Dusit D 2 hotel constance final PDF

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Assignment one in Marketing and Management for BUS 5000...

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Case Analysis: dusitD2 Hotel Constance Pasadena Problem: In 2014, DusitD2 Constance Hotel Pasadena was established, and experienced an impressive 75% occupancy rate (Zhang et al., 2018, p. 22). Up to date, they still hold a 4.5 star rating on Trip Advisor. With the booming tourism and hotel industry, this boutique hotel faces many internal and external factors that can endanger its ability to sustain its competitive advantage. DusitD2 Constance Hotel Pasadena’s location is saturated with competitors that may threaten its ability to compete in attracting customers and sustain its operations. Can the hotel outsmart its competitors and step up in their competitive edge? SWOT Analysis: A SWOT analysis is a tool that will allow dusitD2 Constance Hotel Pasadena to assess in detail its internal and external environment. By conducting an external analysis, an organization identifies the critical threats and opportunities in its competitive environment. It also examines how competition in this environment is likely to evolve and what implications that evolution has for the threats and opportunities an organization is facing. While external analysis focuses on the environmental threats and opportunities facing an organization (Sevkli., 2012, p.14). Identifying these factors can establish a foundation for analytical framework, in which management can use to develop a business strategy. DusitD2 Constance Hotel Pasadena’s SWOT analysis is shown in Appendix A. The hotel’s strengths are great location, steady/high demand, and high use of technology. Its weaknesses include lack of name recognition, more focused on millennials, lower number of rooms compared to competitors, indistinct branding, less support from dusitD2, and open bathroom design. The hotel’s threats include low cost accommodations such as AirBnb, increasing competition with boutique hotels that has increased in numbers and expanding market share of large franchising hotels. Despite these threats and weaknesses, dusitD2 can exploit many opportunities to maintain its competitiveness in the market. These include improve booking system by increasing traffic to the website instead of relying with travel agencies, improve the current live music offering, additional rooms, improve customer experience and expand the business or branch out. Miles & Snow Strategic Analysis: Miles and Snow proposed that firms in general develop relatively stable patterns of strategic behavior in order to accomplish a good alignment with the perceived environmental conditions (Gimenez, n.d.). By conducting an environmental assessment, management can begin to develop a strategy to mitigate those weaknesses and threats and leverage its strengths and opportunities. Based on Miles and Snow generic business strategy, dusitD2 Constance Hotel Pasadena can be categorized as prospector. Prospectors are organizations that almost continually search for market opportunities, and they regularly experiment with potential responses to emerging environmental trends. Thus, these organizations often are the creators of change and uncertainty to which their competitors must respond (Gimenez, n.d.). DusitD2was originally founded in Thailand and has expanded its brand to 8 countries. In 2006, it launched a second generation of hotels and continued to expand to countries such as Kenya, United Arab Emirates, and the U.S. In addition to exploration into these new markets, its strategic focus is on innovation. To serve the special demands of its millennial customers, the hotel offers accommodations such as iPads in every room and an app that provides convenient services (Zhang, et.al, 2018). It also seeks a broad product line, as it has plans to open four restaurants, a Cuban bakery, a fitness center, meeting spaces, and street level retail. With its aim to focus on the demands of a specific group of

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customers, the millennials, the hotel gives more attention to making it more modern rather than keeping its supposed “Thai hospitality”. Porter’s Strategic Analysis: A firm's relative position within its industry determines whether a firm's profitability is above or below the industry average (IFM, n.d.). Under Porter’s strategic analysis, DusitD2 Constance Hotel in Pasadena utilizes broad differentiation strategy. This strategy seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. Kin Hui, Singpoli CEO, chose dusitD2 to offer something different to the market (Zhang, et.al, 2018). It was originally anticipated that the hotel would embrace a unique Thai influence. However, it was later realized that their target millennial customers were not interested in branded hotels. Instead, they wanted innovative technologies to support their tech savvy lifestyles, and the hotel was quick to serve that need. Such adaptability exemplifies the qualities of a prospector, as it thrives in a changing unpredictable business environment. The hotel also offers free rides around Pasadena to guests in an orange electric Tuk-Tuk. This unique, brightly colored mode of transportation is a great marketing tool for the dusitD2 brand to stand out from the rest of its competition and catch the eye of prospective customers and bystanders. Conclusion: As a prospector that seeks broad differentiation to sustain its competitive advantage in a saturated market, dusitD2 has proven that its business strategy is efficient in beating out its competition. The question is how long can it sustain with its current business strategy? For a hotel that was only established 5 years ago, it has an impressive 75% occupancy rate and has a 4.5 rating on TripAdvisor, the same rating as the most luxurious hotel in Pasadena, the Langham. Despite environmental threats such as lack of name and brand recognition and an oversaturation of competitors, dusit2D has proven that even at its most vulnerable state as a boutique hotel entering a new market, its qualities of innovation, adaptability, and differentiation has allowed it to achieve success. However, like any prospector can expect, to sustain its competitive advantage, it needs to constantly examine its market for changes and new opportunities. Recommendation: Despite many internal weaknesses and threats from various factors in the external environment dusitD2 can actually exploit it and turn it to opportunities. First, they should not only focus on millennials, but rather give attention to the other types of travelers such as the Generation X and Baby Boomers who spend more in travelling with $503 average spent, which is $153 more than what millennials are spending. Adding more rooms should also be considered so that they won’t lose some of their customers because of full occupancy. They should consider more conventional rooms to cater to the needs of these non-tech savvy generations. Next, it should re-establish their brand and go back to the original “Thai hospitality” concept without losing its modern and technological services. Since dusitD2 is the only one Dusit hotel in the US, with its good reputation, it should consider expanding to other places. Furthermore, they should also look into redesigning some of the rooms that would offer more privacy especially for travelers who are not romantically involved.

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Appendix A Strengths  Great location: Located on main commercial street, in a city that is a desirable destination recreation, entertainment, and commerce. Close to Rose Bowl that holds the Rose Bowl College Football game and the Rose parade  High/steady demand: Great location ensures a steady flow of visitors who demand hoteling High use of technology: Millennials enjoy the use  of apps for easy booking, checking in and out, request for services etc. The rooms are equipped with substantial plugs for gadgets

Weaknesses  Lack of name recognition: Franchise association was 2nd most important success factor in hotel industry (Alvarez, 2017).  Target customers: Hotel targets 25-40 year old. But millennials spend less on vacations than older generations (KachrooLevine, 2017). 

Lower number of rooms than competitors: At 136 rooms, general manager stated that hotel is typically full.

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Indistinct branding: Although the hotel is supposed to be a franchise of a Thai chain of hotels (Dusit), the internal structure and services are not any close to anything Thai. Ex: Lack of Thai restaurant in the hotel, internal decoration looks more American. Less support from dusitD2: In practice the dusitD2 Hotel Constance Pasadena received little-to-no support from the group, as Dusit had no staff in the United States (outside of Guam) (Zhang, et.al, 2018, p. 36).

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Opportunities  Booking: Opportunity to save money by converting travel agency customers into hotel’s customers, thus avoid commission fees  Bar/club: General manager noted that adding live music increases bar revenues by 20%. Opportunity to expand to a bar/club

Threats 

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Additional rooms: The Rev Par index for the hotel is 100% which is borderline. It means that they might be losing customers to competitors because of unavailability of rooms. Expansion: The hotel is the only one in the US. Since it has established a reputation, they should expand their business to address the threat of increasing market share of large hotel chains.

Open bathroom design: Most of the rooms at the hotel have an open concept wherein there is no separation for the bathroom, bathtub and the bed. AirBNB: New concept plays a major threat to the hotel industry, as many AirBNBs offer lower prices than a traditional hotel Increased competition: From 2009 to 2022, the # of boutiques was expected to increase from 600 to 2,500 (IbisWorld, 2017) Large hotel chains: Large chains can continue to increase their market share through mergers and acquisitions of small boutique chains

References Gimenez, F. (n.d.). Miles and Snow’s Strategy Model in the Context of Small Firms. Retrieved on September 5, 2019 from http://citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.125.803&rep=rep1&type=pdf Hotel Constance Pasadena. (n.d.). Retrieved on September 3, 2019 from https://hotelconstance.com/our-hotel Hotel Constance Pasadena. (n.d.). Retrieved on September 3, 2019 from www.tripadvisor.com Hotel Constance Pasadena.(n.d.). Retrieved on September 5, 2019 from https://www.yelp.com/biz/hotelconstance-pasadena-2 McGuire, S.J.J. (2007) Note on Analysis of Sustainable Competitive Advantage. The SWOT Analysis and VRIO Framework. California State University, Los Angeles (revised April 15, 2008) Porter, Michael E., "Competitive Advantage". 1985, Ch. 1, pp 11-15. The Free Press. New York.

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Sevkli, M., Oztekin, A., Uysal, O., Torlak, G., Turkyilmaz, A. & Delen, D. (2012). “Development of a Fuzzy ANP Based SWOT Analysis for the Airline Industry in Turkey”, Expert Systems with Applications, 39, pp. 14-24. Zhang, Y., McGuire, S., Kwong, K., Gosalia,N., Tiwari, M., & Abousaidi, N. (2018). DusitD2 Hotel Constance Pasadena. Journal of Case Studies. 36(2), 22-52.

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