Sweetest Dreams Inn Case Analysis #1
Mr. Phan, owner of the Sweetest Dreams Inn, is extremely production-oriented. This is probably due to the fact that he has held a job as a production manager for a company producing industrial machinery for many years. Production orientation can be defined as making whatever products are easy to produce and then trying to sell them. Customers are viewed by those such as Mr. Phan, as purchasers of their product instead of people with needs that must be filled ( ). By assuming that all customers want what he himself wants when traveling, he created a product (a plain but modern room with a comfortable bed, standard bath facilities, and free cable TV) seemingly without any research done to either support or deny his ideas. He took the easy route when deciding on whether or not to include additions such as a pool and a restaurant, deeming them “unnecessary”.
David Bowie and Francis Buttle (2004) stated that “to achieve superior business performance companies need to identify what customer needs and wants are, and to satisfy them better than competitors”, that is adopt a market orientation. This ay of doing business focuses on creating relationships with customers and striving to maintain them long-term. It also avoids price competition because it is believed that cost is a secondary concern to level of service. 2)
Although Mr. Phan’s objective was not communicated officially, he did seem to have one in mind when he bought the 60-room hotel. He is concerned because after two years of owning the business his occupancy rate is not where he believes it should be. After the first year the occupancy stabilized at 55% of capacity, but it has remained below the 68% industry average ever since. Discussion of this concern leads one to believe that his objective was by year two to be maintaining an occupancy of at least 68%. This objective can be classified as such because it is:
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