Holiday Inns Development (HID)
Dave Collins, President of Holiday Inns Development (HID), sits down at the conference table with his management team members, Karen Seitz, Tony Briggs, Dave King, and Art Johnson. H.I.D. owns ten Holiday Inns in Georgia, eight hotels of different types in Canada, and one property in the Caribbean. It also owns two Quality Inns in Georgia. Dave Collins and his managers have assembled to define their mission, goals, and objectives and to set strategic plans. As they begin their strategic planning session, the consultant they have hired suggests that each describe what he or she wants for the company’s domestic operations in the next ten years—how many hotels it should own, where to locate them, and who the target market might be. Another question he has asked them to consider is what the driving force of the company should be; that is, the single characteristic that will separate H.I.D. from its competition.
The team members have written their answers on flipcharts, and the consultant has summarized the results. Dave Collins’ goal includes 50 hotels in ten years, with the number increasing to 26 or 27 in five years. All the other members see no more than 20 hotels in ten years and a maximum of 15 or 16 within five years. Clearly, there is disagreement among the top managers about long-term goals and desirable growth rates.
With the consultant’s direction, the team members begin to critique their growth objectives. Dave King, Director of Operations and Development, observes, “We just can’t build that many hotels in that time period, certainly not given our current staffing or any reasonable staffing we could afford. I don’t see how we could achieve that goal.” Art Johnson, Director of Accounting and Finance, agrees. Karen Seitz then asks, “Could we build them all in Georgia? You know we’ve centered on the medium-priced hotel in smaller towns. Do we need to move to bigger towns now, such as Jacksonville, or add another to the one we have in Atlanta?” Dave Collins responds, “We have an opportunity out in California, we may have one in New Jersey, and we are looking at the possibility of going to Jacksonville.”
The consultant next attempts to refocus the discussion. “Well, how does this all fit with your mission? Where are you willing to locate geographically? Most of your operation is in Georgia? Can you adequately support a national building effort?”
Tony Briggs responds, “Well, you know we have always looked at the smaller-town hotels as being our niche, although we deviated from that for the hotel in Atlanta. However, we generally stay in smaller towns where we don’t have much competition. Now we are talking about an expensive hotel in California.”
Dave Collins suggests, “Maybe its time we changed our target market, changed our pricing strategy, and go for larger hotels in urban areas across the whole country. Maybe we need to change a lot of factors about our company.”
1. What is H.I.D’s mission at the present time? How may this mission change?
2. Which decision-making model is the group employing presently? Is it the appropriate model for making the decisions that the group is contemplating; if not, which decision-making model should it be using?
3. As the consultant to HID, how would you apply the strategic management process to the specific facts of HID's situation to help its management team develop a strategic plan? Which key elements of the strategic management process does HID seem to be missing?
4. What do you think H.I.D’s mission, strategic goals, and strategic plans should be at the end of the planning session? Why?