Globalization of Hyatt Place
(7 pages of text)
Multinational, multi-brand hotel corporations serve almost all segments of the market. They own hotels and work with other hotel owners through leases, management contracts and franchise agreements. In the hotel business it is widespread to receive contracts for management, but many well-known players use franchising agreements during their global expansion. In 2011, Hyatt Hotels Corporation has announced that its select-service brands are expanding internationally. Among other issues, the leadership of the corporation now needs to find answers for several questions: What modes of entry should be used in brand internationalization? How should new internationalization opportunities be pursued for the lower-category Hyatt Place while maintaining the company’s premium brand?
This case is suitable for use in an early section in an international business course that introduces students to the topic of international expansion and entry modes. The case can be used to illustrate the challenges in setting strategy and running operations based on international franchising. In a strategic management course, the case can be used to introduce students to the topic of strategic decision-making. Students can explore the choices that leaders need to make between market development and product development. The case can be used in strategy classes when teaching this theme using Ansoff’s matrix. This case seeks to:
Provide insights into the formulation of international strategy in an industry where franchising is used along with other entry modes.Provide insights into the strategic tension existing in multinational firms between continuing to expand globally on the one hand, and continuing to develop and strengthen products and brands on the other.Help students gain skills in assessing risks in international expansion.
United States, Large, 2011
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