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Shangri-La Hotels Group 36

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Zhiwei Liu

on 5 December 2012

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Transcript of Shangri-La Hotels Group 36

The Eight Components
of Strategy Execution Exercising strong leadership
to drive execution forward
and obtain operating excellence. building an organziation
with the competencies
capabilities and resource strengths to execute strategy successfully Marshalling resources behind the
drive for strategy execution. Instituting policies and
procedures that facilitate
strategy execution. 1 Formail vs. Informal Business Structures Shangri-La Hotels Group 36: DOngming Tang
wanglong tang
xiao han
yu li
zhiwei liu What is Shangri-la? •Deluxe Asian hotel chain founded in Singapore in 1971 •“Shangri-La”- Meant to be a reflection on the serenity and service of the hotel •Within 10 years it established a reputation as one of the world’s finest hotel management companies Kowloon Shangri-La Operational Structure Level1: General Manager
Level2: Engineering Division, Rooms Division, Food & Beverage, Human Resources, Finance, Marketing
Level3: Departments attached to different division (e.g. Security, Front office, Banquet, Culinary, lobby, Personnel, Account, Credit, Sales, Meeting Services) QUESTION In what ways does this structure help or hinder their achievement of quality? Shangri-La's Operational structure Level 1: Shangri-La Hotels and Resorts(SLA) Level 2: Shangri-La Hotels international Hotel Management Ltd.(SLIM) and Shangri-La Hotels Asia Ltd. Level1: Managing Director Level2: Human Resources Group Director, Marketing, Finance, Development, Operations, Rooms & Operations, Food & Beverage Level3: Vice Presidents Marketing (attached to Group Director of Marketing) Question Describe Shangri-La’s competitive position in the international hotel industry and their operating structure 2 This was about achieving customer loyalty through individualized recognition and services and it was supported by customer-friendly processes. Customer Loyalty Employee Loyalty For Shangri-La to become a preferred employer, it had to provide
(1) A work environment where people felt valued, appreciated and involved;
(2) A career path where they could see the future;
(3) Competitive pay and benefits. It was reckoned as the engine of “Shangri-La” and the foundation upon which the strategic plan would be realized. It was demonstrated through role modeling of eight Guiding Principles, ethics, integrity and commitment. Management staff was also expected to establish clear strategic objectives, providing guidance and support for alignment to strategy. It was also important to build long-term success without losing sight of short-term business results. Leadership Other Priorities Process Improvement: This was about making processes customer-friendly, eliminating waste and duplication, decreasing costs and increasing efficiency. Elements of “Shangri-La” Vision: To be the dominant hotel company in Asia in 2000
Mission: To be the dominant choice for customers, employees and shareholders.
Philosophy: Asian hospitality from caring people.
Core Values: Respect, Humility, Courtesy, Sincerity and Helpfulness A Company with the competencies
and capabilities needed for proficient strategy
execution The three components of building an Organization
capable of Proficient strategy execution Staffing the organization Building core competencies Structuring the organization Staffing the Organization •Management Team Internal promotions
Growth opportunities • @ 1-2yrs: Service Leaders
• @ 4 yrs: Management (up to Senior Management)
• @ 8 yrs: Service Executive Lateral movement • Recruiting/Retaining Staffing the Organization -Initial retention @ 20%
-Industry norm 27-28%
-Competitors offered 35-50% higher salaries
-60% retention rate • 3 Tier Approach • A (Level 1) -Division Heads
-General Managers • B (Level 2/3) -Property Line Managers • C (Level 4/5) -Front Line Employees Competencies/Capabilities Personalized guest service
"It's in our nature" Updating strategy • M1: 1996
• M2: 1998
• M3: 2003
• M4: 2005 "The Shangri-La Way" More competition in 2000’s
Expansion to the West Training and continuing education 2004 training facility: Shangri-La Academy How do Shangri-La 2000’s “Priorities”, “Elements” and “Guiding Principles” fit together? Formal vs Informal Companies Shangri-La Care II Started in the second half of 1998
6 months to deliever the Shangri-La Care I workshop to all hotel employees Shangri-La Care I •Arrangements for execution
5-Level design
 L1: Divisional Mgrs
 L2: Department Mgr
 L3: Sectional Mgr
 L4: Front-Line supervisers
 L5: Front-Line employees Shangri-La‘2000 strategy Process
Training programs
Core Values
8 practical guidelines
Performance measurement system
Communication kit
Alignment survey “Reliability” --- remove error and waste Shangri-La‘2000 strategy Customer loyalty tools
Customer friendly processes
Employee loyalty tool (Autonomy, empowerment-making decisions)
Work environment, value, appreciation, reward, career path, benefits
Customized training programs
Home visit exercise QUESTION How do Shangri-La intend to deliver both “reliability” and “experience”? Standardisation=Reliability QUESTION How do Shangri-La intend to deliver both “reliability” and “experience”? Shangri-La Academy To deliver a high value, mid price range, quality accommodation. Geared toward a more value-conscious traveler. Future of Shangri-La Principles Future of Shangri-La Process Improvement and Technology supported Leadership. QUESTION •Debut of a new five-star hotel brand by Shangri-La Hotels and Resorts: Kerry Hotels. Priorities of “Shangri-La” Principles of “Shangri-La” In order to fit “Priories of Shangri-La”, “Elements of Shangri-La” and “Principles of Shangri-La” together Customisation=Experience Question What were the major milestones, successes and failures on the Kowloon Shangri-La’s quality journey and what measures of performance support this? A: McDonald's •“Kerry Hotels will appeal to the business traveler who prefers a vibrant and relaxed environment without compromising on service or quality." Integrated Complex Piloted in KSL in February 1997 Meeting Process QUESTION Shangri-La managed to expand to higher wage countries such as Australia and Canada. However they have not been able to enter the U.S. Market.

What, in terms of culture differences, could be preventing Shangri-La from entering the United States? McDonald's The United States may not appreciate the value of Shangri-La's in-depth personalized hospitality based strategy. Their willingness to pay for it may not worthwhile for Shangri-La to enter the U.S. market. "With a solid foundation and reputation for excellence in Asia Pacific, the Middle East and North America, the company's strategic plan now incorporates the goal of expanding the Shangri-La brand globally by operating deluxe hotels in gateway cities and key resorts around the world under management agreements, equity participation or ownership." Partnering for the Future Three aspects:
1.Management Contracts
2. Franchises
3. Hotel Consortia To maintain the momentum of "Shangri-La 2000" programme To maintain the existing level of service with much smaller staff Economic crisis in 1998 made KSL the worst year in terms of revenue and profit Challenge "Shangri-La 2000" was met with substantial scepticism at KSL when it was launched Flight Crews, Reservation Specialists, Baggage Crews. 3 Functional Structure of the Organization Adopting best practices and striving for continuous improvement Instilling information and operating systems that enable company personnel to carry out their strategic roles proficiently Tying rewards and incentives directly to the achievement of strategic and financial targets Instilling a corporate culture that promotes good strategy execution Shangri-La's Vision: The first choice for customers,employees,shareholders and business partners. Ownership: Overall structure: Satisfaction Questionnaires
Golden Circle Performance OPERATION Customer Friendly processes OUT IN PROCESS CUSTOMER LOYALTY Competitor performance monitor Leadership, Environment people feel valued, involved, rewarded Process improvement OPERATION OUT IN PROCESS Role modeling of 8 guiding principles leadership score Training, learning, rewards EMPLOYEE LOYALTY- retention Technology: This was about devising pro-active business solutions, having an ongoing education about technological opportunities while maximizing current systems. Business Results: This was about achieving both short-term and long-term financial results and thus maximizing shareholder value. Leadership drove Employee Loyalty. Leadership drove Employee Loyalty through Customer Loyalty. In order to achieve the Elements of “Shangri-La”, it used components in the Priorities of “Shangri-La” and regarded the Guiding Principles as the regulations and rules to support the whole process. Internal quality management in Shangri-La Hotel “Experience”-- Value for customers 1996.7 1997.2 1998.6 1999.4 1998 The Milestone of Kowloon Shangri-La’s quality journey Started in the second half of 1996
6 months to deliver the Shangri-La Care I workshop to all hotel employees The "cascading process was completed in the first quarter of 1999 Started by the end of of 1997 as a corporate-wide project 4 Group 36: Dongming Tang
Wanglong Tang
Xiao Han
Yu Li
Zhiwei Liu Advantages Individual high standard of service Systematic structure Own management process and standards Disadvantages 1. No common value 2. No common strategy 3. No centralized budget strategy 4. Managed independently - Positioning as a young regional chains, which plays a major role and expend fast in Asia
- Having own hotel management team, which provide guidance and standards to ensure consistency in service quality
- Labor advantage: the labor resource is relatively low in Asia area and most of staffs are hired in local
- Special operational concept: foster consistency and commonality among all hotels but without taking away their individuality Thank you for your attention!! Questions??????? External quality management in Shangri-La Hotel
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