Shangi La Case Study
Executive summary 2
Introduction 3
1. The generic competitive strategy 4
2. The aspects that efforts to execute its strategy 5
3. Critique on the company’s operations 7
4. The culture at Shangri-La Hotels 8
5. Challenges the company faces 9
6. The company’s financial and operational performance 10
7. Challenges Shangri-La face in expanding into Eastern China 11
8. The challenges associated with Shangri-La’s expansion 12
9. The threats of expansion of other hotel chains pose into China 13
10. Recommendations made 13
Conclusion 14
Bibliography 16
Addendum 1: Key financial ratio’s 17
Graphs: 22
Graph 1: Total Revenues 22
Graph 2: Total Operating Expenses 22
Graph 3: Operating Income 23
Graph 4: Net Income 23
Executive summary
The generic strategy of the company Shangri La can be defined as a broad differentiation strategy, one that is seeking to differentiate the company’s product offering from rivals’ with attributes that will appeal to a broad spectrum of buyers.
The efforts that surface to achieve this strategy the company heavily invest in training of their employees, a well defined career path and a market related compensation package.
The critique in using this strategy is that it makes their employees attractive for competitors to make a better offer for employment and this result into a costly exercise.
The mission stamen has a impact on the culture by emphasising the companies motto of excellent customer service.
The biggest challenge that Shangri- La faces is to personalise their services across different geographical locations with different characteristics and the company also face challenges in transferring its core and distinctive competencies.
Shangri-La’s well managed financial system takes care of the operations of the company. It ensures that operations are carried out efficiently. Investors were
Introduction 3
1. The generic competitive strategy 4
2. The aspects that efforts to execute its strategy 5
3. Critique on the company’s operations 7
4. The culture at Shangri-La Hotels 8
5. Challenges the company faces 9
6. The company’s financial and operational performance 10
7. Challenges Shangri-La face in expanding into Eastern China 11
8. The challenges associated with Shangri-La’s expansion 12
9. The threats of expansion of other hotel chains pose into China 13
10. Recommendations made 13
Conclusion 14
Bibliography 16
Addendum 1: Key financial ratio’s 17
Graphs: 22
Graph 1: Total Revenues 22
Graph 2: Total Operating Expenses 22
Graph 3: Operating Income 23
Graph 4: Net Income 23
Executive summary
The generic strategy of the company Shangri La can be defined as a broad differentiation strategy, one that is seeking to differentiate the company’s product offering from rivals’ with attributes that will appeal to a broad spectrum of buyers.
The efforts that surface to achieve this strategy the company heavily invest in training of their employees, a well defined career path and a market related compensation package.
The critique in using this strategy is that it makes their employees attractive for competitors to make a better offer for employment and this result into a costly exercise.
The mission stamen has a impact on the culture by emphasising the companies motto of excellent customer service.
The biggest challenge that Shangri- La faces is to personalise their services across different geographical locations with different characteristics and the company also face challenges in transferring its core and distinctive competencies.
Shangri-La’s well managed financial system takes care of the operations of the company. It ensures that operations are carried out efficiently. Investors were
Bibliography: CAMPBELL, D. & KAZAN, B. 2008. Shangri-La Hotels. . (In Thompson, A. A., Peteraf, M. A., Gamble, J. E. & Strickland, A. J. Crafting and executing strategy. Concepts and cases. Boston: Mcgraw-Hill. C-288 – C-303.) O’KEEFFE, K THOMPSON, A. A., PETERAF, M. A., GAMBLE, J. E. & STRICKLAND, A. J. 2012. Crafting and executing strategy. Concepts and cases. 17th ed. Boston: McGraw-Hill. YU, S a. Gross profit margin: (Revenues – Cost of goods sold)/Revenues 2006: (1002.9 - 408.8)/1002.9 =0.59 b. Operating profit margin: (Revenues – operating expenses)/Revenues 2006: (1002.9 – 729.6)/1002.9 = 0.27 f. Return on invested capital: Profits after taxes/(Long-term debt + total equity) 2006: 219.3/(1506.4 + 2699.2) = 0.052 2003: 82/(1037.2 + 2624.0) = 0.022 2002: 72.7/(1010.9 + 2555.1) = 0.020 b. Long-term debt-to-capital ratio: Long-term debt/(Long-term debt + Total stockholder’s equity) 2006: 1506.4/(1506.4 + 2699.2) = 0.36 2003: 1037.2/(1037.2 + 2624.0) = 0.28 2002: 1010.9/(1010.9 + 2555.1) = 0.28