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Good Hotel Teaching Note – 1
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Good Hotel: Doing Good, Doing Well?
Case Synopsis
Good Hotel was refurbished, re-branded, and opened by Joie de Vivre (JdV), a hotel
management company in November 2008. Good Hotel was known in the industry as the first
to be branded as a “hotel with a conscience” – encompassing a positive attitude,
environmental sensitivity and philanthropy. However, due to the foreclosure and sale of the
The descriptive material in the case focuses on the growing interest in sustainability
by the U.S. lodging industry. Sustainability is characterized as a “game changing megatrend”
Suggested Case Use: Courses and Levels
This case is written to be integrated into a capstone strategic management course at
the undergraduate or graduate levels. The case is best suited for applying strategic
for group presentations.
Learning Objectives
Adopters can use this case to:
evaluation. [See Discussion Questions 1, 6 & 10)
Expose students to the growing importance of sustainability as a megatrend that will
Engage students to debate the value of ‘green’ or ‘sustainable’ strategies in the
Good Hotel Teaching Note – 2
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11 & 12]
Place students in the position of the protagonist, General Manager, to develop
Research Methods for Gathering Case Information
Primary research to gather case data was obtained from management interviews;
secondary data were obtained from publicly available information and published articles or
studies.
April and May 2010.
Basic Pedagogy and Discussion Guidance
The case has been tested once with undergraduate students in a capstone
students in MBA or executive MBA-level classes.
General questions to get the discussion started:
1. What is the vision/mission behind the Good Hotel concept?
2. What three alternatives is Pam Janusz considering for her recommendation to the new
Defining sustainability and its impact to arrive at a shared understanding of this
challenge:
3. How do we define sustainability in the U.S. lodging industry?
4. What impact is ‘sustainability’ having on businesses in general and the U.S. lodging
Good Hotel Teaching Note – 3
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Highlight the inconsistency of Good Hotel following a differentiation strategy with a
specific target customer segment, while not yet possessing the marketing resources to
make this strategy successful in the long run:
Generate debate by asking students to evaluate whether it was Joie de Vivre’s
competencies that made Good Hotel successful or was it the sustainability concept that
made Good Hotel successful – or some combination of the two:
8. How would you competitively position Good Hotel relative to its rivals?
12. Compare the performance of Good Hotel before and after it became Good Hotel. Did
Prompt students to defend a recommendation to discontinue, continue or expand the
Good Hotel concept with specific ideas for implementation that address the dual
concerns of losing JdV’s competencies while promoting the hotel’s long-term
competitiveness:
13. Do you think that the new owners and management team should discontinue,
Suggested Answers to Discussion Questions
Approximate teaching times to devote to each question may vary depending upon the
instructor’s preferences to drill students in traditional strategy concepts or to focus on the
thinking like the protagonist, Pam Janusz.
1. What is the vision/mission behind the Good Hotel concept? [5 minutes]
The vision statement for an organization describes some compelling future state.
conscience.
Good Hotel Teaching Note – 4
2. List the three alternatives is Pam Janusz considering for her recommendation to the
new ownership of Good Hotel . What are the pros and cons of each alternative? [5–
10 minutes]
Figure IM-1 provides one way to organize the discussion on the board. Also, pros
Alternatives
Pros
Cons
Discontinue the Good Hotel
concept
Minimize risk of new
concepts
No debt
No investor risk
No special management
policies for sustainability
Decrease customer base
Decrease in occupancy rates
No sustainability program or
philanthropic image
No growth
Continue the Good Hotel as
it is – no change
Minimize investment risk
No debt
No cost to re brand
Keep diversification of
themes among hotel
Customer growth is flat
Competitors imitate theme
Expand the Good Hotel
concept to new or re-branded
hotels
Increase customer base
Higher occupancy rates
Higher RevPar potential
Higher profit potential
Over expansion
Low demand projections
Increase debt and/or need to
raise equity from investors
3. How should we define sustainability in the U.S. Lodging industry? [5 minutes]
(Holcomb et. al., 2007, pg. 462)
Good Hotel Teaching Note – 5
and social developments.
4. What impact is ‘sustainability’ having on business in general and on the U.S. lodging
industry in particular? Is it high, medium, or low ? Please explain why. [5 minutes]
Figure IM-2 provides one way to organize the discussion on the board. It is important for
Figure IM-2: Impact of Sustainability on the U.S. Lodging Industry
High
Medium
Low
Consumer demand
Competitive imitation
Environmental regulations
Social pressure
Raise occupancy rates
Raise profitability
Managerial concern with
ethics – corporate
responsibility
Guest satisfaction
Develop an image/brand of
doing good in the world
Maintenance issues related
with the physical plant
Need for aesthetics
Source: (Manaktola and Jauhari, 2007)
The next three questions are to designed to lead students to a higher level of
understanding that there appear to be inconsistencies among Good Hotel’s generic level
business strategy, target market segments, and approach to marketing. Some may argue that
5. How would you characterize Good Hotel’s target customers? [5 minutes]
Good Hotel targets customers who value sustainability. One major market segment
sustainability is defined by a target group of customers. *With regard to characterizing the
LOHAS group, the case states these are consumers that focus on health and fitness, the
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However, staying at a budget hotel that happens to be dedicated to philanthropy may be
highly attractive to non-U.S. (such as the tour group from Norway that had to postpone its
6. What type of generic level business strategy is Good Hotel following? Why? [5–10
minutes]
Interestingly, this question can result in some debate among the students regarding the
type of generic level strategy Good Hotel is following. At first glance, it appears like Good
case discussion:
Classified as a boutique hotel that is known to be lifestyle hotel designed for unique
nonprofit.
While Good Hotel appears to be following to a differentiation strategy, it is also positioned as
Room design - as upscale youth hostel with furniture and beddings made from
At this point, the instructor can bring up the point that prior to the advent of new technologies
(i.e. recycling, internet) it was difficult to follow a differentiated and low cost strategy at the
same time. Within the past 15 years companies such as Trader Joe’s, Nintendo (Wii),
Yellowtail wine, Dell, and Toyota (Scion) have introduced high quality differentiated
7. Describe JdV’s marketing strategy to promote Good Hotel. Is this strategy
sufficient? [5–10 minutes]
Good Hotel Teaching Note – 7
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(Top twenty five social networking sites, 2009).
Teaching tip: students should be encouraged to see consumer ratings sites such as
Yelp!, TripAdvisor.com, or the ratings provided by consumers in hotel reservatios sites
such as Orbitz, priceline.com, Hotels.com, etc. This can also be done in real time by
instructors in class.
At this point, the instructor can facilitate a meaningful discussion about what social
media is with regard to definition and impact on consumer buying patterns. Social media is
defined as "a group of Internet-based applications that build on the ideological and
social networking sites in December 2009, up from 13.8% a year before (Prescott, 2010).
experience to adversely affect the “do good” reputation of Good Hotel.
At this time, the instructor can bring up the concept of cause-related marketing or have
management expertise.
8. Assess Good Hotel’s competitive position relative to its rivals. What stands out? [5
minutes]
This question can be answered according to the competitive position view of strategy
(Porter, 1980) by constructing a strategy map on the board. The axis on the strategy map
sustainability.
Case Exhibit 2 provides a list of many of Good Hotel competitors that can be used
during the positioning activity on the strategy map. Figure IM-3 provides one potential
Good Hotel Teaching Note – 8
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Figure IM-3: Strategy Map for Good Hotel and its Competitors
9. Compare Good Hotel’s performance [RevPAR, occupancy (%)] relative to its rivals.
[5–10 minutes]
Students are expected to have completed an analysis of data in case Exhibits 7 and 8
P
r
i
c
e
Sustainability Practices
Good Hotel
W Hotels
Hyatt
Regency
Fairmont
Best Western
Motel 6
Hampton Inn
Holiday Inn
Hilton
Ritz Carlton
Kimpton
Good Hotel Teaching Note – 9
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