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Transcript of IHG case
Laura de Zuloaga
Teresa Fradera About Chinese Culture Personal relation importance: About IHG MARKET SEGMENTS THREATENING COMPETITION HOLIDAY INN CONFUNSION PROBLEM STATEMENT Harrmony and order belief: Group: Authority, hierarchy and status: Chinese people always try to keep the harmony and balance, because they feel that competence leads to the confrontation. They give more importance the group than the individual person. Chinese do not usually do anything by their own. key factor
Before they take in serious any business, they will establish a friendship and mutual confidence relationship Face Image: It is more important in the Chinese culture than the occidental one Chinese people always want to know which the authority grade of his interlocutory authority is and what responsibilities has every member of the company with who they have contact. Intercontinental Hotel Group is one of the world’s biggest hotel chains.
Hotels all over the world.
This business started off with a brewery in Burton, England.
It became one of the most significant hotel chains in the world.
The group’s goal: make their brand the first choice for gests and hotel owners.
More than 660.000 rooms in 4.500 hotels.
More than 100 countries.
7 different hotel brands: Intercontinental, Crowne Plaza, Hotel Indigo, Holiday Inn, Staybridge Suites and the Candelwood Suites.
Their business: franchising, managing and owning.
One of the first hotel chains to enter China. In 1984 in Beijin.
In 2007 Intercontinental hotel group had 76 hotels in China.
Their goal for 2008 was to increase the number to 125 properties in China. There are lot of other foreign lodging groups that are speeding up their expansion into China IHG do not cover all the market segments: they do not have a luxury brand Holiday Inn is considered the main brand of the company in China and is positioned as an upscale or even upper upscale brand. However when western clients comes to China they are surprised due to the fact that in Europe and the US, Holiday Inn appeals to lower segments ANSOFF MATRIX PEST PORTER'S FIVE FORCES POSITIONING DATA ANALYSIS An important barrier: Differentiation.
Capital requirements tos start the business are less
Few economies of scale are in place
Customers can easily switch between the different products offered by the lodging industries.
Your key technology is not hard to acquire or isn’t protected well so other industries can copy your techniques. Few buyers chasing too many goods
Buyers purchasing in bulk quantities
Product is not differentiated: cost of switching to competitor's product is low.
Shopping cost is low
Buyers are price sensitive •There are many substitute products available; in this case the products offered by the other hospitality companies.
•Customers can easily find the product or service that you’re offering at the same or less price.
•Quality of the competitors’ product is better.
•Substitute products are offered by companies earning high profits so they can reduce prices to the lowest level, making it more attractive for potential customers •Suppliers are concentrated and well organized
•Few substitutes available to supplies
•Their product is most effective or unique
•Switching cost, from one suppliers to another, is high
•You are not an important customer to Supplier •There are number of equal competitors.
•customers have low switching costs between the hotel products.
•Industry is growing (which is clearly what is happening in China for the hotel industry).
•Exit barriers are high and rivals stay and compete.
•Fixed costs are high resulting huge production and reduction in prices. KEY DECISION CRITERIA ALTERNATIVE ANALYSIS Strenghts IHG is one of the largest international hotel chains in China.
IHG has a variety of 7 well-known and popular hotel brands in China.
Good relations with Chinese government, industry associations and hotel owners in China.
Alliance with Air China.
Famous among business travellers.
Well trained professionals.
The industry’s most-visited website Weaknesses IHG offer could be more diversified.
IHG is not covering all the different market segments (luxury brand as well as economy/budget.)
Different perception of Holiday-Inn brand in China (upper scale hotel) while in Western countries is not.
Too much standardized product could be less attractive for travellers who want to feel Asiatic experience. Opportunities The economy of China will continue its strong growth.
China is the world’s most populous nation.
China is going to become the world’s leading tourism destination by the year 2020.
Most favourable institutional systems with fewer barriers.
The nationwide increase of business and leisure tourists will create the need for hotels in the coast.
China is investing heavily in transportations infrastructures.
Chinese shareholders trust in international companies.
Internet: tourist use online reservations. Threats There is a threat of new company entrances because capital requirements and entry barriers in the Chinese market to start the business are low.
There is a high competence in the market (domestic and international chains).
Quality of some competitor’s product is better.
Customers have more information and they are more exigent.
There is a business alliance created between domestic hotel groups and the local government. STRATEGIES Segmentation and differentiation Diversification strategy Rebranding Wellness and spa or family resorts in coastal cities: Incrementation of business and leisure tourist’s nationals or internationals will create the need for hotels family resort-type in big coastal cities.
Chinese tourists are looking for spa experiences with an atmosphere of tranquility and calm. SWOT Intercontinental as a Luxury brand: improving services and quality
excellence expirience - High quality restaurant: professional and very well known chef
National and international guests
- Insiders: people who really know the city Discover the city
- Heavenly experience program: 24 hour personalized service Crowne Plaza as a business brand: first choice for business travelers (national and international meetings) showrooms + meeting spaces + cafe break spaces + free Wi-Fi.
future hotels next to airports and train stations in strategic cities Holiday Inn marketing strategy: strong marketing campaign in Europe and the United States Potential customers will know exactly what they book RECOMMENDATIONS Promotion strategy Michelin Chef Database marketing and personalized customer service Insiders Mobile apps for android and iphone Heavenly experience program Bill control through QR College inside the hotels. Upper Upscale and Luxury brands
24 hour personalized service:
whatever they ask for
Change the perception of the guest have a unique experience. Increase the margin of profits of the company + best managersCreate hospitality management schools in strategic cities .Management in hospitality + Training in the hotel for free.
Benefits:Less workers :save money Culture company learningAt least at the lower level as department managers Include inside the hotel room a QR code to allow guest check the invoice status and have a control of them expenses inside the hotel like restaurant consumption or minibar consumption. ACTION PLAN
THANK YOU cover the luxury market segment Design a new brand: combine both luxury and uniqueness in one brand The brand has to reflect local customs and tradition Business hotels near airports The current upscale Holiday Inn’s in China could be rebranded as Crowne Plaza’s IHG should aim to promote the “new” Chinese Holiday Inn as a midscale hotel or resort where both national and international guests can take a break and relax during their holiday Promotion in China because national hotels are huge threat Companies analyse the database to find out what traits are shared by customers who buy cretain types of products or services and target customers with more relevant offers.
Personalized customer service: taking advantage of the client database in order to analyze relevant data such as the last product the customer bought, birthday, likes or preferences...
employees and pocket city guide Rapidly growing
Large audience is reached
Interaction between client and brand