Planning & Goal Setting

Strategy Formulation

20th APRIL 2011

Agenda

Case overviewMission statementLevels of goals/plansCriteria for setting effective goalsHigh performance approaches to planningStrategy insight – Michael PorterKeith Houck’s strategyKey trendsConclusion

BILL COLLINS, PRESIDENT

H.I.D

TONY BRIGGS, MARKETING HEAD

KAREN SETZ, HR DIRECTOR

KEITH HOUCK, CONSULTANT

DAVE KING, HOTEL

OPERATIONS CHIEF

ART JOHNSON, ACCOUNTANT

Case Overview

H.I.D currently owns 21 properties: - 10 Holiday Inns and 2 Quality Inns all in

Georgia. - 8 hotels in Canada and 1 in the Caribbean.

Bill Collins, the president of H.I.D, advocates for adding 27 properties in 5 years and 50 in 10 years. He also wants to move to newer cities and explore new opportunities.

Case Overview (contd.)

The senior management is of the opinion that only 15 hotels in 5 years and 20 in 10 years could be added.

Senior management’s concerns for the president’s vision:

- H.I.D would outpace its income - doesn’t have sufficient manpower nor have the financials to hire additional people - continue to focus on smaller towns due to lesser competition; and - not move to newer cities

Mission Statement

“H.I.D strives to exceed the expectation of our

guests by providing excellent value in well-run hotels located off the beaten track.

In this way we will meet our profit, quality and growth goals.”

Levels of goals/plans andtheir importance

MissionStatement

Strategic Goals/PlansSenior Management

Tactical Goals/PlansMiddle Management

Operational Goals/PlansLower Management

Criteria for setting effectivegoals

Specific and Measurable Cover key result areas Challenging but realistic Defined time period Linked to rewards

Pros and Cons of President’s goals

Pros:

Ambitious Ready to stretch limits Strong vision Rapid growth

Cons:

• No certain road map to meet his goals

• No clarity on planning from top to bottom • Lack of Communication • Rapid expansion as big as this entails a risk if not planned properly

Pros and Cons of senior management’s goals

Pros:

Clear consensus in their vision

Well aware of limitations

involved

Cons:

• Risk averse • Unwilling to move away from their comfort zone

• Lack of motivation

High performance approaches to planning

Strong mission and vision Set stretch goals for excellence Embrace event driven planning Use performance dashboards Organise temporary task forces

President’s VisionSenior

Management’s Vision

Ambiguity

Strategy Insight

Strategy Framework-MBO

Management by Objectives (MBO).

“MBO is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources.”

MBO

Appraise Performance

•Corporate Strategic goals

•Tactical goals

•Operational goals

STEP 1: SET GOALS

STEP 4: APPRAISE OVERALL

PERFORMANCE

Action Plans

Review Progress & Take Corrective Action

STEP 2: DEVELOP PLANS

STEP 3: REVIEW PROGRESS

Keith Houck’s strategy

Develop an action plan.

Raise the required capital.

Plan to expand by 4 new hotels every year which should give 20 at the end of 5 years.

Review progress yearly and take corrective action, if any.

Appraise overall performance.

Keith Houck’s strategy (contd.)

An opportunity to tap promising markets will lead to an increased international presence.

The proposed expansion will lead to growth opportunities, authority and responsibility for the employees as well as provide them with the choice of locations, if any.

These activities will give an impetus to growth and thereby increase their revenue.

Tactical goals•Forecasting•Recruiting•Selecting•Training•Appraisal

•Raising capital •Funds allocation•Budgeting

•Plan, design and develop•Promotion and publicity•Market analysis and trends•Review progress

Human Resource

Finance Marketing

Where to expand?

Asia shakes off recession with dynamic growth

Emerging markets heat up the tourism industry

Asia increasing its market share as a destination this year with a 11% growth rate

SOURCE : As per the world travel trends report of 2010 discussed at the World TravelMonitor Forum, held in Pisa in November 2010. At the annual event, organised by IPKInternational and sponsored by ITB Berlin

Key Trends

Europe: low growth outbound & inbound

North America: low growth outbound; high single-digit inbound

Asia: double-digit growth outbound; high single-digit inbound

At a regional level, Asia Pacific, South America and the Middle East are expected to see the strongest growth in inbound tourists this year.

Key Trends (contd.)

Worldwide tourism growth rates

Key Trends (contd.)