HYPERLINK “https://www.ukessays.com/essays/marketing/tata-group-companies.php” “_blank” https://www.ukessays.com/essays/marketing/tata-group-companies.php check this and edit1.0 Background of Ginger HotelsRoots Corporation Limited is an owned holding of the Indian Hotels Company Limited. Tata Group of companies is part of Indian Hotels company. According to (Kamplikar 2011), Taj Hotels Resorts and Palaces contains 77 hotels, 7 palaces, 6 reserved islands and 12 resorts in 40 places across India with other 18 global hotels in the Mauritius, Malaysia, Australia, UK, US, Bhutan, Maldives, Sri Lanka, Africa, and the Middle East. Joined on 24 December 2003, Roots Corporation Limited runs the Smart Basic hotels all over India. The Smart Basics idea was started in June 2004, the purpose of this is idea was to innovate ways of Indian hospitality.
Ginger uses owns and leases land strategy on which it progresses and managed the hotels and enter joint venture system where by partners provide the land and exposed shell and rents the same to the organisation.
Ginger has been ongoing development through creating and working hotel in new urban communities or by going for extra hotel in existing markets; along these lines extending the geographic reach of the hotel network. Ginger expects to create and work extra mile under both plans of action to keep up or accomplish an overwhelming position in each market secured by their Ginger hotel network.
(Ginger location in India: Source, https://www.gingerhotels.com/site-map.aspx)
1.1 Facilities at Ginger HotelsThe Square Meal Restaurant and In room Dining service
Wi Fi and Net zone
Meeting room and Seminar room
Ironing and Laundry service
Iron and Iron Board
Local Travel Assistance, Car rentals and ATM
Cafe Coffee Day
1.2 Current Business Overview
Ginger Hotels has been expanding within Indian and interring global market as well. Ginger opened another hotel in Mumbai, Andheri East which made to be the second Ginger in Mumbai. Ginger Mumbai is found at Western Express roadway, 3.5 kms from the airport, Ginger Mumbai is Bombay Presentation Centre and the railway station. In addition, the hotel gives comfortable access to the city’s developing corporate centre point on the Andheri Kurla Street.
Ginger has 142 well designed rooms, the staffs at Ginger are welcoming and possess good manner and professional at all time. The hotel gives smoothly and managed check in experience, where by guest’s will be welcoming with coffee while processing for check in. Ginger lobby is full of social environment lobby where by you will have high speed free Wi -fi, bar, restaurant, gym, and much more.
Rahul Pandit, MD and President of Ginger hotels stated that on opening day, “they are glad to grow quality in the business capital of India with the opening of Ginger Mumbai – Andheri East, our second hotel in Mumbai”.
Ginger hotel is establishing at the main chain of marked low cost hotels in India with a strong promise of safety, neatness, comfortability, a refreshing shower experience, a healthy breakfast and regular Wi-Fi connection.
1.3 Objective of this assignment
The aim of the study is to look at the strategic expansion, opportunity and challenges faced by Ginger hotels. As the tourism business is developing global companies face varies challenges which need to be focused. The objectives are based on SMART mode, Below are the objectives of Ginger cooperation.
To achieve higher operational excellence in the existing hotels
To have more 50 more hotels under Ginger this was by the last year
To maintain their loyal customers and attract newer customer due to high increases of tourists.
To improve the brand imagine
To increase marketing campaign and improve promotion strategy
1.4 India Overview
India is the large country with 29 states and seven association Places with a people of 1.17 billion people as of estimated population in 2017 according to the world factbook (CIA US page). It has a culture which has created over ongoing hundreds of years and is an ensuing result of mixing of arranged religious practices, customs and traditions.
The viewpoint for India’s continuing development is reasonably positive because of a youthful population and relating low reliance proportion, complete funds, investment costs, and expanding integration into the global economy.
1.5 Hotel and Hospitality industry in India
According to (Jauhari and Sanjeev,2012) India has become fasted growing country in hospitality industry and by 2040 as per estimates done by organization for economic cooperation and development, India will be potential world’s leading economy country.
This situation has suggestions for speculation, travel and purchaser spending and as tourism builds so excessively should the arrangement of hospitality services. Besides, more global companies looking to enter India market as searching for better business opportunities this expansion will create a variety of tactical and financial concerns that the hospitality industry should address.
The current view for the hospitality area in the world and especially in India is extremely improving which has increase a development boost in the Indian hospitality industry (Cushman and Wakefield, 2009).
Most hotel organization are as well make use of emerging system to set up their connection. For instance, the world’s biggest merger to date occurred in 2015 and included Marriott International, Starwood hotels and Resorts. The merger included 5,500 hotels with a sum of 1.1 million rooms in almost 100 countries (Smith, 2015).
Source: Ministry of tourism India
Source: Ministry of tourism India
2.0. Porter five force
Porter five model was developed by Michael E. Porter in late 1970s, The Five model is an effective means that identify where control is in an organisation position by analysing organisation internal and external environment issues (Scholes ; Whittington 2008). The model detects forces in the microenvironment that push competition and threaten a firm’s capability to generate income. The porter’s forces are threat of new entrants, competitive rivalry, threat of substitution, bargaining power of buyers and bargaining power of suppliers.
The recognition of these heads-up threats or opportunities provide an organisation a chance to grow and design proper policies that increase company income and guarantee a long-term existence of a company (Shariatmadari, 2013).
2.1 Threat of substitute products or service(Low)When a new products or services meets the same basic need in a different way, industry income suffers. The threat of a substitute is high if it substitutes offer an attractive price compared to the cost of the service or product. In case of Ginger hotels mid -size hotels attracting new competitors, also there is low effective substitute of services that Ginger should offer as they provide excellence services that most their customers prefer to visit Ginger again, moreover due to increases of tourists in India it has made Hotel industries to have big opportunities to get more guests who want to sleep in the hotels.
2.2 Bargaining power of suppliers(Low)When looking into power of suppliers can also minimize profit in a particular industry. Supplier can give higher prices or reduce the size and quality of the product given (Porter, 1979). Supplier power is influenced by their numbers the higher supplier the low control they have over the buyer however if there is small number of supplier in the market is easy for them to control the market (Porter, 2008).
In case of Ginger Hotels, the bargaining power of suppliers is limited due to higher competition in the market, as fastest growing country India has been rapidly developing and new hotels are opening every day. Therefore, the power of supplier can affect the business income because few suppliers in town easy for them to set higher price and companies always tries to avoid cost in switching from one supplier to another.
2.3 Bargaining power of buyers(High)This force expresses the impact that customers can have over the organization. Customer can constrain organizations to bring down their prices or to enhance the quality or amount of their products (Porter, 2008). This affects companies, since profit margins are cut off and competition among the market participants is increased. Hence power of buyers is likewise expanded when purchasers buy from a similar supplier in higher amounts (Alrawashdeh, 2012).
In case of Ginger Hotels, the bargaining power of buyers especially for hotels located in metro cities is higher due to high numbers of hotels which offer similar services at similar prices this lead for customer to have bargaining power to negotiate the price and switch to next hotel if not satisfied with price or the quality of the services seen.
2.4 Threat of new entrants (medium)In reviewing the threat of new entrants in India, Ginger hotels has been in the market for a long time and still strive to grow higher globally. Despite this, as much as many organisations want to enter this market and compete with existing players, the common entry obstacle beside government policies are investment amount needed to enter the market as a resourceful competitor is not easy (Karagiannopoulos, 2005). Looking on Ginger’s, it self faces low investment barrier which made to be involve in land lease business mode. Therefore, the threat of new entrants in India market is not so high however there are upcoming players such Hilton Garden Inn, Premier Inn, Indian Railways etc that are looking to enter India hotel business.
2.5 Rivalry among existing competitors(High)
Another force that we will discuss is competitors within an hotel industry, as any business in the world, Ginger has high competition that existing in the hotel business in India. In the event that a market is rewarding, competition in the market will expand as firms are urged to take an interest (Lüttgens, 2015). The level of competition in the market can occurs due to many reasons, such as costs, numbers of competitors, barriers etc (Porter, 2008).
Ginger Hotels tries hard to compete with existing players in order to control the market which has not being easy for Ginger. Ginger offer service improvement and innovation time to time, price discounting and so many flexibilities to their customers.
Ginger’s existing players
ITC Fortune Hotels
Courtyard – Marriott International
Lemon Tree Hotels
3.0 Opportunities toward Ginger hotel in India
The Tourism industry has been an important supporter of the financial development of India, and is key in making business and creating income for both expert and non-expert workers. Hence by reviewing Ginger SWOT analysing this will aids to identify which opportunities that Ginger can benefit.
Ginger Hotels SWOT Analysis
Budget hotel – affordable prices.
Tatas, brand equity.
Support from the Government.
Hotels present in over 40 locations across India.
Launched a “Smart Basic Hotel” concept in order to offer services to large middle call group.
High competition from existing players.
Unable to attract the upper class due to its positioning( bugdet hotel).
Economic growth which lead to increase of people income.
Emerging markets and growth globally.
Development of service offer Threats
Competitors, from new enties and existing players
3.1 Growing tourism and business activities (Opportunities)According Rebecca Bundhun in the nation, India’s tourism sector has huge opportunity for development and the government is working hard to put in place measures needed to take advantage of this, say those in the industry.
Presently, India attracted in about 10 million worldwide tourists, bookkeeping for 6.8 % of GDP, up from 8.8 million the past year, whereas outside trade profit from tourism expanded by 20.8 % to $27.69 billion, the ministry’s data presentation. India has laid out plans to expand its tourist entries to 20 million yearly by 2020.
3.2 Government support affecting the industry directly (Opportunities)The Indian government has understood the nation’s potential in the tourism business and has found a way to make India a worldwide tourism hub.
According (Fintech, 2015) government of India initiated tourist visa on arrival which permitted by travel authorization, currently known as e-tourist visa system on 2014. At moment e-Tourist Visa is open for 80 countries as of 2015.
Some of the main programs organised by the Government of India to contribute a improvement to the tourism and hospitality area of India are below:
Driving to succeed 1% share in world’s international tourist arrivals by 2020 and 2 % share by 2025, source (www.ibef.org)
The government has allocated US$ 183.89 million under budget of 2018 – 2019 for Coordinated advancement of tourist tours under Swadesh Darshan and Pilgrimage Rejuvenation and Spiritual Augmentation Drive.
4.0 Challenges faced by Ginger regarding expanding globallyThere is no an organisation which did not face some challenging when pursuing to expanding their product and services globally, below are challenging faced by Ginger regarding expansion globally
4.1 Brand overloadWhen there is so many companies with same business scope, this may lead to reduction of sales volume of brands advertised from the similar business group, (Jauhari and Sanjeev,2012 uses Marriott as an example saying Marriott provides Fairfield, Marriott get-away club, Home, Yard, Towne Place. It causes it hard for a customer to select where to stay It makes it troublesome for a client to create a choice.
Building brand recognition for the Ginger hotels has gotten to be challenge, and since the business type let large costs on media, innovative promotion is needed. When comes to marketing the challenges faced when marketing team fail to pass clear communication to customers when a customer checks in or give the wrong information as well as commination through advertisement.
To manage well designed organisation as Ginger hotels is not as easy task to manage. The well maintain operations cannot be always goes smoothly as customer expectations are as well high especially from tourists. The drive to successful operation depends of skills employees and management. However most of hotels even Ginger itself faces shortage of employees training and employee’s turnover which affect the operations. Salary package offer and working condition affect employee’s ability to perform (Chun and Davies, 2006), analyse the strong relationship between customer satisfaction and employees.
Furthermore, a professional team helps in providing satisfying services to the customers, hence recruiting young skilful educated candidates has not been easy for the company.
5.0 Mode of entry
Launching the internationalization process is an essential decision that firms might have considered to achieve better results and firm’s position relative to their competitors (Petersen & Welch, 2002). Several entry modes are chosen to acquire limited resources which companies lack. So, the main entry forms are Joint Ventures and acquisitions (López, 2008).
Changes caused by this decision may promote and enhance company’s activity or, by contrary, may turn international expansion into a catastrophe. As a result, firms should examine what are the entry modes and which of them are more suited to company’s characteristics. In addition, the companies have to evaluate the future advantages and if they are appropriate for the company strategy. There are common five modes of entry as discussed by (Daszkiewicz & Wach, 2012)
5.1 Type of mode of entry
In case of Ginger hotels uses not all of mentioned above entries but mainly Franchising and Acquisitions
Franchising: Is a bond connecting supplier and dealer. It is an effective way to combine the strengths, skills and needs of the franchisor and the franchisee. This form requires medium level of risk, control and/or resources commitment and allows sharing cost of expansion. Ginger has been considering at franchise mode of operations to expand its impression in India
Acquisitions: A local firm may join resource with a foreign firm to enter global market. On the other hand, the local firm can purchase a foreign firm and obtain the foreign firm’s rights and control.
In additonal Ginger intend to target family chain businesses, who can join them and contributing to restore and upgrading these hotels to Ginger brand image, Therefore Ginger function on joint the acquisition and lease of land and profit sharing model
Strategies that help Ginger to expand
Gingers main targeted customers are corporate customers, customers who value for budget hotels, and leisure travellers looking for comfortable and suitable services at reasonable price.
At the moment Ginger is utilizing online media to promote the hotel chain which involve: –
Call centre located in India with free toll service
Social profiles such as Facebook page, Twitter, LinkedIn, Google plust etc.
Ginger’s business marketing and promotion plans are aimed to develop consumer perception and desired for the Ginger services- which is to provide the unique services, convenience and comfort in the budget hotel group of the Indian hotel industry; and to inspire customers utilise of their integrated reservation method.
In redesigning customers’ desires to form the brand attractiveness, Ginger does not give room services, laundry and warden, there will be communication message to inform guests to help themselves through advertisement. But despite this concept, there is clearly customer expectation especial for Indian customer who are not comfortable with the Smart Basics concept.
Successful organisations describe how management performs related to the innovation
market positioning which develops the source for competitive advantage. Ongoing marketing research and data collection help the company to measure the current status of the company to implement innovation to give the well build brand product and services to the customers.
Hence Ginger may evaluate deeply it is company Strength and Opportunities time to time in order to change the business direction to have more control in hotels industry. Not forgetting to identify more weakness and threats and have strategic plans to turn these weakness into opportunities that will help the company to grow more than it has become. India hospitality is growing faster and expecting to grow more 2020, Ginger can take this opportunity overcome more market inside the country and outside (globally).