Name: Asif Ahmed Shah

MS 3rd semester

Roll no. MS320132008

Strategic Management
Case Study: ROARING DRAGON HOTEL
Approximately the two hours class discussion about roaring dragon hotel (RDH) was very useful
and helpful to understand the importance of strategic management, because after discussing the
case of RDH, everyone in class agreed with full consensus that without proper strategic planning
even well established business can face failure in long run. For instance, RDH was region
premium and well reputed government owned hotel in china, the employee of RDH felt proud
and was admired by their friends and relatives, their salaries, working environment and other
benefits was highly appreciable and satisfactory and desirable. But with the passage of time the
popularity and income of RDH was decreasing due to ignorance of strategic planning and
management.
As Provincial government of China when realized that the current management of RDH was not
performing well and resulted in lower income, they decided in year 2001 to hand over the
management of RDH to international company, named as Hotel International (HI). In 2002 Paul
Fortune the GM of Hotel International takes over the charges of RDH. To make RDH profitable,
Paul Fortune started the practice in his own way, and his policies and practices after a year was
badly failed due to many reasons and resulted in to the breach of contract by Chinese
government in mid-January 2003.
Reasons for the failure of Hotel International (HI) in China:
Although Hotel International (HI) was internationally well reputed, credential and well known
brand name, but in China they were not successful. Few reasons for failure are as under:
Seems no research done by HI.
Lack of strategic management and planning.
Seems that HI management was not clear about their Mission and Vision, because they
were selected for making RDH profitable, but instead HI involved themselves in massive
changes which deviate HI form keen concern.
Abrupt and rapid changes in RDH.

 Culture sensitivity was completely ignored.

They underestimate the strength of guanxi practices and relationship with other
industries. For instance, the refusal of contract with Nu Fu Travel agency.
The redundancy process was inappropriate, and was not according to Chinese culture.
The employees of RDH were very unhappy with such procedure. In layoff process they
also loss some very competent employees, which later on join other competitors.
The internal or job environment of RDH imposed by HI was very strict and untraditional.
They convert a camaraderie (friendship) environment into very glum atmosphere.
In contrary to failure of HI in China, there were also some positive aspects of Hotel
International (HI). For example, they introduce training system. They were starting to train
the employees of RDH according to international standards.
structure more structured.

They make organization