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Copy of 7 Days Inn Journey To Success

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aqua marine

on 22 October 2013

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Transcript of Copy of 7 Days Inn Journey To Success

Background photo by t.shigesa
7 Days Inn Journey To Success
Turning Point
Established in 2005

Mr. Nanyan Zheng as
co-chair & Yuezhou lin as Chief operations officer.
7 Days Inn now operates more than 1,000 hotels in 168 major cities of china. Within four (4) year of its founding this company had successfully created the first Chinese hotel group listed on the New York Stock Exchange. It has enrolled more than 30 million customers in its membership system.
The first 7 days Inn hotel was opened on Beijing Road, a walking street in the busiest area of Guangzhou --> capital city of Guangdong province.
To target the common business travelers with the service concept of “Sleeping Well Every Day”.
Vertical cutting is basically eliminating unnecessary expenses and using it on customer’s demand of “sleeping well” and also enhancing the quality of their product to satisfy customer’s core demand.
Vertical Cutting
Gradually Growing
Strategies To Success
IT & Membership SystemThe company launches its central reservation system (CSR). It supported 24/7 reservation methods, including online, telephone, wireless application protocol, short messages service and mobile client reservatio
The occupancy rate was below 40
less advertising budget
Not so eye catching location
Introduced 7 days club, as it is the best way to get people aware of the company. .
Parking The Bus - Chain management strategy
In October 2006, the first hotel out of Guangdong province was opened in huang-xing Road in Changsha, Hunan province.
Information Platform
7 days club worked as an information platform for the company and as a result the occupancy rate increased constantly with the growth of 33 million members
Result of vertical cutting
As customers want to spend less money for a better sleep, so 7 days Inn become a competitive along high performance ratio in the national economic hotel by practicing the vertical cutting approach.
Qiafon Han Role
She set up operational regulations, covering procurement, safety management, property assets management, etc. to achieve standardization across hotel chain, a hotel affairs Department was set up under

Qiafon with the power of managing all hotel operational affairs. The department set three (3) functional units i.e. sales, finance and human resource units.

Clear criteria of operational performance, comprehensive training programs and disciplined supervision considerably improve the standardization of daily operation in the hotels.
Matrix Structure
According to the matrix structure functional departments in headquarters such as finance and human resource, supervised a hotel. While a hotel manager also manages the hotel. This matrix structure not only relieved the stress for the hotel affairs department but also allowed other department to play their roles appropriately.
7 Days club
IT & Membership System
Hotel Affairs Management
7 days in operated five (5) hotels, 3 of them in Guangzhou and two in Shenzhen, early 100 miles apart. Qiaofan Han was appointed as operations director in August 2005.
To avoid the conflict between the investors and management the 7 days Inn added a clause in agreement with investors that specified that if investors had any issue with hotel managers then they will report it to the headquarters which will resolve the issue. In any case investors were never allowed to dismiss hotel managers unilaterally.
In order to enhance the commitment of investors the company grants them access to the company’s internal communication system. Investors could not only receive emails from headquarters but also freely join discussion in the system.
Shepherd Management
Sheep (hotel managers) would move forward together without instructions form a shepherd (with full authorization and autonomy); if someone sheep were willing to go forward (the hotel managers with entrepreneurial spirit) and a shepherd dog did its duty (headquarters provides support and supervision), and then this would benefit all.
Cash rewards were granted to good managers and also the honor award of “star managers” to those who continuously ran the business with best outcomes. Headquarters also keep an eye on those one who give poor performance and eliminate them.
Support & Supervision
For better supervision of daily hotel operations the company set up three (3) supervision departments, including quality and safety management, finance auditing and corporate culture while functional departments at headquarters provide support to the managers and supervised the operational performance of hotels.
The advanced information system of 7 Days Inn made operations visible, which strongly supported the practices of the support centers and supervision departments.7 Days Inn was the first company in the industry to integrated online reservation, back-end membership database, confirmation platform, calling centre, short messages service platform and hotel affairs management.
Archon & Council
7 days inn introduce the archon system according to which an archon needed to help with the hotel performance of the region while having no authority to directly manage the hotel managers.
At the same time the company created the council system to facilitated communication between hotel managers and headquarters. The council was not only the communication bridge between managers and headquarters but also had the power to contend against headquarters.
Introduce central reservation system (CSR).
Supported 24/7 reservation methods, including online, telephone, wireless application protocol, short messages service and mobile client reservation. The company launches its central reservation system (CSR). It supported 24/7 reservation methods, including online, telephone, wireless application protocol, short messages service and mobile client reservation.
Autonomy of Hotels
Mergers & Acquisition
The company allowed good managers to acquire or merge with hotels of managers with bad operational performance. The acquisition was done through bidding. As human resources were limited, normally the manager would retain all the staff of the target hotel and would not make any changes.
Franchise & Management
The franchisee called “investor”, and the franchised hotel was called “managed hotel”.
7 Days Inn is the best example of the good operations management. They give importance to their every operation leaving no single weak point behind. This shows us that if every operation is managed through proper planning and with complete concentration then gradually you will attain success. Its success is largely due to its innovative business model and operations strategy, which includes designing product services with the vertical cutting approach, enhancing customer loyalty through a membership system and direct sales, managing a hotel chain with different governance structures and expanding a hotel chain with an innovative franchised-and-managed model.
Full transcript