3. Attracting customers from all over the world due to the uniqueness of the hotel
Russian International Academy of Tourism
Moscow SUBSIDIARY
“Vatel” faculty
Course work
for discipline « Strategic management »
« Features of the differentiation strategy at the Henn-na hotel »
Made by 4rd course student
Shorina Darya
Group: 150503V
Checked by: Efremov I. A.
Moscow
2019
Introduction
In the conditions of fierce competition and rapid changes in the external environment, the strategy becomes the main factor in ensuring the competitiveness of the enterprise. In such an environment, the winner is the one who can better anticipate and quickly calculate the various options for doing business.
Any successful business strategy is based on the competitive advantages of the organization. Competitive advantage can be some unique strength of it, allowing it to stand out among competitors due to special competence.
Currently, the world market is rapidly developing a competitive environment in all areas of economic activity, including the hospitality industry. The hotel business is characterized by a high degree of risk and a fairly long payback period of projects. Therefore, in order to reduce the economic risk, to achieve sustainable growth of a hotel, to achieve the planned economic results, first of all, it is necessary to have a clear competitive policy.
Competitive policy of the enterprise is a comprehensive plan of action of the enterprise aimed at gaining a stable and profitable position of the enterprise in the market, to maintain and increase the market share of the enterprise in relation to competitors on the basis of providing unique value for consumers. One of the priority areas of competitive advantage is the differentiation strategy, which becomes an attractive competitive approach as consumer demands and preferences become diverse and can no longer be satisfied with standard goods. In order for the differentiation strategy to be successful, the company must study the requests and behavior of buyers, know what buyers prefer, what they think about the value of the goods and what they are willing to pay for. After that, the company offers one, and maybe several distinctive characteristics of the goods (services) in accordance with the requests of buyers, and these proposals should be tangible and memorable. Competitive advantage appears when a sufficiently large number of buyers will be interested in the proposed differentiated attributes and characteristics of the goods. The stronger the interest of customers in a variety of characteristics of the products offered, the stronger the competitive advantage of the company.
The main part
The position of the hotel product on the market is determined by identifying its quality, price and other advantages over the characteristics of similar products of competitors. As the parameters describing the positioning, choose the most important for the consumer. As a result of the subsequent ranking and optimization of product series, competitive advantages will be formed. The greater the weight of a given competitive advantage from the consumer's point of view, the more effective the positioning can be. For example, in the hotel business, the main competitive advantages of the hotel can be its location, the historical value of the building, excellent or close to the ideal state of the material and technical base, a high level of quality of service, a wide range of services provided, relatively low prices, etc. for Example, it is stated that this hotel has an advantage in location compared to competing hotels if it is located in the city center or near the business center with a well-developed infrastructure, near the exhibition complex, etc. The hotel, which offers its services at prices lower than those of its competitors, has a competitive price advantage, which the hotel management has determined based on a comparison of the quality of its services with similar indicators of competing hotels. As practice shows, the main source of differences in the positioning of the hotel in the market is the ratio between price and quality of services provided. These are two key parameters that influence the consumer's decision on the choice of the hotel. They can also be used in the construction of maps of the positioning of the products of different hotels in the market.
Positioning is usually carried out in four stages:
1) identification of possible competitive advantages on which to base the position of the product of your hotel, their ranking in order to determine the priority;
2) compiling a list of competing hotel products with similar competitive advantages;
3) selection of the optimal set of competitive advantages, as well as effective tools to inform the market about them;
4) promotion of the selected product position (set of competitive advantages) to the target market.
To achieve the goals of positioning and gaining a strong position in the competition, hotel management needs to be able to differentiate their products and services to identify characteristics that can distinguish them from competing. As the analysis of functioning of the leading hotels in the market of Moscow shows, the following directions of differentiation in hotel business are most widespread: on location of hotel; on historical value of the building; on a condition of material and technical base of hotel; on a class of service and a range of services; on personnel; on quality of food; incentive regular guests; by brand or image. 2. the strategy of differentiation of the hotel company is a strategy of gaining a competitive advantage, involving the orientation of the hotel company to provide greater benefits to consumers by offering high quality services at justifiably high prices.
The purpose of this strategy is to give the hotel services distinctive properties that are important to the buyer and that distinguish the company from competitors. Through this strategy, the hotel seeks to create a situation of oligopoly, in which it, thanks to its distinctive features, has a significant "market power". The acquisition of" market power " protects the hotel and allows it to make profits above the average in the market segment. Its strategic objective is to exploit preferred demand by increasing the value of the hotel company and controlling the life of the hotel product - an element of differentiation.
The most common areas of differentiation in the hotel business are the following:
- for the location of the hotel;
- the historical value of the hotel building;
- the range of services;
- by image;
- the state of the material and technical base of the hotel;
- on the personnel;
- the quality of food;
- under the program of encouragement of regular guests
The location of the hotel. Hotel location is often a strong competitive advantage that should be used to attract customers. For example, the hotel "national" and "Baltschug Kempinski Moscow" are located near the main attractions of Moscow: the red square and the Kremlin. Hotels "Aerotel Domodedovo", "Novotel Sheremetyevo" and "Crew" are located near the airports – their business is based on the reception of airline crews and transit passengers, as well as businessmen who do not want to spend time on the road to the city and back and hold meetings and meetings in the Congress centers of hotels. The proximity of historical monuments, museums, theaters is also used by hotel companies as a competitive advantage. For example, the hotel" Metropol", located in the historical center of Moscow, is one of the most popular hotels in Moscow of the highest category.
According to the historical value of the hotel building. Many of the buildings of the hotels are monuments of history and culture protected by the government. For example, hotels in the former monastery, castle, train station, apartment building, Embassy, on the site of a coffee plantation and even former hotels. Of course, they are popular with fans of history and foreigners and create an atmosphere that should be copied to new hotels.
The range of services. One of the most important competitive advantages of the hospitality industry is the availability of a wide range of services. If the hotel offers only accommodation, it will not be able to survive in the competition. Additional services attract not only guests to stay, but also customers "from the street", which allows you to receive additional income to the hotel company. Additional services of the hotel include: meals (except the main one); organization of excursions; services of the business center; purchase of tickets for various cultural events; grocery and souvenir shops; Babysitting services and children's rooms; domestic services; transport services; room-service, etc.
Additional services recently considered by guests as mandatory components of the hotel offer. And for this reason, hotel companies are trying to modify and modernize existing services. For example, in Korston Moscow hotel it was decided to make telephony services in the room free of charge, as the cost of this service exceeds the income. Of course, food is the main service of the hotel, but the hotel always wants to earn more and offers guests additional services such as Breakfast Supplement, Breakfast delivery to the room, delivery to offices or apartments, branch, etc.
On image. The positive image of the hotel company is often a decisive factor when choosing a hotel guest. It directly affects the competitiveness of the hotel company, accelerates and increases sales, and is an effective tool for achieving the strategic goals of the company, focused on the future. The image of the hotel is formed by advertising, corporate identity, PR-events, impeccable service, physical attributes of the premises, the range of services provided and the behavior of employees.
As the material and technical base of the hotel. Improving the competitiveness of hotels is often achieved through the renewal of material and technical base. Modern consumers have become more demanding to the living conditions and recreation (room equipment, entertainment infrastructure), because they have the opportunity to compare the quality of services provided. Hotels with modern material and technical base, of course, have a great competitive advantage.
On the personnel. Staff differentiation is one of the main types of differentiation in the hotel business, as the reputation of the hotel depends on the human factor. Competitors can copy services, interior design, price system, but it is impossible to copy the atmosphere created by the hotel staff.
Staff differentiation should be aimed at professional recruitment, incentives (moral, material), training, placement and rotation of personnel. It is also very important to achieve team unity, because if the guest does not please at least one employee of the hotel, then all previous efforts of the staff will be lost, and the guest will remain dissatisfied. Therefore, all hotel staff should be United by one task - to please the guest.
On the quality of nutrition. Today, hotels compete with each other not only with beautiful views from the window and cozy rooms, but also with restaurants. According to many experts, the percentage of the flow of guests of the restaurant at the hotel depends on 3 factors: the "number of floors" of the building in which the restaurant is located, a separate entrance to the restaurant and the presence of any "highlight". For example, CitySpase bar, located on the 34th floor of the hotel "Swissotel - Red hills" is among the 50 best bars in the world according to DrinksInternational-2011 and 80% of its visitors are people from the side.
Differentiation in the quality of food is not only the reputation of the hotel, but also one of the main sources of profit. Approximately one third of the income of the hotel company is the cost of guests ' meals at the hotel. Such differentiation also helps to attract the attention of the organizers of conferences, events, banquets and meetings.
According to the program of encouragement of regular guests. A stable competitive advantage of the hotel can be a flexible program to encourage regular guests. These programs are beneficial for both the guest and the hotel and offer guests discounts, cumulative bonus systems, free accommodation, bonus miles, personalized service programs, etc. programs to encourage regular guests to increase the number of visits to the guest, form a loyal relationship, help to communicate with regular customers of the hotel.
Hotel managers pay great attention to these programs, because the cost of keeping one regular customer is much lower than to attract a new guest. In addition, regular customers spend a lot more money, because better aware of all the services of the hotel. IHG Rewards Club is recognized as one of the best programs to encourage regular guests in the hotel business, which is attended by more than 4,600 InterContinental hotels, 400 airlines and 74 million loyal customers, making it the largest.
Depending on the specific features of the hotel products and the capabilities of the hotel itself, it can use simultaneously from one to several areas of differentiation. However, as practice shows, the greatest benefits to the hotel gives one of the strongest competitive advantage.
Differentiation of the hotel enterprise on a range of services is the most perspective direction of differentiation in hotel business.
The main directions of ensuring the competitive advantage of hotels are: the concentration of resources to pre-empt the actions of competitors, keeping the initiative in competition, providing the resource potential to achieve the goals, the development of a flexible system of planning activities in the market by justifying an effective strategy of interaction with competitors. A success-oriented hotel should aim to meet the demand of service users. The focus of its managers should be the development and implementation of their own competitive strategy to achieve this goal.
Consider the action of the five competitive forces identified by M. porter, the most important for assessing the competitive position of the enterprise, in relation to the hotel business.
The first of the forces identified by M. porter concerns the ease or difficulty that a new competitor may face in the market. The main barrier to entry into this market is the amount of investment required. The size of the leading companies in the hotel business is not a significant barrier to entry.
For the hotel services market is characterized by a large number of participants, which are the second force For M. porter (internal competition in the industry). As a result, each hotel occupies a small market share. Accordingly, in order to achieve high results, it is necessary to determine the most attractive segments of the market and evaluate competitive positions directly within them. The hotel chain can be a leader in terms of sales, but at the same time it will not necessarily occupy a leading position in all market segments.
A third competitive force Identified by M. porter relates to the ease with which a buyer can replace one type of product or service with another. In the hotel business, you can select the following options for substitute products for basic and additional services:
♦ products-substitutes for the basic services of the hotel enterprise, which are alternative means of accommodation, for example, renting apartments to visitors through real estate agencies;
♦ products-substitutes for additional services (services of service enterprises, for example, services of beauty salons, restaurants, etc.).
If organizations providing alternative accommodation services shouldn't be involved in mutually beneficial cooperation with the hotel, the service companies offering a variety of services not related to accommodation, can become partners that will contribute to the conquest of the market and increase competitive advantages. (for example, buying an air ticket).
Differentiation in the hotel business is one of the significant factors in improving competitiveness, increasing the number of consumers and the volume of services provided. In many ways, only due to this factor, you can make a market breakthrough. It is the buyers (who are the fourth force By M. porter) that have the greatest impact on the hotel's activities. Therefore, the necessary conditions for the successful existence of the hotel are: conducting extensive marketing research, improving the material component of the service, work to create a reputation of the enterprise, attracting highly qualified personnel, etc., all that allows you to identify a variety of needs of potential customers, attract and retain them, forming loyalty. Stable positive image and high profitability of work facilitate the relations with suppliers (the fifth force on porter).
Thus, there are five forces in the hotel services market, which should be taken into account in the development of competitive strategies and the formation of the range.
Consider the implementation of the differentiation strategy on the example of the Henn-na hotel in Japan.
In the Japanese city of Sasebo (Nagasaki Prefecture) opened the world's first hotel, where guests are served by robots. Among them are the cleaners, the receptionist, as well as robots to help fold clothes in the closet. The hotel is called "Strange hotel" (Henn-na Hotel), it is built in the Park Huis Ten Bosch. The first guests were received here on July 17, 2015. Now there are 72 rooms, in the future it is planned to expand the number of rooms to 144. Accommodation costs $ 73 per night.
Henn-na Hotel General Concept: "Excitement meets comfort. Introducing state-of-the-art technologies, Henn-na Hotel is the world-first hotel staffed by robots.
At the front desk, you will be greeted by multi-lingual robots that will help you check in or check out. At the cloakroom, the robotic arm will store your luggage for you. Mechanic yet somehow human. Furthermore, once you register your face with our face recognition system, you will be free from the hassle of carrying the room key around or worrying about losing it.
One of the definitions of the Japanese word “Henn” is “to change,” which represents our commitment for evolution in striving for the extraordinary sensation and comfort that lies beyond the ordinary. This is the strategy of differentiation in this hotel. The owner has created a unique concept, a new approach to service, accommodation of guests; a new approach to hospitality.
Resource Gizmag reports that Henn-na Hotel is a joint development of Kawazoe laboratory of the Institute of industrial Sciences at the University of Tokyo and Kajima Corporation. The creators of the hotel set out to not only create a place of comfortable rest and fun, but also to make your business economically profitable, modern and environmentally friendly.
The robots meet guests at the front Desk to help them with accommodation. If you wish, you can register on arrival at the hotel yourself. This will save waiting time and eliminate Queuing. The robot servants at the Henn-na Hotel perform a variety of tasks. Some carry Luggage, others are engaged in cleaning and washing. Valuables can be transferred to the storage room, which is also in charge of the robot.
The new hotel has a number of other high-tech solutions, for example, to get to your room after the procedure of face recognition. This eliminates the need to carry a key that can easily be lost. Magnetic key cards are provided for those who do not want to use facial recognition technology. The rooms use lamps with motion sensors that automatically detect the presence of a person and adjust the level of illumination. Lighting and other amenities can also be controlled through the tablets that are present in each room. All electrical appliances are energy-saving, and solar panels are installed on the roofs. The room lighting is powered by motion sensors, but you can adjust other settings by controlling them from your tablet. Fold things will help the robot-cloakroom attendant, which has the appearance of a metal hand – he will unpack your suitcases and hide things in the closet. You can find out the time and weather at the robot toys Churi-chan. It is easy to guess that the cleaning of the room is also made by robots. Well, if the guest wishes to get acquainted with the whole hotel, the tour will be conducted by a robot guide.
Of course, there are real people in the hotel – they are responsible for security. Throughout the hotel there are cameras that allow you to monitor the work of "employees" and their interaction with guests.
This is still hard to believe, as until recently, hotels used a minimal set of technologies – a digital code to enter the room and order services through terminals, which allowed to save on hotel staff.
Also, following the chosen strategy is manifested in the introduction and use of new environmental technologies that help to protect and preserve the environment. Each room is equipped with a radiant microclimate system that uses electromagnetic waves to transfer heat from one object to another without heating or cooling the air between them. In hot weather, the system removes heat from the body, and in cool weather, on the contrary, retains it. This system uses electromagnetic waves to transfer heat directly from one object to another without affecting the air in between. When it is hot out, this radiating-type heating/cooling system draws heat away from your body to make you feel cool. When it is cold out, it makes you feel warm by keeping heat from escaping your body. It also creates a lower temperature differential than conventional heating/cooling systems and is less affected by air currents.
The hotel also adheres to two concepts in the design of the rooms: EAST ARM Concept and WEST ARM Concept. The EAST ARM Concept is Aiming for the coexistence with the environment, Henn-na Hotel has adopted the Radiant Panel Air Conditioning System, the cutting-edge air conditioning system that is superior in the energy efficiency. When it is hot, this radiating-type heating/cooling system draws heat away from your body to make you feel cool. When it is cold, it makes you feel warm by keeping heat from escaping from your body. It is designed to make less temperature difference than conventional air conditioning systems, creating a comfortable environment in all seasons. Unlike modular bathrooms that are commonly found in many hotels in Japan, the bath and the toilet are installed separately. This arrangement recreates a home-like bathroom where you can relax in a large bathtub, providing comforts throughout your stay.
The WEST ARM Concept is inspired by the name “Huis Ten Bosch,” which translates into English as “House in Woods,” the concept of the West Arm is to create the space filled with the tranquility and warmth of wood. In addition to chic and modern interior decors, Henn-na Hotel has introduced new and environmentally friendly features like structural timber product CLT (Cross Laminated Timber), which is the first to be adopted at a hotel in Japan, solar panels, and cutting-edge hydrogen energy system in order to enhance the guests’ comfort during their stay. Discover the new experience at the neo-futuristic hotel where “coexistence with the environment,” the foundation philosophy of Huis Ten Bosch, lives on.
The Huis Ten Bosch amusement park was opened in 1992 as an "Eco-Friendly Future City." Fully outfitted with numerous environmentally features, such as a system for waste recycling and various contrivances to conserve water and electricity, the park strives to this day to protect natural ecosystems.
And so, they knew that if they were going to open a new hotel at Huis Ten Bosch, it would need to have environmentally friendly buildings and facilities. At the same time, they also wanted to create a hotel featuring contrivances to provide a comfortable, even stay at a reasonable price. In order to make all of this possible, they strive to achieve "The Ultimate in Efficiency."
After taking a fresh look at each of the services and facilities that are commonplace in conventional hotels, they settled on an idea for a completely new kind of hotel. Pioneering the use of advanced technology, this hotel would be the world's first to be staffed by robots.
They're of consideration for the environment, the hotel is also actively working to decrease energy usage and reduce waste. Toward this end, they also ask for their guests' understanding and cooperation with regard to certain points. This is an entirely new endeavor, one that turns the entire hotel business on its head. Therefore, they plan to continue changing by making constant adjustments and improvements based on feedback from the guests.
The founders of Henn-na Hotel predict the new project as promising and effective. The plans for the future – the creation of 1000 such robotic hotels in different parts of the world.
The differentiation strategy is an element of competition, so to confirm that the hotel is have chosen really uses this strategy, it is necessary to consider the competitive environment, what advantage does Henn-na hotel have compared to other accommodation facilities in the region.
Competition in the hotel market in Japan is high. The competitiveness of the hotel is influenced by many factors: location, number of rooms, star rating, infrastructure, material and technical condition, room price, availability of attractions and others. But all of the above factors are not significant today. For the real success of the institution constantly requires fresh ideas. It is competition that stimulates the emergence of new ideas and influences the actions of hotel services manufacturers. For full-fledged work in the conditions of fierce competition it is necessary to be guided by the principle: yesterday's today is not good!
The introduction of innovative solutions is a necessary condition for the competitiveness of the institution. New management methods, modern technologies, qualified specialists and a high level of service are able to constantly generate profit.
In Japan, there is no traditional European classification of hotels from one to five "stars". Hotels in Japan are distinguished more by type. There are a lot of accommodation options, so hotels have to lure guests with new approaches, methods and concepts, as did the hotel Henn-na. This is the first hotel in the world that has introduced robots to permanent work, not people. For Japan, robots are not something unique or special, they are quite a lot in the restaurant and entertainment sector, but the owner of the" strange " hotel went further and was able to attract the attention of the client, and this hotel does not belong to any type, such as business hotels, capsule, youth, traditional; this hotel is for everyone who can pay for accommodation services, so because of its unusual, non-standard approach to the guest, the latest environmental developments, it has become popular, and if at the beginning the owner wanted to open a small building with only 30 rooms, now it is about 100 rooms and plus 5 buildings together with an entertainment Park. They not only became competitive, but also became leaders. Compared to other hotels, they do not have a loyalty program, minimized the human factor and service, no restaurant, no cultural identity as in the Ryokan-a traditional Japanese hotel; no service 24 hours, except for the Park there is no entertainment services, no individual approach to the guest and so on, but for all its shortcomings, this hotel attracts more attention than its competitors thanks to the differentiation strategy, thanks to a new approach, innovative technologies. In this hotel you can't see the old Japan with its simplicity, gardens for meditation, national attributes and mentality, but with it you can see a completely new approach in hospitality, new ways of development in the hotel business, you can see modern Japan with its technological progress.
Conclusion
The essence of the differentiation strategy is the production of goods or services of one functional purpose, but with different characteristics, in order to meet the different needs of more consumers.
Differentiation can be expressed in different areas: the characteristics of goods or services, as a service (service component), in design, in the state of the material and technical base, the location of the enterprise, as well as in the image and reputation of the enterprise. The owner of the hotel Henn-na in Japan competently developed a strategy of differentiation using for its implementation methods of analysis and study of consumer behavior, their requests, needs and preferences. The application of differentiation became an attractive competitive strategy when a completely new direction and hotel concept was chosen, as the current hotel services market in Japan offers more standard hotel products. The strength of competitive advantage in this case is determined by the level of interest of consumers in the differentiated attributes of the hotel product and its characteristics: the higher the interest, the stronger the competitive advantage. In turn, the successful implementation of the differentiation strategy provided the hotel enterprise with a number of opportunities: to set a higher price for the hotel product, to increase sales by attracting more consumers of hotel services, to turn consumers of products into loyal users, to expand the volume of services provided and the number of rooms. Competitors will be hard to repeat or attract customers using this feature of the hotel, as the mentality of local residents does not allow them to take someone's ideas and re-implement them, moreover, it will not be something new and unusual. In this century, robotics is relevant, especially in Japan, in almost every field of activity there is a robot assistant, but if the hotel of this type will want to enter the world market, the Europeans may not be able to adopt new technologies, as in other countries, robots are not so tightly entered into the daily life of man, especially creates a lot of movies about the capture of the world by robots, so some people have fears and stereotypes that are hard to get rid of. Therefore, most likely hotels will not prove themselves on other continents. In order to implement the strategy of differentiation, the hotel has created a completely new hotel product: a new type of hotel (robot hotels), a new approach to guest service, new environmental concepts. The advantages of this strategy are as follows:
1. The emergence of unique concepts
2. High competitiveness
3. Attracting customers from all over the world due to the uniqueness of the hotel
4. The strategy not only increased the survival of the company, but also raised the hotel to the top position among other competitors
5. Increased the profitability of the product due to the ability to set a higher price.
The disadvantages of the strategy include the following:
1. Increasing the cost of creating a unique product
2. The need for investment in the communication of distinctive options of the product
3.The concept is mainly for Asian countries.
Nevertheless, the hotel is expanding every year and attracts more and more new customers from around the world, but remains open to a number of problems, for example:
1. Robots are not always able to answer question
2 Accurately. Robots should convey the atmosphere of the hotel, to help solve any problems that may arise during your stay
3. No hospitality
4. Robots in the rooms react to any movement
5. The robots are slow and not multi-function
6. Robots are expensive to maintain.
However, these problems are already being solved. A number of robots have been decided to remove and replace them with living people, so as not to lose its uniqueness and at the same time to preserve the concept. Thus, the hotel Henn-na successfully implements the strategy of differentiation and every year tries to expand its audience and enter the world market, while each time regularly conducts market research, analysis of competitors ' strategies and continuously looking for new ways to maintain and achieve competitive advantages in order to maintain and improve its position in the market of hotel services.
References
1. Orlova A. M., the Strategy of differentiation and the conditions of its application in the hotel business, Saint-Petersburg, Russia // Economics and innovations management. 2015. № 11 [Electronic resource]. URL: http://ekonomika.snauka.ru/2015/
2. http://www.h-n-h.jp/en/concept/
3. https://creativeconomy.ru/