HARVARD BUSINESS CASE THE RITZ-CARLTON HOTEL COMPANY

Dia Mohammed Celisa Chan William Mickens Anwar Azim Haewook Lee

EXECUTIVE SUMMARY
The Ritz-Carlton provides a quality experience and Gold Standard service. The situation facing the company is encompassed by the 7-day countdown, which represents a conflict between the owner/operator Can McBride and Collins come to terms with providing quality service and training without compromising the service that the 7-day countdown and opening at a lower occupancy rate ensures?

P.E.S.T
Political Political stability Economic Stable economy High demand (many business clients, diplomats and wealthy people in DC) Good economic indicators in the hotel industry (ADR, Revpar) Technological

Social

Washington DC attracts high Technological innovations: profile clientele Internet Convenience is in high demand

Porters Six Forces Industry Analysis

Supplier Power Developers Contractors Laborers/Employees Threat of Entry Minimal due to high cost of entry
Threat of Substitution Resorts Luxury apartments Condominium Amusement Parks Upscale Casinos

Rivalry Four Seasons Mandarin Oriental Park Hyatt Hay-Adams St. Regis Other property developers

Complements Spa/Sports Club Restaurants Retail Shops Luxury condominiums

Buyer Power Hotel Guests Business Clientele Event Planners Residential Owners

A.G.I.L
Adaptation Recognizing and adapting to different preferences, dictated by locale(Global Business) 110 Ft. height limit Implementing a higher security standard based on the location and possible high-profile clientele Latent Values Goal Attainment To be the best at providing service to achieve, maintain, and eventually exceed occupancy expectations Obtain new management contracts for new hotels and resorts

Integration

Post-opening training and Orienting new employees to the Ritzdevelopment plan (7-Day Carlton mantra Meshing the owners desires with the Countdown) Global recognition as a leader in Ritz-Carlton gold standard guest services (Exhibit 6 Awards won Integrating Total Quality by Ritz-Carlton) Management success of the Ritz Ritz- Carlton name Carlton with Millennium Partners Ability to create luxury environment desire for immediate return on that commands premium prices investment

S.W.O.T ANALYSIS
Strengths Brand awareness High quality service Successful training program Revenue driver: event business Experienced executives and mid-level management Outside marketing(concierge desk at airports) Low employee turnover Opportunities Improved 7-day training process to reach maximum occupancy in shorter time Increase satisfied customers; increase revenue Ability to accommodate diplomatic envoys based on security based design of facility Location will increase access to wealthy, influential clientele Weaknesses Poor location compared to Four Seasons 8% dissatisfied customers Continued motivation among employees Not conforming to digital documentation of guest complaints, results in inefficiencies Loss of revenue due to 7-day training Threats Competition: Four Seasons Dissatisfied customers may result in loss of good will Conflicting viewpoints between owners and operators Shift in negotiation power from management to owner

Force Field Analysis (FFA)

Situation: Revamping the Seven Day Countdown to increase average occupancy.
Forces Propelling The competitive advantage Providing flawless service Seven Day Countdown a small portion of budget Attracting condominium residents and high-end customers Employees well trained for handling guest difficulties Employees feel empowered and responsible by embracing the company culture Meeting business a growing market Hotel part of multi-use facility that can potentially attract Seven Day Countdown can help the company adapt locally and expand globally Forces Restraining Loss of revenue Uncertainty regarding ROI of training Lower ADR and RevPAR than FourSeasons Difficulty with maintaining motivation dissatisfied customers are inevitable Supplier power of Collins and Millennium Partners - could push McBride to make premature or illogical decision on the training program Possibility of discrepant views between property owners and the Ritz-Carlton

RECOMMENDATIONS/CONCLUSION
Explore the possibility of expanding the 7-day training and development of employees to include prior training at other locations that are already operating at 80% occupancy. Increase the initial occupancy rate from 50% to 60%, in an effort to appease the owners concerns about loss of potential revenue during the first four months of operations.

REFERENCES
"Harvard Business School." Rev. of Harvard Business Publishing Massachusetts, by Sandra J. Sucher and Stacy E. McManus. Harvard Business Review. Web. 02 Sept. 2011. <http://www.hbsp.harvard.edu>. Michelli, Joseph. "Training the Talented, the RitzCarlton Way." American Management Association. McGraw-Hill, 4 Sept. 2008. Web. 11 Oct. 2011. <http://www.amanet.org/training/articles/Trainingthe-Talented-the-Ritz-Carlton-Way.aspx>.