ANALYSIS OF OPERATING ENVIRONMENT AND COMPETITION

Submitted By: Ashish Jain (71059) Submitted to: Prof. Freda J Swaminathan Gaurav Singh (71064) Nishith Kejriwal (71078) Saurabh Jain (71089) Sumit Mathur (71096)

HOTEL

1

July 30, 2007

business facilities. each restaurant is reflective of that tradition. Bhutan. The Taj Group For more than 100 years. beautiful beaches. setting benchmarks for an outstanding culinary experience. and gracing important industrial towns and cities. HOTEL 2 July 30.tata. India's premier business house. Over the years. and Californian cuisine into the country. 1903. interiors. Thai. and the Middle East. historical and pilgrim centres.and a legendary experience in hospitality. Mumbai. Taj has won international acclaim for its quality hotels and its excellence in dining. We are concentrating on the leader Indian Hotel industry ie. and world-class.com. Malaysia. USA. The Taj Group.Introduction of the Industry A hotel is an establishment that provides paid lodging usually on a short-term basis. Taj is recognized as the premier hospitality provider. Taj was the first to introduce Sichuan. Taj Hotels Resorts and Palaces comprises 57 hotels in 40 locations across India with an additional 18 international hotels in the Maldives. It began on December 16. a swimming pool or childcare. Hotels often provide a number of additional guest services such as a restaurant. Mauritius. Mexican. it was the first to open a 24-hour coffee shop in India at Taj Mahal Palace & Tower. the Taj Mahal Palace & Tower in Mumbai. spanning the length and breadth of the country. UK. Sri Lanka. Italian.In India. This grand hotel epitomized a philosophy that still holds true today: provide impeccable service and unparalleled facilities so every stay is a memorable one. Africa. A part of the Tata Group of companies www. An innovator in dining. Australia. personalized service. Today. Some hotels have conference services and meeting rooms and encourage groups to hold conventions and meetings at their location. when Jamshetji Nusserwanji Tata opened Taj’s first hotel. In 1972. and wildlife destinations. The Taj Group has acquainted guests with the living heritage of India . 2007 .

began during HOTEL 3 July 30. Demographic Environment: Population. Foreign tourists and High segment families. Target consumers of “Taj Hotel” are Business Class. a) Elements of macro-environment from a marketer’s perspective (of a leader “Tha Taj Group”) Suppliers Public Macr oEnv iron ment Market Intermediaries Competitors Customers A marketer must pay attention to the interaction of these environmental forces. The Taj group gives a regional touch in the area of its operation by providing regional theme including the hotel environment. The majority of the young IT professionals spend their leisure time by visiting exclusive hotels and resorts. Because of the cultural diversity and regional differences The Taj Group continuously conducts research on consumer behavior. Globalisation. 2007 . Economic Environment: India’s economy has been showing vibrancy and growth from 1991 ever since the government initiated programs to ease government controls on industry and commerce. like most important matters. Socio-cultural Environment: India is a complex nation of cultures and sub-cultures. We are analysing the operating environment and competition for the service “HOTEL”. successful companies recognize and respond profitably to unmet needs and trends. India is a young nation with its median population being 25 years. food etc.Analysis of Operating Environment In order to analyze the operating environment. This generates considerable amount of revenue for the hotels. population-age mix and literacy levels of population come under this category. The Taj being one of them. costumes of waiters.

circuit tourists and high-end domestic travelers with fascinating ‘Wildlife Experiences’ within India. Taj spa at Fort Aguara beach resort and Taj holiday village offers guests a space to de-stress and relax. their likes and dislikes. As per the rule a certain percentage of total hotel premises is devoted to greenery. which helps them to follow their guests' needs over a lifetime. With the world at his feet and a world of information at his fingertips . Government policies: The Taj is of the view that the Government's imposition of different taxes and irrational treatment of low star hotels are of great concern.They believe that personalisation and customisation of each guest's needs. Political and legal Environment: This environment deals with the increase in business legislation and the growth of special interest group. anywhere in the world. with an ecologically sustainable model. The high rocketing price of HOTEL 4 July 30. They feel that the Government should come out with a strong suggestion and open agenda that should be something that the hotelier can rely upon. All treatments have been designed to guide guests in their internal and external journey towards a balance of the physical and metaphysical being. to provide wildlife enthusiast. is something that Taj has to constantly focus on. Taj pays high tax to the government. 2007 . Natural Environment: The deterioration of the natural environment is a major global concern. Technology Environment: The hotel guest of the future will be far savvier and discerning. Taj hotel and resort palaces has entered into a joint venture with Conservation Corporation Africa (CC Africa) and Cigen Corporation. This means that the challenge for hotels to sustain connections with guests will only increase. the focus is increasingly on revving up the product and the service.this period.he will choose to stay at a hotel chain that remembers his preferences and delivers an inimitable experience every time. Protection of consumer’s interest is the first priority of the hotel. Luxury hotels in India constitute over 70 per cent of the company’s profits and attract international guests. The Taj group is trying to address this through their guest tracking system. part of the Chaudhary Group.

in which there is no justification of higher prices. More and more tourists are coming to India and this has resulted in huge business for the hotels. both occupancy and average room rates have improved. The Taj believes that the present auctioning of hotel sites at an unreasonable price by the Delhi Development Authority (DDA) has also created a lot of hurdles. The clientele base of the Taj hotels can be broadly divided into the following categories: o Foreign tourists o Corporate World o HOTEL Upper Middle Class Families 5 July 30. The government should try to nationalize and make its taxation norms more convenient. Most cities saw occupancy levels improve over the previous year and. The stimulus for the ever increasing demand for the more number of hotel rooms is the growth in the economy and the spurt in the tourism. The Taj Group of Hotels is also cashing on this trend and is opening its hotels and resorts in different cities of the country and also outside the country. • Consumer: The hotel industry has a very wide spectrum of consumers which has led to an exponential growth in the hotel industry. b) Opportunities for Taj Group: • Market Demand: The year 2006-2007 saw a continuation of growth momentum experienced by the hotel industry in 2005-2006. 2007 . the growth rates for the important 19 hotel markets have been above 10% and are tipped to touch 14% this fiscal year. consecutively for two years.taxations has unnecessarily caused/created great worry to the tourists and travelers. According to HISCA. which made them ultimately opt for other destinations.

2007 . this has resulted in tremendous growth for the Taj group of Hotels. This has also generated huge revenues for the Taj Group of Hotels. people are willing to spend more money. It has already established its chain in America and Britain and is venturing into other countries as well. The various commodities which are required by the hotel are as following: o Apparels and clothing o Furniture and other accessories o Automobiles o Raw food materials The Taj group of hotels have outsourced these activities to other firms under strict contracts of superior services to the customer. Also with the high economic development of the country. The I. This also adds the growth of the Taj hotel chain. Also the corporate world is regularly organizing international conferences which are organised in hotels like the Taj. All these items are crucial for the growth of the hotel industry. Being the industry leader Taj can acquire other hotels which can increase its market share in the industry. c) Elements of the microenvironment: HOTEL 6 July 30.T boom has resulted in the economic surge of the middle class. India has emerged as the new hottest tourist destination and with more and more tourists coming to the country. Also Taj is expanding its market by opening its hotel outside the country.These consumer segments constitute the core business of the Taj Group of hotels. • Supplier Related Factors: The Taj group of Hotels has also made extensive changes to improve its supply chain. • Industry: The growth of the Taj group of Hotels can be further catapulted through mergers and acquisitions. The Taj group has to fulfil its superior quality standards and therefore take care of all these basic needs of the hotel. as a result more and more people are spending on leisure activities.

curry paste.Employee Consumer Elements of Micro Environm ent Competitors Distributers Suppliers d) Inferences of the environment: • Competitors: Welcom Heritage Group. Marriott and Hilton are aggressively looking for a share of the action in India. HOTEL 7 July 30. Prakash & Company deals in quality food products such as sweet corn kernal. Curtains. Due to rise in tourism. canned fruit & juices. Trident Group. Foreign Tourists. Upper Middle class Families. Emaar MGF-Whitbread JV etc. 2007 . Cushion & Cushion Covers. • Suppliers: MRM Export provides a wide range of Bed Sheets. baby corn. emergence of new tourist destinations. instant cup noodles. Sarovar Park Plaza Group. Blackstone. • Customers: Business Class Corporates. Berggruen Hotels. Calif Engineering Pvt. Mansingh Group. Oberoi Hotels & Resorts. coconut milk & cream. Thai sauce. etc. Business Pages India Provides all India guide services by directory of exporters. HRH Group of Hotels are the main Indian players that compete Taj Group. ITC Welcom Group. are the main consumers of taj Groups. etc. Ltd. and technological upgradations with the emergence of new breed of tech-savvy travelers make it imperative for many global ventures to come to Indian Market like Dubai Ventures. importers and service providers. Jaypee Group.

Meridien. Dallas-based Pegasus Solutions is a global leader in providing technology and services to hotels and travel distributors. Foreign Tourists. TPP considered every aspect of employees' organizational career planning. the Taj Group developed the 'Taj People Philosophy' (TPP). Tulleeho is India's only marketing consultancy and services firm for the alcoholic beverages industry and has a service contract with the Taj group of Hotels. Leela Ventures. right from their induction into the company till their superannuation. to show its commitment to and belief in employees. They also have partnerships with NGOs like Katha Khazaana and Akshay Pratishthan which is meant to improve the baking and catering skills of women. has a service agreement with Taj Hotels Resorts and Palaces.Heritage Group. etc.Le Meridian. travel and tourism industry. Marriot & Hilton. ITC Group. e) Prediction on the future trends: The hotel industry very much depends on the country’s hospitality sector i. Upper Middle class Families. Substitute Cruise Tourism. Radisson. which covered all the people practices of the group. etc. Hyatt Group. Suppliers: Prakash & Company. Hyatt. Many international hotels including Sheraton.Berggruen Hotels. In 2000. Buyers: Business Class Corporates.• Distributors: Pegasus Solutions. Allwar Enterpises. Tour Organizers. Potter’s Five Forces model for ‘Taj Group’ Potential Entrants: Blackstone.Dubai Ventures. Industry Competitors: Oberoi Group. Royal & luxury Trains. etc. etc. Rashy Buying Services. Hospitality Sector is expected to grow at the rate of 8% between 2007 and 2016.e. etc. Four HOTEL 8 July 30. Domotex International. 2007 . Inc. • Employee: The Taj Group had always believed that their employees were their greatest assets and the very reason for the survival of their business.

business people may be dissuaded from travelling to India.0%. If the logistics of travel itself are troublesome. With a booming IT sector. Haryana and Uttar Pradesh having ear-marked 75 potential NCR sites for hotel development.9% respectively.4 millions tourists' arrival in the country last year. The Capital has also witnessed 32. the surrounding services need to be improved. three Starwood (the 300-room Westin New Delhi. and Marriott International are already established in the Indian markets and are still expanding. With 4. new developments in the National Capital Region (NCR including Delhi and its suburban conurbations of Gurgaon and Noida) are set to include a 320-room Novotel. 2007 . Thus India’s economy needs to continue its boom and the government continue to invest in the country’s infrastructure. This figure is expected to grow further in the coming years. up from number nine in 2003. Between now and the Games.1 per cent growth in tourists' arrival in the last year.0% and 2. Chennai and Kolkata have shown a growth of 25. The Readers Travels Awards 2006' has placed India at number four among the world’s must see countries. The public sector is also playing a role with the state governments of Delhi. the industry has been seeing unprecedented growth with an average of 15 per cent every year. 10. a 200-room Taj Hotel. However justification of such high average room rates can be found only in world-class facilities and back-up services for the business traveller. As India’s cities attract increasing numbers of visitors. India is ideally placed to thrive in the 21st century. The cities of Mumbai. However it’s also predicted that the forthcoming Commonwealth Games in 2010 will create a demand of 25000-30000 rooms in NCR against the present capacity of only 15000 rooms. HOTEL 9 July 30.Seasons Regent. the 97-room Westin Sohna-Gurgaon and the 220-room Sheraton New Delhi) and a 319-room Leela-Kempinski joint venture.

Likely changes: 1. it is likely that the market environment will be undergoing a drastic change in the near future. mini-bars. All modern amenities like fax. 2007 . Shopping malls 8. Increasing competition between hotels of the same cateogary 2. Spa with elements of yoga. Multi-cuisine restaurants in single hotels 2. 5. multimedia workstation with internet and secretarial services 7.f) Changes in Marketing Environment and Impact on the industry: With the increasing competition and globalization. Intensive brand creation campaigns to increase market share 9. Low star hotels won’t be able to withstand the increasing competition HOTEL 10 July 30. Golf-course inside the hotels 6. direct dial telephones and additional outlets for fax/modem. meditation and ayurveda to relax and rejuvenate guests Impact: 1. Real time downloading of international newspapers in its original format 4. Wireless Internet connectivity 3. photocopier. Conference rooms equipped with electronic safes.

3. Competitive Behavior: Competitor Map for ‘Taj Group’ Cruise Tourism Le Meridian Business Tour Organizers Marriot & Hilton Luxury Price ITC Group Taj Group Touris m Heritage Group Culture Royal & Luxury Trains eg. 4. Foreign hotels coming in to India: Big international names with more financial clout and global reach like the Four Seasons. Marriott and Hilton are aggressively looking for a share of the action in India. Palace on Wheels Oberoi Group HOTEL 11 July 30. Attrition: The growing travel and tourism industry. foreign hotels coming in to India and the demand from IT companies will put a tremendous pressure on staff retention. 2007 .

2007 . Along with this it has also fulfilled its social responsibilities which are its core values. India’s booming economy is continuously contributing to the Hotel Industry. So. There is a bright future for the hotel industry in India because of the following factors: • Improving infrastructure and Growing IT sector Booming Economy Visa on arrival for the foreign traveler Modernization of airports and construction of international airports in major towns Encouragement of public private partnership Encouraging associations of trade by involving private sector in decision making • • • • • The inference is growth of hotel industry is directly dependent on the economic growth of the country. It has taken us approximately 11 years to reach or exceed the previous occupancy highs seen in the mid nineties. and China. Inferences and Conceptualisation India's hospitality sector has grown in an unprecedented manner during the last few years if not decades.Conclusion The Taj Group of Hotels is the leader in the hospitality industry with a market share of 40% and has been providing excellent services to its consumers. This mix of capital and social culture has catapulted the Taj Group of Hotels to become the leader in the industry. Executive Summery Observation. The Taj group will continue to work on its global expansion strategy. and has become one of the fastest and leading global players.tata. References: HOTEL http://www. which may see it acquiring properties in the gateway cities of Europe.com/indian_hotels/ 12 July 30. This has been the result of a strong performance of the corporate sector in the country and largely a sense of sanguinity with regard to economy. India is today one of the world's fastest growing hotel markets. North America.

2007 .com/tajhotels/taj_index.http://www.india-chainhotels.com/ http://www.htm HOTEL 13 July 30.travelmasti.

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