Golden Arch Hotel Case Analysis

Stella Smith

SEH312

April 10, 2013

GOLDEN ARCH HOTEL

1) After reading the case study, conduct a SWOT ANALYSIS AND SUMMARY related to McDonald’s entry into the hotel market in Switzerland.

SWOT ANALYSIS & SUMMARY

Strengths

1. Automatic self-check-ins

2. 24 hour drive through McDonalds in hotel

3. Good prices

Weaknesses

1. It only has one restaurant, McDonalds…

2. Bad location-5miles from airport and there’s nothing at walking distance

3. No immediate service4.

Opportunities

1. Dining options

2. Entry into breakfast category

Threats

1. There are already many successful hotels with loyal customers

2. Hotels closer to airport and with more dining options

Cite at least 2 of each SWOT elements and a closing summary

Threats

The Golden Arch Hotel is located near Zurich-Kloten Airport, this was actually a bad location due to all the competition; many of them are 5 star hotels. These hotels are competition to them because they offer a variety of dining options while The Golden Arch only has a McDonalds as its dining restaurant.

Weaknesses

One of the reason a lot of people decide to choose other hotels instead of the golden arch is because it is also located 5 miles from the airport, while there are hotels closer to the airport, as close as a little less than 2 miles. A customer mentioned how “there was nothing at walking distance from the hotel”. Usually, hotel guest like to walk around before dinner, especially tours, however the lack of anything around the hotel makes it undesirable.

2) What is the break-even occupancy rate for the Golden Arch Hotel?

Use Exhibits 5,6 7, & 8 in Case Study to CALCULATE Break-Even based on Occupancy.

Golden Arche will reach breakeven only if it occupies 7,841 rooms per year, which is the max capacity.

3) Which market segment should Golden Arch target, and why?

Golden Arch should target

Currently, Golden Arch’s market segment is the upper class people, business travelers, travel groups, and frequent travelers, and layover people. However, for Golden Arch to be even more successful, their market segment should be economical and upper middle class people. They should be their market segment because