7 Days Inn: Operations Strategy (Simplified Chinese Version)
(9 pages of text)
7 Days Inn, a leading hotel group in China, was established in 2005 and was listed on the New York Stock Exchange in 2009. It now operates more than 1,000 hotels in 168 major Chinese cities and has enrolled more than 30 million customers in its membership club. Its success is largely due to its innovative business model and operations strategy, which includes designing product services with the vertical cutting approach, enhancing customer loyalty through a membership system and direct sales, managing a hotel chain with different governance structures and expanding a hotel chain with an innovative franchised-and-managed model. In particular, the case introduces the company’s shepherd management philosophy. However, as the company expands, it has become difficult for headquarters to manage and supervise all the hotels. In addition, the resignation rate of hotel managers has gone up to 30 per cent in the past few years. What should 7 Days Inn do to deal with these challenges? Does the company need to break the rules again and innovate its business model, operations strategy or operating model — or all of them?
The case can be used to illuminate operations strategy, product/service design, organization governance, business model innovation and entrepreneurship in operations strategy or operations management courses.
This case leads students to have a better understanding of
- product and service design to satisfy customer needs.
- chain management, particularly expanding and managing a chain.
- control and autonomy balance in managing an enterprise.
- business model innovation needs and the ways of innovating a business model, operations strategy and an operating model.
Accommodation & Food Services
China, Large, 2012
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