...S w 9B05M035 MAJESTICA HOTEL IN SHANGHAI? Jane Lu prepared this case under the supervision of Professor Paul W. Beamish solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. This material is not covered under authorization from CanCopy or any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2005, Ivey Management Services Version: (A) 2005-12-02 On March 20, 2005, Richard Roy, executive vice-president of Majestica Hotels Inc., was in China, for negotiations with Commercial Properties of Shanghai Limited (CPS). They were discussing a possible management contract under which Majestica would be the operator of a new luxury hotel there owned by Shanghai Industrial Holdings. Majestica Hotels Inc. was one of the world’s leading operators of luxury hotels. The expansion into mainland China had been on management’s agenda since 1999. The opportunity emerged in late 2003 when a close...
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...Majestica and CPS have the problem of agreeing on a large amount of issues—Majestica wants to keep everything consistent with the operations of their current hotels, while CPS wants to have a controlling hand in the construction and management of the hotel. First, CPS wants to learn how to manage the hotel themselves in the near future. Majestica wants to sign a contract term no less than 50 years because that is what they have on their current hotels elsewhere. However, since the average hotel management term in China is only 10 years, CPS is prepared to offer no more than a 30 year contract. CPS also does not want Majestica to control all aspects of the construction and design of the control, whereas Majestica feels is necessary they do control these aspects. Since Majestica has named all of the hotels it manages as “Majestica Hotel, (Location),” it feels it should name this hotel “Majestica Hotel, Shanghai” in order to be consistent. CPS disagrees and wants to name the hotel “Shanghai Oceania – Majestica Hotel.” The management and general staffing of the hotel is the most important issue at hand here. Majestica believes that creating a service culture at the hotel is the most important part of being a successful luxury hotel. Therefore, experienced expatriate managers and carefully selected employees is a must in Majestica’s eyes. CPS disagrees and wants to have a Chinese general manager in the near future as well as Chinese employees at every level. CPS wants to...
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...InterOffice Memo To: Subject: Majestica Hotels Inc. Position to take regarding the Shanghai opportunity Problem Statement Majestica Hotels has been given the opportunity to manage a new luxury hotel development in Shanghai being constructed by Commercial Properties of Shanghai Limited (CPS). Negotiations have been stalled due to the different expectations of both parties regarding their roles in the new development and the terms of the management contract. Alternatives Majestica has three options at this juncture. The company can either stick to the established operational guidelines and not compromise on any aspect of the contract negotiations, provide concessions in certain aspects and counter‐propose, or leave the negotiations entirely. Based on a detailed SWOT and trend analysis (Exhibit 1) as well as the benefits to both parties as a result of this partnership (Exhibit 2), the preferred route for Majestica to take in this case would be to provide concessions in certain aspects and counter‐propose. Analysis of the preferred option Due to the established reputation of Majestica, it is important to ensure that the concessions made do not negatively affect the core competencies of Majestica (Exhibit 3) as well as its brand value. Should negotiations reach a point where these competencies or the brand value could be compromised, it would be ...
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...Course code Course title Type of course Level of course Department in charge Year of study Semester Number of credits Lecturer Email of the lecturer Prerequisites Form of studies Teaching language GRAV009 Advanced Topics in International Marketing Compulsory Graduate Graduate school 1 2 st nd 6 ECTS; 36 hours of class work, 126 hours of self-study Prof. Dr. Hemant Merchant hemant.merchant@yahoo.com Marketing, International Marketing; Programme requirements (pre-reading) Consecutive (Evenings & Online) English COURSE ANNOTATION This course is designed to facilitate a more “applied/practical” understanding of contemporary issues facing companies who market (or intend to market) their products/services across national boundaries. The course focuses on real-life challenges that companies encounter in the context of their international marketing function (broadly defined). In general, these challenges relate to identifying, evaluating, and making tradeoffs across national, organizational, and personal contexts. Thus, we will discuss formulation- and implementation-related challenges as well as generate solutions to ‘international marketing’ dilemmas. COURSE LEARNING OUTCOMES Learning Methods: Case discussion; Role plays; Mini-debates; Mini-lectures Assessment methods: Class participation; Case presentation; Final exam CLO1. Understand the international marketing environment; Contemplate and analyze international marketing opportunities. CLO2. Gain an understanding of international...
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...Internal Analysis Current strategy: (CIBC) Retail banking with trust, offshore and capilat market activities. Invest in new banking system, ICBS. (Barclays) Focus on rationalization along with development of the onshore and offshore busineses. Strengths: Well Established (CIBC) | Only major bank serving the Caribbean, this experience has given the bank strong leadership, expertise, and management skills. In addition, CIBC has 40 branches in 8 countries giving it a strong brand and public image in Caribbean | Effective System (CIBC) | (CIBS) that will enable efficient operations and allow the company to go into new channels | Strong Client Relationship (Barclay) | Strong client relationship building system, targeted to its working client base | Weaknesses: Inefficiency (CIBC) | Current banking system is not fully utilized because investment exceeds scale of operations | Ineffectiveness (Barclays) | BRAINS system is ineffective in facilitating internet and telephone banking, and operations are manually intensive and costly compared to competitors. | Competitive Advantage: (CIBC)Well established since 1920’s, is the only major bank serving the Caribbean as a separate unit, and has an effective and efficient banking system (ICBS).(Barclays) Strong customer relationships which resulted in its market position and maintained its margins. Core Competencies: (CIBC)Market leader in credit card sales, retail banking, offshore and capital market activities....
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