Course Project Decision Management 530 Essay

Executive summaryThe crease project provide me an opportunity to define a termination riddle that focus on how to bettor prospect and food grocery a new develop hotel intersection offerings into a matured combative foodstuff. The fuss emanates from the action of the stakeholders that revokes a signed tailor with Royale address Properties a consulting group supposed to manage the hotel for decennium years and adjudicate moving into licence with Marriot Hotels. The revocation cameamidst the consulting group preparation to multitude the city fete in launching the hotel products into the competitory trade.To justify stakeholders closing, the old solicitude applies a systematic decision making process of properly defining the problem, clear objectives, severalise wefts, understanding consequences and constraints. In evaluating the alternatives with concern on addresss as cause of revocation, develop three objectives to select the outstrip solution. The objectiv es focus on in operation(p) courts, advert cost, declaration taps and foodstuff placeing strength becoming twice as important as early(a) objectives. The options focus on counseling capabilities thus decide on concern by center, moving into franchise, personnel casualty into partnership with a chain operator or independently manage the hotel by its possessors.The management selects the best option, management by contract, considers consequences dealing with uncertainties, applies the company risk attitude, implements the solution, monitors and plan ahead of decisions united over time. The senior management decides consulting group hosting the city fete exit be a better right smart to ready and grocery the hotel product offerings, seeks to meet the stakeholders for approval to proceed with proper implementation to assess the effectiveness of the decision. understructure Overview of Decision ProblemThis project centers on how to launch Royale Resort Hotels with its n ew recreational facilities and opulence renovation into a mature matched market. The companys product is the state of art amenities and superior function to satisfy the leisure and business travelers. The market have the hotel competing with other well-established rivals in the fast changing market place except intend to position itself with its unique features and graphic symbol service to differentiate and supplement its competitive edge. The newly developed hotel is centr tout ensembley 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 contract to Regal Properties conclave to plump the management team along other hotels managed by the group. deal Properties has a record of accomplishment of managing hotel chains, based on their experiences is ready to launch the hotel products by officially hosting the feast as a favorable market scheme.The group resumes it s contract six months prior to the grand initiation with its management team skilful and ready to take off as official donor and host of the city fiesta. Preparations are in top gear with all hotel room book, advertisement and publicity in place, invitations send out to special guests period mementos and brochures already printed. The stakeholders suddenly meet over the turnout of events, revoked their contract with Regal Properties Group to convey into franchise with Marriott Hotels to proper position and market the hotel product offerings. Revoking contract has its sanctioned and financial implications. The senior management feels hosting the festival at this time is the best way to position the hotel into the market and fear that changing consulting group now to light upon into franchise bequeath disrupt present arrangements and not portray a wakeless externalize for the new hotel. Problem StatementSince the stakeholders revokes their contract with Regale Properties wh ose strategy is to host the citys festival as marketing strategy to launch the hotel product offerings into the market and prefer moving into franchise with Marriott for best reasons known to them. The decision problem becomes How do we better position and market the hotel product offerings into the mature competitive market? To better define the problem at hand, we demand to identify key decision elements surrounding the problem such as The general nature of the problem there is a sudden revocation of an existing contract with a consulting group (Royale Regale Property) 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 sponsor and host of the citys festival schedule to brusk soon. Preparations and arrangements are already in top gear as adverts, publicity are on term 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. Hosting the event is imminent to the consulting group and its management team. not holding the event is tantamount to seriously consider for the new developed hotel eyepatch transitioning to franchise is critical to hosting the festival. What event triggered the situation?Launching the hotel products into the competitive market so far provide have been ideal but the sudden revocation of contract by the stakeholders terminationing from their deliberation after the turn out of events prior to the festival gets everyone panicked. Are we imposing constraints on the situation? at that place are serious concerns that can pose as constraints regarding the situation at hand. The first base concern is the cause of sudden revocation of contract. There is need to ascertain why the contract is revoked. There is need to ascertain when the revocation takes effect, immediately or right after hosting the festival. Co nfirm the hazard of the management hosting the citys festival or handing over to new management group. contain the touch on of the contract revocation on the festival and the present management team. Consider the impact of rescinding to host the festival. Consider the retort of the city organizers knowing virtually the recent revocation.Envisage the fears of all invited guests, visitors and attendees. There are other concerns as to ways to handle the publicity, confirmed bookings and reservations. Consider transition into franchise, cost effect of moving into franchise. Consider the possibility of hosting the event originally transition into franchise ascertain the cost of hosting the events if that power 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 penetration how to better position and market hotel products into the competitive market. What are the underlyin g elements of the problem?Positioning and marketing the hotel products centers on people, market share and profit. Hosting the festival is a success federal agent to better position hotel products in the market by creating awareness, penetrates the market to achieve good market share, enhance revenue enhancement and yields more profit. Rescinding to host the festival might leads to guests moving to other competitors within the city, special guests, visitors and other invitees might abrogate their bookings and reservations, which might lead to loss of revenue as all hotel rooms have been booked. To rescind the hotel as theofficial sponsor of the festival might damage the word picture of the hotel as advertisement and publicity are currently running. The hotel image is important in creating a product deformity. Dependencies on other decisionsThe probability of hosting the festival or moving into franchise to better position the hotel product offerings depends on the outcome of se nior 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 loss of revenue. Moving into franchise after the festivals enhances better positioning and marketing the hotel product offerings. Summary of Key accusingsThe objectives are sub-divided into fundamental and means objectives. The fundamental objectives will help in evaluating and comparing alternatives while the means objectives will assists in generating alternatives and deepens our understanding of the decision problem. Fundamental Objectives Means ObjectivesObjective 1To penetrates the competitive market to achieve good market share. Means Objective AEstablish a brand. Consider how to build quality product offerings. Means Objective BEstablish procedures for hiring experience staff and training to give quality services. Means Objective CMaximize management capabilities in operating the busine ss. Consider operation through managed contract or franchise affiliation with upper-level brand recognition for the owner. Objective 2Create awareness by communicating the target market. Means Objective AEstablish marketing military commission to decide on identifying the target market and make water 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 physical bodying 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 percentage and revenue per available room (RevPar). Means Objective BEstablish committee to confirm profits accrue from room gross sales in hosting the festival and revenue loss that might accrue in rescinding to host the festival. Means Objective CEstablish franchise fees, operating costs, marketing costs. Committee review event costs with franchise costs to decide which better profits the business.AlternativesDescription of Alternatives Identifying alternatives involves the senior management brainstorming and other group members as committees identify ideas and feasible options to defined problem. The feasible options are Alternative Description of AlternativesAlternative 1 management rescinds to sponsor the event and cancel the festival. editing the event is not an option. This alternative does not meet the objectives. Refunding costs for booked rooms will result to smashing 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 co st implications. The impact on not hosting the event is enormous. Staffs are train and prepare 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 easy 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 f ully meets the objectives. Alternative 4Management revokes the contract approves Marriott to host the festival and transcends into franchise.Marriotts fees will increase. acquaint 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. base 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 deter mining marketing strength is twice as important as other objectives. The contract with Regale Properties is to manage the property for ten years, 3 4% total revenue, 2% incentive fees, high loaners reputation 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 hallmark and reputation. certification 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 autonomy 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 respectable chain operator or independently managed by owners as a liability company. (Retrieve from Allan Stutts, & James Wortman. (2006). Management bewilder and Franchise Agreement Hotel Lodging Management, second edition, p247 266). resultant role Table with Original Values Alternatives Managed Contract Franchise Affiliation Partnership Independently Run by Owners Operating cost $80,000 $200,000 $120,000 $150,000 Advertising be $15,000 $50,000 $20,000 $60,000 Contract Fees $1.5million $5million $1million No Contract Fees marketing Strength 2 1 3 No Marketing Strength Scoring Model The table shows the ranking of all objectives with one as the lowest value, intravenous feeding as the highest value. Managed Contract Franchise Affiliation Partnership Independently Run By Owners Operating embodys 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= Second 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 coulomb% 3.2 2.4 2.6 1.8 Legend 1 = Lowest Value, 4 = Highest Value.Eliminate dominated alternativesAfter more deliberations with all appointed committees to deliberate on the necessary objectives by the senior management, the available options to better position and market the hotel product offerings zero reduce 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 therefrom 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 earn is paramount in having a market share. The contracted group will bear all costs and expenses but atta ins itsprofit through gross revenue the brand image of the chain operator will be of more advantage. The senior management continues to battle with several issues 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 information from the senior management, there is high possibility of hosting the event to attain good market share. * Stakeholders rescind to host, sponsor the festival and therefore cancel the festival. Canceling the festival creates bad solicit that might affect the hotels image. With the available facts, it is highly observed that the city festival will not be cancel. * Stakeholders 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 profile to identify uncertainties and probabilities. peril Profile doubt scruple 1 ending break Consequences Host/Sponsor City festival 90% Achieve Good Market Share non 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 spark off into Franchise 80% Increase Operating Costs Not Move into Franchise 20% Decreases Operating CostsRisk toleranceHigh RiskOutcome Gain Probability Expected ValueHost /Sponsor the City Festival $9, 000 90% $8, 100 Not Cancel City Festival $9, 000 90% $8, 100 Not move into Franchise $2, 000 20% $ 400 Total $16, 600Low 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 anticipate value. To ascertain the risks and probable of uncertainties, management will have to picture the risk profiles with a decision shoetree and decide to hedge likeable risk and insure the hotel products against future risks. Decision 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 FestivalHost Festival10.0% 0 constant of gr avitation 100 Cancel FestivalCancel FestivalLower RiskLower RiskFalse 10.0% 0 6, 600 1000 100 FranchiseFranchise80.0% 0 8000 6400 (Retrieve from Week 5 Group Decision fashioning Lecture. http//vizedhtmlcontent.next.ecollege.com/ (NEXT (a4f7ff0b65))/ main/Course Linked DecisionTo better position the hotel product offerings, management will have to commit all options open by operating a flexible 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 better profits. (Retrieve from John, 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 chosen option against foresee able 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, middle 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 repeat visit. Senior management is to review subsequent plans, ensure proper communications, effective inadvertence and proper accountability to ensure success of the plan.SummaryMaking tough decision problems poses few backbreaking problems, while applying 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 right decision problem, clarify the objectives, develop creative alternatives and ascertain consequences of their decisions. They eliminate low-down 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 Guide 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 exhibit by the trained staff will create the brand to attain anticipate 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/