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Exercises – Operations Strategy

Exercise 1: Rede Valentin

Your first assignment as an internal consultant to one of the largest global consulting firms is to work on the operations strategy of a hotel chain operating in the Brazilian northeast called Rede Valentin. The hotels of the network operate in three different capitals, namely: Natal, Fortaleza and Recife. All hotels work with the "all inclusive" system (drinks and food are already included in the package price). The main public of the network is composed by families who spend an average of seven to eight days hosted. The company works with a strong partnership with a major national tourism operator.

[pic 1]

To start your project, the hotel chain has already made available for you two surveys carried out by its own executives. The first report takes into account the factors that customers value most, and the second the performance of some competitors, as shown in the following data.

    Research A: factors raised with Hotel Customers

Attribute

Natal

Fortaleza

Recife

Price

9

8

10

Menu variability

1

3

2

Service speed

6

6

5

Entertaiment options

9

9

8

Room quality and comfort

4

5

5

     Valuation scale ranges from 1 to 10. (1- Less important; 10- Most important)

Research B: Benchmarking with other networks than currently operate in the Northeast

Attribute

Valentim

X1

X2

X3

X4

X5

X6

X7

Price

Bad

Terrible

Terrible

Excellent

Excellent

Terrible

Excellent

Terrible

Menu variability

Regular

Excellent

Good

Excellent

Excellent

Good

Excellent

Bad

Service speed

Terrible

Good

Good

Good

Excellent

Good

Regular

Bad

Entertainment options

Excellent

Terrible

Terrible

Regular

Regular

Terrible

Regular

Bad

Room quality

Good

Good

Excellent

Terrible

Terrible

Excellent

Terrible

Excellent

Public

Families

Couples and Families

Couples

Families

Families

Couples

Families

LGBT

All inclusive?

Yes

No

Yes

yes

yes

yes

yes

No

Based on that information, please answer the following questions:

a) What are the order winning criteria? Why?

b) Prepare the relevance and performance matrix for this case.

[pic 2]

c) The executives of the network elaborated a plan of sequenced actions as shown in the table below. These actions are already approved with the Board of the company. Is the sequence correct? Why?

Action

Impact

US$

1

Implement HVAC system into all rooms

Improve customer comfort

1,000,000

2

Install artificial waves system into pool

Artificial surf as an entertainment option

3,000,000

3

Open new thematic restaurants

Increase menu variability

$ 500,000

4

New partnerships with axe singers

Native experience and entertainment for customers

$ 300,000

5

Install new television system into all rooms

Improve quality and variability of TV shows into the room

$ 700,000

6

Advance marketing approach with tourism agencies

Optimize and reduce price of one week stay into the hotel

$ 340,000

7

Employee training – new management system and standardization of time and service

Reduce errors and speed up service time

$ 200,000

...

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