Introduction
The success of any company relies heavily on the decisions that managers make on a daily basis. The process of globalization is making it possible for brands to expand into different countries across the globe (Sztorc, 2017). The case study of Otto Hotels and resorts highlight the advantages and challenges that the process can have on a business enterprise. The success of the organization will depend on the decision that the manager makes to prune or retain the existing 21 brands of the organization. Investigating this case study will help in getting a solution that will have a positive impact on the long-term success of Otto Hotels and Resort.
1. What do you think should be done in the case and why?
I think the best solution to the problem is to retain the existing 21 brands and map a business strategy that will create a uniform management approach and service delivery. There are various factors that the opposing sides have to take into consideration before making a decision. These factors include profitability, market share expansion, growth, shareholder satisfaction, and economic benefits. The 21 brands present an opportunity for the organization to have its presence in more regions without injecting more funds for expansion (Dev, 2018). They can benefit from getting a higher number of customers which will increase their profit margins.
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"Case Study: Prune the Brand Portfolio?".
Shareholders will also stay loyal to the brands if they can retain the names of flags that they identify with in the franchise. This loyalty and support will have a positive impact on the business process of the organization (Sztorc, 2017). Investors will also not pull funding from the organization after understanding the fact that 21 flags will generate more revenue for them. The 21 brands will ensure that Otto Hotels and resort use pricing models and strategies that will have a positive impact on profits and performance.
Lastly, the 21 brands will have a positive long-term impact on the share value and revenue stream for the organization. The managers should focus on finding ways to ensure that all brands are operating successfully and have a long-term mindset that will increase value for Otto Hotels and Resorts. This approach will ensure that all flags work to achieve uniform results that will have a positive impact on the growth and stability of the organization.
Question 2: Modelling after the Acquisition of Sheraton by Marriott
The acquisition of Sheraton by Marriott for 13 billion dollars presents a unique example that Otto Hotels and Resorts can use to model their business structure. The merger makes Marriott the largest hotel company in the world with more than 30 brands (Picker, 2015). Marriott is not looking to make changes to the business operations of Sheraton but take advantage of unique business strategies that the Sheraton uses to get and retain customers.
Otto Hotels and Resorts can learn from this process because Marriott has more flags and they are using a business model that ensures all brands survive the merger to create success in the organization. They can provide unique services that meet the needs of different customers in the society (Picker, 2015). Marriott is not looking to prune any brands but is focusing on improving the performance of individual brands in the community. This approach is helping to ensure that the company remains profitable and competitive in a challenging business environment.
Conclusion
The situation above highlights the need to have a strategy that will promote the success of Otto Hotels and resort without affecting the future stability of the organization. There is no need to prune the brands because companies like Marriott are operating a franchise with more than 30 brands successfully. Managers at Otto Hotels should look for a feasible solution that will merge the vision and mission of individual flags to attain long-term growth and profitability in the society. This approach will lead to long-term growth and success for Otto Hotels and resort.
- Dev, C.S. (2018). Case Study: Prune the Brand Portfolio? Retrieved from https://hbr.org/2
- Picker, L. (2015, November 17). Marriott to Buy Starwood Hotels, Creating World’s Largest Hotel Company. Retrieved from https://www.nytimes.com/
- Sztorc, M. (2017). Franchising as a Model of Business and Hotel Development in the Process of Market Globalization. Scientific Journals of the Economic University in Cracow, 825, 60-7
