Group 4

Starwood Hotel

Mohammad Ali
Kelly Khoman
Christine Salim
Azizullah Ahmadi
Reyhan
Mehdi Jafari

Case 6 is discussing Starwoods hotels & resorts bringing aloft to India. There is a high and
rapid growth simultaneously in the sector of infrastructure, properties, and businesses since
they are also supported by the investors to contribute to the newer generation. One of the
reasons the Starwood hotels and resorts are opening in India is because there is a shortage
and very limited rooms and low quality existing hotels, this one of the reasons they are attracted
to open up in India. Lots of reasoning on why the investors invest in India especially in the hotel
and service industry that is booming throughout the years. India failed to provide the visitors and
guests with its maximum experience and quality, but this weakness is also not overlooked by
the big country and giant brand. They even use this weakness as an opportunity to open up a
better school to create a qualified and good performance of graduates that will later on join in
the industry. General sector is also growing rapidly and becoming better throughout the years,
however this rapid growth could potentially cost and threaten India for the increasing inflation
and in interest rates. But during this time lots of the giant brands looked at India as a big
potential investment, later on brands like Starwood, Westin, Four Season, Marriott, W hotel, Sa.
Regis and so on open up their new chain in India and followed by the second tier hotel domestic
and international brand. Below is the SWOT Table we’re making to support the movement that
is done by the investors on why they need to invest in India during this rapid growth. Well put
aside all of the good and bad things that India offered for investors there are some questions
that needed to be considered for us about this case such as

1. Will the brand work in India as a new generation of Indian customers emerges?
The brand itself will work especially when the numbers of visitors is increasing every
year due to several factors like a cheap flight ticket and increasing numbers of qualified
and good quality hotel even from the middle second tier hotel to the 5 star hotel, this
second tier hotel is also put their maximum effort to provide for their customers since a
lot of their competitors is a luxurious 5 stars and well known hotels for their service
quality, facility and so on. New generation tends to like traveling more than the boomers
that frequently like to just do short trips or casual holidays, not traveling to lots and
experiencing new and unique places that they never have been before.
 The number of visitors is also rapidly growing every year in India. This is also supported
by the affordable and cheap traveling cost in India resulting in low to high class guests
who can afford to do traveling in India, from the locals to the international.

2. Can Starwood correctly forecast and adjust to future developments in the Indian
economy?
What has been mentioned about the company's resources, it is important to understand
what role they are playing to make the company successful. Some of the mentioned
resources, such as skilled workers, can help the company to achieve perfect results. The
presence of an effective and good board of directors ensures that all operations are on
track. We can see that the resources are unique, such as financial resources and
customer reputation. No other company can replace Starwood because of its unique
service delivery. By involving employees and customers in the decision-making process,
the company's potential is fully recognized. The company recognizes its advantages
over other companies and will expand to all possible countries as long as it identifies
potential markets or niches. having a strategic plan is very important for them which the
company has many according to the case study as an example that I can mention is
opening many hotels in different cities that they can promote their brand, especially the
existing opportunity in India the market is growing very fast due to demand of hotels
because of the many travelers that visiting India. So in conclusion, despite all of these
potential threats that have been mentioned in the case, Starwood executives are
optimistic about Aloft's success in India, because of the rich cultural heritage and
profitable economy, and exotic landscape that can make India a perfect place for them
and can to adjust and survive.

3. With the challenges of inflation and rising interest rates, what will the future hold? Well
the case itself said that the level of inflation is rising and the rising interest rates is
 becoming a potential threat but not because the economy is experiencing or going in a
phase of recession but due to their very rapid growth and its predicted on the early
stages to have inflation however, the table have shown different results for a few period
of time the Rupee was becoming stronger towards the dollars instead of losing its value
more which means the inflation is still under control. The case also said that the general
income for the Indians are generally raising consistently leading to the growth income of
the area. Inflation and interest rates could be a big problem for businesses if the
condition or the government couldn’t handle it well but with this level of growth and
transaction power that the community have it will not become a problem they can adjust
and follow the inflation levels for the wages for example or selling products. “With a
booming economy, inflation has almost doubled from 3.9 percent to 6.9 percent between
2006 – 2007, suggesting possible currency depreciation and an increase in interest
rates. Paradoxically, however, improved economic conditions and expectations of high
sustainable growth rates have led to currency appreciation instead. The Indian Rupee
(R) rose against the U.S. dollar (USD) from 46.2 Rs in 2006 to 43.1 Rs by March 2007,
and it is expected to further appreciate to 39 – 41 Rs per $ 1 in 2008.”

4. Will the Indian government continue being cooperative and welcoming to foreign
investors? And if not, what can Starwood and other industry players do to increase their
bargaining power?
Since India is improving in all aspects and more specifically in the tourism industry the
government will cooperate with all foreign investors. Because it helps the Indian
country's economy as well as create more jobs for the local community. India has been a
favorite destination for tourism and it has been attracting tourists from all around the
world. Therefore, the government provides more opportunities for foreign investors.
According to the statistics, there is significant growth in the hotel industry and also the
number of tourists annually. which is indicating the number of arrivals in the hotel, shows
around 12% growth in one year between 2005-6. So, it is a good opportunity for the
Starwood Hotel for investment. We think the government will cooperate with the
Starwood Hotel as long as Starwood can follow the rules and regulations from the
government and overcome the challenges in terms of cultural adjustment, sustainability
 and tagline. Moreover, Starwood Hotel creates more jobs for the host country and
purchases the local products which in turn helps to boost the economy of the country.
So, it can increase the bargaining power toward the government.

5. As the popularity of the Indian market grows, will other global and domestic chains
increase their aggressiveness, posing enhanced competitive threats?
As a market grows it becomes an attraction thus the competitiveness in that market will
likely increase. With the enhanced competitiveness, Starwood and its new brand Aloft
must remain competitive and some ways to remain competitive can be done by following
the customer trends, keeping up with the developments that occur in the related sector,
and investing not only in technologies but also in training the employees to become the
best. With Aloft’s “see green” program, it can be a competitive advantage and might be
attractive to guests because guests would prefer to stay in a hotel which can also
contribute to saving the planet.

Strength
Opportunities Strength Opportunities Strategy
1. Easing restrictions on
foreign ownerships &
wealthy population
leading to high &
sustainable growth in
infrastructure & real
estate
2. Behavior of
government leads to
fastest growing
economies in the
world & most
attractive markets for
foreigners (FDI)
3. Income of Indian
citizen rises generally
4. Number of foreign
visitors grew from 11
to 15 percent in 2005
- 2006
SWOT Table Matrix
Weakness
1. Lots of rooms to grow to
become a better country
2. Consistently growing
sectors of infrastructure,
real estate, tech, industry,
service, as well as global
competitive
3. The Aloft brand has a
“see green” program
which empowers guests
to make ecologically-
responsible choices and
provides operators tools
to reduce overall impact
to the environtment.
4. Low fare airline leading to
increasing numbers of
visitors accessible to
travel
5. Aloft brand expansion will
cost cheaper than
expansion using other
brand
Weakness Opportunities Strategy
1. Implement expansion
strategy with financial
support from local partner
(S5, S3, O1, O2)
2. Partnership and make
channel with the
neighbors country to
attract more visitors and
investors (S4, S5, O1,O4)
3. Also, focus on the
domestic tourism by do
marketing for the local
community. (O3, S5)
1. Huge shortage of rooms
and low quality existing
rooms including service
quality
2. Inadequate airport and
transport infrastructure that
was provided for the
visitors
3. They have high taxes
4. Bureaucratic visa
procedures for foreign
travelers
5. Due to high development
in hotels and service
related sectors, Aloft must
act immediately in
obtaining skilled labors
since it is limited.
1. The investors open up new
opportunity for producing a
high quality hotelier to be
part of the new generation
for the hospitality industry
(W5, O6)
2. Do marketing on the
foreigner visitors and work
with travel agents
regarding to provide visa
for foreigner visitors (W3,
W4, O1)
 5. The service sector
shows an aggressive
growth of 13.0 percent
6. Seeing a lot of bad
quality from
graduates, investors
expand their
academic programs

Threats Strength Threats Strategy Weakness Threats Strategy

1. Prices have increased 1. Consistent level of grows
because of high
occupancy from 15 to
20 %
2. Tedious bureaucratic
restrictions, arcane
business practice, 2. The see green project
corruption will become
the hassle factor for
investors
3. Even well known hotel
schools of India is
complained about the
bad quality and low
employability factor of
fresh hotel graduates
4. Inflation potentials
and rising in interest
rates
5. Well known global
and domestic brand
competitors
and expansion will also
leads to the country
inflation leading to rising
in expenses and wages
for the hotel (S1, S2, T4)
from Aloft brand will not
only help the environment
but becoming a unique
value a distinct from
others competitors (T5,
S3, S5)
1. The financial returns to all
enthusiastic investors will
depend on future Indian
socio political and
economic stability. (T2,
2. Decrease the hotel
revenue in the low season
(T4, W3)
3. The Aloft need to recruit or
partner together with the
good organization to
recruit a better and
qualified graduates (T3,
W5, W1)