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CASE STUDY On HOTEL LAKE PARADISE: ROADBLOCKS TO SUCCESS

Subject: Strategic Formulation Submitted to: Prof R. Patnaik

Submitted by: Section F: Group No. 9 Members: Vinayak Goldar( 2012368) Vineet Nagar(2012369) Vipin Goel(2012370) Vishakha Sugand( 2012371) Vishal Golchha (2012372) Vishal Moonka (2012373)

Batch: 2012-14

HOTEL LAKE PARADISE: ROADBLOCKS TO SUCCESS

About Manali (India) Manali at an altitude of 2,050 m (6,726 ft) in the Beas River Valley is a hill station nestled in the mountains of the Indian state of Himachal Pradesh. It is located about 270 km (168 mi) north of the state capital, Shimla. Manali is primary attraction for the tourists who want to visit the Himalayas. Rohtang Pass is very much popular among tourists. Kullu River nearby also offers opportunities for rafting. The climate in Manali is predominantly cold during winters and moderately cool during summers. Tourism in Manali The landscape here is breath taking. One sees well-defined snow capped peaks, the Beas River with its clear water meanders through the town. On the other side are deodar and pine trees, tiny fields and fruit orchards. It is an excellent place for a holiday, a favourite resort for trekkers to Lahaul, Spiti, Bara Bhangal (Kangra), and Zanskar ranges. From temples to antiquity, to picturesque sight-seeing spots and adventure activities, Manali is a popular resort for all seasons and for all travellers. Introduction of hotel Hotel Lake Paradise, Manali is a 4 star hotel located on the mountain top of Manali. It was founded in the year 2002 by VP Chain of hotels. Mr. S. Chandra, chairman VP chain, along with his two brothers founded this hotel which was a dream project of his younger brother Mr. R. Chandra. Located in the picturesque valley of Manali, Lake Paradise always had huge footfalls coming its way. Lake paradise was the first choice of tourists coming from all over India and abroad. Its an ideal place for rejuvenating for your mind, body and soul from the stress. Hotel lake paradise has following facilities: AC/Non AC Rooms & Suites Restaurant Garden Areas Swimming Pool

Vision, mission & values Vision To Sustain hotel Lake Paradise as one of Manalis most respected hotel through world class ambience, creating growing value for Manalis tourism industry and the hotels stake holders. Mission To enhance profitable hospitality services in globalizing environment, developing superior and sustainable stakeholder value. Values Hotel Lake Paradises core values are aimed at creating a customer focused high performance hospitality service which adds value to all its stake holders. Section F: Group 9 Page 1

Customer focus We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction. Excellence Doing the right things at the right time is our mantra. We shall strive for excellence under any circumstances. Innovation We shall continuously improve and upgrade our processes, services and management practices in order to deliver the best value to our customers.

Management speaks MANALI is a hill station Four thousand five hundred feet above sea level, enveloped amidst lush green hills, strawberry farms and panoramic valleys is an one hundred and fifty square kilometres plateau. For Recreation of the body we have Manali's best designed swimming pool for you to take a plunge and work up an appetite. The Jacuzzi is also there to replenish your body with a new vigour. The children too can splash in their pool. Enjoy a game of carom board, chess or a set of table tennis at our recreation centre. A cluster of cottages set amidst 3 acres with swaying trees and soft lush green lawns with an unmatched landscape designed by famous experts of horticulture. Each room be it BUDGET or EXECUTIVE (a/c or Non-a/c) have been designed keeping you in mind. Every room would give you that homely feeling with a touch of modernity which is necessary in today's hi-tech world. The management of Hotel Lake paradise believes in the traditional mantra of Athithee Devo Bhava (The guest is an incarnation of god) and we take immense pleasure in providing the best cuisines be it Gujarati, Punjabi, Chinese, Italian, Mexican or Bambaiyaa (chaat, pav-bhaji,etc) Other facilities for local sight-seeing and sports activities are available for the customers. The WOW TIMES of Hotel Lake Paradise.. The strategic location of it being just half a kilometre away from the mall road of Manali has made it favourable for the tourists as tourists prefer to be near the market place so that there is ease of going around the local areas of the region. At the same time its serenity welcomes people who are there just for relaxation. Cost advantages which the firm enjoys is one of the major strength of the Hotel Lake Paradise, beside that being a well established hotel in that region they already have a good customer base. Hotel Lake Paradise also provides excellent customer service as Mr. S Chandra and Mr. R Chandra have had an experience of 10 years in service industry both in India as well as abroad. This has given them the knowledge to give customers cutting edge service in the competitive industry. This is also observed by having repeat customers and customers through references. The management also maintains a good relationship with the local tourist guides and travel agents which results in enlarging the customer base for the hotel as there are many customers who reach at their destination and then look for hotels around. Hence good relation with local tourist guides has enabled them to get customers to their hotel. Section F: Group 9 Page 2

They are well aware about the local conditions, so are able to provide the best possible service in that region. The Hotel enjoys very good infrastructure facilities which help them in managing operations even during any extreme situation, considering the altitude at which it is located. The WOE TIMES of Hotel Lake Paradise.. On the other hand the hotel suffers from a few hindrances which are costing them a lot at the moment. Some problems did exist from a long time but the management failed to recognise, understand and thus solve. Firstly, Uttrakhand floods of June, 2012 leaving behind trails of death and destruction of local people as well as tourists has created as fear in minds of tourists with respect to all hill stations. Hence, the number of tourists was less at all the hill stations during Diwali and Christmas of 2012 as well has vacation period of 2013. This is a problem not only for Hotel Lake Paradise but all Hotels in Manali. If we look at internal factors, one of the main problems is the online booking system which is not available. When Hotel Lake Paradise was established in 2002, in India people did not prefer to book hotel rooms online hence they had not paid attention to that aspect but ignoring it till date has affected their occupancy ratio by 20%, the number of foreign tourists staying in their hotel is less compared to other hotels in the same category. The number of Indian tourists looking for and booking hotels online has also increased in the past 4 years. Also, there have not been any major upgradations from its inception so the newer hotels are coming up with better infrastructure and modern interior for rooms. The area surrounding the hotel was very beautiful. On the other side of the road facing the entrance was the river Beas. In the backside of the hotel at the distance was a lake surrounded by the mountains adding to the look of the hotel, but the land right behind the hotel is now purchased by someone who has created a mess in that place. It is being used as a dumping ground, this is creating unhealthy situation for Hotel Lake View. SURVIVAL STRATEGIES In the wake of dismal internal and external conditions, Hotel lake paradise needs a magic wand to undo all problems. Resting on its past laurels no more seems a way out for this hotel which is on quicksand only to keep sinking unless the foundation is solidified. One cannot gainsay the fact that Hotel lake paradise enjoyed virtual monopoly in initial years of formation. However non-adaptability to change became one of the major internal reasons for its woe times. Internal problems to a large extent can be solved if the hotel makes itself abreast with the latest technology. Quick response to the problem of pesticide infected food was probably the only silver lining for this hotel which otherwise is palled by dark clouds. External problems are unique in the sense that majority of the times one has no control over it. Entrapped by the recency effect of Uttarakhand natural disaster, people have developed a forbia for hill stations. Such mental state is not within the control of management. However, the hotel industry can join hands with the tourism department of Himachal Pradesh and try to promote the tourist places by focusing on safety and other critical issues. The shabby constructions in the vicinity which pulls crowd away from the hotel can be dealt with in a legalised manner preceded by friendly persuasion. The competitors have only gained ground as Hotel lake paradise has given them a chance to outdo itself. Proper check of its loopholes can put the hotel back on track and shoo competition away. Proper check involves the process of Business process Reengineering and a thorough follow of Kaizen- continuous improvement.

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EXHIBITS

Exhibit.1 SWOT Analysis of Hotel Lake Paradise Strengths Cost Advantages Good customer base Awareness among local people Good relationship with tourist guides and travel agents. Loyal customers Market share leadership Well awareness about local situations Good infrastructure facilities Opportunities Acquisitions Set up tracking camps Asset leverage Financial markets (raise money through debt, etc) Innovation Online booking facility Product and services expansion

Weaknesses Bad communication Diseconomies to scale Limited online presence Not innovative Not diversified

Threats Competition Economic slowdown External changes (Climate, politics, taxes, etc) Exchange rate fluctuations Lower cost competitors or imports Maturing categories, products, or services Price wars. Unhygienic conditions for keeping food fresh.

Exhibit.2 12 years profit scenario

BOTTOMLINE(FIG. IN LACS)
50 45 40 35 30 25 20 15 10 5 0 1 2 3 4 5 6 7 8 9 10 11 12

BOTTOMLINE(LACS)

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Exhibit.3

Hotels front view Exhibit.4 Organisational Chart

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