ASSIGNMENT: HYATT REGENCY
Prepared By:
Submitted to:
Roshan Upreti
faculty of UniglobeCollege
Sapana Chaudhary
Mr. Rabin Prakash Sharma
Shubhash Shrestha
Soni Kumari Thakur
Sophiya Shahi
Contents
Introduction.........................................................................................................................................................3
Vision statement ..................................................................................................................................................3
Mission statement ...............................................................................................................................................6
Objectives of Hyatt Hotel ....................................................................................................................................8
Values ...................................................................................................................................................................8
Hyatt Regency Porter’s Five Forces Analysis ..................................................................................................8
Strategic Group Mapping ................................................................................................................................11
Competitive profile matrix ...............................................................................................................................13
SWOT Analysis of Hyatt .....................................................................................................................................15
Internal Audit....................................................................................................................................................22
Value Chain .......................................................................................................................................................25
The resource-based view of Hyatt ...................................................................................................................29
VRIO analysis ...................................................................................................................................................34
Balance score card of Hyatt Hotel ...................................................................................................................37
SPACE Matrix ..................................................................................................................................................40
IE Matrix Analysis ............................................................................................................................................44
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Introduction
A hotel is a managed building or establishment, which provides guests with a place to stay overnight
– on a short-term basis – in exchange for money. The precise features and services provided to guests
can vary quite drastically from one hotel to another, and hotel owners generally aim to attract a
particular type of customer through their pricing model and marketing strategy, or via the range of
services they offer.
The hotel industry is the section of the service industry that deals with guest accommodation or
lodgings. By most definitions, the hotel industry refers not only to hotels, but also to many other forms
of overnight accommodation, including hostels, motels, inns and guest houses. However, it does not
usually include long-term or permanent forms of accommodation
History of Hyatt
The first Hyatt House opened in 1954 by entrepreneurs Hyatt Robert von Dehn (1904–1973) and Jack
Dyer Crouch (1915–1990) as a motel near Los Angeles International Airport. In 1957, the hotel was
purchased by entrepreneur Jay Pritzker for $2.2 million. His younger brother, Donald Pritzker, also
took on an important role in the company. Considering the growing use of air travel for business, the
Pritzker brothers realized that locating a high-quality hotel near a major airport was a valuable business
strategy.
In 1969, Hyatt opened its first hotel outside the United States, when it was awarded the management
contract for the President Hotel in Hong Kong. The President Hotel was renamed the Hong Kong Hyatt
Hotel (later known as the Hyatt Regency Hong Kong).
In 1972, Hyatt formed Elsinore Corporation, a subsidiary to operate the Four Queens Hotel and Casino
and the Hyatt Regency Lake Tahoe Resort, Spa & Casino. After Hyatt became a private company in
1979, Elsinore was spun off as a public company. The company opened the Playboy Hotel and Casino
as a joint venture with Playboy Enterprises.
History of Hyatt in Nepal
Hyatt Regency is the biggest five-star hotel in Nepal. Located near the Bouddhanath stupa, the hotel
stretches over 37 acres. The hotel, opened in 2000, is built in the traditional Newar architecture on 37
acres of land. It is operated by Taragaon Regency Hotels, and employs 400 workers. The hotel was
built under public-private partnership with 40% public ownership and 60% private. By 2017, the
public share in the hotel had shrunk to 9%; the ownership of original private investors increased slightly
too around 62%. Public representation on the board of directors had shrunk to one member out of
eleven, from three members out of nine in 1993; the Sharaf and Shrestha families had seven seats on
the board. By 2019, the hotel was registering record profits with quarterly revenues of more than Rs 1
billion.
Vision statement
A vision statement describes what a company desires to achieve in the long-run, generally in a time
frame of five to ten years, or sometimes even longer. It depicts a vision of what the company will look
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like in the future and sets a defined direction for the planning and execution of corporate-level
strategies.
For a vision statement of any company to be effective it must cover the following eight components:
1. Future focused: A clear vision establishes a connection between the present and the future in order
to improve the consistency of an organization's operations. Any activities or decisions made today
must take into account how they will affect the organization's future; otherwise, the organization
risks failing in the future.
2. Directional: A strong vision statement has a definite direction. It determines the company's overall
course. It outlines a strategy a corporation intends to use to expand and bolster its business. The
mission, objective, goals, strategy, and plans are created in accordance with the vision statement.
3. Clear: An effective vision is clearly articulated and easily understood by all stakeholders of the
company. It should not be understandable to the management committee only, should be known to
customers and all direct and indirect parties.
4. Feasible: A vision should have some degree of viability and not just be produced in the mind. In
terms of capability and resources, the company should be able to implement the vision.
5. Value based: The individuals inside and outside of the company should benefit from the vision
statement. People can connect with an organization's basic values through a successful vision.
6. Challenging: A successful vision is never easy to achieve. It stands for a future that is both further
than what is currently attainable and further than what we currently believe is feasible.
7. Unique: A vision needs to set a company apart from others. An effective vision captures the
distinctiveness of the company to set it apart.
8. Inspiring: Engaging and motivating people toward organizational goals is the function of a strong
strategic vision. It appeals to people's hearts and minds.
Vision of Hyatt Regency
According to the company’s 2017 annual report, Hyatt Hotels’ vision statement is as follow:
•
Vision Statement:
A world of understanding and care.
Component of vision statement
A world of understanding and care.
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The length of the vision should contain 50 to 100 words. This vision statement of Hyatt consist only 6
words which doesn’t convey clearly but also the vision statement has the following main components:
1. Future focused
The Hyatt hotel vision statement is “a world of understanding and care”. It indicates that it an
aim is to serve worldwide.
2. Directional
The Hyatt hotel vision statement is directional because it has clear understanding of what they are
working toward and will feel driven by that purpose.
3. Clear
The Hyatt hotel vision statement is “a world of understanding and care”. This shows the clarity as it
avoids using jargon and buzz words and written in concise sentences.
4. Values Based
The Hyatt hotel vision statement is value based as it talks about understanding and care for their
costumer.
Vision component that are not in the statement are:
1. Feasible
The Hyatt hotel vision statement didn’t portray an expectation for the future that is achievable
2. Challenging
The Hyatt hotel vision statement didn’t mention that what catalyst will impel the organization to move
toward that dream.
3. Unique
The Hyatt hotel vision statement didn’t highlight the particular value or impact that the organization
provides so stakeholders can learn why they should follow Hyatt over anyone else.
4. Inspiring
The Hyatt hotel vision statement didn’t describe a vision that excites the internal and external
stakeholders.
The vision statement of Hyatt must more descriptive and should consist the standard format. It should
be conveyed in such a way that it includes all the components of vision statement.
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The new vision statement:
“The ideology of our vision is to continue to apply and set the highest standards of service quality and
in that way justify and uphold the reputation that we have among the guests, partners, competitors and
the wider community. We use and constantly introduce environmentally friendly technologies and
processes in order to remain in balance with nature and also meet the needs of contemporary society.
Tradition is a testament to our success but in the future, we also want to embrace the changes that
modern time brings and become more attractive in the market and more interesting to our guests and
partners.”
Mission statement
A mission statement is characterized as an action-based declaration of an organization's goal and its
approach to serving customers. This can occasionally include an explanation of the business, what it
does, and its goals. The objective of the business is succinctly summed up in the mission statement.
For a mission statement of any company to be effective it must cover the following nine components:
1. Customers: Who are your customers? How do you benefit them?
2. Products or services: What are the main products or services that you offer? Their uniqueness?
3. Market: In which geographical markets do you operate?
4. Technology: What is the firm’s basic technology?
5. Concern for survival: Is the firm committed to growth and financial soundness?
6. Philosophy: What are the basic beliefs, values and philosophies that guide an organization?
7. Self-concept: What are the firm’s strengths, competencies or competitive advantages?
8. Concern for public image: Is the firm socially responsible and environmentally friendly?
9. Concern for employees: How does a company treat its employees?
According to the company’s 2017 annual report, Hyatt Hotels’ mission statement is as follow:
•
Mission Statement:
To deliver distinctive experiences for our guests.
The length of the mission should contain 50 to 100 words. This mission statement of Hyatt consists
only 7 words which doesn’t convey clearly but also the mission statement has the following main
components:
1. Customer
The mission statement is to deliver distinctive experiences for our guests. These statements are succinct
and are aimed to cater to a customer’s desire not only for physical, but also for the emotional comfort.
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2. Products or services
The product here is Hyatt aim is customer comfort both physically and emotionally.
3. Market
Hyatt talking about serving the world so here market is whole world.
4. Philosophy
Hyatt’s philosophy of customizing the environment to every individual customer and delivers
personalized comfort and care rather than standardized luxury treatment as seen in other hotel chains.
5. Concern for public image
The mission statement is to deliver distinctive experiences for our guests. This shows that they believe
colleagues embody purpose of caring for people, including each other, guests.
6. Concern for employees
The company has a very developed corporate culture, where the management teams are supposed to
lead by example.
7. Concern for survival:
Hyatt portfolio of properties around the world. They work with existing and prospective owners and
developers to increase their presence around the world, which we expect will lead to guest satisfaction,
brand preference, and new channels for professional growth for our colleagues.
Mission component that are not in the statement are:
1. Technology
The mission statement didn’t mention what kind of advance technology they are using to serve the best
and how they create satisfaction for customer.
2. Self-Concept
The mission statement is to deliver distinctive experiences for our guests. This didn’t mention the
uniqueness of the organization which is the basis for the competitive advantage in terms of core values,
beliefs and aspiration.
The mission statement can be conveyed in new way
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New mission statement:
“The mission of our hotel is to provide outstanding lodging facilities and services to our guests. Our
hotel focuses on individual business and leisure travel, as well as travel associated with group’s
meetings. we emphasize high quality standards in our rooms and food and beverage divisions. We
provide a fair return on investment for our owners and recognize that this cannot be done without well
trained, motivated and enthusiastic employees."
Objectives of Hyatt Hotel
Objectives are purpose statements that help create an overall vision and set goals and measurable steps
for an organization to help achieve the desired outcome. A strategic objective is most effective when
it is quantifiable either by statistical results or observable data. Businesses create strategic objectives
to further the company vision, align company goals and drive decisions that impact daily productivity
from the highest levels of the organization to all other employees.
Objective of Hyatt
The objective for the company is not just objectively high levels of service, but increased customer
satisfaction. The perception of care is as important as the standards of care that makes the Hyatt brand
famous. The corporate culture is meant to ensure high levels of engagement from the employees, as
engaged employees provide better care and make the venture profitable to its owners. Lastly, Hyatt is
hoping to achieve sustainable advantage by implementing these three key qualities, such as the focus
on the customer’s perceptions, high levels of employee engagement, and high standards of care.
Values
At Hyatt, we value...
- Mutual respect: Listen well, verify and acknowledge
- Intellectual honesty and integrity: Tell and accept truth, and honor your commitments
- Humility: Let actions speak for themselves, and recognize the contributions of others
- Fun: Don't take yourself too seriously
- Creativity and Innovation: Challenge conventional wisdom, take action/risks, and evaluate
Hyatt Regency Porter’s Five Forces Analysis
Porter’s five forces model Porter's Five Forces is an analytical framework developed in 1979 by
Harvard Business School professor, Michael E. Porter. The Five Forces model is widely used to
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analyses the industry structure of a company as well as its corporate strategy. Porter identified five
undeniable forces that play a part in shaping every market and industry in the world. The five forces
are frequently used to measure competition intensity, attractiveness, and profitability of an industry or
market. The key aspect about using Porter’s Five Forces for the airline industry in the Nepal is that the
airline industry has been buffeted by strong headwinds from a host of external factors that include
increasing operating expenses, high fuel prices, and greater landing and maintenance costs, apart from
intense competition from low-cost carriers that has led to a cutthroat price war which has led the
industry severely affected.
Porters Five Forces Model of Hyatt Regency
Threat of new entrant (Low)
▪
▪
▪
▪
Bargaining
(Moderate)
▪
▪
▪
▪
▪
power
of
Buyers
No product differentiation
High price
High switching cost
Number of sellers are too
many
Low price sensitivity
Capital requirement high
No switching cost
Economies of scale
High number of players
Rivalry among the existing competitors
(Moderate)
▪
▪
▪
Huge number of players
Low switching cost
No product differentiation
Bargaining power of Suppliers (Low
to moderate)
▪
▪
▪
▪
Low switching cost
Suppliers’ concentration is
low
Highly price sensitive
Products lack differentiation
Threat of substitute products or services
(High)
▪
▪
▪
▪
No switching cost
Service differentiation
Few customers
Low price
Porter Five Forces Analysis is a strategic management tool to analyze industry and understand
underlying levers of profitability in a given industry. Hyatt Hotels Corporation managers can use Porter
Five Forces to understand how the five competitive forces influence profitability and develop a strategy
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for enhancing Hyatt Hotels Corporation competitive advantage and long-term profitability in lodging
industry. Hyatt Five Forces helps to evaluate the company's existing market position in light of a variety
of internal and external elements, including competitors, clients, suppliers (vendors and partners),
financial strength, future potential, and alternative options.
Threat of new entrants: Low
In the hotel industry the investment required to set up the business is very high, and this creates a very
high barrier to entry. Also, since there are already very high number of well-established players in this
tier of hotel chains, it will be very difficult for any new entrant to match up with the kind of brand
recognition that is already held by the established players. There is virtually no differentiation in terms
of service offered between Hyatt & similar luxury hotels and hence location becomes a very important
factor when it comes to differentiation. Since most of the prime location already have most of the wellestablished players, this increases the barrier to entry. However, since there is virtually no switching
cost involved, if a new entrant were to set up good services at a prime location and if it manages to
market itself well, it is easy for the new entrant to steal market share.
Bargaining power of suppliers: Low to moderate
The primary suppliers in the hotel industry are the personnel involved. The only thing that a luxury
hotel like Hyatt provides over the lower tier budget hotels is the fact that the luxury hotel employ staff
that give a much better service. This means that these are the suppliers who have a higher bargaining
power. The other augmented services offered by the hotel such as a restaurant requires suppliers for
high quality ingredients but since this is in a much lower volume, this does not pose much of a threat.
Since the working conditions for the employees in the luxury hospitality industry might not be the best
as there are long working hours and odd timings, they have to be compensated with higher pays. These
staff include the managers, chefs, waiters as well as the maintenance workers such as janitors, room
cleaners, swimming pool maintenance, gardeners as well as the restaurant staff such the chefs and
servers.
Bargaining Power of Buyers: Moderate
In this industry, there is not product differentiation between the competitions, the customers will make
their decision based on price point. However, for the luxury and business customers that Hyatt Hotels
tends to cater to, there is a tendency for all the competitors to be very high priced because of the value
they provide. These customers also tend to be price insensitive and are willing to pay a high price for
the luxury experience and prime location that is on offer. The threat is quite a bit higher in the off
season in this kind of seasonal industry and there is a tendency for customer to elect not to choose to
settle for a lower tier hotel and hence the company has to price their room accordingly to account for
this but the pricing cannot be too low as that might lead to the existing customers being put off as the
exclusivity aspect is loss
Threats of Substitute Products or Services: HighThere are no switching costs at all and also there
is service differentiation in this industry. These hotels tend to all be the most profitable only during
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peak seasons when all the hotels are occupied to near peak occupancy. In the off season or if there is
some kind of adverse condition such as the lockdown because of the COVID-19 pandemic, then all the
players suffer. However, budget hotels would tend to suffer the least in these cases as the few customers
in these times that do want to rent hotels will do so at the cheaper price points and Hyatt Hotels will
face losses.
Rivalry among the Existing Competitors: Moderate
This is an intensely competitive industry as there are a huge number of players in the market at all price
points fighting with Hyatt and there is virtually no differentiation between the services offered by the
various players. There is also no switching cost so one cannot expect customers to stay loyal to the
brand. In this luxury category this is especially a pressing matter as exemplary service is expected and
if there is even a little customer dissatisfaction, this could lead to huge backlash in terms of the customer
coming back. In this industry, one can see that location is one of the most important factors that can
affect how popular a hotel can be. The locations of Hyatt hotel chains generally include airports, tourist
destinations, and business parks depending on the kind of customer the hotel is targeting. It is common
to find many competing upscale hotels in the same area.
Strategic implication for Hyatt Hotel is following:
•
By innovating new products and services. New products not only bring new customers to the
fold but also give old customer a reason to buy Hyatt Hotels Corporation ‘s products.
•
By experimenting with product designs using different materials so that if the prices go up of
one raw material, then company can shift to another.
•
New products will also reduce the defection of existing customers of Hyatt Hotels
Corporation to its competitors
•
Collaborating with competitors to increase the market size rather than just competing for
small market.
Strategic Group Mapping
A strategic groups map is a visualization tool for capturing the essence of the competitive landscape in
an industry: extent of competition between and among strategic groups, mobility barriers, available
niches, positioning and industry dynamics. Strategy group mapping helps create, implement and
monitor strategies of an organization. It helps understand the competitive landscape of an industry and
develop suitable strategies to attract customers away from the competitors.
It helps the firm with the:
1. Identification of close and distant rivals.
2. Identification of attractive and unattractive positions of the firms in industry.
3. Analyzing the type and level of entry barriers the firm will face.
4. Examines the number and type of entry barriers the firm will face.
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Various Criteria needs to be considered as the organization falls within the same strategic group. The
criteria for the Hotel industry that can be taken are:
•
Room Price
•
Service
•
•
•
•
•
•
•
No of rooms
Product quality and features
Advertising and promotion
Attractive Tour Package
Number of Foreign tourist arrival
Food and Beverage Cost
Room Occupancy
Two criteria that is taken for creating the strategic group mapping are:
1. Room Price- Price refers to the cost of room which the customer has to pay per day.
2. No of Rooms- No of rooms refers to the total number of rooms in the Hotel.
High
Soltee Hotel
Mobility Barrier
Hyatt
Regency
Anapurna
Everest
Internati
onal
Room Price
group
Low-cost strategic group
Pokhara
Grande
Differentiated Hub and Spoke Strategic
king
sbur
y
Mechi
Crown
Plaza
Malla
Central
Plaza
Aloft
Low
Room Number
Low
High
High
Figure 1: Strategic group mapping of Hyatt Regency
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As per the above strategic group mapping, the Hyatt Regency Hotel has the more room than any other
hotels room price low than their closer competitors, which are Soltee Hotel, Hotel Annapurna, Everest
Hotel and Hyatt Regency. And it’s needed to be considered that there are no mobility barriers between
these hotels as well. Still charging low price. Some of the strategic implications for the Hyatt Regency
Hotel are mentioned as below. By maintaining the existing brand, the Hyatt Regency Hotel should
improve the quality of their products as well as they should come with variety of other products as well
like:
•
•
•
•
•
The hotel should offer various type of tour package as run by another hotel at event of festival
and other event.
As Hotel international charge low price to beverage, Hyatt Regency Hotel also should go for
offering beverage through psychological discount
The hotel should come with variety of special products also be careful about the cost leadership
strategy
. As hotel Pokhara has come up with the rooftop bungy jump as well, the Hyatt Regency Hotel
should also come up with these kinds of adventures as well to beat those intense competitions.
As Soltee hotel does several advertisements, Hyatt Regency also should go for creative
advertisement and promotional strategies.
The strategic implication for the Hotel Mechi Crown Plaza be as follows to charge more price. As
Hotel Kingsbury is charging it than the Hotel Crown Plaza even after having the few rooms number
than Mechi Crown Plaza,
The Melmchi Crown must focus on investing on promotion through social media through various
challenging program and social welfare act.
•
Open the heath service within hotel premises.
•
Participate in various event to attract local and foreign tourist
•
Focus on running AGM program, marriage ceremony and other similar kind of activities
Competitive profile matrix
The Competitive Profile Matrix (CPM) is a tool used to assess the relative strengths and weaknesses
of the company and its competitors. Firms frequently utilize CPM to better understand the external
environment and the competition in a specific industry. The profile matrix analyzes and contrasts a
company's main rivals based on the crucial success characteristics specific to the industry. The research
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also identifies the company's relative advantages and disadvantages in comparison to rivals. As a result,
a business may quickly determine the regions it should develop and the ones it should safeguard.
Critical success factor
1. Location
2. Cleanliness
3. Security
4. Service
5. Price
•
•
•
Comparative Profile matrix
Hyatt
Marriott
Everest
weight Rating Score Rating Score Rating
Score
0.2
2
0.4
4
0.8
4
0.8
0.2
3
0.6
3
0.6
2
0.4
0.2
4
0.8
3
0.6
3
0.6
0.3
4
1.2
4
1.2
3
0.9
0.1
2
0.2
3
0.3
4
0.4
1
3.2
3.5
3.1
Critical Success Factors: The main aspects that affect an organization's success in its industry are
known as critical success factors (CSF). A business must operate at the pinnacle of perfection to
succeed in its field. These variables differ between industries or even between strategic groups. For
analysis, CSF should include both internal and external factors. The critical success factors for
Hyatt hotel are:
1. Location
2. Cleanliness
3. Security
4. Service
5. Price
Weight: Each essential success factor should be given a weight that ranges from 0.0 (low
importance) to 1.0 (great importance). The weight denotes how crucial that element is to the
company's success. The importance of each component would be equal if weights weren't assigned.
In the real world, this scenario is not possible. All of the weights must add up to 1.0. In our example,
highest weight is assigned to service followed by location, cleanliness, security and price.
Rating: The ratings in CPM refer to how well companies are doing in each area. They range from
4 to 1:
o 4 - Means a major strength
o 3 - Minor strength
o 2 - Minor weakness, and
o 1 - Major weakness.
Subjectively assign the ratings and weights to each company. However, this process can be done easier
through benchmarking. Benchmarking reveals how well companies are doing compared to each other
or industry’s average. Note that firms can have equal ratings for the same factor.
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•
Score: The score is the result of weight multiplied by rating. Each company receives a score on
each factor. Total score is simply the sum of all individual score for the industry. The firm that
receives the highest total score is relatively stronger than its competitors. In our example, Hotel
Marriott has the highest score of 3.5 and least score is of Hotel Everest. Hotel Hyatt has the
relatively greater score than that of Hotel Everest i.e., 3.2 which shows that Hotel Everest have
strong position among the competitors.
SWOT Analysis of Hyatt
A SWOT analysis identifies a company’s strengths, weaknesses, opportunities, and threats. A proven
and true management paradigm that allows Hyatt to compare its business and performance with
competitors and the industry as a whole.
Strengths of Hyatt
Organization’s strength is something that makes it stand out from the rest. It can be a competitive
advantage that sets it apart from its competitors. Some of the strengths of Hyatt are as follows
•
Top in Hospitality: Hyatt is recognized amongst the world’s top hospitality brands and it has
maintained the position. The strength of Hyatt is powered by the belief and importance of their
family and people on Hyatt.
•
Best Facilities: Hyatt offers apartment-style suites with full kitchens, living areas, and more,
including a 24-hour gym, and in-house laundry. Food, beverages, spas, and other recreational
facilities. Hyatt’s top-notch facilities make Hyatt what it is today.
•
Highly Trained Staff: It is very important to maintain the morale of staff members. The
employees here have gained professional skills and experience. The staff of Hyatt will always
figure out how to entertain customers.
•
Attractive Tour Packages: Hyatt provides budget packages to luxury packages catering to
each traveler’s needs. Appeal to Hyatt organization comes from the popularity Family, friends,
couples, every type of package are ever ready.
•
Excellent Customer Service: Hyatt offers excellent customer service and manages its
customers’ basic needs at their leisure. Hyatt offers expert assistance, transparent pricing.
•
Quality & Standards: Hyatt comes under the best premium group for destination stays and it
maintains hygiene standards and takes into account customer satisfaction factors as a top
priority which is why most people who are planning to travel choose Hyatt hospitality among
others.
Weaknesses of Hyatt
Weaknesses are those elements of your business from which you can rectify your abilities. These are
the factors where a company needs to look carefully and change for the better.
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•
Unnecessary Operation Cost: The market targets unique and extreme costs for the tour
which sometimes seem to be unnecessary costs.
•
Hyatt is Expensive: Although Hyatt offers great deals and offers on travel packages,
somehow Hyatt is still more expensive than other hospitality partners in the market. Midincome people who wish to travel and enjoy Hyatt hospitality are not able to do so.
•
Dependence on Tourism: The hotel industry is a part of the bigger travel and hospitality
industry. This dependence makes the hotel industry vulnerable.
•
Labour Outflow: With higher dropout rates compared to other organizations in the industry,
Hyatt, and has to spend significantly more on employee training and development than its
competitors.
Opportunities for Hyatt
Opportunities are those elements that might give an organization a competitive advantage.
Opportunities are external to your company and present the possibility of profits, sales, etc.
•
International Tourists: The growth rate of outsiders with higher disposable incomes is high,
so Hyatt can render these types of customers by selling travel packages to increase the market.
•
Continuous Innovation: Hyatt should continuously update its unique touch + tech model to
deliver a better experience to travelers because positive feedback from travelers is required now
to grow the Hyatt business. Hyatt is working on innovation to give a better experience to
travelers.
•
Full Utilization of Internet: Utilization of the internet to display hotels, offer visibility,
presence, marketing and distribution. Showcasing affordable hotels which are an ideal option
for a weekend stay will increase the bookings at Hyatt.
•
Business Class: There is a surge in the number of business travelers in India. This is where
Hyatt can launch their business suit for entrepreneurs who are looking for luxury stay and
accommodation at their respective destinations.
•
Hyatt Hotels Expansion: Global hospitality chain Hyatt is expecting to have 90 hotels in
India by the next 5 years. This opportunity and decision will help the group to tap the country’s
potential for leisure and hospitality.
Threats to Hyatt
Threats are those elements that can be harmful to your company’s growth.
•
Increasing Competition: Hyatt competes in the hyper-saturated market mid-tier and faces
fierce competition from other leading travel companies. Even though they have a strong
presence in the industry, they are dwarfed by the revenue of their competitors.
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•
Customer Expectations: Due to increasing options of online travel booking, customers are
more possessed to urge online budget travel packages with all the facilities at low prices. This
habit of customers has affected the revenue generation of Hyatt.
•
Losing Faith of Customers: Dishonest online businesses damage consumers’ confidence and
faith in the entire enterprise of internet marketing.
•
Safety Concerns: After a pandemic, people who stay in hotels are more likely to stay in a
sanitized and safe hotel. Hyatt travel packages also include partnerships with hotels and a
careless step from hotel partners will directly affect the image of Hyatt and the company could
face some legal action and cases from travelers.
•
Misbehavior With Customers: Any sudden misbehavior and informal way of talking with
customers by the hotel manager or welcoming staff will affect the brand image of Hyatt.
Travelers will not prefer to purchase travel packages next time from Hyatt.
•
Boutique Alternatives: Cheaper and more robust hospitality services are mushrooming each
day. Airbnb is the primary threat to the hotel industry, for that matter.
Hyatt is one of the leading companies in the hospitality and tourism sector, guided by its purpose to
care for people so they can be their best. In the SWOT analysis of Hyatt, we observed that the company
has a significant global presence. As the day changes the company’s dominance has been decreasing
because of improper strategy in marketing. Also, it should work on the online reach, Utilizing the
internet, social media campaigning, so, to cater to a wider audience on a global level hence posing stiff
competition to its contemporaries.
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Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate firm's internal
environment and to reveal its strengths as well as weaknesses.
For evaluating strength of hotel industry following points are required to considered:
•
•
•
•
•
•
•
Safe & Comfortable Atmosphere like Home
Cushion the Local Economy
Room Income
Room occupancy
Food and Beverage cost
Brand Awareness
Attractive tour Package
For evaluating weakness of Hotel Industry following points are required to considered:
•
•
•
•
•
•
Average Room Rate
Service Charge
Employee Turnover
Customer Satisfaction Index
Number of Employee Divided Room
Number of Foreign Tourist Arrival
We have selected following points from the strength and weakness to evaluate Hyatt Hotel
IFE matrix-Hyatt Hotel
S. N Key Internal Factors
Strength
Weight (W)
1 Room Income
0.12
2 Room occupancy
0.13
3 Food and Beverage cost
0.1
4 Brand Awareness
0.12
5 Attractive tour Package
0.12
Weakness
6 ARR (Average Room Rate)
0.1
7 Customer Satisfaction Index
0.1
8 Number of Foreign Tourist Arrival
0.05
9 Number of Employee Divided Room
0.06
10 Employee Turnover
0.1
Total
1
Rating(R) Weighted Score (W* R)
4
0.48
4
0.52
3
0.3
4
0.48
3
0.36
0
2
0.2
2
0.2
1
0.05
1
0.06
1
0.1
2.75
Based on the IFE matrix, evaluate the internal strengths and weakness of Hyatt Hotel. Based on the
above IFE Matrix of Hyatt Hotel, the internal strengths and weaknesses of Hyatt Hotel can be classified
into four categories:
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A. Major strengths (4)
B. Minor Strengths (3)
C. Minor weaknesses (2)
D. Major weaknesses (1)
A. Major strengths of Hyatt Hotel in the above IFE matrix are all those that provides strong competitive
advantage to the Hyatt Hotel and has the ratings of 4. These includes:
•
•
•
Hyatt Hotel is generating high sales revenue.
The room occupancy of Hyatt Hotel is more.
The Hyatt hotel has allocated huge money in advertisement.
B. Minor strengths of Hyatt hotel in the above IFE matrix is all those that provided competitive
advantage to the Hyatt hotel only to some extent and has the ratings of 3. These includes:
•
•
Food and Beverage cost of Hyatt hotel is little bit cheaper.
The tour package offered by Hyatt hotel is almost similar in the hotel business except few
products.
C. Major weaknesses of Hyatt hotel is all those that highly weakens its competitive position in the
market and has the ratings of 1 in the above IFE matrix. These includes:
•
•
•
The number of foreign tourist arrival rate has been decreased due to limited facility
The sufficient rooms are not divided for taking rest to employees.
Most of the employee resign due to over workload.
D. Minor weaknesses of Hyatt hotel is those that may have a negligible negative impact on the
competitive advantage of Hyatt hotel and has a rating of 2 in the above IFE matrix. These includes:
•
•
Hyatt average room rate are relatively above the average room rate in hotel industry
Few customers complain about the service rendered by Hyatt Hotel
Notwithstanding of the number of key qualities and shortcomings included in an Internal Factor
Evaluation (IFE) Network, from the score of 1 to 4, a weighted score of 2.5 demonstrates that the
organization has an average competitive advantage, a weighted score underneath 2.5 shows that the
organization contains a week competitive advantage and the weighted score over 2.5 demonstrates that
the organization appreciates a good competitive advantage. Here, within the case of Hyatt hotel, the
IFE Matrix appears a weighted score of 2.75 which demonstrates that the company encompasses a
good competitive advantage over another commute hotel.
Recommendation for improving to Hyatt Hotel’s internal strength are listed below:
•
•
Raise the required capital through IPO/FPO to increase the financial capabilities
Provide the service through latest technology and focus on digital marketing
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External Factor Evaluation (EFE) Matrix is a strategy tool used to examine company’s
external environment and to identify the available opportunities and threats.
For evaluating the opportunities following points are required to considered:
•
•
•
•
•
Online booking
Local & international tourist
Tax policy
Offering quality services
Set higher standards for rooms division
For evaluating threat following points are required to considered:
•
•
•
•
•
Unstable political situation
Customer expectation
Misbehavior of customers
Security risk
Intense Competition
We have selected following points from the opportunities and threat and weakness for evaluating of
Hyatt Hotel
EFE Matrix - Hyatt Hotel
S. N Key External Factors
Opportunities
1.
Set higher standards for rooms division
2.
International tourist
3.
Tax policy
4.
Skilled workers
5.
Offering quality services
Threats
6.
Unstable political situation
7.
Customer expectation
8.
Misbehavior of customers
9.
Security risk
10.
Intense competition
Total
Weight
0.11
0.11
0.08
0.12
0.10
Rating
4
3
3
4
3
Weighted Score
0.44
0.33
0.24
0.48
0.30
0.12
0.09
0.08
0.06
0.12
1
2
1
1
2
2
0.24
0.09
0.08
0.12
0.24
2.56
1. Based on the EFE matrix, evaluate the External opportunities and threats of Hyatt Hotel.
Based on the above EFE Matrix of Hyatt Hotel, the External opportunities and threats of Hyatt
Hotel can be classified into four categories:
A.
B.
C.
D.
Major opportunities (4)
Minor opportunities (3)
Minor threats (2)
Major threats (1)
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A. Major opportunities of Hyatt Hotel in the above EFE matrix are all those that provides strong
competitive advantage to the Hyatt Hotel and has the ratings of 4. These includes:
•
•
Set higher standard for rooms division
Skilled workers
B. Minor opportunities of Hyatt hotel in the above EFE matrix is all those that provided competitive
advantage to the Hyatt hotel only to some extent and has the ratings of 3. These includes:
•
•
•
International tourist
Tax policy
Offering quality services
C. Major threats of Hyatt hotel is all those that highly threats its competitive position in the market and
has the ratings of 1 in the above EFE matrix. These includes:
•
•
Customer expectation
Misbehavior of customers
D. Minor threats of Hyatt hotel is those that may have a negligible negative impact on the competitive
advantage of Hyatt hotel and has a rating of 2 in the above EFE matrix. These includes:
•
•
•
Unstable political situation
Security risk
Intense competition
Regardless of the number of key opportunities and threats included in an External Factor Evaluation
(EFE) Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest
possible total weighted score is 1.0. The average total weighted score is 2.5. A total weighted score of
4.0 indicates that an organization is responding in an outstanding way to existing opportunities and
threats in its industry. In other words, the firm’s strategies effectively take advantage of existing
opportunities and minimize the potential adverse effect of external threats. A total score of 1.0 indicates
that the firm’s strategies are not capitalizing on opportunities or avoiding external threats.
Here, in the case of Hyatt Hotel, the EFE Matrix shows a weighted score of 2.56 which indicates that
the company is responding in an above average way to existing opportunities and threats in its industry.
Recommendation for improving the strong position of the company are as follows;
•
•
•
Hyatt should hire experts in cybersecurity, IT, and hotel logistics, then rearranging them into a
full-fledged R&D department.
Develop a new brand image that would set the brand apart and attract new customers, especially
among the younger generations.
Increase the effectiveness with which current properties are used in the domestic market which
would help to reduce the losses and prevent the existing loyal customer base from switching to
other hotels.
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Both tools are used to summarize the information gained from company’s external and internal
environment analyses. The summarized information is evaluated and used for further purposes, such
as, to build SWOT analysis. Even though, the tools are quite simplistic, they do the best job possible
in identifying and evaluating the key affecting factors.
Internal Audit
Internal auditing is an independent, objective assurance and consulting activity designed to add value
and improve an organization's operations. To get competitive advantage , we have to focus on auditing
of following department.
A. Human Resource Department
The HR audit is the process of examining intensely and objectively the organization’s HR policies,
procedures, documentation, systems, practices and strategies to protect the organization from litigation,
establish best practices, and identify opportunities for improvement. In a nutshell, the HR Audit gives
organizations the opportunity to assess what the organization is doing right, as well as how things
might be done differently, more efficiently, or at a reduced cost. It also helps the company identify
outsourcing opportunities and cost saving strategies. The audit process consists of a succession of
questions covering the primary components of the HR function. The following checklist can help audit
HR department of a Hyatt hotel:
• Are the HR goals aligned with the goals and strategies of the Hotel?
• How many managers and supervisors does the hotel have?
• How many full-time employees? Part-time employees?
• Are employees aware of their status?
• How are the recruitment, screening, and selection processes documented?
• Are applicant backgrounds checked? Are references checked? How is reference checking
documented?
• Are all employees trained on discrimination and harassment issues?
• Are minors prohibited from working more than their hours allowed by the Fair Labor Standards Act?
• Is there a system for performance evaluation? Are you aware of the different types of evaluations?
• Are employment practices in line with the various anti-discrimination laws?
B. Marketing Department
Auditing a marketing department requires collecting information about your company, marketing
activities undertaken and planned, as well as competitors and target audiences. It also involves
answering questions about key goals and objectives for the marketing department.
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The checklist of questions for a marketing department in a Hyatt hotel may be listed as follows:
• Is the marketing manager using right social media channel to inform and attract customers?
• Is the hotel’s content marketing encouraging more bookings?
• Is the hotel website attractive and user friendly?
• How competent is the marketing team to form proper marketing strategies?
• Is the advertisement message comprehensive to the targeted customers?
• Is monitoring being done on the reviews posted by the customers on the hotel’s website?
• Are hotel details (hotel facilities, rates, travel and location) posted and updated regularly on hotel’s
website and online booking sites?
• How good is the marketing manager while maintaining the relationship with the customers?
• Has management made any effort to measure the cost effectiveness of varying marketing
expenditures to see what happens when they spend more or less in any area?
• Is management very knowledgeable about its competition and their marketing efforts, both current
and future?
• Does management appear to be in touch with current trends in the marketplace?
• Are accounting and front office reports respected and valued by the marketing department for their
accuracy, timeliness, and relevance in making marketing decisions?
C. Operations Department
Operation Department audit meant from restaurants to resorts, the hospitality industry demands strong
operations management to delight guests, develop employees, and deliver financial returns. If the total
hospitality product is to be administered effectively, operations managers need to acquire an
understanding of the complete process involved in planning, implementation and control, including a
knowledge of the design and development stages.
The checklist of questions for an operation department in a Hyatt hotel may be listed as follows:
• Has the guest been met in person to ensure closure?
• Are rooms clean and prepared prior to guest’s arrival?
• Keys and registration cards for Mobile Check-In are prepared and ready?
• Are empty suites allocated for upselling to ensure ‘No Suites Go Empty’?
• Is proper inspection done in public area washrooms for cleanliness (odor free) and functionality?
• Is guest’s complaints and requirements about any amenities initiated at the front desk?
• Is proper quality and freshness of the food and beverages being maintained?
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• How promptly is the foods and beverages being delivered to the customer’s room?
• Is proper track of the guest’s purchase from the restaurant, the bar, or coffee shops in the hotel being
done?
D. Finance department
In a job description, a financial auditor evaluates companies' financial statements, documentation,
accounting entries, and data. They may gather information from the company's reporting systems,
balance sheets, tax returns, control systems, income documents, invoices, billing procedures, and
account balances.
Checklist questions for Finance audit are as follows:
1. Is the finance manager using efficient sources of funds?
2. Financial statement is accurate or not?
3. Whether the policies are adopted or not in preparing financial statement?
4. Can the firm raise needed short term capital?
5. Is the firm debt situation excellent?
E. Management functions audit:
A management audit is an assessment of how well an organization's management team is applying its
strategies and resources. A management audit evaluates whether the management team is working in
the interests of shareholders, employees, and the company's reputation. Checklist questions for
Management audit are as follows:
a. Are the Hyatt hotel’s objectives and goals measurable and well communicated?
b. Is the organization’s structure appropriate?
c. Are organizational reward and control mechanisms effective?
d. Do managers delegate authority well?
e. Are employee turnover and absenteeism low?
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F. Research & Development capabilities audit:
For the internal audit in R&D department organization should focus on the development of new
products before competitors, improving product quality, improving manufacturing processes to reduce
costs etc. Checklist questions for Research & Development capabilities audit are as follows:
a. Does the Hyundai Motors have R&D facilities? Are they adequate?
b. Are the organization’s R&D personnel well qualified?
c. Is communication between R&D and other organizational units effective?
d. Are R&D resources allocated effectively?
e. Are present products technologically competitive?
Value Chain
Value Chain is a traditional manner of departmentalizing stages of the business process. The value
chain highlights the importance of the operational manager being involved in all aspects of the process,
from suppliers right through the customer. With the value chain approach functional boundaries are
ignored and, in many organizations, it’s now accepted that the operations manager has to control the
whole process from buying in goods and services to the final stage of satisfying the customer.
Marketing, accounting, human resources are not showing up in the value chain, but the operational
manager has to be interesting and to be involved in these internal functions of the organization as well.
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The primary value chain activities are:
1. Logistics/ Inbound: The distribution of manufacturing after the raw materials are received and
warehoused.
2. Operations: the transformation process of inputs into services and finish products.
3. Logistics/ Outbound: The warehousing and distribution of the finished goods.
4. Marketing and sales: Placing the product on the market generating sales reaching the right
people interested to buy it
5. Service: The tool used to offer the product on the market and the service offered after the
product is sold (customer service)
This Primary Activities are supported by:
•
•
•
•
The infrastructure of the firm: organizational structure, control system, company culture etc.
Human resource management: employee recruiting, hiring, training, development and
compensation.
Technology development: technologies to support the value chain activity
Procurement: purchasing input such as materials, supplies, and equipment.
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“The firm’s margin or profit then depends on its effectiveness in performing these activities efficiently,
so that the amount that the customer is willing to pay for the products exceeds the cost of the activities
in the value chain. It is in these activities that a firm has the opportunity to generate superior value. A
competitive advantage may be achieved by reconfiguring the value chain to provide lower cost or better
differentiation”.
Value chain analysis
In this step information is collected from all the people involved within the organization such us guest,
employees, suppliers, business partners, travel agents and tour operators. This stage will also involve
the way to recruit people with the right skills that will deliver the best service. How to keep the team
motivated and informed about the performance. In the case of these featured company the KPI system
(Key Performance Indicator) has been introduced to control the standard of performance that will help
to get feedback from the guest to enhance the guest engagement.
If we analyze for instance a telephone order placed to the room service department, the customer will
value a quick answer to his/her call, a good an polite manner, efficient taking of order details with fast
and knowledgeable answering of questions and a quick resolution to any problems that arise during the
order. Delivering a professional service, the customer will like the correct solution based on the good
options and up to date alternatives.
Value Chain in Hyatt Regency
In the service industry and especially in the hotel industry, the value is added and created from the
people inputs of time, knowledge, equipment and systems to serve the hotel guests and customers.
Customers in these companies can be also employees from the same organization. The more value is
created, the more people will be ready to pay the price for the service or product and the more they will
keep on buying from the same company. The decisions to differentiate the products offered from the
two companies are crucial to add value and persuade the potential customer to the right choice.
The primary activities in the Hyatt Regency are:
Inbound logistics-Starting from the Inbound Logistics where Hyatt Regency have all the contracts
with supplier that are delivering the food and beverage, providing laundry service and other services.
For example-in the food department where the hotel has all the deals with suppliers that deliver the
goods and food material, identifying and evaluating potential suppliers, obtaining price quotes,
negotiating with and managing suppliers. Hyatt regency carries out the following activities:
• Deal directly with supplier (food and beverage provider, room and utilities, other service)
• Negotiate markup price with the distributor (cost Supplier)
• Warehouse (moved the received goods to the warehouse and stores them)
• Employee Recruitment (Guard, staff)
• E-commerce application (Online Booking) for hotel reservation to attract customers.
Operations- In the Hyatt hotel can be the way the services and final products are offered and
distributed to the different outlets and different guests. In this part, customers will check in based on
previous online reservation and the hotel operation started to contribute excellent service toward
customers.
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•
Check in (start contribute the service to guest-Room selection, pricing, complementary for
offline reservation)
• Room Accommodation service
• Conference Operation (room service and conference with wedding and event service)
• Food and Beverage operation (international and local cuisine restaurants)
• Recreation Operation (Swimming pool, sport and outdoor activities)
• Housekeeping (cleanliness room)
Outbound Logistics- This is about how the services and last products are offered and distributes to
different customer. Hyatt Regency promoted its hotel and the rooms must be met desired by clients.
The hotel provides:
High standard service
• Room (designed by guest by select the room suitable their taste)
• Food and beverage (all meals cooked in the expert way)
• Front office operation (luggage of their guests moved from car/taxi to the lobby)
• Call room service (if customer want room making, bed making, food delivery)
• Check out (verifying check out process-if additional charge, handover of room key)
Marketing and Sales: All the activities that are trying to get customers and people interested in the
hotel for rooms, conferences, restaurants but also the promotion of the hotel with advertise and pricing
considering the competitors through:
• Hotel website (easy to navigate, fast and reliable)
• Social Media (Instagram, Facebook) as their marketing strategy
• Email marketing strategy (order confirmation and A from customer)
Services – Service in the hotel industry is crucial for its success. After sales service are important
because the company’s reputation will be damaged when the unsatisfied customer complaint is easily
spread via through internet. The quality of service is created with a certain number of employees in
proportion with the hotel capability and with the respective training. Hyatt Regency takes following
factors into consideration:
• Customer complaints and feedback for understanding the customer needs and incorporate the
necessary change for customer satisfaction.
• Customer support (problem Solving)
Support activities in Hyatt Regency
Firm Infrastructure- Hyatt Regency has an effective management system that enables it to carry out
its daily operations. The Firm Infrastructure is represented from the management team with the longterm planning, the quality management, public affairs, finance and accounting.
• Productive structure to control organization
• Rundown fundamental factor (cleanliness room, quality food)
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• Banquet and conference facilities
• Administrative handling system for creating the value in hotel and satisfy the customers.
Human Resource- Huma Resource Management encompassed all support activities that contribute to
growth of the hotel’s workforce.
• Professional staff
✓ Recruitment
✓ Coaching
✓ Training activity (Employee motivation)
Procurement-It refers to the function of purchasing inputs from the third parties, which is used in the
firm’s value chain. The Hyatt Regency carries out the following activities:
• Purchase inputs from third parties
• Provide Equipment and facilities needed for visitors and the buildings
• Engagement of hotel with its suppliers and outsourcing contracts
• Outsource laundry services to clean up their bed sheets and towels.
Technology Development-Hotel’s goal in leveraging and web-innovation is to increase customer
satisfaction by providing fast and timely client service. Technology Development is very important
within the hospitality as it is a modern industry in constantly growth where new technologies are
needed to save time and work smarter. Technology offered in Hyatt Regency are:
• Online website
• Best choice for corporate meeting etc (capacity, preferred venue)
• 10 Other room (Audio visual equipment)
The resource-based view of Hyatt
The resource-based view [RBV] is a strategic management tool and framework that is used by
companies and organizations to identify and exploit the resources available strategically so as to create
a sustainable competitive advantage for the organization in the long run. The RBV framework is based
on assessing and identifying resources that will prove to add competitiveness to an organization, and
aligning them strategically. According to the RBV, all organizations and firms have access to and
possess and control a resource which allows them to build a comparative advantage.
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Figure 1 Resource-Based View of the Firm
1. Tangible resources
Tangible resources include those resources that are physical in nature and can be easily identified by
the organization and competitors. Moreover, these resources can easily be brought from the market, or
developed in the long run. Based on this fact, where competitors may acquire identical or similar
resources. In the future, they provide little to negligible competitive advantage to the company.
Tangible resources available at Hyatt Hotels Corporation include, for example:
1.1 Land
The land is a tangible resource for Hyatt Hotels Corporation which includes all spaces owned and
rented by the company for purposes of hosting production units as well as for warehousing purposes.
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Additionally, all units owned or rented by the company for purposes of packaging are also included to
be tangible resources under the land.
1.2 Equipment
For Hyatt Hotels Corporation, equipment is also a tangible resource that includes all the equipment
owned by the company for purposes of production and packaging, as well as other operational
purposes. In this manner, all technological advancements, and technological integration for improving
processes and operations may also be seen as an extension of equipment that the company employs to
enhance its product line, and incorporate economies of scale.
1.3. Materials
Materials include all the raw materials and other packaging materials that Hyatt Hotels Corporation
uses for the successful production and packaging of its products. The materials are tangible in nature,
and may also easily be accessed by the competitor players for their own production processes and other
purposes.
1.4. Supplies
Supplies also include all products and supporting materials that are needed by other functions in the
Hyatt Hotels Corporation for the successful attainment of business goals and targets.
1.5. Facilities
Facilities are also a tangible resource that is visibly identifiable by competing players with respect to
Hyatt Hotels Corporation. The facilities include all the production units, warehouses, offices and
supporting buildings and functions for the company which help it in streamlining its processes and
operations, and also lead to successful performance. Facilities also include the interior design and
interiors of buildings at Hyatt Hotels Corporation – designed for optimizing performance and
maintaining brand image.
1.6. Infrastructure
This includes all the land and facilities in terms of technology, buildings, office materials and
maintenance, and allocation of power resources such as electricity to its plants by Hyatt Hotels
Corporation. The infrastructural buildup is an important resource for the company for ensuring high
performance, and ease of operations for the company. However, like other tangible resources, it may
be accessed easily by competing players – who may develop similar resources for their own products
and functions in the future.
2. Intangible resources
Intangible resources refer to those resources that have no physical value but are still owned and
possessed by organizations such as Hyatt Hotels Corporation. Competing players are more than often
unable to purchase, or acquire the intangible resources available to Hyatt Hotels Corporation because
of associated factors and aspects of historical uniqueness, causal ambiguity, and social complexity.
Intangible resources are largely inimitable and likely to stay within the organization over the long run
as well, and thus form the basis of competitive advantage for Hyatt Hotels Corporation. For Hyatt
Hotels Corporation, some intangible resources include, for example:
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2.1. Brand reputation
Brand reputation for Hyatt Hotels Corporation is built over historical uniqueness where the brand has
worked hard to provide high-quality products and earn consumer trust over decades. The company’s
brand reputation – based on its organizational culture and unique relation with customers –can not be
imitated by the competitors, and may become a source of competitive advantage.
2.2. Intellectual property
Hyatt Hotels Corporation’s production processes and its product uniqueness is safeguarded by
intellectual property rights which prevent other competing players from copying or having access to
its unique product blend, and product ingredients and inputs. This ensures novelty to Hyatt Hotels
Corporation and makes its products inimitable for competing players.
2.3. Patents and Copyright
Hyatt Hotels Corporation enjoys patents and copyrights not only for its production processes and
product composition but also for research and development activities that it undertakes for product
improvement and enhancement. These patents and copyrights protect Hyatt Hotels Corporation against
potential encroachments or imitation.
2.4. Goodwill
The goodwill for Hyatt Hotels Corporation is again developed through historical uniqueness where the
brand’s reputation and customer experience have allowed the development of long-standing goodwill
for the company. This, In turn, has enhanced the overall brand equity for Hyatt Hotels Corporation.
The goodwill for the company has developed over a long period of time through continuous hard work
by the Hyatt Hotels Corporation brand, and cannot be copied by the competing players.
2.5 Trade names
The trade name is also an intangible resource for the company as other players cannot adopt or imitate
this name. The trade name is recognizable by the customers, and provides instant recognition for the
company across borders. The trade name also communicates the brand promise and values to customers
globally and is a source of competitive advantage for the company.
2.6 Customer experience
Hyatt Hotels Corporation provides a unique customer experience to its customers through its brand
activities, and offerings – as well as marketing activities. Though marketing activities may be copied
by competing players, the strategic direction and intent with which the customer experience and brand
activities are planned is inimitable and prides a unique source of competitive advantage to Hyatt Hotels
Corporation.
2.7 Patented technology, computer software, databases and trade secrets
Hyatt Hotels Corporation is also successful in its operations and businesses and has a large customer
following that is loyal and does repetitive purchasing because of its trade secrets – which also
comprises of having a secret recipe for product competition. Hyatt Hotels Corporation also regularly
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develops and incorporates advanced technology that is developed internally and is thus patented. This
includes hardware and software for improving the company’s operational processes, and as such,
provides an edge to the business in factor markets.
2.8 Video and audiovisual material (e.g. Motion pictures, television programs)
All marketing content and video and audio-video material designed, developed, launched, and released
by Hyatt Hotels Corporation is also an intangible resource. Though this marketing content has little
physical value, it contributes towards brand building for Hyatt Hotels Corporation and works towards
increasing brand awareness, brand recognition, and overall brand equity.
2.9 Customer lists
Hyatt Hotels Corporation has a variety of different product lines and product offerings for different
target groups and target consumer markets. Based on this, it is safe to state that Hyatt Hotels
Corporation has developed unique customer. Moreover, this customer market comprises of different
consumer groups and categories. As such, Hyatt Hotels Corporation has unique customer lists, and this
can’t be imitated largely because of social ambiguity attached.
2.10 Licensing, royalty and standstill agreements
Hyatt Hotels Corporation has developed unique licensing, royalty and standstill agreements over time
in the different consumer markets it operates. Based on this progress of the brand, and brand
characteristics, along with strategic leadership and vision – Hyatt Hotels Corporation has been able to
develop inimitable licensing, royalty, and standstill agreements that allow its competitive positioning
in factor markets.
2.11 Customer and supplier relationships
Hyatt Hotels Corporation has unique customer and supplier relationships. The customer and supplier
relationships have developed over time through consistent behavior, trust-building, and transparency
in operations and intent. The strong customer and supplier relationships help Hyatt Hotels Corporation
informing global networks that are well managed, and smoothly undertaken – and largely inimitable
by competitors in the immediate future.
2. Heterogeneous and immobile characteristics of resources
The RBV for firms holds that all resources possessed, controlled and owned by organizations have two
core characteristics – of heterogeneity and immobility.
3.1 Heterogeneity
Under heterogeneity, the RBV assumes that resources based on skills and capabilities – for example in
the form of human resource activities, training, and talent, varies from company to company. This
variation is important for avoiding the building of characteristics of perfect competition. As such, with
heterogeneity, the RBV assumes that each organization has a different amount and mix of resources –
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which lead to different strategic directions and strategic choices to them – under similar external
pressures and conditions.
This means that the strategic decision and choice undertaken by Hyatt Hotels Corporation will differ
substantially from its competition under similar external environmental pressures based on the different
mix of resources available to the company. This assumption of heterogeneity under RBV allows Hyatt
Hotels Corporation to complete product and outperform the competition in facto markets, and also
achieve competitive advantage through its use of unique resource bundles and mixes.
3.2 Immobility
Under the assumption of immobility, the RBV assumes that resources available to the firm are not
mobile, and cannot be transferred from one organization to another – in the short run at the least. Based
on this notion of immobility in the short run, the RBV assumes that rival companies are unable to
imitate, and replicate resources available to Hyatt Hotels Corporation, and devise and implement
strategies and decisions similar to that of Hyatt Hotels Corporation. Intangible resources are largely
immobile in nature.
All intangible resources available to Hyatt Hotels Corporation are heterogeneous and immobile in
nature at large. The tangible resources are also immobile in nature in the short run for Hyatt Hotels
Corporation and maybe homogeneous to the player in the factor markets depending on the
advancement, and strategic developments of competing players.
VRIO analysis
The characteristics of heterogeneity and immobility are not sufficient for Hyatt Hotels Corporation in
using resources to develop a competitive advantage. To determine if resources can be used and
enhanced to develop a competitive advantage in the long run with sustainability, it is important that
resources identified for the company to fulfill the VRIO criteria.
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Figure 2: VRIO analysis with respect to competitive advantage and RBV
The VRIO framework assesses tools on criteria of being valuable, rare, inimitable, and organization.
For Hyatt Hotels Corporation, the VRIO strategic tool may be applied to the identified resources to
determine if the resources allow the building of competitive advantage over the long run. For Hyatt
Hotels Corporation, this is seen as:
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Resource
Land
Equipment
Materials
Supplies
Infrastructure
Facilities
Brand Reputation
Intellectual property
Patents& Copyright
Goodwill
Trade names
Customer experience
Patented&technology,
computer
software,
databases and trade secrets
Video
&audiovisual
material
Customer lists
Licensing,royalty&standstil
l agreements
Customer&supplier
relationships
Valuable
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Rare
N
N
N
N
N
N
Y
Y
Y
Y
Y
Y
Y
Inimitable
N
N
N
N
N
N
Y
Y
Y
Y
Y
Y
Y
Organized
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Advantage
Competitive parity
Competitive parity
Competitive parity
Competitive parity
Competitive parity
Competitive parity
Competitive Advantage
Competitive Advantage
Competitive Advantage
Competitive Advantage
Competitive Advantage
Competitive Advantage
Competitive Advantage
Y
Y
N
Y
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
N
Y
Temporary Competitive
Advantage
Competitive Advantage
Temporary Competitive
Advantage
Temporary Competitive
Advantage
Competitive advantage
Competitive advantage is defined as circumstances or possession and control of resources that put
Hyatt Hotels in a superior and favorable business position. These resources and circumstances have
allowed Hyatt Hotels to outperform other players in factor markets in different countries and also
allowed it to create a unique customer base with high demand for its unique product offerings and highquality products. However, competitive advantage develops in the long run, and is generally
sustainable since the resources that a company owns, controls or possesses successfully fulfill al VRIO
criteria.
When resources available to Hyatt are heterogeneous, and immobile in nature but successfully fulfill
only some VRIO criteria, other forms of advantage are formed for the company. This includes:
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Competitive disadvantage
Competitive parity
Short term competitive
advantage
Competitive advantage
The competitive disadvantage for Hyatt Hotels Corporation would be the
possession of resources that are not valuable at all, and may lead to the
company performing unfavorably in relation to competition, and may lead
the company to underperform.
Resources that lead to the building of competitive parity for Hyatt Hotels
Corporation are those that allow the company to achieve the standard and
average results and performance in an industry.
This refers to a superior business edge and benefits enjoyed by Hyatt Hotels
Corporation. However, this is more temporary in nature as the resources
may be imitated by competition and players in factor markets in the future.
They may similarly, also be acquired by players in the factor markets over
time. As such, though they provide Hyatt Hotels Corporation with a
competitive advantage, this is only temporary in nature, and not sustainable.
A superior edge developed by Hyatt Hotels Corporation on the basis of its
resources is sustainable and lasts over the long run as well. This is generally
inimitable by the competition and has developed through historical values
attached. Hyatt Hotels Corporation is able to exploit resources to build a
competitive advantage further in a sustainable manner.
Balance score card of Hyatt Hotel
A balanced scorecard (BSC) is characterized as administration framework that gives input on both
inside trade forms and outside results to persistently move forward vital execution and result. A
balanced scorecard could be a vital administration execution metric that makes a difference companies
identify and progress their inside operations to assist their outside results. It measures past execution
information and provides organizations with criticism on how to form way better choices within the
future.
Organizations now use the balanced scorecard to:
• Communicate what they are trying to accomplish.
• Ensure that all employees are aligned in their day-to-day activities and values.
• Prioritize the implementation of products, services, and projects.
• Define strategic targets and then measure and monitor progress toward them.
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The four perspectives of the Balanced Scorecard The balanced scorecard model reinforces good
behavior in an organization by isolating four separate areas that need to be analyzed. More importantly,
there is a causal relationship between the perspectives. Working from the bottom to the top: Changes
in Organizational Capacity will drive changes in Business Processes that will impact Customers and
improve financial results. The causal relationship may not be guaranteed if a new perspective is added.
The result might be a useful scorecard, but it would not, by definition, be a balanced scorecard.
In brief, the four scorecard perspectives are:
1. Finance
2. Learning and growth
3. Business processes
4. Customer
The four Perspectives of the Balanced Scorecard
Perspective Area
1. Financial
2. Customer
3. Internal Business and
Process Perspective
4. Learning and Growth
Key Question
How do we look to our owners or shareholders?
How do our customers perceive us?
What internal activities should we make more efficient?
How can we improve and grow, all while creating value?
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Administration at Hyatt Regency
can utilize Adjusted Scorecard vital instrument to construct
economical competitive advantage by superior understanding the relationship among - budgetary
assets, inside forms, client inclinations, and operations administration in Hyatt Regency’s in general
technique.
Perspective
1. Financial
2. Customer
3. Internal
Objective
▪Profitability
▪Increased
Revenue
▪Timely
delivery of
goods and
services
▪Lowest price
▪More customer
• Meeting
product
introduction
goals
• Product
development
cycle
4. Learning
• Break-even
time realized.
▪Employee
retention and
productivity
Measure
▪ Earnings per
share
▪Revenue per
guest
▪Revenue per
available room
Target
▪20% per year
Initiative
▪Optimize route
▪15%per year
▪Standardize
facilities
▪On time Arrival
Rating
▪1st on industry
▪Customer
Ranking
n
▪No of customer
Changing
▪operation cost
▪Maintenance
costs
▪10%per year
▪AI Service use
▪80%satisfactio
▪Rank
▪customization of
food menu
▪increase % of
food choices
▪Quality
management
▪Customer loyalty
program
▪monitoring of
international oil
price changes
▪food choices
varieties
▪on time
performance
▪quality
▪Employee
satisfaction
▪Hours of
training
▪increase in salary
and retirement plan
skill levels
attained
▪staff training
▪increase
productivity per
employee
personnel
turnover
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SPACE Matrix
The SPACE matrix is a management tool used to analyze an organization. It is used to determine what
type of strategy a company should employ. The Strategic Position & Action Evaluation matrix, or
SPACE matrix, is a strategic management tool that focuses on strategy creation, particularly as it relates
to an organization's competitive position. The matrix indicates whether a company should be
aggressive, conservative, defensive or competitive. Financial strength and competitive advantage are
two internal dimensions of the matrix. The two external dimensions are industry strength and
environmental stability.
The SPACE matrix is divided into four quadrants, each of which denotes a different kind or character
of a strategy:
▪
Aggressive
▪
Conservative
▪
Defensive
▪
Competitive
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The process of SPACE Matrix is selected a set of variables to define financial position (FP),
competitive position (CP), stability position (SP), and industry position (IP).
Assign a numerical value ranging from +1 (worst) to + 6(best) to each of the variables that make up
the FP and IP dimensions. Assign a numerical value ranging from –1 (best) to –6 (worst) to each of the
variables that make up the SP and CP dimensions.
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Factors that make up the SPACE Matrix of Hyatt regency
Internal Strategic Position
External strategic Position
Financial position (FP)
Rating Stability position (SP)
Rating
Assets
+5
Price competition
-2
Cash flow
+4
Demand variability
-4
Inventory turnover ratio
+4
Rate of inflation
-3
Average
+4.33
Average
-3
Competitive position (CP)
Rating
Market share
Industry position (IP)
Rating
-3
Growth potential
loyalty
-2
Profit potential
4
Customer service
-1
High paying customer
5
Average
-2
Average
+4.67
For X-axis
CP + IP
2.67
(X,Y)=(2.67,1.33)
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For Y-axis
FP + SP
4
1.33
FIG: Space matrix of Hyatt Hotel
Implications
Financial position: Strong
Stability position: Strong
Competitive position: Strong
Industry Position: Strong
Strategies
From the above figure of SPACE matrix, Hyatt regency is in the aggressive quadrant. As a result, in
order to achieve a competitive advantage in the market, the hotel needs pursue an aggressive strategy.
Market penetration, market development, product development, and backward and forward
integrations are all strategies that can be utilized to attract a large number of customers.
Some of the strategies for Hyatt Hotel can be:
I. To create monetary position solid company can grow benefit to unused showcase and give
administrations to provincial zones as well. I
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II. Minimizing costs can to decrease the monetary burden.
III. Entrance methodology such as passage lessening, showcasing exercises can offer assistance in
expanding advertise share.
IV. As discuss travelers and tourism division are rising, administrations to visitor put can upgrade the
competitive position of the organization
IE Matrix Analysis
An analytical technique called the Internal External Matrix (IE) can help businesses make strategic
decisions. The EFE and IFE matrix combined weighted average scores, which equal one point in the
IE matrix, are used to determine how the IE matrix is organized. Depending on the cell where the
organization is placed, that point will bring up alternative business plans.
Two essential dimensions make up the Internal-External (IE) Matrix: the IFE total weighted scores on
the X-axis and the EFE total weighted scores on the Y-axis. The total weighted scores derived from
the divisions allow construction of the corporate-level IE Matrix. On the X-axis of the IE Matrix, an
IFE total weighted score of 1.0 to 1.99 represents a weak internal position; a score of 2.0 to 2.99 is
considered average; and a score of 3.0 to 4.0 is strong. Similarly, on the Y-axis, an EFE total weighted
score of 1.0 to 1.99 is considered low; a score of 2.0 to 2.99 is medium; and a score of 3.0 to 4.0 is
high.
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Three Major Regions:
• Grow and build
• Hold and maintain
• Harvest or divest
Hyatt Hotel IE Matrix:
Based on the total weighted average score of the EFE and IFE matrices, the IE matrix can be arranged
of Hyatt Hotel as follows:
Division
Service
Revenue
Revenue
Profit
Profit%
IFE score EFE
(%)
1
Hotel
140
100
score
14
45
100
2.75
2.56
FIG: IE MATRIX OF HYATT HOTEL
Implication
Division 2:
Hyatt Hotel Division lies in the 2nd Region: Hold and Maintain, market penetration and product
development are two commonly employed strategies for this division.
Strategy
Following are the major strategies that can be adopted by this division in order to gain competitive
advantage in the market:
1. The company should concentrate on low-cost campaigns, increased marketing campaigns, and
attractive sales revenue to grow its customer base and revenue.
2. The business can establish its own parts manufacturing facility to cut import costs and open up a
new market since the parts can be sold to other hotels.
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