Marketing Strategy Case Review Notes

In: Business and Management

Submitted By karag003
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Astor case
• Prepare an hour presentation that describes 1) his/her initiatives, expenditures, and outcomes for each of the past two fiscal years, and 2) planed initiatives and budgetary needs for fiscal 2006.
• Fiscal 2005 – projected to be the 5th consecutive unprofitable year.
• James announced he wanted to achieve profitability in 2 years.
• He stated the company would growth in earnings before interest, taxes, depreciation and amortization as a corporate performance measure and a basis for determining sr. management and executive ompensation.
• James overall corporate objective was a 7% increase in EBITDA.
• The charge given the 4 senior VPs represented a significant departure from past practice, the annual planning and budgeting process had been more to down than bottom up and rev enue focused rather than earnings driven.
• Elizabeth mentioned that the new planning and budgeting process will be challenging because it is bottom up and profit driven rather than top down and revenue driven.
The US hotel industry
• Recorded revenue was $113.7 billion and grossed $16.7 billion in pre tax profit in 2004.
• More than 4.4 million hotel rooms in the US as of December 2004.
• Hotel industry is highly fragmented, with no one company or brand controlling a majority of hotel rooms.
Hotel segmentation
• Hotels compete on the basis of amenities, price and service.
• Limited service hotels account for 1.4 million hotel rooms in 2004, while full-service branded accounted for 1.6 million.
Hotel segment performance and projections
• All hotel segments have evidenced improved performance since 2003 on 3 most trakced operation statistics 1) occupancy 2) average daily rate 3) revenue per available room.
• There was a significant decline on all three measures in 2001 and 200.
• In 2004, the average occupancy across all hotel segments was 61.3%, the ADR was $86,…...

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