Shangri-La Case Study

Topics: Hotel, Customer, Shangri-La Hotels Pages: 7 (2411 words) Published: September 25, 2012
1. What are the key elements of Shangri-La Hotel’s strategy? Which of the five generic competitive strategies described in Chapter 5 is the company employing? What is Shangri-La’s strategy for competing internationally? Firstly, the elements involved in a company’s strategy can be separated into two categories: internal and external ones. Based on our research, we believe that the key elements that in Shangri-La’s strategy are the internal ones that include management, organisation culture, employee and service. For organisation culture and service, Shangri-La has its own service model which is called “Shangri-La Hospitality”. The company builds up its brand on service excellence with a state mission as “delight customer each and every time”, and offers customers an unforgettable experience by blending local culture, exotic arts and ambience. In order to achieve exceptional customer service Shangri-La sets up a five-level organisation design to delegate authority to its employees. In addition, it has a strong training system for its employees which will ensure the employees performing consistently in the highly personalised guest service. The Shangri-La Academy and Care Program are under the training system. Moreover, the company adopts a three-tier compensation system to show a clear career path to its employees. In this way Shangri-La builds up employees’ loyalty to the company. Secondly, Shangri-La is using Focused Differentiation Strategy in the five generic competitive strategies described in Chapter 5. Shangri-La is securing advantage with its excellence service and style offering that is carefully designed to appeal unique preferences and needs for a narrow, well-defined group of customers. Like other top-class brands that target customers who are willing to spend much higher price to get a high quality product or more comfortable service, Shangri-La utilises focused differentiation strategy to attract its well-defined target customer group. Finally, Shangri-La combines two different strategies and applies them to its business extension for the international competing. When the company enters into foreign markets, it uses Licensing Strategies. The definition of Licensing Strategies is licensing foreign firms to use the company’s technology or to produce and distribute the company’s product. Shangri-La has integrated service principles, service model, training style and career growth method in different regions in order to maintain their service standard. However, when the company competes in foreign markets, it adopts a multi-country strategy. The definition a multi-country strategy is varying the company’s strategy from country to country in response to differing local market and competitive conditions and differing buyer tastes and preferences. Shangri-La’s service principles mean different things to different customers in different market. The company adapts to the local requirements and picks up the little things from different culture. Shangri-La is individual in each city but still maintain their strong brand image. 2. What policies, practices, support systems, and management approaches underlie Shangri-La’s effort to execute its strategy? What core/distinctive competencies has management at Shangri-La tried to build and nurture? The answer for this question can be structured into two parts as Shangri-la’s strategy contains two core components: personalised customer service and employee development. Under personalised customer service, Shangri-La employs its mission statement “delight customers each and every time”; the principle of Shangri-La hospitality which involves the 5 core principles—respect, humility, courtesy, helpfulness and sincerity; its five-level organisation design that groups its employees in five different levels and sets to each level particular guidelines, discretion and a dollar amount to handle customers requests without management approval; Shangri-La Academy to standardise the...
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