INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

IIM KOZHIKODE CAMPUS, P.O, KOZHIKODE-673570

PROGRAMMES OFFICE
Date of Exam: _23/03/22_________ Programme: PGP25___
Course Name: SUB__________ Term /Section: _B______________
Roll No: PGP/25/070______ Name of the Student: Anushka Ghosh

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1. Case: ITC Hotels: Is responsible luxury sustainable? Questions

1. a) Identify the various activities that can be considered as responsible luxury at ITC Hotels (3
marks) (Hint: It may be possible to identify around 8-10 such activities)

In 2009, ITC hotels rebranded itself as “ITC Hotels: Responsible Luxury” in an attempt to
declare itself as an environmentally conscious corporate. They messaged this brand image by
being environmentally sustainable, responsible to the local communities and society, and
responsible for the safety and comfort of guests and employees.

 ITC Hotels had become water and carbon positive and had been recycling 100 per cent of its
waste since 2013.
 They embedded sustainability in their operations to a great extent –
o They used multi-glazed windows to minimize solar heat gain and lowered air
conditioning loads
o The wood used in hotel furnishings was procured from sustainable forestry sources
o Integrated flow restrictors to reduce water consumption in guest rooms
o Recycled water was used in flush systems, air conditioning towers, and drip irrigation for
landscaping.
o Integrated a solar-powered thermal system for hot water and steam which incurred
substantial upfront capital investment. They went the extra mile and justified their
initiative by achieving lower operating expenses and greater strategic benefits, such as a
lower carbon footprint.
 INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE
IIM KOZHIKODE CAMPUS, P.O, KOZHIKODE-673570
PROGRAMMES OFFICE
o ITC Hotels’ Food and beverage department’s committed to locally source more than 40
per cent of food ingredients. This largely reduced the hotel’s carbon footprint and also
ensured freshness of ingredients while promoting local livelihoods.
 Food that was less sustainable to source was highlighted in the menu to create
customer awareness
 Average distance to source food ingredients came down from 120-150km to 80–
100 kilometres, impacting reduced carbon footprint and energy needs.
 Local sourcing was tied into the Food Sherpa experience that ITC Hotels
provided, in which guests were invited on a tour of fine and exotic local cuisine
and food markets.
o To promote sustainable operations across the sector, Anand invited both peers and rivals
to visit ITC Hotels and attend its green tour.
 CSR Initiatives
o Greening - ITC Rajputana property supplied seedlings and saplings to employees and
neighbouring communities as part of a tree planting initiative
o Blood Donation - The company’s Welcomhotel Grand Bay organized a children’s day
blood donation camp.
o Education and Training - At the Chhindwara ITC Culinary Skills Training Centre, ITC
Hotels staff trained youth from neighbouring villages. Graduates of the centre found
employment with reputed restaurants and hotels, and some started their own ventures.
 Tried to elicit sustainability consciousness among its own customers through discreet signage and
offered the option of a green tour to observe and appreciate the company’s ecological initiatives.
 Their concept of responsible luxury went beyond environmental sustainability with their recently
redesigned sleep experience, which focused beyond the beds to create an entire sensory
environment that was conducive to deep sleep. Their extent of R&D goes to owning a sleep
laboratory.

SDG

GOAL 1: No Poverty
GOAL 2: Zero Hunger
GOAL 3: Good Health and Well-being
GOAL 4: Quality Education
GOAL 5: Gender Equality
GOAL 6: Clean Water and Sanitation
GOAL 7: Affordable and Clean Energy
GOAL 8: Decent Work and Economic Growth
GOAL 9: Industry, Innovation and Infrastructure
GOAL 10: Reduced Inequality
GOAL 11: Sustainable Cities and Communities
GOAL 12: Responsible Consumption and Production
GOAL 13: Climate Action
GOAL 14: Life Below Water
GOAL 15: Life on Land
GOAL 16: Peace and Justice Strong Institutions
GOAL 17: Partnerships to achieve the Goal
 INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE
IIM KOZHIKODE CAMPUS, P.O, KOZHIKODE-673570
PROGRAMMES OFFICE
b) Categorize each activity identified above, as per the four quadrants/categories conceptualized
in the framework given in Fig.1 (see next page). Explain your logic briefly (15 marks)
High CSR
- Certain initiatives such as reducing heat gain
through glazed windows, integrating flow
restrictors to reduce water consumption, use of
sustainable wood in furniture have high
sustainability footprint, given the scale of ITC
hotels. However don’t necessarily translate to a
profit formula.
- Nakul Anand inviting peers and rivals to visit ITC
Hotels and attend its green tour will illicit these
competitors to further their sustainability plans,
increasing social impact at scale.
Low Philanthropy
- Blood Donation - The company’s Welcomhotel
Grand Bay organized a children’s day blood
donation camp.
Low
Shared Value
- Water and carbon positivity – reaffirms investor
confidence and has high social impact, also
pushes other competitors to achieve the same
- Embedding sustainability in operations through
extensive recycled water usage and solar-
powered thermal systems directly reduce cost of
materials and energy related costs.
- Locally sourcing ingredients largely reduces the
hotel’s carbon footprint in transportation and
promotes local livelihoods, thus high Social
Impact. But at the same time, they are
minimizing transportation costs and offering
fresh food to customers, which is a differentiator
to grocery that stays in cold storage for days.
- ITC Hotels staff training youth from
neighbouring villages ensures human and
community wellness and also spreads positive
brand image amongst the community.
Business as usual
- Discreet signage and offering green tour to
observe and appreciate the company’s ecological
initiatives is a direct marketing imperative to
showcase environment-first approach
- Redesigning holistic sleep experience targets
human wellness with a low social impact and is a
first of its kind customer-centric initiative – plays
as a differentiator. The leadership strongly
emphasis how their primary offering is luxurious
sleep and everything else is business.
- Greening initiative by ITC Rajputana which
supplies seedlings and saplings to employees and
neighbouring communities creates social
awareness amongst key stakeholders in the value-
chain and increases trust
High
 INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE
IIM KOZHIKODE CAMPUS, P.O, KOZHIKODE-673570
PROGRAMMES OFFICE

2. Does ITC Hotels have a competitive advantage? Analyse from a sustainability

perspective.

ITC was one of the earliest in the Indian hospitality business to pursue sustainability with
its multi-faceted initiatives targeting seamless integration, value and social impact. As
one can see, in the above matrix many of their initiatives fall in the Shared value
category, with high business and social impact. Some of the key competitive advantages
in sustainability include –
o Securing platinum level certification for leadership in energy and environmental
design for its premium luxury hotels. This has enabled them claim to be the
Greenest Luxury Hotel Chain in the World, which can be an integral part of their
marketing campaign.
o ITC Hotels was an active member of both the Federation of Hotels and
Restaurants of India and the Hotel Association of India who produce relevant
research, organize networking events, and promoted India as a travel destination.
This positive association can go a long way to communicate and message the
public about ITC Hotels’ green initiatives and enhance brand image.
o ITC hotels, under the leadership of Nakul Anand is pioneering sustainability at
the Indian hospitality forefront by organizing a cross-industry organization called
Federation of Associations in Indian Tourism & Hospitality. This was born to
enhance cooperation across entities in the business and also promote sustainable
operations across the sector. Here Anand and his vision are both advantages. He
further invited peers and rivals to visit ITC Hotels and attend its green tour,
benchmarking the original standards.
o They have an early start to integrating sustainability in operations at a largescale,
once they are able to crack the potential here, they will not only be able to reduce
costs, such as in the case of bottled glass water project to reduce costs by ~40%,
but also be far ahead of competitors. This is purely because processes differ hotel
to hotel and imitating operations is extremely complex. Their ongoing
integrations haven’t yet placed them at the top of revenue for operations, however
come second only to Taj. (Exhibit 1)
o Apart from core capabilities required to generate superior value for the consumer,
in most areas of their size plays a significant role, they own the highest number of
rooms as denoted in exhibit 1.
 INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE
IIM KOZHIKODE CAMPUS, P.O, KOZHIKODE-673570
PROGRAMMES OFFICE

(8 marks)

3. How can ITC Hotels enhance its positioning of responsible luxury to create or sustain its
competitive advantage? Propose and justify two recommendations on the way forward. (9
marks)

Both plastics and air pollution are pressing environmental concerns.

Enhance various ongoing Expand the company’s

responsible environment
operations
Pros - Common consensus amongst leadership
that they are in the business of selling
sleep, and everything else is business and
secondary ( Exhibit 2). Enhancing various
ongoing initiatives will help them stay
close to their core business operations,
while maintaining competitive
sustainable advantage.
- transform the situation.
INHALE pilot program
- With Delhi’s pollution peaking and
India being home to 14 of the 20 cities
with highest pollution levels in the
world, the scale of the problem they
are targeting and may get recognized
for is massive.
- They can pioneer in this space and
work alongside the government to
- ITC’s innovation in this space could
expand beyond the visitors to the
mass
- Here there technology could be
installed in open spaces and
community gathering places such as
malls to increase human wellness but
also as a marketing initiative

(Out of scope - In the light of the

upcoming covid pandemic,
favourable)
Cons - Although these initiatives are key, - Expensive
compared to Inhale program, they lack a - Directing majority resources towards
certain tangibility that could be one goal is risky and may or may not
promoted. pay off.
 INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE
IIM KOZHIKODE CAMPUS, P.O, KOZHIKODE-673570
PROGRAMMES OFFICE

Recommendations

1. ITC needs to pursue their ongoing testings for redesigned luxury sleep
experience with complete might. This is a core element of their business and
when integrated with their business can introduce the prospect of a winner
take it all market due to the rarity, inimitability, value and sustainability. The
inhale program can complement this by reducing air pollution within the
hotel premises, but also go beyond.
2. They need to first attain operational efficiency with sustainability and then
launch the inhale program at large scale. Operation efficiency will enable a
profitable revenue stream to further support R&D in this space. A hybrid
approach needs to be followed between 1st and 2nd options, where initially
the focus should be more on alternative 1, replace plastic usage, build
luxurious sleep value proposition and achieve operational revenue. Followed
by increasing r&d in inhale and launching it in pilot cities.