ORCHID ECOTEL CASE
Vithal Kamat completely overhauled a small chain of restaurants into a consortium of well-run and ecologically sustainable hotels under his leadership. Kamat hotels have five major verticals, which range from five star services to restaurants in the economy segments. Kamat formulated plans to expand each vertical by using alternative targeted growth strategies. The economic downturn, however, hit his business badly resulting resulting in a sharp sharp decline decline in hotel hotel occupancy occupancy and competitive competitive tariff tariff rates offered offered by other competing hotels. Amidst the impending crisis, Kamat planned to use the core competence of ecotel hotel range in order to create a niche in the market and to separate his brand hotels from the competitors and to leverage its position in the market. In this case we see all the problems faced by Kamat to enhance and induce the core competence of „Orchid‟ to the other verticals. This case illustrates the challenges he faced in enhancing the core competence of an ecotel hotel into the other verticals. In order to do that and to expand the strategy, he should address the burning issues tactfully and as we see, Kamat executes his strategies beautifully and very capably. Financial Financial challenges: Although he wanted to emulate the „ecotel‟ model into other verticals, Kamat soon realized that his strategies had limitations that came in the form of financial infrastructure and capital expenditures. Other major verticals under his brand name had their own brand personalities and they targeted different customer segments. Hence operative strategies for each vertical were quite different from each other. Kamat hotels had a modest beginning, but it soon endeared itself to customers and carved a place for itself in the market and invariably developed into an industry leader quickly. Along with certain strategic ventures, it opened up certain newer vistas and newer establishments. Over a span of nine years it established nine new vertical to operate on. It has global presence, with branches in major cities in every continent, covering major hubs of economy. Now, they wanted to scale up this core competency to take competitive advantage by augmenting all vertical of the company using its core competence and by offering environmental friendly services. This concept was a big challenge to Kamat as this might strengthen the „Orchid‟ brand, but might restrain the growth of the company in its other verticals. Competitive Strategy: Orchid aggressively promoted its eco-friendly concepts and services and used them as a competitive advantage. It added value to its core competence by providing eco friendly and organic foods thus accentuating accentuating the Eco friendliness of the hotel. It also collaborated with international eco friendly firms like HVS eco services. To make its employees more conversant with the concept and more competent it conducted workshops and several training programs which by itself was a welcome move. For aggressive brand promotion, it undertook several environmental friendly activities involving varied sections of society. It got the „ecotel „certification , the first of its kind in Indian industry. Thus hotels are no more considered merely in terms of luxury but an all-encompassing experience, Kamat hotels raised the bar by making its customers realize realize that they are doing their bit for the society and environment. Thus by playing by its core competence , hotel Orchid had a strong strategy to counter competition.
Core Competence: Hotel Orchid‟s core competence was in its environmental friendly hotels. They wanted to build on this advantage even further by integrating the various physical infrastructure and human resources. They actively promoted several “green” teams which undertook various eco-friendly ventures. All the activities of the hotels were based on eco-friendly values and concepts. They took pains to make the customer aware of the various environmental issues and initiatives of the hotel. The hotel was designed keeping all values of environmental issues in mind. It further experimented with several initiatives that would gather eyeballs and engage the customer further in environmental activities. Their core competence slowly permeated to other segments and verticals, thus increasing the overall profitability of the company as a whole, keeping the shareholders happy. They wanted to create the unique marriage as it were between economy and ecology. Sustainability and Sustainable competitive advantage: The scale versus value option was the biggest concern to Kamat. The shareholders were of the view that while Kamat‟s sustainability might have strengthened the „Orchid‟ brand, but had hindered the growth of the company in its other verticals. Accentuating all the other verticals by playing around with the basic core competence advantage of its eco friendly hotels was the biggest challenge that Kamat and his associates were facing. They were the first ones to introduce the concept and the hotels to India and thus had the first movers advantage. The holistic version of a „green planet‟, and starting programs encompassing local participation, creating awareness among employees and all out conservation and cost cutting by internal conservation through energy saving gadgets and environmental friendly materials. Lastly to encourage guests to participate in all activities introduced the‟ feel good „ and „home away from home‟, factor, and thus added to the overall appeal and experience of the guests. This gave and edge to the chain , enabling it to carve a niche for it in the competition. Group 8 Ashish Baniwal Sandeep Chakrabarti Sonali Sen Veenu Shankar
