Mcdonald Case Study
Q1. Assess the SWOT of McDonald entering the hotel market in Switzerland?
Strengths:
1. Golden Arch association with McDonald’s brand.
2. CEO Urs Hammer came from a hospitality background.
3. The hotel restaurant was open 24 hours a day.
4. Self Check-in and Check-out of hotel at the airport.
5. Unique room layout with patented “curved wall” design.
6. Golden Arch was only 1 km away from AutoBahn.
7. Internet access via TV and wireless keyboard.
Weaknesses:
1. Segments like Airline crews would be tricky, as McDonald did not have hotel chains that Airlines could associate with.
2. Airline usually paid less than 100CHF for layovers- while Golden Arch was priced between 150 – 200 CHF.
3. Golden Arch was not able to host large conferences.
4. Positioning itself as four-star hotel.
Opportunities:
1. Zurich, where the hotel Rumlang was being opened was on an upswing with usually high occupancy rates.
2. The airport of Zurich-Kloten generated more demand for hotel beds and major expansion plan of airport would increase capacity by 50% shortly.
3. Even as the room inventory increased by 3000, growth continued in the industry.
4. The long distance bus traveler segment.
Threats:
1. Competing 4-star Hotels in the Area: Movenpick and Hilton.
2. Accor group of hotels
3. Hotel Airotel Rumlang (5 km from the airport)
4. Allegra Hotel in Kloten (2.2 km from the airport)
5. Hotel Novotel, which was closer to several major business centers.
6. The other 17 new hotels and 2 extensive enhancements planned coming up near Zurich and airport area.
7. Increase in supply of hotel rooms to increase by 40% that will result in excess supply of room inventory.
8. Sustaining the operation of the hotel would be difficult, as the Swiss human resource market had dried out.
9. In past it was seen that despite projecting growth for industry occupancy rates had gone down from above 70% to tight 50%.
Q3. Which segment should Golden arch target and why?
Strengths:
1. Golden Arch association with McDonald’s brand.
2. CEO Urs Hammer came from a hospitality background.
3. The hotel restaurant was open 24 hours a day.
4. Self Check-in and Check-out of hotel at the airport.
5. Unique room layout with patented “curved wall” design.
6. Golden Arch was only 1 km away from AutoBahn.
7. Internet access via TV and wireless keyboard.
Weaknesses:
1. Segments like Airline crews would be tricky, as McDonald did not have hotel chains that Airlines could associate with.
2. Airline usually paid less than 100CHF for layovers- while Golden Arch was priced between 150 – 200 CHF.
3. Golden Arch was not able to host large conferences.
4. Positioning itself as four-star hotel.
Opportunities:
1. Zurich, where the hotel Rumlang was being opened was on an upswing with usually high occupancy rates.
2. The airport of Zurich-Kloten generated more demand for hotel beds and major expansion plan of airport would increase capacity by 50% shortly.
3. Even as the room inventory increased by 3000, growth continued in the industry.
4. The long distance bus traveler segment.
Threats:
1. Competing 4-star Hotels in the Area: Movenpick and Hilton.
2. Accor group of hotels
3. Hotel Airotel Rumlang (5 km from the airport)
4. Allegra Hotel in Kloten (2.2 km from the airport)
5. Hotel Novotel, which was closer to several major business centers.
6. The other 17 new hotels and 2 extensive enhancements planned coming up near Zurich and airport area.
7. Increase in supply of hotel rooms to increase by 40% that will result in excess supply of room inventory.
8. Sustaining the operation of the hotel would be difficult, as the Swiss human resource market had dried out.
9. In past it was seen that despite projecting growth for industry occupancy rates had gone down from above 70% to tight 50%.
Q3. Which segment should Golden arch target and why?