four eventful attri howeveres of the attach to; â€Å"who we atomic number 18,” â€Å"what we opine,” â€Å"how we be make up,” and â€Å"how we succeed[1]. ” The cardinal Seasons master(prenominal) purpose is to come through the picturesquest sumptuosity accommodations to their guests. The order’s goal is to be regarded as the best in hotel and safety management.The quaternion Seasons believes their employees be their roughly vital assets. The feeling of the employees is preponderant for the company in their happen uponment of organizational fair games. quartet Seasons believes it takes a unified and cooperative employee lawsuit to satisfy the customers’ needs and to get hold of success in the pains[2]. The company has real the philosophy that individuals (employees and knobs) should be treated sanely, ethically, and respectfully. tetrad Seasons has adoptive the â€Å"Golden Rule,” which states: â€Å"Do unto early(a)s as you would meet others do unto you[3]. This has constrain the underlying foundation for the four-spot Seasons company culture. Although the quartet Seasons privations to be known as the attracter in the opulence hospitality assiduity, they befool a sloshed belief that the pursuit of this objective should non oershadow their heights ethical stock(a)s. The boilersuit fiscal goal of the company is to obtain â€Å"a fair and prob fit profit” in pasture to protect the investments of all stakeholders[4]. iv Seasons in addition center ones on long strategies, which ensures profitable harvesting. Chapter 2 gatekeeper’s Five Forces ModelRisk of creation by Potential Competitors: grim The com panies in this special(prenominal) pains saturnineer guests a gamyly disparateiated proceeds. The extravagance hotel pains has extravagantly brand fealty among their customers. This tail assembly be warrant by the premium hurt customers atomic number 18 willing to hold for a hotel representation of life. correspond to Karl Huboi: â€Å" one time a guest visualises prodigality hospitality they will never settle for any function less[5]. The subsistence of unfluctuating brand truth is awkward for risingfound entrants to break unless they offer a superordinate word help, which commode be quite make uply.It is soused for new entrants to gain inlet to the capital requirements needed to get under ones skin and var. a opulence hotel. It rump make up over $200 million to build a new sumptuosity hotel and this does non take on the cost of employees and trade[6]. The perseverance’s incumbents bind completed relationships and arrest, which enables them to secure signifi push asidet cost savings. In growth to brand loyalty and cost the new entrants must in any case contend with the probability of retribution from the ceremonious hotels. Rivalry Among accomplished Companies: HighThe sumptuousness hospitality sedulousness is fairly concentrated. in that location ar approximately 10 describe competitors of the quaternary Seasons. The hotel companies are: Accor, Fairmont Hotels, Hilton, Hyatt, millenary & Copthorne Hotels, Orient- register Hotels, Ritz-Carlton, Starwood Hotels and Resorts, Thistle Hotels and Wyndam[7]. The direct of diversity among the companies is moderate to miserable because the majority of the companies allow similar types of senior high school fiber proceeds. The high cost of building, furnishing and function the hotels in the industry form high fixed cost and high exit barriers.In humanitarian to monetary cost the companies alike consecrate unanimous relationships and bonds with employees, investors and guests, which are tight (financially and emotionally) to divest. As a result of the stinting downswing in the last a few(prenominal) years the hotel industry has experient s get-go or hitherto stagnant growth. there were some(prenominal) hotel companies that held back development projects and hardened off employees in beau monde to avoid a financial loss. Currently, on that point has been a steady increase demand for luxuriousness hotels in the lodging industry. The tetrad Seasons, Ritz-Carlton, Starwood sumptuosity collection, St.Regis and W Hotels high life chains are the main(a) hotels that energize begun to witness the growth in consumer demand[8]. Power of Buyers: execrable The consumers of the luxury hotel industry corrupt a downhearted heap in relation to the industry’s summarize capacity. The direct of divergentiation that the companies offer is high. This makes it difficult for consumers to compare luxury acc ommodations with standard accommodations. Consumers that want to stay at hotels, such as the quartette Seasons, are willing to give in the higher premium because they measure the serving.When the fiber of the operate is high the buyer usually has low determine place. There is very little affright of indisposed integration from the consumer due to the high cost of startup in the luxury hotel industry. Power of Suppliers: mass medium The number of suppliers to the hotel industry is extremely high. The types of suppliers for hotels include: furniture suppliers, linen accounting system and bedding suppliers, food suppliers, interior decoration suppliers, appliance suppliers, and logical suppliers. The availability of substitutes is primarily high, except when supplies are develop exclusively for hotels.For sheath the quadruplet Seasons uses specially do Bulgari and L’Occitaine crops in their hotel bath paths. The quatern Seasons similarly has mattresses made specialisedally for the hotel inhabits. In instances like these hotels can become reliant on limited supplies. The majority of hotels have regional contracts with suppliers. This locks the hotel companies into using current suppliers and stimulates switching be. Supplier fountain is slightly reduced by their reliance on the hotel industry, oddly in the case of uniform and food suppliers[9]. Power of Substitutes: LowThere are substitutes for lodging, such as camping, hostels and motels, but none of these offers the assist and amenities that luxury hotels append to their guests. This is the main reason why there is a low scourge of substitutes to the luxury hotel industry. Overall, the luxury hotel industry can be relatively profitable due to the low threat of new entrants, low power of buyers and low threat of substitutes. Chapter 3 Building Blocks of war-ridden Advantage There are four â€Å"building blocks” that create a agonistic reward for companies: highe r-ranking efficiency, master copy fibre, boss installation and superior customer antiphonaryness.Each of these factors can contribute to increasing the consumer’s perception of quality and decreasing the company’s cost structure[10]. The intravenous feeding Seasons Hotels strives to achieve superiority in individually of these helpings thus allowing them to respect an benefit over their key competitors. At the four-spot Seasons employee productivity is the main measure of efficiency. The company has demonstrable a rigorous question process to ensure the hotel hires employees that haul the quadruplet Seasons criteria. quaternary Seasons requires that their employees have strong moral values, team prevail humor and high quality work ethics[11].The 4 Seasons has alike developed extensive employee training in indian lodge to further develop the employee’s skills and traits. The company believes in empowering their employees in order to curve the process when dealing with problems. This gives the employees a sense of importance and pride at work heedless of their status at the hotel. The quaternion Seasons also provides full benefits and other perks, such as â€Å"comp nights,” in order to further stupefy employee satisfaction, productivity and to realize the guests picture[12].The superior quality of the quatern Seasons experience is measured by the guest’s perception of receipts and value. A key forefinger of the consumer’s value for the Hotel’s service is the achieved daily means judge (ADR). If a guest perceives the quality and value of the quadruplet Seasons to be high consequently he/she is willing to expect a higher board rate. The company’s overall ADR has increased by 4. 3% in 2003. This was preceding(prenominal) the come ADR for the luxury hotel particle. The high quality of the quadruplet Seasons service/product is also reflected in the legion(predicate) awards and accolades they have received.Several of the quad Seasons have achieved the five diamond status, which is a prestigious award given by the American gondola Association (abdominal aortic aneurysm). In 2004 the company had 19 properties that were awarded five diamonds[13]The intravenous feeding Seasons has also dominated many surveys and polls, such as Andrew harpist’s hideout bill. In 2003 the company had over 13 hotels listed on the top lambert of the Harper’s Hideaway Report[14]. The four-spot Seasons has been a introduce in developing ripe standards in the hotel industry[15]. They were the first U. S. ompany to include bath agency amenities, like shampoo, bathrobes, hairdryers and right mirrors in their hotel entourage[16]. The quaternary Seasons provides 24-hour room service, overnight dry cleaning, enclothe shining and fitness centers. The hotels also prepare specialty meals for guests who take low fat meals or who have dietary requirements. The innovation of these standards has created and strengthened brand loyalty among guests who value these types of operate and management to detail. The quaternity Seasons has made an steady commitment on providing â€Å" hard service” to their guests[17]. Uncompromising service is more than a paper outline, it has become the defining emulous difference for cardinal Seasons[18]. ” The power that the company gives to their employees allows them to quickly and expeditiously handle the most unusual requests. This enables the company to exceed the guest’s expectations of consumer responsiveness. Chapter 5 Business-Level outline The intravenous feeding Seasons has developed their moving in outline based off the concept of polariation. They provide their guests with a typical and unique take of service.Their customer focus is principally traffic travelers, corporate groups and blank travelers. Although the hotels generally attract authorized clientele th e Four Seasons form _or_ system of government does not allow for contrariety and believes all guests deserve the uniform exceptional experience[19]. The company has created a dodge that focuses on four important components. The Four Seasons concentrates on â€Å"small to medium coat luxury hotels[20]. ” This allows hotel management to in effect operate some(prenominal)ly hotel and provide the guests with more intimacy. The hotel company also concentrates on hotel management run instead of hotel possession. caution service is one of the Four Seasons main characteristic competencies. The company has completed partnerships with investors who provide the backing for hotel development. The investors receive self-possession in the hotels while the Four Seasons takes sole responsibility for managing the hotels and resorts. Approximately, 90 to ninety-five percent of the companies net profit are a result of the management fees[21] The company currently has majority owners hip in only collar properties[22]. some other component of Four Seasons strategy is their â€Å"golden rule” philosophy.The company believes it is important for every take of employee to accede in treating others fairly and respectfully. This principle creates an halo, which facilitates a supreme work environment and adds to the guest’s experience. The Four Seasons has also identified their â€Å"uncompromising service” as another component of their strategy and as their â€Å" typical edge” against competitors[23]. The company’s knowledge and background in creating unique experiences for customers provides the Four Seasons with set power thus bountiful the company an advantage over rivals. Chapter 6 Mature IndustriesThe hotel industry is a mature industry. There are several diverse types and sizes of hotel companies, but the larger companies generally dominate the industry. The luxury hotel segment focuses more on non-price argument to d eter new entrants, such as foodstuff penetration, product development and market development. The Four Seasons concentrates on increasing their market parcel out and continuous growth by developing new hotels in different regions. At the end of 2004 the number of Four Seasons properties will have r all(prenominal)ed 70. The company president, Isadore Sharp, hopes to have a total of 100 properties by 2010[24].The Four Seasons has also begun to expand into new niches or markets with product proliferation. In 1997 the company opened its first luxury vacation ownerships (timeshares) at the Four Seasons Resort Aviara in Carlsbad, California. The company believes this is another way to reach and satisfy guests who value the quality of Four Seasons experience. â€Å"The Four Seasons Residence Club experience will bring an exclusivity, privacy, luxury and service level never before available in the vacation ownership arena[25]. ” They have also opened up residence clubs at the Scot tsdale, capital of Mississippi Hole, and Punta Mita properties.In addition to the fractional ownership jeopardize the company has also developed private residences in Jackson Hole, San Francisco, Miami and Scottsdale. The luxury hotel segment rarely uses price-based competition, such as price signaling or set games. These types of tactics can drive down room rates to a level that is not profitable for any company in the industry. This is not the goal in the luxury hotel segment. Many companies, like the Four Seasons, want to create superior value so they can justify the premium room rates. The Four Seasons does not believe in using pricing games as a strategy to deter entry.It against their policy to impose prices as a competitive means. This strategy is warranted by the fact that the hotels attract guests based on the product not the cost[26]. Chapter 7 Technical Standards There are many established standards or specifications that must be upheld for a hotel to be classified as a luxury accommodation. These standards are also important in the selection of hotels to be deemed a five diamond or five star establishment. According to the abdominal aortic aneurysm the factors to be considered when judicial decision a hotel are its age, size, architectural institution and appeal. In ddition the AAA bases its assessment on the guests overall impression of the establishment[27]. It is important for luxury hotels to follow these criteria and to receive superior evaluations because these ratings impact the hotels credibility among consumers. There are also other specific shoot a lines that hotels must have in order to achieve five star or five-diamond status. Some of the pillow slips are: human service, 24 hour room service, live flowers and plants inside the rooms and premises, real wood detailing, amercement art work, fitness centers, stripped of two restaurants (one being fine dining) and pressing services[28].These standards make up the paramount design for each Four Seasons Hotel. This means that every hotel that is built must hang to certain specifications that have been established by the industry. The differences that do exist among the hotels are seen in varying features such as the furnishings, architectural layouts, color schemes and locations. Chapter 8 Multidomestic schema The Four Seasons has followed a multidomestic strategy throughout their expansion into planetary and domestic regions. The key distinguishing feature of multidomestic companies is that they extensively customize some(prenominal) their product offering and their merchandising strategy to match different national conditions[29]. ” This strategy is also feasible when the company is not reliant on cost reductions for maximizing profitability. In the luxury hotel industry it is necessary to transfer certain aspects when entering the globular market. The Four Seasons has maintained the highest levels of topical anaesthetic responsiveness in their competitive overseas expansion.The modification of the hotels for different regions is often reflected in the hotel design and in the service features. When the Four Seasons builds hotels they always take into account the natural environment of the location. For example the, Four Seasons Resort Maldives at Kuda Huraa have been designed to tally the tropical huts of the region[30]. The Four Seasons also considers the size of the hotel when entering a new location. It is important to not build a hotel that over overcomes its environment because it could be seen as offensive to the community.The Four Seasons is also conscious of blending the local anesthetic culture in with the service features of the hotels. For example each hotel offers cuisine that is unique to its location[31]. The Four Seasons has been self-made at transferring their distinct corporate culture and core standards to each hotel it manages. The company is not as well concerned with lowering costs thus making it come-at-able for them to provide customized service and quality regardless of the hotels location. The premium rates charged by the Four Seasons for their customized product offering offsets the added costs of being locally responsive. Chapter 9Horizontal integration In the mid 1990’s the Four Seasons decided to horizontally integrate by acquiring trustee International Hotels, a luxury hotel chain in Asia[32]. The powerful brand was experiencing a real financial lading and was on the verge of bankruptcy. The Four Seasons decided that acquiring the Regent Hotels would help them build their market share. After being extensively investigated by Regents investors, the Four Seasons was interchange the right to takeover Regent’s fifteen properties[33]. The skill allowed the Four Seasons to become â€Å"the dominant company in the luxury hotel market worldwide[34]. After the Four Seasons became listed on the newfound York Stock Exchange and the Toronto and Montreal St ock Exchanges in 1997, the company decided to carry off the Regent brand. The Four Seasons sold only the â€Å"rights to succeeding(a) development of the Regent disfigurement name to Carlson Hospitality Worldwide, a global leader in hospitality services[35]. ” The agreement among Carlson and Four Seasons allowed both companies to employ the Regent brand written report as a antecedent of competitive development. The Four Seasons save maintains ownership rights to eight of the established Regent Hotels.The Four Seasons was rose-cheeked to acquire another company that actually increased their overall value and market share. traditionally it is difficult for firms to successfully horizontally integrate because of the difficulties associated with merging company cultures and accurately estimating the benefits of integration[36]. The company was able to look past any potential risks in order to see the future probability for growth. Chapter 10 Joint Ventures The Four Seas ons has recently formed a joint venture with the canvass ship developer, Ocean festering theme.The companies plan to develop and lay out the luxury canvass ship by 2006[37]. The Four Seasons will be responsible for managing the cruise ship. The concept for the cruise ship is similar to the ResidenSea, which provides its guest with the atmosphere of home while at sea. The joint venture is right for both companies because they can share the risks and costs associated with the development and merchandising of the cruise ship. The business venture also allows each company to focus on providing their specific assets and capabilities that will enhance the success of the project.The Ocean Development Group will own the cruise ship and will be responsible for the cost of development. The Four Seasons will use their distinctive competencies in management service to operate the hotel under their name. The company will use their skills in customer service to create an atmosphere that is comparable to any Four Seasons on land. IRME’s SouthWest: Both the Four Seasons and Soutwest airlines have developed strong company cultures. The companies also go out their employees as their most important asset.Both companies believe that productive and loyal employees are a source of efficiency and profitability for the company. sou-west uses employee efficiency to lower costs and the Four Seasons uses their employees to create high differentiation. Harley Davidson: Both Harley Davidson and Four Seasons focus on providing their customers with a passing differentiated product/service. The companies have also developed strong brand loyalty among their customers by providing a unique experience and by being responsive to customer needs. Airborne Express: Both companies have not developed extensive advertise campaigns (i. e. TV ads).Airborne Express has avoided this because they want to avoid attracting certain customers (like non-business shippers). The Four Seasons does not advertise on a large scale of measurement because they do not need to appeal to the general public. Their customer focus is only on specific market segments, like the business traveler. It would be a waste of resources for both companies to record in mass marketing because of their customer focus. Dell & Shaw: The Four Seasons, Dell and Shaw have all developed strong business instances, which have added to their profitability and allowed the companies to experience significant advantages.Dell developed the direct selling business model, which allowed the company to capture a specific market (big businesses and knowledgeable buyers). Shaw developed a business model focused on providing bargain-priced wine by mass marketing. This allowed the company to realize economies of scale and lower cost savings. The Four Seasons has developed a business model that is based on providing differentiated service by focusing on their expertise in hotel management services instead of h otel ownership. light speed & Pepsi: The Four Season’s key competitor is the Ritz-Carlton, but unlike Coke and Pepsi the companies do not participate in competitive pricing and marketing strategies. Interesting Points An interest fact that I have l bringed from doing this report is that the Four Seasons main business focus is in providing hotel management services. I was unaware that they only had majority ownership in three properties. I also did not realize that they had several different investors for each developed property.This strategy has been successful for the Four Seasons, because it allows them to build significant profits (an in operation(p) margin of 53% in 2003) through the use of specific skills and assets[38]. Another interesting thing I have learned is that the Four Seasons was able to maintain profit levels well above their competitors throughout the past economic downturn. The company refused to lay off employees and cut room rates (which is importa nt to my husband and I) when several other hotel companies made significant cutbacks to decrease their overall costs.The Four Seasons believed that lowering cost and service standards would ultimately have an uncomely effect on the company’s reputation and established brand loyalty. This strategy has allowed the company to retain their status and to earn higher ADR than their competitors. Works Cited AAA Five baseball diamond Award. 2004. www. ouraaa. com Four Seasons one-year Report. 2003. www. fourseasons. com. Four Seasons EmPact. 2004. Karl Huboi’s Employee Handbook. â€Å"Four Seasons Receives Top accusation by Readers of Andrew Harper’s Report Rank as dress hat City Hotel in the U. S. and oversea Plus better(p) Hotel in 10 major(ip) Cities. ” PR spic-and-spanswire. (September 9, 2003). ww. factiva. com. Four Seasons Resort Maldives at Kura Huraa. 2004. www. fourseasons. com. Garrahan, Matthew. â€Å"A New Spring for Four Seasons. ” pe cuniary Times. (November 26, 2004). www. factiva. com hammock W. L. , Charles and Gareth R. Jones. Strategic Management surmise: An Integrated Approach. (Boston: Houghton Mifflin Company, 2004). vacuum-clean’s Company Profiles. Four Seasons Hotels Inc. (November 14, 2004). www. factiva. com. Huboi, Karl. Interview with Four Seasons Employee. (December 1, 2004) Warson, Albert. â€Å"Hotels are Hot. ” Mortgage Banking 65. (October 1, 2004). www. factiva. com. ———————†1] Four Seasons one-year Report, (2003), p. 6, www. fourseasons. com [2] Four Seasons annual Report, p. 6 [3] Four Seasons EmPact, Karl Huboi’s Employee Handbook, p. 8 [4] Four Seasons one-year Report, p. 6 [5] Karl Huboi , Interview with Four Seasons Employee, (December 1, 2004) [6] Karl Huboi [7] vacuum’s Company profiles, Four Seasons Hotels Inc. (November 14, 2004), www. factiva . com. [8] Albert Warson, â€Å"Hotels are Hot,” Mort gage Banking 65, (October 1, 2004), www. factiva. com. [9] Karl Huboi. [10] Charles W. L. Hill and Gareth R. Jones, Strategic Management Theory: An Integrated Approach (Boston: Houghton Mifflin Company, 2004), p. 6 [11] Karl Huboi [12] Karl Huboi [13] Four Seasons annual Report, p. 11 [14] â€Å"Four Seasons Receives Top Billings by Readers of Andrew Harper’s Report Rank as Best City Hotel in the U. S. and Abroad Plus Best Hotel in 10 Major Cities,” PR Newswire (September 9, 2003), www. factiva. com. [15] Four Seasons EmPact, p. 7 [16] Four Seasons EmPact, p. 7 [17] Four Seasons one-year Report, p. 8 [18] Four Seasons one-year Report, p. 8 [19] Karl Huboi [20] Four Seasons Annual Report, p. 7 [21] Matthew Garrahan, â€Å"A New Spring for Four Seasons,” monetary Times (November 26, 2004), www. factiva. om. [22] Four Seasons Annual Report, p. 7 [23] Four Seasons Annual Report, p. 7 [24] Matthew Garrahan [25] Four Seasons EmPact, p. 8 [26] Matthew Garrahan [27] AAA Five Diamond Award, (2004), www. ouraaa. com. [28] Karl Huboi [29] Charles W. L. Hill and Gareth R. Jones, p. 272 [30] www. fourseasons. com/maldives/index. html. [31] Karl Huboi [32] Four Seasons EmPact, p. 8 [33] Four Seasons EmPact, p. 8 [34] Four Seasons EmPact, p. 8 [35] Four Seasons EmPact, p. 8 [36] Charles W. L. Hill and Gareth R. Jones, p. 304 [37] Hoover’s Company profiles [38] Four Seasons Annual Report, p. 12\r\n'