How To Survive The Recession, Then Fail The Recovery - The British Airways Story

"How To Survive The Recession, Then Fail The Recovery"
“The British Airways Story”.
Last year BA reported a sharp rise of operating profit to £883 million, which in view of the rising fuel price and their falling market share, seemed to be bucking the downward global trend.
This year they reported a loss of £401 million.
Somewhere between the two reality probably lies, but when has reality ever paid out a performance bonus? And when have the published numbers ever reflected what is actually happening to a business?

A spokesman for BA, Mr Willie Walsh, said last month: “The combination of unprecedented oil prices, economic slowdown and weaker consumer confidence has led to substantially lower first quarter profits." “But,” He said ”British Airways is well prepared and has adapted its plans in the event of further economic uncertainty.”

These reported performance figures for BA and their smooth denial of concern reminded me of the last time BA management hit the news.

It was several years ago and Rod Eddington, the then chairman of British Airways, was responding on TV to concerns about the profitability of British Airways.
He was having a moan about how the budget airlines were cutting into his market share, but he was still being quite bullish about it. He told the interviewer how, in the last three years, he had cut the operating costs of British Airways by 5% and that although the competition was tough they fully expected to maintain their market share.

What he didn’t say was that in the past three years, to make that 5% saving, he had made redundant 16,000 members of his workforce.

He must have had some idea of the consequences of those redundancies for the remaining workforce. How did he think they felt about it?

Did he think they still felt good about working for British Airways?
Did he think they still felt their jobs were secure?
Did he think they felt proud of what had happened.

At the time Rod Eddington seemed supremely unconcerned by any of the consequence of his actions other than the ability to boast about the financial savings he thought he had made.

The men and women who worked for BA had. in the main been in their dream jobs. Pilots, who as schoolboys had pictured themselves wearing Raybans while they lounged around in the cockpits of big jets.
Cabin crew who used to dream of all the exotic destinations they would go to.
Baggage handlers and support staff who at the time could use BA to nip over to Paris for the weekend for the price of a cup of strong coffee.

And then, by making 16,000 redundancies, Rod Eddington had at a stroke completely changed the way that the remaining BA employees felt about what they did.

He had changed their attitudes and behaviours from those of a proud group of motivated people, dedicated to the service of their customers, to a bunch of disillusioned job hunters.
By making these redundancies British Airways changed the behaviour of their whole workforce from a powerful group of people who were proud of what they did, to an apathetic, untrusting workforce who were only interested in where they could send their next CV.

In the latest twist in the saga of the failure of BA we read of the appeal from the current management for the workforce of BA to give the company one months work without pay to try to save the company.

Since the days of Rod Eddington, management at BA have completely lost the loyalty of their staff by the way that they have behaved towards them, creating a morally bankrupt organisation, Make no mistake, this moral bankruptcy was caused by BA management.
Now we see the current management attempting to cash a cheque against the BA account that they themselves have already emptied.

Is this BA management completely misreading the way that the workforce feel about the company they work for? Or is this a cynical manoeuvre by management to deflect the blame for the failure of the company?

It is possible that the company will fail without these individual contributions from the workforce.
The workforce must be aware that it is just as likely that the company will fail even after they have put themselves into personal debt to try to keep it afloat, the only difference being that when the company fails, even after the workforce have given their time for free, the workforce will be in an even worse position to support their families.
Either way, management have already broken the trust of the workforce and since none of the management team seem to have offered to work for nothing it seems even less likely that any of the workforce will be persuaded to stick their necks out.

Do BA management truly believe that the workforce, working for nothing, will save them or are they working a spin, which when the company goes to the wall will enable them to say
“It was not our fault, We were let down by the workforce who would not support us.”

In this ongoing crisis we have to be very careful about what we do to survive and how that changes the way that our remaining workforce feel about they are asked to do.

Ride roughshod over the workforce during the recession because you can, and like BA you will have a very hard time continuing to trade even when the rest of the world has resumed doing business, Or, take care of your people when they most need it and they will take care of you when you need it.

We can’t have it both ways.

What goes around comes around.


Peter A Hunter
Author – Breaking the Mould
www.breakingthemould.co.uk

L'Oreal Paris Menexpert

L'Oreal is a brand that is extremely popular among females. Anyone who thinks of beauty thinks of L'Oreal. But it is relatively unknown among men. If it is known at all, it is for high quality beauty care for women. So, L'Oreal has an image that is strongly feminine.

But L'Oreal wants to change that image now. With the rising of the Metrosexual Man, L'Oreal has come up with an exclusive range of men's grooming products. These products are mainly skin care and shaving products, under the brand name 'L'Oreal Paris Menexpert'

There have been similar other attempts by personal care giants trying to woo the man with products that were popular among females. Eg. HLL's Fair & Lovely Vs Fair & Lovely Menz Active, Fair and Handsome, etc.

The current stigma associated with beauty for men and also the rift between the sexes does not let men touch anything that is remotely feminine. India is definitely one of the more masculine cultures where males would like to keep an arm's length from products associated to females. No one will publicly admit using a product or get caught anywhere around it. Yet, products are flying off the shelves really fast.

Question

With such a strong feminine image attached with L'Oreal, how would you as a brand manager deal with the task of making a success out of Menexpert and thus come close to Men too? What role can women play to help you out?

(This case study is provided by FMCG Marketers http://www.fmcgmarketers.com/ and is created by Mr. C.Seshagiri )If you want our panel of marketing experts and Mr. C.Seshagiri to analyse your solutions then send your solutions to contactus@blogomania.in

Pepsi-Other than Colas

With increasing health consciousness among Indians, soft drink majors have had to rethink their strategies. New products have come in the market bearing the 'health' tag. Among these are packaged milk, lassi, buttermilk, juices, etc. All these products act as a healthy substitute for soft drinks, while also creating a hip image

With all the distribution challenges and seasonal nature of demand, this category of health drinks is going good. Not only are the soft drink makers coming in the fray, even non beverage players are entering the arena. Eg. Dabur has entered the marketing with its range of Coolers.

In all this action, fruit juices seem to have won the battle against flavoured milk. Not many brands are available in the flavoured milk category, nor are many people spotted consuming it.

Assume that you are a marketing manager at Pepsi and are considering a concept of flavoured milk in the Indian Market. How would you make sure that it justifies your investment and creates a positive image about your company? Please also consider that even with its immensely popular soft drink segment, Pepsi has broken even just now, if at all.

Question

Assume that you are a marketing manager at Pepsi and are considering a concept of flavoured milk in the Indian Market. How would you make sure that it justifies your investment and creates a positive image about your company? Please also consider that even with its immensely popular soft drink segment, Pepsi has broken even just now, if at all.

(This case study is provided by FMCG Marketers http://www.fmcgmarketers.com/ and is created by Mr. C.Seshagiri )
If you want our panel of marketing experts and Mr. C.Seshagiri to analyse your solutions then send your solutions to contactus@blogomania.in

L'Oreal Garnier Multi Lights

Hair Highlighting is a craze that has recently picked up weight, but is actually more than two years old. All of us know what hair highlighting or streaking is. Highlighting is when you bleach a few strands of hair rather than the whole thing. Now it is a fairly costly affair, with a single highlighting session with a good hair dresser costing you above one thousand rupees. Attached to this are the general barriers related to its effect on hair, the social perceptions, etc.

In line with its agenda to bring beauty to women, L'Oreal brought highlighting, too, to people. It launched a Home Highlighting Kit, branded 'Granier Multi-lights'. The product is available in two shades, at Rs. 200. Right after L'Oreal, Godrej also launched its own range of Home Highlighting Kits. The firms expected an effect very similar to what happened when Home Hair Coloring Kits were launched. They expected a bang. But nothing happened. People are still crazy about highlighting. But no one wants to buy a home highlighting kit and highlight their own hair. The would rather go to a salon and pay a hefty fee for a professional job.

Question

If you are the brand manager of L'Oreal Multi-lights, what will you do?

(This case study is provided by FMCG Marketers http://fmcgmarketers.com/ and is created by Mr. C.Seshagiri )

If you want our panel of marketing experts and Mr. C.Seshagiri to analyse your solutions then send your solutions to contactus@blogomania.in

INDIAN 5-STAR HOTEL BRAND TAJ – CAN IT ACHIEVE THE SAME SUCCESS IN UK MARKET AS IN INDIA?

“The vision for the Taj Group is for it to be a select chain, present globally. Asian, perhaps in character, but absolutely international in terms of systems and processes and with a strong West European focus. The way forward was to make sure that the entire Taj team is imbued with the missionary zeal to sell the brand.”
- R.K. Krishnakumar, Managing Director, Taj Group of Hotels

“The continuing dramatic growth in the London hotel market is very heartening - although we should remember that London was still recovering from the impact of the bombings last September - and it’s clear that regional hotels are continuing to build on their solid performance to date this year. "
- Robert Barnard, partner for hotel consultancy services at PKF.

The Taj group[1] of hotels internationalize in UK by opening up two five star hotels namely – 51 Buckingham Palace[2] and Crowne Plaza London St. James[3]. These hotels in London offers the best in luxury and comfort besides being equipped with state-of-the-art conference facilities for meetings and seminars. With TATA[4] group rapidly expanding their businesses across the borders of India, Taj group of hotels was lured by the London city, which is today one of the world’s leading business, financial and cultural centres[5]. The biggest challenge for Taj group of hotels is whether they can maintain the same success rate as in India? Some of the factors would become matter for discussion while making entry in to UK market. The problems like: cultural barriers, human resource management problems, competition, problems originating from changes in cuisines, importing the equipments (machinery) required to make special Indian cuisines, brand equity from name ‘Taj’, categorization of right type of customers for Taj hotels in UK on basis of luxury, business and leisure classes, international hospitality standards, are identified as crucial success factors for Taj’s success in UK. These factors may favor or hampers the success of Taj in UK. The impact of these factors would form main objective of this case and each factor would be discussed in detail as the case progresses.

The international hospitality standards are affected immensely by changes in culture[6], people (customers and human resource), quality of service, brand (brand equity) who is service provider, from what cultural background a service provider comes from (country of origin effect), track record for providing services in the same field (consistency), how frequently service provider adapts with fast changing services environment, innovativeness in services being delivered to right customer, at right quality, at right time and at right prices[7].

Background note – Indian Hotels Company Ltd (Taj Group of Hotels)

Indian Hotels Company (IHL), belonging to India’s prestigious Tata Group, operates one of the largest hotel chain in South Asia under the brand Taj Hotels Resorts and Palaces. Its history begins more than 100 years back when the Group’s founder, Jamsetji N Tata, opened the first hotel, the Taj Mahal Palace and Tower, in Mumbai in the year 1903. The mission of Taj hotels is to make visitor’s stay memorable one by providing unmatched and world class service standards. It comprises hotels with 9082 rooms and over 200 food and beverage outlets. During the fiscal year ended March 31, fiscal 2006, the Company added 583 rooms to its portfolio. During fiscal 2006, the total number of hotels owned or managed by the Company was 75[8]. Over the years, IHL has created a niche for itself in hospitality sector. The creative thinking has been success mantra for Taj throughout world. Right from Beach resorts to palaces and Villas, these properties has become popular tourist destinations worldwide[9]. (For important milestones achieved by Taj Group of hotels refer to Exhibit No. 11.)

Specialization! Specialization! Specialization!

Taj hotels are ambassadors of warm Indian hospitality, contemporary, efficient service and modern luxury. Taj represents world renowned landmarks and modern business hotels with beach resorts and lavish and authentic Rajput[10] palaces. Taj hotels, resorts and palaces specialize into three categories:

Taj Luxury Hotels: Taj Luxury Hotels (Refer to Exhibit No. 1 and 2) are representation of true Indian hospitality culture by providing lavish accommodations and incomparable services. With profitable locations around the globe, each hotel offers luxuriously appointed suites and rooms, specialty restaurants and bars, state-of-the-art business facilities, modern fitness centres, rejuvenating spas, and well equipped banquet and meeting facilities. The villas and palaces make guests feels as King with butlers serving them in true royal style. The cuisines menu of Taj includes world’s best tasted cuisines like Indian, East Mediterranean, Chinese, and Vietnamese.

Name of the hotel
Location
The Taj Mahal & Tower
Mumbai, India
Taj Land End
Mumbai, India
The Taj Mahal Hotel
New Delhi, India
The Taj West End
Bangalore, India
Taj Coromandel
Chennai, India
Taj Krishna
Hyderabad, India
The Pierre
New York, USA

Exhibit No 1: The members of the Leading Hotels of the World Ltd.
(Source: Taj hotels website,
URL: http://www.tajhotels.com/AboutTaj/CompanyInformation/Taj_hotels.htm)
Name of the hotel
Location
Taj Lake Palace
Udaipur, India
Rambagh Palace
Jaipur, India
Umaid Bhawan Palace
Jodhpur, India
Taj Exotica Resort & Spa
Maldives, Indian Ocean
Taj Exotica Resort & Spa
Mauritius, Indian Ocean

Exhibit No 2: The members of the Leading Small Hotels of the World, Ltd.(Source: Taj hotels website,
URL: http://www.tajhotels.com/AboutTaj/CompanyInformation/Taj_hotels.htm)
Taj Leisure Hotels: Taj Leisure Hotels aims to provide guests with adventure, romance, comfort, and style such as rooms with sea view, restaurants that serve the freshest catch of the day, the latest water sports facilities, tennis courts, freshwater swimming pools, spas, and travel assistance, multi-lingual concierge services to make guest’s trip a memorable one. Taj Garden Retreats make guests feel in lap of nature with peace and calmness engulfing them. Taj Leisure Hotels offer everything from comfortable rooms with a view, friendly efficient service, specialty restaurants and lively bars, telecommunication facilities such as Internet connectivity, well equipped business centres, conference facilities, and banquet areas. At the Spas, Ayurveda[11], yoga, meditation, and herbal knowledge come together to create a holistic experience in harmony with its location.

Taj Leisure Hotels are a complete family destination offering a wide variety of activities for all age groups.
For the young members of the family, Taj Leisure Hotels offers exciting, fun-filled holidays that provide the best in children activities ranging from sports, culture, environment, adventure, music, and entertainment.

Parents can relax throughout their holiday by leaving their children in the care of the hotel staff, which will make sure that the younger guests have a holiday to remember.

Taj Business Hotels: The Business Hotels of Taj are spread across India, Sri Lanka, Africa, and the Middle East. Designed to satisfy every need of the business traveler, the hotels offer everything including well appointed rooms, telecommunication facilities such as wireless internet connectivity, efficient service, specialty restaurants and lively bars, well equipped business centres, and conference facilities and banquet areas, and helpful travel assistance.
For example, The BLUE, Sydney is part of the Leading Small Hotels of the World, Ltd.



Globalization of ‘Made in India’ Taj hotels

Indian Hotel Company expanded its international operations (refer to Exhibit No. 3 and 4) through acquisitions, licensing, management contracts, and wholly owned subsidiary.

Country
Mode of Entry
Year of Entry
Joint Venture/ Licensing/ Company Acquired
The Crowne Plaza, London, United Kingdom
Licensing agreement
1982
Bass Hotels & Resorts
The Taj Pamodzi, Lusaka, Zambia
Acquisition
1995
Zambian Government Hotels
Taj Exotica & Spa and Taj Coral Reef Resort, Maldives
Wholly Owned Subsidiary


Hotel BLUE Sydney, Sydney, Australia
Acquisition
2005
Star wood Group
The Pierre, New York, USA
Management Contract
2005

Rebak Marina Resort, Langkawi, Malaysia
Management Contract


Taj Denis Island, Seychelles
Management Contract


Taj Exotica Resort & Spa, Mauritius
Management Contract


Palm Island Jumeirah in Dubai
Management Contract


Thimphu in Bhutan
Management Contract


Raffles and Swissôtel
Marketing Strategic Alliance
2004

Shilla Hotels & Resorts, Korea
Marketing Strategic Alliance
2006


Exhibit No 3: Taj group of hotels international presence.
(Source: Information compiled from Indian Hotels Company Annual Report,
URL: http://ibef.org/download/The_Indian_Hotels_Company.pdf)

Indian Hotels Company Ltd. (IHL) expanded globally by licensing agreement in 1982, with UK based Bass Hotels & Resorts for the use of the name The Crowne Plaza for its hotel in London. Zambian government decided to privatise the hotel in 1995; IHL picked up a 70 per cent stake in the hotel and renamed it as the Taj Pamodzi[12]. IHL’s international portfolio went on to include luxury resorts in the island countries of Maldives, Mauritius, Seychelles and Sri Lanka; business and resort destinations in the Middle East; service apartments in the UK and luxury hotels in the USA and Malaysia. A network of international offices was created in New York, London, Frankfurt, France, Dubai, Singapore, Sydney and Tokyo to support the bookings for these hotels and resorts.

IHL adopted acquisition in attractive markets to expand internationally. The latest acquisition is that of a 100- room hotel in Sydney, Australia, in December 2005, currently operated by the Starwood Group, for Australian $ 36 million. This hotel is rated among the top 5 hotels in Sydney and is located in the central business district of the city.

IHL is also increasing its global presence through the route of management contracts. In July 2005, the company entered into a management contract with The Pierre[13], New York a luxury hotel in Manhattan that was established way back in 1930. The 44-storied hotel offers full-service apartments as well as guestrooms, including 52 suites. The management contract signed for The Pierre is significant for IHL’s overall market strategy given New York's importance as a gateway to the US and one of the most competitive luxury markets across the globe. It is expected that with more and more Indians travelling abroad on business the presence of a familiar brand would make Pierre one of the top choices for the Indian business traveller. The same brand recognition and Pierre's close association with the Taj would also work with the international traveller on a visit to India.

In the same year IHL made its first entry in Southeast Asia by getting into a management contract with the Rebak Island Marina Berhad[14], a luxury resort on the island of Langkawi in Malaysia. Establishing a presence in Malaysia is a part of Taj’s global strategy to establish its presence in key gateway cities and leisure destinations. IHL just have to pay management fee and can save them from full payment needed for buying or leasing the hotel by adopting management contracts strategy.

In global markets, other management contracts undertaken by IHL include Taj Denis Island, Seychelles and Taj Exotica Resort & Spa, Mauritius. In addition to these the company has undertaken management contracts for hotels at Palm Island Jumeirah in Dubai, and Thimphu in Bhutan, which are currently on renovation and would start functioning soon. The hotel at the Palm Island named Taj Exotica Resort & Spa is the company’s fourth hotel in the Middle East and is expected to open in 2007.

IHL signed a strategic marketing alliance in 2004 with Raffles International, a renowned hotel group that markets its hotels and resorts under two brands – Raffles[15] and Swissôtel[16]. The marketing alliance will enable both the hotel groups to encourage each other’s strengths in their respective stronghold markets, through cross promotion of 14 Taj Luxury hotels and 15 Raffles Hotels.

In March 2006, IHL also entered into a marketing alliance with Shilla Hotels & Resorts[17], Korea to develop joint marketing activities that include joint participation in trade shows, sales events, and niche marketing programs. Furthermore, the companies will also assist each other in exchanging sales leads and conducting road shows across India and Korea.

To diversify its presence in the hospitality business, IHL has ventured beyond hotels and expanded its presence in airline catering, operating private jets and yachts, service apartments, spas and wildlife lodges.

‘Taj’ brand is pioneered by TATA Group of companies, India's premier business house, presently headed by Ratan Naval Tata. (Refer to Exhibit No. 4, 5 and 6)

Exhibit No. 4: Globalization at Glance for IHL
(Source: Information compiled from Indian Hotels Company Annual Report,
URL: http://ibef.org/download/The_Indian_Hotels_Company.pdf)

Exhibit No 5: Indian Hotel Company – Products, Establish date, Founder, and Locations of hotels.
(Source: URL: http://ibef.org/download/The_Indian_Hotels_Company.pdf)

Exhibit No 6: Overseas locations of Taj hotels.
(Source: URL: http://ibef.org/download/The_Indian_Hotels_Company.pdf)

Taj group of hotels in London

Indian Hotels Company Ltd. (Taj Palaces, Resorts and hotels) entered London through licensing agreement with UK based Bass Hotels & Resorts for the use of the name The Crowne Plaza for its hotel in London, in 1982. The idea behind such a move was to tap business, leisure and luxury guests moving from India to London and also to tap London guest base.

Problems Identification – While entering in London, UK market
International hospitality problems
In a hotel group, service quality is very important due to the high level of customer contact. Some of the problems identified within 51 Buckingham Palace and The Crowne Plaza St. James are:
Complaints in the food and beverage section within the hotel;
Staff motivation and attitude
Housekeeping problems
Inadequate communication between management and front-line staff members
Inadequate communication between management and customers
Slow service at various times[18]

Exhibit No 7: International Hotel Performance Data, March 2007.
(Source: HotelBenchmark Survey by Deloitte)

The performance stats for hotels in London (Refer to Exhibit No. 7 and 8) are not impressive due to the fact that London is very expensive city for any business to exist. If we have a look at room rates (Refer to Exhibit No. 9) in both the properties of Taj in London, it’s quite a expensive deals. The management cannot decrease the rates for profit maximization, and thus leading to lesser number of guests turnover.

Exhibit No 8: Performance stats for Indian Hotels Company Ltd. (IHL)
(Source: The Indian Hotels Company Ltd.,
URL: http://finance.google.com/finance?q=BOM:500850)

Exhibit No 9: Room rent for Taj properties in London, UK (in pounds).
(Source: http://www.tajhotels.com/)

Competition in London hotel industry (Indian Curry[19] Culture)

In Britain traditional recipes includes Fish n' chips, Roast Beef, Yorkshire pudding and ales[20] from England, Ireland Scotland and Wales, which is all together a different recipe what is being offered in India. The London city being a truly international hub for various businesses and city mix of various cultures, one can expect to find cuisines from all over the world. So, whether it’s Sushi[21] or Teriyaki[22] from Japan, sea weed[23] from China, curry from India, Hamburgers and Hotdogs from America or Salt Beef and Latkas[24] from East Asia, London has it all.

Indian curries are very famous throughout UK. Taj enjoys ‘country of origin effect’, as Curry being originated in India and can sell it as Unique Selling Preposition (USP). Taj hotels in London would require outsourcing of recipe and curry powder from India to serve UK customers. The large number of five star chains (Refer to Exhibit No. 10) does serve Indian curries in their menu to London customers. But there are large number of small Indian hotels and restaurants, which are serving British customers with delicious Indian curries.

For example, Hason Raja Indian and Bangladeshi Restaurant and Takeaway (www.hasonraja.co.uk), 84 Southampton Row, Holborn, London, is selling Indian curry culture.

London, being financial capital of England, there are lots of five star hotels available in city, eating into market share of each other. The London customers are having option of luxury, boutique, leisure, Victoria house, etc. various themes of five star hotels. The Exhibit No: explains about these themes in detail. Besides five star hotels, there are small hotels, restaurants chains catering for needs of customers within London, specializing in their respective cuisines.

Cultural Mismatch

With the terms like globalization and liberalization the competition amongst the global players (in hotel industry) all over the world has increased manifolds. The case becomes more intense when an organization is seeking for international business opportunities. While designing international business strategies, there are few important parameters to be taken care of. One such parameter is ‘Culture’ of target country (market). “The culture is like nose, you cannot see it, but everybody else can see it, and thinks it is peculiar if it differs from theirs, in addition, you always go where it leads you, and it is always in the way”[25].

The use of different language settings in different countries can create problem for international human resource managers within Taj hotels in UK. The commonly spoken language by Indian Taj hotels managers is Hindi, but in UK it is English. The managers need to be trained in English language to take up guests in London, UK market. “So, an international managers should be able to understand cultural differences by linguistic skills; language as gateway to culture.”[26]

Exhibit No: 5D model by Geert Hofstede showing comparison for India and UK
Source: Adapted from Geert-Hofstede work on culture, (URL: http://www.geert-hofstede.com/hofstede_dimensions.php?)

From cultural point of view, India differs in many ways from United Kingdom. India scored highest on Power Distance dimension, showing un-equality amongst various societies in Indian culture. Indian tends to have group-based economies and have hierarchal structure in their decision process where as counter part in UK societies are more individualistic and loosely organized. So, a London based guest in hotel would look for individuality and would not like to share much of information with communities and groups. They would not like to let anybody peep into their privacy. Whereas, Indians are more relationship oriented, and would like to form communities and groups with one leader and leader being influencing other members of the group. Managers in London Taj (Refer to Exhibit No.12 for management team of Indian Hotels Company Ltd.) should know their limits up to which they can enter into personal boundary of British guest, which becomes more crucial in business meetings and special occasions. “The culture determines values and management practices need to be consistent with these values, otherwise, organizational performance is likely to be reduced.”[27]

There are certain businesses etiquettes which need to be take care of while dealing with British guest within hotels. British guests would like to be punctual and would not bear any kind of delay in processes. They would like to be greeted by mere by simple handshake. English language should be common platform for communication.

Future plans

Indian Hotels Company Ltd. is well equipped with growth elements. Encouraged with its success of its Ginger[28] hotels, IHL is in the process of rolling out such hotels to several new locations and might take this concept to foreign countries like London. The UK hotel market is strong enough since past few decades, and lots of entrepreneurs have identified opportunities to develop niche market products. Taj would definitely look forward for improvements upon problems faced right now and would introduce new hospitality concepts such as Ginger hotels in London market.

In UK Market, the new niche hotel companies will continue to expand and refine their product. At the same time, major hotel companies are likely to continue to incorporate elements of the new hotel products into their product offer, in order to retain their customer base and to set themselves apart from the competition. The challenge for Taj group of hotels would be to overcome the problems and to come up with new innovative product offer and improve upon hospitality standards, to sustain in highly competitive London market.

Taj Hotels Resorts and Palaces has selected Amadeus Revenue Management System (RMS) for 32 hotels and resorts around the world. With Amadeus RMS, Taj, India’s largest hotel group with 76 hotels in 51 destinations “will be able to sell the right room at the right price to the right guest.”[29]



Exhibit No 10: Shows the number of five star hotels with themes available in London city.

Hotel
Location
Rooms
Notes
13 Half Moon Street Apartments and Hotel
Mayfair
10
In a 1730 house; an adjunct to the 4 star Flemings Hotel.
22 Jermyn Street
St. James's
22
townhouse hotel; owned by Togna family since 1915
41 Hotel
Westminster
20
boutique hotel
Athenauem Hotel and Apartments
Mayfair
123
Modern
Baglioni Hotel
South Kensington
66
occupies a group of Victorian houses
The Bentley Kempinski
South Kensington
64
occupies Victorian buildings
The Berkeley
Belgravia
214
modern building; opened 1972, Includes the uber trendy Blue bar. Roof top pool
Blakes Hotel
South Kensington
51
occupies a group of Victorian houses
Brown's Hotel
Mayfair
117
occupies eleven townhouses
Capital Hotel
Knightsbridge
49
Modern
Carlton Tower Hotel
Knightsbridge
220
Modern
Charlotte Street Hotel
Fitzrovia
52

Churchill Hotel
Marylebone
445
Modern
Claridge's
Mayfair
203
London's most aristocratic hotel; founded 1812 and rebuilt 1898 art deco
The Connaught
Mayfair
92
traditional grand hotel
Conrad London Hotel
Chelsea
160
modern; overlooks the marina at Chelsea Harbour
Courthouse Hotel Kempinski
Bloomsbury
116
occupies a classical former magistrates court; modern rooms
Covent Garden Hotel
Covent Garden
58
English country house style
Dorchester Hotel
Mayfair
238
opened 1931; art deco exterior and "Georgian country house" rooms
Draycott Hotel
Chelsea
35
occupies three 1890s houses
Four Seasons Canary Wharf
Canary Wharf
142
modern chain hotel; opened c. 2001
Four Seasons London
Mayfair
220
modern chain hotel
Franklin Hotel
Knightsbridge
50
opened 1992 in four Victorian houses; English country house style
Goring Hotel
Victoria
74
built 1910; traditional English style
Grange City Hotel
City of London
307
opened this century, near to Tower of London
Grange Holborn Hotel
Holborn
200
opened in a new building in the late 1990s
Great Eastern Hotel
City of London
267
Victorian railway hotel; reopened 2000
Grosvenor House Hotel
Mayfair
446
built 1928
Halkin Hotel
Belgravia
41
Modern
Hempel Hotel
Bayswater
40

Intercontinental
Mayfair
458
modern; most rooms of any central London 5 star hotel, multi-million pound refurbishment 2006
The Landmark London
Marylebone Road
299
Victorian grand hotel; opened in 1899 as a railway hotel
Lanesborough Hotel
Knightsbridge
95
traditional grand hotel, first UK hotel to offer free phone calls
Langham Hotel
Marylebone
429
London's largest hotel when it opened in 1865
Le Meridien Hotel Piccadilly
Mayfair
266
traditional grand hotel
The London Hilton on Park Lane
Mayfair
450
modern; London's tallest hotel
The Mandarin Oriental, Hyde Park
Knightsbridge
200

Marriott County Hall Hotel
South Bank
200
occupies part of the neo-baroque London County Hall.
Marriott Grand Residence
Mayfair
49
built 1926
Marriott London Grosvenor Square
Mayfair
221
early 20th century neo-Georgian
Marriott London Park Lane
Mayfair
157
built 1919
Marriott West India Quay
Canary Wharf
348
built 2004; 301 rooms and 47 apartments
Millennium Hotel Mayfair
Mayfair
348
early 20th century neo-Georgian
One Aldwych
The Strand
105
early 21st century interiors in an early 20th century neo-baroque office building
Park Lane Hotel (Sheraton)
Mayfair
307
traditional grand hotel
Plaza On The River Club And Residence
Lambeth
66

Radisson Edwardian Hampshire Hotel
Leicester Square
124
English country house style
Radisson Edwardian Heathrow Hotel
Heathrow
459
modern; most rooms of any Greater London 5 star hotel
Radisson Edwardian Mayfair Hotel
Mayfair
289
Modern
Renaissance Chancery Court Hotel
Holborn
356
opened in the 1990s in a grand 1914 office building
Ritz Hotel
St. James's
133
opened 1906; French chateau style building; possibly the most famous hotel in the world and synonymous with Afternoon Tea.
Royal Garden Hotel
Kensington
398
Modern
Sanderson Hotel
Fitzrovia
150
Ian Schrager minimalist hotel
Savoy Hotel
The Strand
207
traditional grand hotel; opened 1889 - first in London with ensuites to all rooms and leading the way in glass recycling
Sloane Hotel
Chelsea
22
occupies some Victorian houses
Sheraton Park Tower Hotel
Knightsbridge
181
Modern
Sofitel St. James
St. James's
186
opened c.2000 in a grand classical former bank headquarters
Soho Hotel
Soho
91

Stafford Hotel
St. James's
80
English country house style
St Martins Lane Hotel
Covent Garden
204
1990s Philippe Starck minimalism in a 1960s office block
Swissotel London, The Howard
near The Strand
189
Modern
Threadneedles City Boutique Hotel
City of London
69
occupies a banking hall built in 1865
Trafalgar Hilton
Trafalgar Square
129
opened 2001; contemporary building behind a retained façade
Waldorf Hilton
near The Strand
303
grand hotel built in 1908; contemporary interiors from a refit completed in 2005

(Source: www.wikipedia.com, URL: http://en.wikipedia.org/wiki/Hotels_in_London)


Exhibit No 11: Important Milestones in the History of Taj

1903: Created history with the opening of The Taj Mahal Palace Hotel, Bombay (Mumbai) – India’s first Luxury hotel 1971-72: Pioneered the concept of authentic Palace Hotels in the country with the Rambagh Palace in Jaipur, the Palace of the Maharajah of the esrtswhile state of Jaipore, India.1974: Conceptualized the unique beach resort at Fort Aguada, Goa built within the walls of a Portuguese fort overlooking the Arabian Sea 1978-82: Taj launched in Delhi with its luxury hotel - Taj Mahal Hotel on No. 1 Man Singh Road and then prepared India for the Asian Games by setting up Taj Palace, Delhi with the largest convention centre in the country 1982: Taj established a presence in the Western Hemisphere with the historic St. James Court Hotel near Buckingham Palace, London 1984-92: Well before these destinations became world renown for their beauty, Taj expanded to Kerala and Sri Lanka 1992-97: Rolled out Business Hotels in key cities and towns across the country, branded as Taj Residency hotels 2000: Consolidated its position as the largest chain in India with hotels in Ahmedabad and Hyderabad, the latter city being a joint venture with GVK Hotels resulting in a dominant position in the market for premium and luxury hotel rooms 2002: The new Taj Exotica Resort & Spa, Maldives, within six months of its launch, was awarded the title of "The Best Resort in the World" in the first ever Harpers and Queen Travel Awards


Exhibit No 12: Management team of Indian Hotels Company Ltd. (IHL)

(Source: The Indian Hotels Company Ltd.,
URL: http://finance.google.com/finance?q=BOM:500850)
[1] The Taj group of hotels is one of the businesses of TATA group, India’s premier business house.
URL: http://www.tajhotels.com/AboutTaj/CompanyInformation/default.htm

[2] A luxury hotel located in the heart of Westminster, London, 51 Buckingham Gate's 84 luxury and spacious suites and apartments are the perfect central London five star address.
URL: http://www.51-buckinghamgate.co.uk

[3] Crowne Plaza London-St. James combines supremely comfortable accommodation with the latest facilities and superb cuisine and have 342 individually decorated rooms including 21 suites, many of which overlook the unique and award-winning courtyard garden.
URL:http://www.tajhotels.com/Luxury/CROWNE%20PLAZA%20LONDON%20ST.%20JAMES%2CLONDON/default.htm

[4] The TATA group is one of India's oldest, largest and most respected business conglomerates. The Group's businesses are spread over seven business sectors. It comprises 96 companies and operates in six continents. It employs some 2, 46,000 people and collectively have a shareholder base of over two million and market capitalization of $57.6 billion.
URL: http://www.tata.com/0_about_us/index.htm
[5] National Statistics Online, URL: http://www.statistics.gov.uk
[6] Hofstede, 1990
[7] Baily et al, 2005 and previously
[8] The Indian Hotels Company Ltd., URL: http://finance.google.com/finance?q=BOM:500850

[9] The Indian Hotels Company Ltd. Annual Report,
URL: http://ibef.org/download/The_Indian_Hotels_Company.pdf

[10] Rajput is caste amongst Hindu community in India, meaning ‘rajaputra’ or ‘son of the King’, URL:
http://en.wikipedia.org/wiki/Rajput
[11] Ayurveda is an ancient Indian system of holistic medicine drawn from Vedic literature that seeks to balance individual imbalances through adjustments in diet, exercise, and sleep and involving herbs, aromas, meditation, and yoga to address health issues.
URL: http://dictionary.reference.com/browse/Ayurveda
[12] Located in Lusakas, Zambia Taj Pamodzi is business and government district, enjoys the elegance of any of 193 centrally air-conditioned rooms including suites, Five meeting rooms, including a Board Room, comfortably seating 45 to 350 persons theatre style or 25 to 350 persons for cocktails and receptions.
URL: http://www.tajhotels.com/business/Taj%20Pamodzi,LUSAKA

[13] The Pierre, USA is one of the world's finest luxury hotels, 201 rooms, 52 suites showcasing unique interiors including 12 grand suites; with a few featuring terraces.
URL: http://www.tajhotels.com/Luxury/The%20Pierre,New%20York/default.htm

[14] Rebak Island Marina Berhad, Kedah is in Langkawi Island, which has 100 rooms and 4 suites - 12 Garden rooms, 48 Seaview rooms, 12 Beach Chalets, 30 Family Chalets, 2 Honeymoon Suites, 2 Senari Suites.
URL: http://www.journeymalaysia.com/islandlangkawirebak.htm
[15] Raffles The Plaza, Singapore, is located alongside sister hotel Swissotel The Stamford, is awarded best hotels in world for food by Conde Nast Travelers (UK) Gold List, 2007

[16] Swissotel The Stamford, located in the heart of Singapore, is a deluxe hotel that boasts a prime Singapore location.

[17] The Shilla Seoul, a member of Leading Hotels of the World, is recipient of numerous accolades and awards, including Conde Nast Traveler’s Annual Gold List, Euromoney magazine’s “Favorite Hotel in Seoul”, Zagat’s World Best 10 Hotels, and Travel & Leisure’s 500 World’s Best List.
URL: http://www.shilla.net/seoul/en/

[18] Courtesy: Interactive talks with Taj Officials, names disclosed for personal reasons
[19] Curry comes from a South Indian word – Kari, meaning spiced sauces.

[20] Ales is a type of beer brewed from barley malt with a top-fermenting brewers yeast that ferments quickly, giving a sweet, full body and a fruity, and sometimes butter-like, taste.

[21] Sushi is cold boiled rice moistened with rice vinegar, usually shaped into bite-size pieces and topped with raw seafood (nigiri-zushi) or formed into a long seaweed-wrapped roll, often around strips of vegetable or raw fish, and sliced into bite-size pieces (maki-zushi). URL: http://dictionary.reference.com/browse/Sushi

[22] Teriyaki is a Japanese cooking sauce for fish or meat. URL: http://en.wikipedia.org/wiki/teriyaki

[23] Sea weeds are plants extensively used as food by East Asian (China, Japan, Korea), URL: http://en.wikipedia.org/wiki/Seaweed

[24] Latkas are potato pancakes.
[25] Hofstede, 1990
[26] Kaplan and Ulijn, 1995
[27] Earley 1994, & Newman, and Nollen, 1996

[28] Ginger hotels is new concept by Taj, where facilities includes: Self check in, Safe zone, Restaurants, Give n take, Gymnasium, Meeting rooms, Smart space rooms, Business centres, Currency exchange, water dispensers. URL: http://www.gingerhotels.com/facilities/index.htm
[29] URL: http://www.m-travel.com/news/2007/03/taj_to_implemen.html

QUESTIONS

Q1. For years, Taj Group of Hotels has been trying to enter profitable markets with management contracts as entry mode for foreign markets. Critically evaluate this entry mode option used by Taj to enter various markets in the world?

Q2. Evaluate internal and external environmental forces encouraging Taj Group of Hotels to internationalize?

Q3. What problems can hamper the growth of Taj group of hotels in the foreign market entry? Critically evaluate factors responsible with examples?