Business development assignment on: Sheraton Hotels

Introduction

The strategy for business growth aligns with the aspirations of the company which includes the mission, vision and the values. Many companies develop the aspirations at the early stages of the development while some do it in the later stages of consolidation. However it is crucial to develop these business growth strategies while considering the aspirations in the course. If it may so happen where a company reaches a stage having no scope of developing the business strategies then it would require the company to evaluate the aspirations and develop them further.In the Hotel industry business strategy is one of the most essential elements to build the reputation and make it popular all over. The Study below focuses on critical examination for understanding the importance of strategic development for Sheraton Hotel and the need for analysis driven strategy in terms of both local and international perspectives. Further it presents the influential factors for making strategic decisions. The entire report focuses on the relationships among strategy and sustainable competitive advantage. There are various concepts upon which the business strategies of a firm are determined; however some of the most popular ones with its components have been discussed below (Hi.com 2000).The Business Strategy Concepts

There are 3 what’s on which business strategy concepts are based upon. They are:

What is the target customer segment: The critical question for any business is to evaluate the target business segments for their products and services. The target segment is usually described in different ways which includes the demographics, psychographic characteristics of customers, department of business segments, etc. For the hotel industry in case of Sheraton Hotel the customers are both local and international customers.

What is the whole product that the company delivers to the target segment: These are the products and services which the company has on offer. It is defined as a comprehensive set of activities as well as interactions which are intended for designing, creating, and delivering valuable as well as unique whole product experiences. It is basically the core product in addition to the other ancillary touch points which the customers of the product or services use. In case of Sheraton Hotel the core business service is accommodation whereby the ancillary to it are its packages, transport services, restaurants, city guide services, etc.What are the customer development channels?: This include the customer development channels which the company or organization uses for finding, acquiring and growing its customers. It is defined as the design, creation, and delivery of all the touch points to the products to enhance the experience of the buyers while trying to perceive them for availing the services offered. The components of this are the comprehensive set of content, interactions, and activities with the market participants who are involved to design, create and deliver valuable as well as unique experiences for helping the customers realize the customer centric goals of the company.

About Sheraton Hotels

In the hospitality sector Sheraton Hotels are among the most popular brands globally. They are located in almost every continent of the world which includes Australasia, Asia, Europe, Latin America, Middle East, and Africa. The portfolio of Sheraton Hotels includes 383 properties in more than 57 countries around the world. The main driver for its business strategic decisions have been the consistent high standard of service, strategically located hotels and resorts, Innovative locations, customer focussed services, etc. The Sheraton Hotels chain is owned by the Starwood Hotels and Resorts Worldwide, Inc. which is a US based transnational corporation.The Sheraton Business Strategy

In the hospitality industry the accommodation and other related services are pretty different from the other marketable commodities. Where on one hand unsold commodities may remain on the shelf and have the potential to be sold later, a hotel room cannot do the same. For the duration a hotel room may not be occupied and booked, it presents the lost opportunities to the hotel. With all these views in mind Sheraton has performed quite well in managing its organization and balancing its activities as follows:

• Constant delivery of superior guest experience
• Focus on maximisation of the market share
• Providing the expected return to the hotel owners

Primarily the focus of the hotel chain has been the luxury end of hotels. The services on offer have been customized for meeting the needs of both the leisure and business travellers. To cite out the strategy for business growth would be as follows:

• Brand Loyalty: The consistency at which the company has been providing high standard of services has created a unique brand loyalty among its customers. Moreover with its presence globally and the same standard of services at each location makes adds the flexibility to the services on offer. In order to reinforce this strategy the hotel giant offers a customer loyalty program which is pretty similar to the frequent flyer programs offered by many airlines. It has been named as the Starwood Preferred Guest Program that aims at providing great benefits to the regular customers.
• Responsive towards international convention market: The Sheraton Hotels have been very responsive towards the growth of its international convention market. The Australian properties of the group provide spacious meeting halls, banquets, ballrooms backed by high quality services for meeting virtually every need of their clients. The clients may hold small board meetings or national as well as international conventions, the hotels facilitate all. Backed by coordinated support programs to the clients along with the quality assurance initiatives these facilities have been one of the primary ingredients to the business strategy for the company. The components of the quality assurance program guarantees covering the key elements like meals within five minutes of the time stipulated, audio-visual arrangements as promised, and availability of accommodation as per the assured time.
• Strategies to increase Occupancy Rates: Occupancy rate as mentioned above falls among the primary measures for the hotel’s commercial viability. It is one of the most important goals of an organization to maximise its occupancy rate. Usually accommodation market is seasonal most of the hotels globally develop special package for boosting the occupancy rate during the lean periods of the year, weekends, and other holiday periods. Sheraton Hotels have made an intensive advertising campaign globally for promoting each of its hotels as a different brand under one label. They offered special rates for their business travellers and the public servants travelling on government business. They also have several well customized packages in association with tour operators where they provide substantial discounts of the rack rate for accommodation. All these have highly contributed in the last decade where the occupancy rate has jumped from 73% to 81% globally.

Relationship with the growth strategies and sustainable competitive advantage

The strategies discussed above implemented by Sheraton Hotels have contributed highly towards its growth strategies and gaining sustainable competitive advantage. The primary competitive advantage for the hotel chain is basically based upon the ethos of the quality of service it offers. This has firmly positioned Sheraton Group of Hotels in the upper end of the luxury markets. The well-defined customer segmentation strategies have contributed highly towards the competitive advantage which it has gained from the strength of the products and services on offer. The luxurious facilities that are available at the hotels are the basis for its superior quality of services. The multi-pronged strategy has made the hotels to attract high profile customers especially people of the Royal families, high ranking government officials, and big foreign delegates (investors.amadeus 2011)Sheraton Hotels have been constantly upgrading through innovative improvements and additions which has been regarded as one of the key drivers to its future growth and gain competitive advantage. There have been many old as well as new players who have provided a stiff competition to the hotel group but it has done remarkably well to sustain the new entrants and gain a competitive edge in the marketplace. Diversification has been one of the other business strategies which have been done quite creatively by the group. They have diversified their set of activities while providing customized services and packages for the respective places where they have their hotels in. This path of diversification of services on offer by the Sheraton Hotels has been a primary driver to the business strategies and contributed for gaining competitive advantage among its competitors.

Lessons out of the study of the business strategies implemented by Sheraton Hotels

All the strategies deployed by the Sheraton Hotels have been aimed in accordance with the aspirations of the company as it strives to be among the best hotels globally. The lessons to be learnt out of the strategies implemented by the Sheraton Hotels for its business Growth are: (Starwoodhotels 2102)

• Sophisticated program for market research: The study reveals that it is very important for a company to have a sophisticated program to conduct its market research. Sheraton has a well implemented research program which ascertains the needs of its customers and making them loyal towards the brand.
• Perceptions and expectations: With a very in-depth knowledge of the industry globally the Sheraton Hotels have done quite well to understand the perceptions and expectations of its customers. This shows to us the importance for the company to understand and keep a note of the perceptions as well as expectations while devising the business strategies.
• Importance of getting feedbacks: Sheraton Hotels has a very well-manages feedback system where customer focus has been given the highest priority. This explains to us the importance of getting feedbacks and hence taking measures to cater to all the concerns and needs of every single customer.
• Ancillaries to facilitate business growth: It hereby is clear that a business cannot strive on single product unless it has the right set of ancillaries to support its business plans. Taking the case of Sheraton Hotels it makes us understand the importance of the ancillary services such as transport services, restaurants, packaged tours, etc.
• Diversity in the services: A business strategy plan should always have diversity in the range of services on offer. Different offers, discounts, and types of rooms available for stay are among the most important elements to bring diversity in terms of hotel chains (Blog.openviewpartners 2012).
• Empower and appreciate individual achievements: A part of the business strategy and increase the efficiency of the services offered it is very important for any firm to empower its employees with responsibilities and appreciate their commitments. In the same way Sheraton Hotels like the other hotel groups shows the involvement of the sales staff and appreciation of the star performers on a regular basis.
• Separate Management: One of the key elements of the business strategies applied by the Sheraton Hotels is the policy that individual hotels undertake some limited marking and advertising in their own domestic markets. It has actually supplemented to the marketing and advertising strategies of the Sheraton Group as a whole.
• Use of different forms of media for different advertisements: Another policy included in the business strategy of the hotel chain is use of different forms of advertisements for projecting Sheraton Hotels differently. The company uses business and travel magazines for promoting their hotels whereas quality press as well as their magazines have been used for advertising their promotional packages for specific destinations.

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