North American and European brand hotel chains in their quest to maximize the wealth of shareholders have recently shed ownership of the assets and freed up capital to focus on their core business with the help of hard contracts. The subsequent pursuit of further business has driven the internationalization and a new business model of franchising has developed the brand / value proposition in international locations. Globally recognized brands hold the promise of global quality. It is … Read more »

North American and European brand hotel chains in their quest to maximize the wealth of shareholders have recently shed ownership of the assets and freed up capital to focus on their core business with the help of hard contracts. The subsequent pursuit of further business has driven the internationalization and a new business model of franchising has developed the brand / value proposition in international locations. Globally recognized brands hold the promise of global quality. It is generally believed that the Western value brands more than brands from emerging markets, so that they deliver calculate the prices for global customers worldwide. The service failure is frequently encountered in the accommodation and food industry. Such failures can act as an important performance measurement criteria. Managers learn how to gain from the service delivery failure and address questions loyalty of existing customers. They are afraid to lose them, as the cost of acquiring new customers may exceed the cost of keeping existing customers. The case shows how a globally branded North American hotel chain violated the basic teachings of maintaining global brand promise, not ignored generally accepted North American customer service standards to instigate delivery failure recovery and leveraged company-specific skills to maximize shareholder wealth. The reaction of local partners, the response to the imbalance in the relationship and subsequent adjustment of the value proposition are withdrawn from the perspective of a holiday couple that diluted brand experience first-hand recounts.
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Jim Kayalar
Source: Ivey Publishing
11 pages.
Release Date: 13 March 2012. Prod #: W12792-PDF-ENG
We Are So Sorry: Sedangs Prestige Resort HBR case solution