Orchid Ecotel Case

Analysis
Group 2I

Group 2I
Abhishek Agarwal
Rishab Kothari
Pragya Pathak
Mayank Gupta
Sri Harsha Mikkilineni
Shanu Malik

What are the challenges in terms of financial aspects?

Can they take up aggressive plans?

Due to he economic slowdown members were concerned about the additional

costs incurred due to green

To leverage the competitive advantage of Ecotelling the company has to invest

huge capital expenditure and the scaling wasnt very easy

They retained all the employees even during the economic turn down which in
fact put an extra burden on the financials

Aggressive Plans: Opportunities

They have excellent and well trained work force in environmental friendly services

The Economy is expected to revive, experts anticipate September 2009 was down
point and the market will now progress

Studies have also shown a greater demand for budget hotels than luxury hotels

Customer preferences are shifting towards eco friendly organisations

Ecoteling - A competitive strategy for Kamat Hotels Challenges

Capital Expenditure requirement

Other verticals target different segments of people
Operational strategies are different for different verticals, operational costs
need to be cut to establish Ecotel model
Risk of losing on brand value of Orchid Hotels if eco-friendly activities not
implemented properly

How economic downturn affected companies goals?

The global economic slowdown that began on September 2008 caused a reduction
in corporate travel both domestic and international segment

Travelers number decreased by 3.3% from the previous year

Orchid faced a tough time in maintaining the employee strength as they didnt fire
anyone due to their companies policy and felt their employees as their resources

The focus during the time was more on cost-cutting solutions through ecoinitiatives

Orchid shifted its strategy to volume of the business to generate revenues during
the tough times

Their relationship with their vendors and suppliers played a key role in not allowing
the payments to get delayed

But the operations started picking up from 2009 which helped the company stick
to its initial goals

What steps need to be taken by Kamat Hotels if it plans to leverage upon the core
competency?

They should maintain their image as Eco-friendly hotels and should provide
consultancy to other upcoming hotels.
Should collaborate with international firms like HVS Energy & Sustainability,
which will help them to lower their operational costs, improve revenue and
evaluate environmental performance
Training workshops should be conducted for its employees and its staff
Maintain their offering as value based and unique but still being value for
money
Kamat should focus on starting an institute in hotel management, with
ecotel being the main focus.

Can Building an environmentally sustainable hotel

(ecotel) be regarded as the core competency ?

Building environmentally hotel was their core competency as

Being a pioneer it set itself apart from the other competitors in luxury hotel
segment

Enabled to leverage this competency in their other verticals

Well-accepted concept and assured customer demand with 87% of foreigners

preferring green hotels

But some issues had to be resolved first

High capital investment needed for basic infrastructure and maintenance

Other verticals has own strategy and catered to different types of customers

Competitors like Hyatt, Oberoi, Taj, etc promoted luxury and consumption
experiences

What are the key drivers of sustainability through

building core competency?

Added value by providing eco-friendly experience and organic food and

services
Moving in the direction of sustainability increased their revenue and lowered
their operational costs
Ecological-economic win-win situation as using natural lights, dimmers,
sensors, rubber wood, triple-glazed windows saved millions
Giving cards with seeds not just led to planting of 60 lakhs trees but also
enhanced the relation and experience of visitors
Luxury to be associated with its unique offerings and values

Which option will help the The orchid to

achieve the sustainable development?

First way to go will be to change all verticals of company to the model similar to orchid
ecotel model and apply various environment friendly methods in those verticals too

Second approach would be to selectively transform some of their business verticals to

Ecotel model and put hold on transformation of sectors where it is not economically
feasible and cost related to transformation is high

Third way could be to expand all verticals of business without changing their core
behavior and allow them to expand on their own models

In our opinion, second method to selectively transform the business to ecofriendly model is
best. By this, we can transform sectors like LOTUS and VITS which share same business
characteristics as Orchid and such transform will help them to leverage upon their core
competencies without much work and they can grow similar to The Orchid hotels in future
easily.

Thank You