IIM Case Study

In the morning of July 10, 1999, a team from the Ministry of Tourism, Government of India, visited The Park, a five-star hotel in Calcutta, to consider its application for upgrading its categorization from "Five Star" to "Five Star Deluxe". The team inspected the hotel's decor, standards of service, rooms, systems and overall arrangements. In the afternoon came the verdict, not entirely unexpected: "Approved." The hotel staff went into a mood of great celebration.

The approval gave the hotel a greater recognition and status, enabled it to attract higher-class clientele and move closer to the classy image of its competitors, Taj Bengal and Oberoi. The recategorization was another feather in the cap for the hotel, coming after its selection in May 1998 as a member of the Small Luxury Hotels of the World. The top management of the hotel sought such recognition to strengthen the direction of its efforts to reposition the hotel as a "boutique hotel"2 and change its image from a "comfortable and affordable hotel mainly for Public Sector executives and budget travellers" to "a classy and trendy hotel" conveying an image of youth, vitality and a place where "things happen". The management had articulated for the hotel a mission that highlighted premium status, global standards and service excellence as its key elements. It had also taken a number of steps to translate its "boutique" concept into practice.

Though the management of the hotel was very happy with the recognition as a Five Star Deluxe hotel, it did not want to rest on its laurels. It was aware that still much remained to be done. It was not sure to what extent the boutique concept was implemented and understood by its customers and employees. The scenario for the hotel industry in Calcutta was not very attractive, but the competition was increasing. Hence it wanted to assess the competitiveness of the hotel in the changed competitive scenario of Calcutta, develop a competitive strategy and think through the problems in implementing it.