Holiday Inns on Six Continents

Q1. Why did Holiday Inn's business model and strategies change over time?

Holiday Inns founded the market for average price, average quality motel rooms. In 1960s, Holiday inn was founded to meet the need of the customers. Holiday inn set the standard for offering motel features like air conditioning and icemakers. By 1960s holiday inn was very successful and has a rapid growth. This low cost strategy was successful in 1960s. In 1970, travelers were beginning to make different demands on hotels and motels. Some wanted luxury and were willing to pay more. But Holiday inn was still offering average standards on average cost which cause the decline in business. But in the 1970s the chain ran into trouble because it failed to see that the market was fragmenting, creating the need for different kinds of products, ranging from luxurious resort features to the basic, non-frills accommodation. Holiday inn was left stuck in the middle, with its undifferentiated product and average costs. Hotel industry is highly competitive so competitors got the market share by offering luxury standards. Holiday inn was under attack by the competitors and declined the profitability.

In the 1980s, the company fought back by differentiating to offer a range of products, from the inexpensive Hampton Inns chain to a to the luxury crown plazas. Holiday inn start focusing on customer segmentation and meet the needs of different kinds of customers Holiday inn this move was success full and again got high profitability. Late 1990s falling revenue made it clear due to intense competition.

These moves were successful and led to a temporary advantage but by the late 1990s, Holiday inn was again in decline. The firm needs to find a new strategy to ensure that it prospers in the highly competitive hotel industry. In 2000 holiday inn focus on market positioning and get ready to meet the globalization challenge. Holiday inn is having more than 3000 hotels and motels in the world.

Q2. What are the strategies behind the six continents Hotels current business model? In what way is it trying to improve its competitive advantages?

Kemmons Wilson, founder of Holiday inn started his business in 1950s. At that time management sciences were rare and no one knows about the strategies of business. Holiday inn realized that there was an unmet customer needs for accommodations on highway during their journeys. Holiday inns business model was focused on COST LEADERSHIP strategy.

Cost Leadership Strategy:

"An integrated set of actions designed to produce or deliver goods or services at the lowest cost, relative to the competitors with features that are acceptable to the customers."

About 10 years of success full business, company maximized her profit by successful implementation of this strategy. Holiday Inn established its 1000 hotels