Michael Porter Operations Strategy At 7 Days Inn free essay sample

Days Inn Case Analysis Questions 1. Based on Michel Porter’s views on operations strategy, please analyze how 7 Days Inn obtains competitive advantages by determining the portfolio of services through the vertical cutting approach. The traditional situation in hotel industry is that, the more you pay, the higher quality you get. But actually, most of the businessman just needs a comfortable bed and a hot water in bath. The vertical cutting approaches make this available and the price is lower than the traditional hotel. With this strategy, 7 Days Inn obtains a great competitive advantages against its competitors and earn the opportunity to the following fast expend. 2. â€Å"Management first, franchise later â€Å"has been the expansion strategy frequently used by international chain enterprises. However 7 Days Inn creatively come up the â€Å"franchising with management â€Å"in 2008. Please analyze the network economic effect of chain, and the characteristics and appropriate conditions of leased and operated hotel ,managed hotel and traditional franchised hotel. We will write a custom essay sample on Michael Porter: Operations Strategy At 7 Days Inn or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The network economic effect of chain benefit 7 Days from 3 angles. Firstly, it reduce the cost of purchase and management. Secondary, it helps to occupy and maximize the market share. Last, it is a good approach to promote the 7 Days brand by open more and more branch hotels. Lease is a more flexible way to run the business, and it will use less cash flow and get more net income. But the franchising with management approach is a more flexible way for their expend. In this way, they use the investor’s investment and keep the control at the same time. It is a better way comparing with the traditional franchised hotel. 3. 7 Day Inn implements operations dept. anagement ,matrix management, and shepherd management sequentially to improve the efficiency and effectiveness of chain management. Referring to Amit and Zott(2012),please discuss how an enterprise constantly makes business model innovation ,how to turned business innovation into enterprise values and how to derive, sustain and enforce the capability of innovation. As the company become big ger, some problems are inevasible. The supervisor of company should make some change to deal with these problems. Sometime, they need an innovation of their business model. To turn business innovation into enterprise value, the supervisor should take all the changing situation into account. In this way, you will find one or two key factors for you to improve and abandon the others. In the 7 days inn case, the supervisor will focus on the encouragement, so the shepherd management strategy born. 4. Please analyze the psychological impact of shepherd management of on the hotel managers. Then, please identify the possible reasons why such a number of hotel managers resign. What do you think Lin Yuezhou should do to solve the resignation problems Most of the managers will treat it as their own business and try their best to run the hotel. In the way, the talent managers can show their ability, and benefit company at the same time. The possible reasons for the managers’ resign are: a)They frustrate with the conditions they face, either because of their ability or the limit resource. b)They earn enough money and experience, and they think they can run their own hotel. c)They get a better offer form the competitors. Mr Lin should put more focus on this problem because it is a drain of talent person. Lin should find the main reason of their resignation and do the relatively disposal. 5. What do you think of shepherd management? As 7 Days Inn come into the thousands hotels era, do you believe that the bonus of shepherd management has been used up? How to solve the problem of management inefficiency? Where should the operations strategy of 7 Days Inn head? The shepherd management benefit 7 days in the relatively small scale. But when the branch hotel number become bigger, the shepherd management strategy will do harm to the management team for it increase the difficulty of control. I agree that the bonus of shepherd management has been used up when 7 Days Inn come into the thousands hotels. As the hotel numbers become bigger, the 7 days inn’s management team is losing control of their branch hotel because they give to much power to the managers. They can’t easily valuation the performance of each hotel. To solve the problem of management inefficiency, I suggest 7 days inn to setup an command sub-system in their internal system. Since 7 days inn’s internal system is powerful, adding a sub-system is easy and most of the manager will use this system to get news form management team.