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Bringing Aloft To India

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Presentation on theme: "Bringing Aloft To India"— Presentation transcript:

1 Bringing Aloft To India
Tural Ismayilov Vishal Gonuguntla

2 Introduction Starwood hotels and resorts - hold, control and franchise hotels Barry Sternlicht – Founder Approximately 850 hotels under these brands purchased Hotel Investors trust Aloft - attempt to compete Nine Brands

3 Summary Starts with overview Plans to open 50 hotels by 2010
Indian economy, trends and overall business environment Discusses tourism and the hospitality industry (new business opportunities) Increase in economic conditions in India (attracts FDI) Big domestic players - Leela Ventures, Oberoi Group, Taj Group

4 Summary Indian hotel industry looks promising, but hurdles Corruption
Infrastructure limitations Money laundering High construction prices Shortage of skilled labor Cultural adjustment Aloft - its features and benefits Mid-priced select service brand developed by Ross Klien Focus on new generation of travelers Incorporates sea green program

5 Environmental Analysis
The broad environment Success - internal and external Successful company - analyze existing factors and forecast results Most common tool - PEST framework

6 PEST Analysis Political Rules and norms to operate in the country
Hotel industry in India: Labor regulations Environmental regulations Merger regulations Food and safety regulations Cost to adhere to these laws - expensive Laws regarding minimum wage Laws governing treatment of employees Heavy fines

7 PEST Analysis Economic
Favorable economic conditions - Attracts tourists (domestic and international) Huge growth in Tourism sector Liberalization reforms in 1990s - emerging market for FDI GDP expected to rise from 6% - 11% by 2025 Hotel, Transport and communication sector - growth rate increased from % in 2007 Real estate sector - positive growth (construction expected to rise 4 times)

8 PEST Analysis Economic
Inflation increased from % (overshadowed due to improved economic conditions) Government allows owning 24% in publicly traded real estate for foreign shareholders Improvement in financial market and advancement in electronic payment infrastructure Indian citizens net income and demographic profile - rise More people in high and middle income level Stability and longer growth prospects

9 PEST Analysis Socio-Cultural
Core objectives of hotel service - maximization, satisfaction and happy experience to customers Knowledge about ethnicity, race and cultural backgrounds Aloft Change foodservice menus Fresh fruits and juices Food, beverage and meeting spaces in tune with mentalities

10 PEST Analysis Technological Modern infrastructure
Increasing use of internet Aggressive advertising on the internet High-tech information systems (Competitive advantage) Increasing cost of energy Improved payment options Enhanced guest reservation system Online booking facilities Wi-Fi on-the-go First mover maintains competitive advantage

11 Industry Analysis Business tool - examines current business environment Helps in detailed research on competitors, products and consumers Most famous tool - Porter's five forces analysis Identify intensity of competition Profitability and attractiveness of industry to outperform competitors Starting point for strategies and competitive position

12 Five Forces That Drive The Industry
Bargaining Power of Customers Threat of Substitutes Competitor Threat Bargaining Power of Suppliers Threat of New Entrants

13 Threat of New Entrants Response:
Change tactics, prices, market shares, advertising High capital costs Manage spending in equipment, construction and pre-operational expenses Good location - Target market High quality service Starwood - take advantage of brand image and loyalty Taj, Oberoi and Leela - brand loyalty influences new entrants Also control raw materials and distribution channels

14 Threat of Substitutes When does it occur?
Different prices, amenities etc. Same service, different price Constant challenge - Make customers choose them over competitors Recession Hotel relationship with customers Change in demand and supply of hotel rooms

15 Competitive Rivalry Fierce competition Internet – Key role
Customer inclination – Price Sensitivity Intensity of competition – Factors Product differentiation & low switching costs

16 Bargaining Power of Suppliers
Provides raw material Dependent on products & services Long-term relationships Quality Experienced staff

17 Bargaining Power of Customers
Higher power Increase threat of backward integration More exposure to internet Compare prices Eradication of intermediaries Loyalty programs

18 Strategic Issues of the Industry
Access & Connectivity Amenities Human Resources Security

19 SWOT Analysis Strengths Weaknesses Opportunities Threats
High Reputation Brand Loyalty Geographical Reach 8 Different Brands 850 Hotels 150,000 Employees More focus on domestic brand Small Brand International Brand Awareness Opportunities Vacation Ownership Market on the rise Aloft in India Digitalized Media Threats Skilled Labor Competition Political Disturbances

20 Strategic Direction & Major Strategies
Developing the Strategic Plan Strategic Direction & Major Strategies Target Market – Upscale business Online presence & Sales capabilities Loyalty Programs High quality services at best costs Cross promotion of complimentary products

21 Evaluation of Opportunities &
Recommendations Top Managements – Evaluate shortcomings & benefits Digitized Media – Problems & Security concerns Internet – Cost effective tool for marketing Reputation – Time & Effort Positive & Negative comments Excellent prospects, but economically dependent Cross-Selling

22 Organizational Resources Analysis
Strategic Direction Internal Environment Values (Promises) Enriched Performance

23 Management

24 Financial Analysis Financial position Profit from each available room
Comparison of revenues per year

25 Conclusion Nine Brands Aloft’s target market – Mid range
Indian hospitality sector – High prospects Government incentives & concessions Critical obstacles & challenges Shortage of skilled labor Many ethnic & cultural backgrounds Indian industry analysis Cater to Indian lifestyle & way of living

26 References Ante, S. (2007) Six Sigma Kick-Starts Starwood. Retrieved from Brenner, A. (2006). Starwood Hotel and Resorts, Inc. Global companies. Retrieved from: Clough, R. (2014). In Focus: Starwood brands performance update. HVS Dener. Available at: Council of Supply Chain Management Professionals (CSCMP). (2011). Logistics Management. Retrieved from: Farrell, R. (2014). Environmental Business Analysis. Hearst Newspaper. Available at: Fritz et al. (2009). Integrated Company Analysis. Wisconsin School of Business. Retrieved from: business.library.wisc.edu/resources/kavajecz/.../starwood_pres.pdf Gemkow, W. (2010). A Case Study on the Implementation of Six Sigma within Starwood Hotels & Resorts. Retrieved from: Hotelstockindex (2014). Starwood Hotels advances asset-light strategy. Retrieved from: Jameson, D. A. (2011). The Rhetoric of Industrial Espionage The Case of Starwood V. Hilton. Business Communication Quarterly, 74(3), Retrieved from: Lee, K., & Carter, S. (2011). Global marketing management. Strategic Direction, 27(1). Retrieved from: Prajapati, K. B., Jadeja, S., & Goswami, M. (2014). PEST Analysis for Indian Luxurious Hotel Market. Asian Journal of Research in Business

27 References Economics and Management, 4(3), Available at: Starwood, (2014). Company values overview. Starwood Hotels and Resorts Worldwide, Inc . Retrieved from: Starwood (2014). Starwood Hotels & Resorts. Retrieved from: Tavitiyaman, P., Qu, H., & Zhang, H. Q. (2011). The impact of industry force factors on resource competitive strategies and hotel performance. International Journal of Hospitality Management, 30(3), Retrieved from: Zhao, W. (2009). Issues, challenges and trends that facing hospitality industry. Canadian Research & Development Center of Sciences and Cultures. Retrieved from:


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