Starwood Hotel and Resort Case Study

Starwood Hotel and Resort Case Study

STARWOOD HOTEL AND RESORT CASE STUDY 6

StarwoodHotel and Resort Case Study

Q.1what are the drivers of Economic Boom in India?

Theeconomic boom has been driven by very many factors some of whichresides in both service and the industrial sector. The industrialsector has made tremendous progress in the recent past with a growthrate of 11.1% in 200-2007. Manufacturing grew by 12.3%. Hugeimprovement in the global and technological competitiveness ofmanufacturing has enhanced merchandise export growth. The serviceshave expanded far and wide the average rate grew from 9.8 to 11.2%in 2006-07. The communication, hotels, trade and transport industryhave grown tremendously thus making India to have an economic boom.

Willthe Indian government continue being welcoming and cooperative toforeign investors?

TheIndian government continues to be cooperative with the foreigninvestors since India is becoming a land of opportunities. Thesustainable and high growth rates with easing restriction onwealthier population and foreign ownership have contributed to newbusinesses. Also, there has been a huge shortage of room coupled withlow-quality hotels in most of the cities in India has attracted theforeign investors. Thus the government should continue beingcooperative

Q.2Do the Cash and other resources of international hotels give them acompetitive advantage over domestic chains?

Witha booming economy, the inflation has almost doubled thus showing acurrency depreciation coupled with an increase in the rates ofinterest. The improved economic conditions have led to thedepreciation of the currency. The resources and cash of theinternational hotel give them a competitive advantage since India hasbeen facing the challenge of accommodation and quality hotels in thehospitality industry. Thus, having money to finance their operationswill pose a competitive edge.

Ifthe advantage exists is the advantage of cash and other resources asustainable advantage?

Thiswill act as a prerequisite of a sustainable disadvantage since, whenthe available opportunities are exploited, fewer opportunities willbe in existence, and thus deep pocket may be advantageous but notsustainable enough. Cash or valuable resources are the corecompetency or the capability of the firm. It is thus more profitableto a firm having cash since this cash or resource acts as the corecapability against those without.

Q.3 Will the domestic and global chains increase their aggressivenessposing enhanced competitive threats?

Theaggressive expansion by the international hotels and the Indian hotelchains will shape the success of the hoteliers. This is seen as thesuitability of the new brand of aloft for the Indian customers. Asthe average disposable income of the citizens in India increases, thedemographic profile of the country will increase with a higherproportion of the people with middle and high-income. The number offinancial assets by 2005 increased by 19.3% in India where thepopularity increased with other global chains thus increasing theiraggressiveness thus posing a major threat where most of theinvestors.

Despitethe threats, Starwood executives have been rather optimistic aboutthe success of aloft in India, exotic landscape, booming economy andrich cultural heritage. India is a vibrant market and an ideal matchof vitality and energy of Aloft hotels. The government has allowedthe foreign investors to own about 24% in the public traded realestate and has removed the sectoral caps on ownership by theforeigners. Such relaxation brings business opportunities andtrustworthiness of the Indian government

Q.4why is the Starwood expanding with an newly created and untestedbrand like aloft?

Thesuccess of the new brand is dependent on Starwood`s ability to copewith the future developments in the Indian economy. The brand is amid-priced select service brand launched in New York fashion week.The brand can work well outside the US such as India since it bringsconvenience, style and the social atmosphere to the bustling anddiverse Indian landscape.

Doesthe brand concept work outside U.S

Thebrand concept can work outside US since it present new ways ofstaying and playing to the global community of leisure and businesstravelers. Aloft would open not less than 25 Aloft hotels in the 30major cities. The brand will work despite the higher entry costs inthe US. Starwood also expects that the expansion through aloft willbe less expensive than expanding through the other brands. It is alsocheaper in terms of staffing ad the brand will succeed if theemployee is trained. The brand is suitable for the emerging marketsand in essence, it will connect well with Starwood facilities

Q.5Will the aloft brand work in India with the emergence of newcustomers?

Thebrand will work well in India since India is one of the fastestgrowing economies of the world and present diverse opportunities foraloft. In essence, Starwood has aloft in one of the internationallyrecognized hotel operation in India. With aloft, the new generationof the customers who have emerged can be reached into the mid-marketsegment.

Elementsof aloft that make it hard to bring to India?

Thebrand may make it difficult to bring to India since though there hasbeen tremendous progress in introducing the state of art consumerproducts no real innovation in the hotel industry has been made. TheAloft hotels, however, will present as a market defining concept inIndia and thus there is no doubt that India is ready to face it.

References

Enz,C. A. (2009). Hospitalitystrategic management: Concepts and cases.John Wiley and Sons