Indian Hotel Industry - Launch of 'indiOne'

Abstract:
Indian Hotel Company Limited (IHCL), the leading Indian hospitality concern, has joined
hands with C.K.Prahalad to launch indiOne, a new concept that will redefine the hotel
industry and provide the company with a new growth opportunity. The caselet outlines the
reasons for IHCL's entry into the budget hotels segment and provides details on the indiOne
concept. Further, the caselet explains the design and implementation of the concept. It
discusses the implementation challenges and the future plans of IHCL for this venture.
Issues:
Budget hotels and its viability in Indian hospitality market.
New product development in hospitality industry.
Importance of segmentation and targeting in hospitality
services.
Introduction
Leading management thinker, C.K.Prahalad, took a sabbatical
from his busy academic work and spent nearly two years in
India, not for writing a book on his favorite subject -- mass
marketing -- but to launch a new mass marketing concept in the
hotel industry called indiOne.
Indian Hotel Company Limited (IHCL), the leading Indian hospitality concern, has joined
hands with C.K.Prahalad to launch indiOne, a new concept that will redefine the hotel
industry and provide the company with a new growth opportunity. In 2001, the company was
in a poor shape with a decline in revenues largely due to recession and a decline in foreign
tourist arrivals after the 9/11 attacks...
Questions for Discussion:
1. IHCL took two years to develop the indiOne concept, with a dedicated team under the
guidance of C.K.Prahalad. Discuss the new product development process involved in the
creation of indiOne, a budget chain of hotels.
2. IHCL is known for its luxurious Taj group of hotels. However, it has forayed into the
relatively unknown territory of budget hotels that requires careful planning and cost control
to be profitable. How far do you think IHCL has succeeded in making this venture profitable?