global management principles case study
DESCRIPTION
Holiday Inn case study for Global Management PrinciplesTRANSCRIPT
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Planning & Goal Setting
Strategy Formulation
20th APRIL 2011
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Agenda
Case overviewMission statementLevels of goals/plansCriteria for setting effective goalsHigh performance approaches to planningStrategy insight – Michael PorterKeith Houck’s strategyKey trendsConclusion
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BILL COLLINS, PRESIDENT
H.I.D
TONY BRIGGS, MARKETING HEAD
KAREN SETZ, HR DIRECTOR
KEITH HOUCK, CONSULTANT
DAVE KING, HOTEL
OPERATIONS CHIEF
ART JOHNSON, ACCOUNTANT
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Case Overview
H.I.D currently owns 21 properties: - 10 Holiday Inns and 2 Quality Inns all in
Georgia. - 8 hotels in Canada and 1 in the Caribbean.
Bill Collins, the president of H.I.D, advocates for adding 27 properties in 5 years and 50 in 10 years. He also wants to move to newer cities and explore new opportunities.
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Case Overview (contd.)
The senior management is of the opinion that only 15 hotels in 5 years and 20 in 10 years could be added.
Senior management’s concerns for the president’s vision:
- H.I.D would outpace its income - doesn’t have sufficient manpower nor have the financials to hire additional people - continue to focus on smaller towns due to lesser competition; and - not move to newer cities
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Mission Statement
“H.I.D strives to exceed the expectation of our
guests by providing excellent value in well-run hotels located off the beaten track.
In this way we will meet our profit, quality and growth goals.”
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Levels of goals/plans andtheir importance
MissionStatement
Strategic Goals/PlansSenior Management
Tactical Goals/PlansMiddle Management
Operational Goals/PlansLower Management
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Criteria for setting effectivegoals
Specific and Measurable Cover key result areas Challenging but realistic Defined time period Linked to rewards
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Pros and Cons of President’s goals
Pros:
Ambitious Ready to stretch limits Strong vision Rapid growth
Cons:
• No certain road map to meet his goals
• No clarity on planning from top to bottom • Lack of Communication • Rapid expansion as big as this entails a risk if not planned properly
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Pros and Cons of senior management’s goals
Pros:
Clear consensus in their vision
Well aware of limitations
involved
Cons:
• Risk averse • Unwilling to move away from their comfort zone
• Lack of motivation
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High performance approaches to planning
Strong mission and vision Set stretch goals for excellence Embrace event driven planning Use performance dashboards Organise temporary task forces
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President’s VisionSenior
Management’s Vision
Ambiguity
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Strategy Insight
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Strategy Framework-MBO
Management by Objectives (MBO).
“MBO is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources.”
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MBO
Appraise Performance
•Corporate Strategic goals
•Tactical goals
•Operational goals
STEP 1: SET GOALS
STEP 4: APPRAISE OVERALL
PERFORMANCE
Action Plans
Review Progress & Take Corrective Action
STEP 2: DEVELOP PLANS
STEP 3: REVIEW PROGRESS
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Keith Houck’s strategy
Develop an action plan.
Raise the required capital.
Plan to expand by 4 new hotels every year which should give 20 at the end of 5 years.
Review progress yearly and take corrective action, if any.
Appraise overall performance.
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Keith Houck’s strategy (contd.)
An opportunity to tap promising markets will lead to an increased international presence.
The proposed expansion will lead to growth opportunities, authority and responsibility for the employees as well as provide them with the choice of locations, if any.
These activities will give an impetus to growth and thereby increase their revenue.
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Tactical goals•Forecasting•Recruiting•Selecting•Training•Appraisal
•Raising capital •Funds allocation•Budgeting
•Plan, design and develop•Promotion and publicity•Market analysis and trends•Review progress
Human Resource
Finance Marketing
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Where to expand?
Asia shakes off recession with dynamic growth
Emerging markets heat up the tourism industry
Asia increasing its market share as a destination this year with a 11% growth rate
SOURCE : As per the world travel trends report of 2010 discussed at the World TravelMonitor Forum, held in Pisa in November 2010. At the annual event, organised by IPKInternational and sponsored by ITB Berlin
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Key Trends
Europe: low growth outbound & inbound
North America: low growth outbound; high single-digit inbound
Asia: double-digit growth outbound; high single-digit inbound
At a regional level, Asia Pacific, South America and the Middle East are expected to see the strongest growth in inbound tourists this year.
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Key Trends (contd.)
Worldwide tourism growth rates
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Key Trends (contd.)
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