Rosewood Hotel Case
Case Study of Rosewood Hotels & Resorts
Background:
Established in 1979, Rosewood Hotels & Resorts, a privately held company, became known for its ability to enhance a property’s value by creating unique, one-of-a-kind properties that differentiated from other chain-like luxury competitors. In early 2004, to boost the company’s growth, Rosewood considered to implement a new branding strategy to establish Rosewood as a true brand with a global reputation for iconic luxury hotels.
Problem Definition:
Rosewood was facing the problem of restriction and limitation from current individual brand strategy on the sales performance & company’s development, and the problem of choosing approaches that could be adopted to boost the company’s growth.
Critical Issues: There were both advantages and disadvantages in the strategies of individual branding and corporate branding. The critical issue would be to understand the pros and cons between these two strategies and to calculate the customer lifetime value and NPV from the investment that the two strategies could bring to Rosewood. Besides, the management also had to evaluate the potential positive impact on guest retention and to see if the revenues could offset the increased marketing and operational cost and effort it required.
Alternatives:
Rosewood had to progress in two steps: first to decide the branding strategy, whether to adopt individual branding or corporate branding, and secondly to decide whether to set up the frequent-stay program. In combination, Rosewood had four alternatives:
1. Individual branding strategy with frequent-stay program
2. Corporate branding strategy with frequent-stay program
3. Individual branding strategy only
4. Corporate branding strategy only
Analysis:
Comparison from Pros and Cons
Individual Branding Strategy:
Pros:
1. This individual branding strategy was a powerful tool to differentiate Rosewood properties from competitors with a corporate brand.
2. Under
Background:
Established in 1979, Rosewood Hotels & Resorts, a privately held company, became known for its ability to enhance a property’s value by creating unique, one-of-a-kind properties that differentiated from other chain-like luxury competitors. In early 2004, to boost the company’s growth, Rosewood considered to implement a new branding strategy to establish Rosewood as a true brand with a global reputation for iconic luxury hotels.
Problem Definition:
Rosewood was facing the problem of restriction and limitation from current individual brand strategy on the sales performance & company’s development, and the problem of choosing approaches that could be adopted to boost the company’s growth.
Critical Issues: There were both advantages and disadvantages in the strategies of individual branding and corporate branding. The critical issue would be to understand the pros and cons between these two strategies and to calculate the customer lifetime value and NPV from the investment that the two strategies could bring to Rosewood. Besides, the management also had to evaluate the potential positive impact on guest retention and to see if the revenues could offset the increased marketing and operational cost and effort it required.
Alternatives:
Rosewood had to progress in two steps: first to decide the branding strategy, whether to adopt individual branding or corporate branding, and secondly to decide whether to set up the frequent-stay program. In combination, Rosewood had four alternatives:
1. Individual branding strategy with frequent-stay program
2. Corporate branding strategy with frequent-stay program
3. Individual branding strategy only
4. Corporate branding strategy only
Analysis:
Comparison from Pros and Cons
Individual Branding Strategy:
Pros:
1. This individual branding strategy was a powerful tool to differentiate Rosewood properties from competitors with a corporate brand.
2. Under