Hotel Latvia: Sell Out, Hang In or Partner?
(10 pages of text)
Case (Gen Exp)
Three friends have followed their entrepreneurial dream to build a five-star hotel in Liepaja, a seaside city in Latvia. After a few early profitable years, the hotel is struggling, due to the massive downturn in the Latvian economy as a result of the European Union financial crisis and slow recovery. The hotel has declined from generating an annual profit to now making a loss or barely breaking even. On several occasions, the co-owners have considered selling up while they can still break even. With the European Union showing signs of recovery, business confidence is returning and the future is starting to look up. The co-owners must decide whether to put all their struggles behind them, retain the ownership of the hotel and look forward to the potential days of profit that lie ahead. Alternatively, they can move in an almost opposite direction, by selling up and moving on. What strategic direction will produce a successful outcome?
This case is ideal for courses in the fields of international business, international management, international marketing, strategic management and any business studies that address developing international operations, including in former Soviet economies. The case can be used as follows:
- As a major written assignment in the second half of a unit.
- As a group discussion workshop conducted in a 90-minute class.
- As a homework exercise with students returning to class to discuss their findings and/or discuss and compare their strategies.
- As a major written or presentation assignment to challenge teams to formulate strategy, develop solutions and investigate what further information they need to make a correct strategic decision. Teams may report their answers back to class through discussion or in a presentation or questioning format to encourage broader comparison.
Accommodation & Food Services
Latvia, Medium, 2001-2014
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