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Abstract
This paper aims at discussing and evaluating the strategic management of Four Seasons
Hotel and Resorts current situation and future position and development. This research report
identifies the sources of competitive advantage for Four Seasons and strategic challenges
faced by the company on its expansion plans. The paper adopts some management models to
help better understand the current situation. PESTLID and Porters five forces help to
understand the current challenges facing the company from the perspective of the hospitality
industry.
Introduction
As the worlds leading operator of luxury hotels and resorts, the goal of Four Seasons is
to offer affluent business and leisure travelers the finest hospitality service in each destination
it serves. To this end, the firm has achieved enormous success in the past 45 years.
Seasons must know it competencies as well as its threats. Profound understanding about these
issues could help Four Seasons to manage its business more effectively, efficiently, and more
successfully. The aim of this case analysis is to serve as an impartial appraisal of Four
Competitive Advantages
Four seasons source of competitive advantage emanates from personal service. Four
Seasons competitive advantage allows it to better serve customers more than competitors,
Dynamic capabilities
Maha Abdullatif Abutalib, 2012
Distinctive value
Four Seasons has a strong brand and reputation resulting from the distinctive value that
the customer perceives as premium and is willing to pay more. According to Michael Porter,
Internal integration
Four Seasons has a road map highlighting that all function including training,
marketing, financial, procurement, among others focus on supporting the strategic position of
the firm.
The sustainable strategy of Four Seasons is strongly aligned with human resource
strategy. To ensure this, the company shapes recruitment criteria to ensure that they select the
right employees that meet the demanding requirements of customers. On the other end, Four
Seasons human resource policy provides specification for job design, training, performance
evaluation, remuneration, and career opportunities necessary to nature and retain good
employees. The companys human resource strategy has resulted to less staff turnover of
about 24%, a figure less than half the luxury segment average (Marler, 2012).
Continuous learning
specialized management knowledge of luxury hotels, and constant honing the routine
The company focuses exclusively on the luxury segment of the hospitality industry.
Porters five forces analysis provides a useful model to identify the dynamic forces shaping
the hospitality industry, and how these forces influence Four Seasons.
The company focuses exclusively on the luxury segment of the hospitality industry.
This customer segment put more emphasis on quality of services rather than price. The
consumption preference of these guests dictates that they are not price sensitivity and will not
sacrifice the service quality for low price. This implies that the effects of substitutes from
Concerning supplier power, Four Seasons conducts a mass procurement at all its hotels
in order to ensure uniform quality while controlling the operation cost. Operating such
includes potential employees. Four Seasons attract potential employee with its reputation and
The treat of new entrants is relatively low to Four Seasons due to high barriers to entry.
Those barriers include capital and time required to develop a well-established and respected
luxury brand name. Additionally, obtaining management contracts for luxury properties
proves difficult to new entrants due to lack of enough confidence among developers.
The major challenge to Four Seasons includes competition from established luxury
hotels and the buyer power. Four seasons handles these challenges by investing on how to
differentiate with competitors and meet the expectations of customers and shareholders.
Industry rivalry
Maha Abdullatif Abutalib, 2012
There is high level of rivalry in the luxury segment for customers and acquisition of
new management agreements. Specifically, competition for customers arises from luxury
hotel chains such as Starwood, Ritz, and Leading Hotel Group. Rivalry among competitors is
mainly based on brand recognition, room rates, location, quality of service, and
accommodations.
Power of buyers
Since Four Seasons focuses on management of hotel and resort properties, its growth
opportunities depend on its ability to establish and maintain sustainable strategic relationship
with new and existing owners. The factors that influence property owners decision include
the quality of management services and the benefits gained by hotel owner for retaining Four
Seasons brand image and management services. Four Seasons raises the confidence of
property owners by its specific performance criteria, which assures propertys yield to be
among the top three in the local market. Owners may cancel the contract if the criteria are not
Differentiation strategy
In order to forge a head of competition, Four Seasons must intensely consider what it
has, what it can do, and what it can achieve. Four Seasons focuses on organic growth of its
core business, which involves enhancing its overall position in the industry as well as
Differentiation focus
management team, Four Seasons follows a focused differentiation strategy (Ivanovic, &
Blazevic, 2009). Such strategy serves to reduce the bargaining power of consumers and
Maha Abdullatif Abutalib, 2012
reduce competition. Four Seasons use of personal service serves as a source of superior
quality, brand reputation, and growth. Long-term strategy that Four Seasons should consider
involves further enhancing perceived value to charge a premium price for this benefit and
reduce the perceived cost in order to increase margin as displayed in figure 3. Even though,
achieving hybrid strategy may prove difficult, it provides the only suitable way for Four
Conclusion
Luck always follows the prepared. Four Seasons success is a continuous effort. It is the
result of a long-term sustained effort to achieve and maintain a distinctive excellence over
competitors. At the center of Four Seasons excellence is the precise translation of its strong
Bibliography:
Garrett, T. & Gray, B., 2005. Service product development for sustainable advantage: the use
of the source-position-performance model. Available at: < anzmac.info/conference/2005/cd-
site/pdfs/5.../5-Garrett.pdf> [Accessed 2 December 2012].
Ivanovic, S, & Blazevic, M 2009, 'Human resource management in the hospitality industry',
Tourism & Hospitality Management, 15, 1, pp. 107-116, Hospitality & Tourism Complete,
EBSCOhost, viewed 2 December 2012.
Lima, T, 2006. Michael Porters five forces model: summary and interpretation [pdf]
Available at: < www.cbe.csueastbay.edu/~alima/.../fiveforcesporter.htm> [Accessed 2
December 2012].