Course Project Decision Management 530 Essay

executive director SummaryThe course project provide me an opportunity to define a close problem that direction on how to break in function and food tradeplaceplace a untested develop hotel mathematical product offerings into a get ond agonistic trade. The problem emanates from the action of the stakeholders that revokes a signed pin down with Royale Regale Properties a consulting throng supposed to manage the hotel for ten years and decide woful into certify with Marriot Hotels. The invalidation cameamidst the consulting group preparation to soldiery the city feast in tack togethering the hotel products into the competitive market.To justify stakeholders conclusion, the precedential direction applies a systematic decision making process of beseemingly delimit the problem, clarify objectives, identify secondarys, understanding consequences and constraints. In evaluating the substitutes with concern on be as occasion of revocation, develop three objectiv es to contain the scoop up solution. The objectives centre on operating tolls, publicise be, sign up fees and merchandising strength nice twice as important as other objectives. The options focus on counsel capabilities thus decide on commission by beat, touching into prerogative, going into partnership with a chain actor or singly manage the hotel by its possessors.The centering selects the best option, trouble by fetch, considers consequences deportings with uncertainties, applies the company find attitude, implements the solution, monitors and plan ahead of decisions linked oer clip. The old counsel decides consulting group hosting the city fiesta depart be a give way to plant and market the hotel product offerings, seeks to butt the stakeholders for panegyric to proceed with proper implementation to assess the effectiveness of the decision.Introduction Overview of ending ProblemThis project centers on how to launch Royale Resort Hotels with it s new unpaid facilities and opulence service into a mature competitive market. The companys product is the state of art amenities and excellent go to compensate the leisure and business travelers. The market cause the hotel competing with other well-established rivals in the immobile changing market place but intend to position itself with its unique features and quality service to distinctiate and leverage its competitive edge. The newly real hotel is centr eithery located in Stockton city, CA. and ready to be launch into the market in a grand style by hosting the citys yearly fete slated for July 4, 2013. The hotel is on melt off to Regal Properties free radical to go past the management group along other hotels managed by the group. Regale Properties has a record of accomplishment of managing hotel chains, based on their start outs is ready to launch the hotel products by offici totallyy hosting the feast as a unspoilt marketing strategy.The group resumes its guid e six months prior to the grand spread outing with its management team trained and ready to take off as official buy at and host of the city festival. Preparations atomic number 18 in top gear with all hotel retinue booked, advertisement and publicity in place, invitations send out to finicky customers while mementos and brochures already printed. The stakeholders suddenly meet over the turnout of showcases, revoked their contract with Regal Properties Group to extend into franchise with Marriott Hotels to proper position and market the hotel product offerings. Revoking contract has its legal and financial implications. The precedential management feels hosting the festival at this time is the best way to position the hotel into the market and business that changing consulting group now to move into franchise give disassemble present arrangements and not portray a good stunt woman for the new hotel. Problem StatementSince the stakeholders revokes their contract with Re gale Properties whose strategy is to host the citys festival as marketing strategy to launch the hotel product offerings into the market and prefer contemptible into franchise with Marriott for best reasons known to them. The decision problem becomes How do we split up position and market the hotel product offerings into the mature competitive market? To better define the problem at hand, we necessity to identify key decision elements surrounding the problem such as The general nature of the problem in that location is a sudden revocation of an existing contract with a consulting group (Royale Regale plaza) to move into franchise with another group (Marriot Hotels). Royale Regale Property already entered into a deal to launch the hotel into the market by being the official suspensor and host of the citys festival schedule to open soon. Preparations and arrangements are already in top gear as adverts, publicity are on while invitations already send out to special guests or the events. Reservations and bookings of hotel rooms for guests, attendees are in progress, as the hotel rooms are booked. hordeing the event is impending to the consulting group and its management team. not holding the event is tantamount to good-for-naught image for the new developed hotel while transitioning to franchise is critical to hosting the festival. What event triggered the situation?Launching the hotel products into the competitive market so far will stick out been ideal but the sudden revocation of contract by the stakeholders resulting from their deliberation after the turn out of events prior to the festival gets everyone panicked. argon we imposing constraints on the situation?There are serious concerns that elicit pose as constraints regarding the situation at hand. The first concern is the cause of sudden revocation of contract. There is need to get word why the contract is revoked. There is need to ascertain when the revocation takes effect, immediately or safe after hosting the festival. Confirm the possibility of the management hosting the citys festival or handing over to new management group. Consider the repair of the contract revocation on the festival and the present management team. Consider the impact of rescinding to host the festival. Consider the response of the city organizers knowing about the new-made revocation.Envisage the fears of all invited guests, visitors and attendees. There are other concerns as to shipway to handle the publicity, digested bookings and reservations. Consider transition into franchise, damage effect of moving into franchise. Consider the possibility of hosting the event before transition into franchise ascertain the cost of hosting the events if that force be the cause of revocation. Consider Marriott Hotel taking over the events to transcend into franchise, or consider other options. Engage the senior management to brainstorm how to better position and market hotel products into the competiti ve market. What are the vestigial elements of the problem?Positioning and marketing the hotel products centers on people, market share and profit. Hosting the festival is a conquest factor to better position hotel products in the market by creating awareness, penetrates the market to achieve good market share, enhance tax and dies more than profit. Rescinding to host the festival might leads to guests moving to other competitors at heart the city, special guests, visitors and other invitees might cancel their bookings and reservations, which might lead to bolshie of receipts as all hotel rooms have been booked. To rescind the hotel as theofficial champion of the festival might damage the image of the hotel as advertisement and publicity are currently running. The hotel image is important in creating a product taint. Dependencies on other decisionsThe probability of hosting the festival or moving into franchise to better position the hotel product offerings depends on the exit of senior management meeting. The success of the festival will better position and market the hotel product offerings. Rescinding to host the festival will damage the hotels image and results in sack of revenue. Moving into franchise after the festivals enhances better positioning and marketing the hotel product offerings. Summary of Key impersonalsThe objectives are sub-divided into fundamental and inwardness objectives. The fundamental objectives will help in evaluating and comparing alternatives while the message objectives will assists in generating alternatives and deepens our understanding of the decision problem. Fundamental objectives Means documentals documental 1To penetrates the competitive market to achieve good market share. Means target area AEstablish a daubmark. Consider how to construct quality product offerings. Means aim BEstablish procedures for hiring hump staff and training to give quality services. Means Objective CMaximize management capab ilities in operating the business. Consider operation through managed contract or franchise affiliation with high-level brand recognition for the owner. Objective 2Create awareness by communicating the target market. Means Objective AEstablish marketing committee to decide on identifying the target market and create brand awareness. Means Objective BEstablish committee to consider attracting people to the hotel. Consider different methods of communication, advertising and publicity, holding events in which hosting the festival is a factor or move into franchise. Means Objective CEstablish committee to consider the cost of shrewd a media mix, cost of hosting the festival, cost of moving into franchise. Objective 3Enhance revenue to yields more profit. Means Objective AEstablish committee to ascertain cost of hosting the festival and cost of moving into franchise.Establish committee toascertain the average room rate, occupancy contribution and revenue per available room (RevPar). Means Objective BEstablish committee to confirm winnings accrue from room sales in hosting the festival and revenue loss that might accrue in rescinding to host the festival. Means Objective CEstablish franchise fees, operating be, marketing costs. Committee review event costs with franchise costs to decide which better profits the business. alternatesDescription of Alternatives Identifying alternatives involves the senior management brainstorming and other group members as committees identify ideas and workable options to defined problem. The feasible options are Alternative Description of AlternativesAlternative 1Management rescinds to sponsor the event and cancel the festival. Canceling the event is not an option. This alternative does not meet the objectives. Refunding costs for booked rooms will result to great loss of revenue. Image of the hotel is at stake. Alternative 2Management revoked the contract and move into franchise. Revoking contracts has its legal and cost impl ications. The impact on not hosting the event is enormous. Staffs are train and repair to host the event. Adverts, publicity, brochures, fliers, banners printed, the cost affect is enormous. The alternative does not meet the objectives. Alternative 3Management revokes the contract after the festival and move into franchise. Hosting the event is the best option.There is great opportunity in this alternative as adverts, publicity better position the hotel products, create a brand image, attracts people to the hotel, guests will experience quality service. The hotel penetrates the competitive market to have a share.Hotel image creates tripping transition into franchise. Reduces operating costs, marketing costs, needs only technical assistance.Helps build a brand that will facilitate franchise negotiations. Hosting the event helps in creating awareness, gives the opportunity to penetrate the market, with hotel rooms fully booked provides profitability to the owner. The alternative ful ly meets the objectives. Alternative 4Management revokes the contract approves Marriott to host the festival and transcends into franchise.Marriotts fees will increase. Familiarize with management team and other employees will be time consuming. Setting standards in terms of creating logo, design and style will forestall events date. This will lead to incurring additional operation costs. Hosting the festival and transitioning into franchise can be cumbersome. Retraining and rehiring staff to their standards can be stressful.This alternative is not a good option to take.SelectionFrom the outcomes of the senior management meetings and other group deliberations, it is observe that the stakeholders concern were more on costs incurred so far in preparations for hosting the festival. Based on the management decision, the objectives to select the best way to market the hotel product offerings is to review operating costs, advertising costs, contact fees and all agreement terms while dete rmining marketing strength is twice as important as other objectives. The contract with Regale Properties is to manage the property for ten years, 3 4% correspond revenue, 2% incentive fees, high lenders re gear upation in providing loan, and high penalty impose on party that initiates cancellation. The managed contract gives owner greater control over physical and operational quality of the hotel thereby protects owners trademark and reputation. immunity agreement will be for twenty years with non- refundable initial fees, fixed monthly fee ranging from 3 -6.5% of room sales, advertising fees, loan assistance, training fees, with owner loss of self-sufficiency and contract terminates when not meet standards. Other options arrived at are maintaining the managed contract with Regale, moving into franchise, going into partnership with a repu turn off chain operator or independently managed by owners as a liability company. (Retrieve from Allan Stutts, & pack Wortman. (2006). Manag ement Contract and immunity Agreement Hotel Lodging Management, second edition, p247 266). moment Table with Original Values Alternatives Managed Contract Franchise Affiliation confederation Independently Run by Owners direct cost $80,000 $200,000 $120,000 $150,000 advertisement constitutes $15,000 $50,000 $20,000 $60,000 Contract Fees $1.5million $5million $1million No Contract Fees merchandise Strength 2 1 3 No Marketing Strength Scoring Model The table shows the ranking of all objectives with one as the lowest value, four as the highest value. Managed Contract Franchise Affiliation Partnership Independently Run By Owners Operating cost 4 1 3 2Advertising Costs 4 2 3 1Contract Fees 2 1 3 4Marketing Strength 3 4 2 1Score 13 8 11 8Legend 4 = Best Option, 3 = third best, 2= imprimatur best, 1 = Worst. Weighted Scoring Model Alternatives Weight Managed Contract Franchise Affiliation Partnership Independently Run by Owners Operating Cost 20% 0.8 0.2 0.6 0.4 Advertising Cost 20% 0.8 0.4 0.6 0.2 Contract Fees 20% 0.4 0.2 0.6 0.8 Marketing Strength 40% 1.2 1.6 0.8 0.4 TOTAL coke% 3.2 2.4 2.6 1.8 Legend 1 = worst Value, 4 = Highest Value.Eliminate dominated alternativesAfter more deliberations with all appoint committees to deliberate on the necessary objectives by the senior management, the available options to better position and market the hotel product offerings zero down on management team capabilities of managing the hotel products. However, when apply weight to the values, franchise dominates the idea of independently managed by owners hence eliminates the idea. Identifying Tradeoffs Using Even SwapsSwapping the available options, managed by contract exceeds all other options and appears to be the best alternative. ConsequenceManaged by contract appears the best alternative to position and market the hotel products as having a brand conjure up is paramount in having a market share. The contracted group will bear all costs and expenses but ge t aheads itsprofit through common revenue the brand image of the chain operator will be of more advantage. The senior management continues to battle with several disobliges as risks, uncertainties and probabilities to better position the hotel products into the competitive market or move into franchise affiliation. Their objectives are to achieve a good market share, create a brand image and maximize profitability. Some of the consequences envisage are* Management holds festival before revoking the contract. Can this help in penetrating the market to have a good market share. Based on relevant schooling from the senior management, there is high possibility of hosting the event to make headway good market share. * Stakeholders rescind to host, sponsor the festival and therefore cancel the festival. Canceling the festival creates bad press that might affect the hotels image. With the available facts, it is extremely observed that the city festival will not be cancel. * Stakeholde rs might move into franchise affiliation. Reviewing the budget costs, moving into franchise involves additional fees as training fees, advertising fees and monthly fees. Based on the management analysis, there is likelihood that it might affect the profitability. Thus highlights a risk compose to identify uncertainties and probabilities. Risk Profile scruple Uncertainty 1 expiration Chance Consequences Host/Sponsor urban center festival 90% reach out Good Market Share Not hosting/Sponsor City fete 10% Achieve no Market Share Uncertainty Uncertainty 2Outcome Chance Consequences Cancel City festival 10% Lead to bad pressNot Cancel City festival 90% Lead to Good Press Uncertainty Uncertainty 3Outcome Chance Consequences Move into Franchise 80% Increase Operating Costs Not Move into Franchise 20% Decreases Operating CostsRisk toleranceHigh RiskOutcome Gain prospect Expected ValueHost /Sponsor the City Festival $9, 000 90% $8, degree Celsius Not Cancel City Festival $9, 000 90% $ 8, 100 Not move into Franchise $2, 000 20% $ 400 Total $16, 600 let loose RiskOutcome Gain Probability Expected ValueNot Host /Sponsor the City Festival $1, 000 10% $ 100.00 Cancel City Festival $1, 000 10% $ 100.00 Move into Franchise $8, 000 80 % $6, 400.00 Total $6, 600By using this concept, the management is able to evaluate which of the three alternatives will yield best result while factoring uncertainties that exists. In this case, the high risk has the best expected value. To ascertain the risks and probable of uncertainties, management will have to picture the risk profiles with a decision tree and decide to douse likeable risk and insure the hotel products against future risks. close TreeHost FestivalHost Festival90.0% 0.9 9000 8100 Cancel FestivalCancel FestivalHigh RiskHigh RiskTrue 90.0% 0.916,600 9000 8100 FranchiseFranchise20.0% 0.20 How to better position and market hotel productofferings How to better position and market hotel product offerings2000 400Host Fe stivalHost Festival10.0% 0 1000 100 Cancel FestivalCancel Festival bring down RiskLower RiskFalse 10.0% 0 6, 600 1000 100 FranchiseFranchise80.0% 0 8000 6400 (Retrieve from Week 5 Group Decision Making Lecture. http//vizedhtmlcontent.next.ecollege.com/ (NEXT (a4f7ff0b65))/Main/Course Linked DecisionTo better position the hotel product offerings, management will have to leave all options open by operating a waxy plan. The immediate problem is to launch the products into the competitive market, communicate the products to the target market and create a brand image. Consequent plans will be to move into franchise after attaining a brand this will boost sales revenue and automatically meliorate profits. (Retrieve from fundament, Ralph & Howard. (1999) Smart Choices). Implementation, Monitoring and ControlTo implement the chosen decision, senior management will brief all partiesinvolved with up to date information. The senior management meets with all committee heads to assess the c hosen option against foreseeable risks or bias. In this case, senior management feeds back the stakeholders as per the research, outcomes, consequences and benefits of the chosen option. To better clarify issues, opinions of legal experts will be inquire to put management at a desired advantage.Hosting the festival is imminent in launching the products into the competitive market, thus stakeholders will honor Regale Property Group to host the city festival as the official sponsor for the event date 4 July 2013. The trained team from the operation managers, snapper managers and supervisors will oversee the trained personnel to deliver best services to guests by turning guest services into a memorable experience that will bring about a recur visit. Senior management is to review subsequent plans, ensure proper communications, effective supervision and proper accountability to ensure success of the plan.SummaryMaking tough decision problems poses few difficult problems, while applyin g a systematic approach helps focus on tough elements to resolve problem easily. The decision of revoking the contract to move into franchise poses a tough decision problem on the management but save for the senior management ability to resolve issue by applying a rational approach. The management was able to address the honest decision problem, clarify the objectives, develop creative alternatives and ascertain consequences of their decisions. They eliminate deplorable alternatives, deal with uncertainties, consider their risk taking attitude and develop flexible plan to deal with linked decisions ahead of time. (Retrieve from Frumi Rachel (2010). A Practical eviscerate to Making Better life Decisions Smart Choices). ConclusionWith great success of hosting the city festival holding on Fourth of July, the quality of guest services will attract customers to bring about a repeat visits. Their standard rooms, food services and recreational facilities with quality service discover by the trained staff will create the brand to attain expected market share. The quality service and product will leverage the hotel edge in the competitive market. As the hotel becomes well known and attain more sales the precedent to future plans in maximizing profits isforeseeable.ReferencesAllan T. Stutts. & James F., Wortman (2006). Management contract and Franchise Agreements Hotel and Lodging Management, second edition, p.247 266 Frumi Rachel (2010). A practical Guide to Making Better Life Decisions Smart Choices John S. Hammond, Ralph L. Keeney, Howard Rafia (1999). Smart choices, Harvard Business School Press Culled from Week 5 Group Decision Making Lecture Decision Tree. http//vizedhtmlcontent.next.ecollege.com/