MBA Report: Analyzing and Improving Baglioni Hotels' Operations

This report examines operational improvements for Baglioni Hotels, focusing on key areas such as marketing, human resource management, and finance. The report details how the progress of the company can be tracked through specific goals, including improving sales, enhancing customer retention, and optimizing financial performance. It explores the importance of employee selection and retention within the hospitality industry, highlighting its significance for service quality and customer satisfaction. The analysis also covers competitive advantages, discussing Porter's generic competitive strategies such as differentiation and cost leadership, and how Baglioni Hotels can leverage these strategies to gain a stronger market position. The report considers the impact of new management systems on service delivery and emphasizes the importance of continuous operational development for sustained success. The report provides a roadmap for maturity of service organisation of UK which is Baglioni Hotels.

MBA - Managing Operation
Improvements

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. How would progress of company be tracked by goals?..........................................................1
2. Choice of potential field of hotel.............................................................................................3
3. Competitive advantage............................................................................................................3
4. Capabilities and skills required................................................................................................7
5. Management systems required to build, operate and maintain these capabilities...................8
6. Impact of new management system on service delivery system.............................................8
CONCLUSION................................................................................................................................8
REFERNECES..............................................................................................................................10

INTRODUCTION
Operational improvement is very fundamental and essential requirement which needs
continuous efforts and development for organisation so that they are successful in market and
working in proper environment as well. Operational efficiency will be playing very important
role in overcoming challenges and strengthening up their Key Performance Indictors or USP.
Managing a company and then its operations are very much important which will be driving
growth or profitability into market. This present report is focusing on three areas of current
operations and then developing road map to maturity of service organisation of UK which is
Baglioni Hotels. The company is an Italian based hotel which is owing about 9 luxurious hotels
in Italy, France and in 2004 opened up in UK. Further discussion will be on what company is
doing to compete in market of London so that they could be having higher share of profits and
what skills and capabilities they would be requiring to compete in market area. Impact of new
management system on service delivery system and choice of Baglioni Hotel’s product and
service is also studied in last.
MAIN BODY
1. How would progress of company be tracked by goals?
Baglioni Hotels alike any other company operating within hospitality industry is having
certain areas of operations including like that of human resource, finance, sales, security, public
relations, food and service and housekeeping. The job and working of operational manager of
Baglioni Hotels will be dealing with customers, employees, supervisors with running of hotel on
smooth bases. So among these areas of operation of hotel only 3 of them will be included or
studied into this report including marketing and public relations, human resources management
and finance (Agarwal and Brem, 2015). All three of them are interlinked with each other, having
their own long and short term goals with that of overall organisation which they need to achieve.
On the same time it is essential that company is been able to measure the progress of all the goals
and objective set so that they could be judging their actual performance against the target set.
The goal of various operations will be including like that of:
Marketing and public relations- reaching out wider areas of market so that sales could be
improved over coming 12 months
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Human resource management- involving or selecting qualified and capable labour force having
quality to handle customer in good way so that customer retention rate could be enhanced over 6
months
Finance department- this area will be dealing with collecting up of more finance so that
company could plan to open new set up in other parts of UK. While lowering down cost in each
area of working of Hotel is also essential for goal.
These goals set up need to be evaluated based on their level of performance and what
progress company is making based on their actual achievement and set targets. There are many
tools, techniques and measures which Baglioni hotel should be taking place so that their targets
and goal could be evaluated and progress is tracked (Cheng and et.al., 2017). As target of
marketing and public relations department is reaching out to larger number of audience so that its
base of customer could be increased which is improving sales in coming 12 months. So there are
many measures or techniques which are helping company to evaluate and track its performance
from the set targets.
Conversion rate- this is the percentage of visitors who are visiting the site of company or
viewing their content this will be encouraging Baglioni hotels in building up of more customers
with help of website. The rate of conversion is good performance matrix of measuring or
tracking set goals which are highly based on industry like in hospitality sector it is around 2-3%.
The goal of Baglioni hotels is to increase reach of company with the help of correct marketing
tools like that of website content or other social media marketing. So this could be tracked with
help of conversion rate which is measurement of effectiveness of marketing targets.
Overall employee turnover- this is another tracking criteria which could be analysing what
number of employees are voluntarily leaving organisation each year. This is calculated by adding
number of employees towards the starting of year with that in end and then dividing those by two
so that average number could be find out. So this will be helpful in tracking down qualified and
capable labour forces who remain within organisation for longer duration of time. This is target
of human resource department and could be fulfilled only when company is making its efforts in
selection and retention of employees for longer duration.
Operating cash flow- this is one of the measures which organisation could be using so that they
are been able to understand ability of company in paying up of delivery and routine working
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(Dalmarco and Barros, 2018). As finance department is setting target of lowering down of cost
of firm so that they are having larger amount of revenue if cost is low then.
2. Choice of potential field of hotel
Employees are the main essence of growth, increase in performance, improvement in
revenue, gaining larger share in market and also retention of customers especially in service
industries. In service industries like that of Hospitality employees are having direct interaction
and communication with customers of firm so it is required that Hotel is focusing on their
employees more. Human resource department is that which is concerned with selecting,
reviewing, recruiting, training and retaining employees it is the most part of any organisation.
Hospitality industry is that one area which is including best and qualified professionals so that
they are giving their best service to customers and achieving targets of company as well. This
area is been selected so that Baglioni Hotels could be focusing on it as it is the most essential and
important factor for company to focus on.
All employees of companies are very much essential and important so it is required for
management of hotel so that it is easy to attain goals and targets. The objective which is set by
human resources department is to select qualified and capable personals who are having quality
to handle customers which is helping in retention of potential customers. This particular area or
field is been chosen due to its increasing importance within service sector of economy so it is the
most potential area (Lu and et.al ., 2016). It would be including all vital requirements of
company like that related to qualified and skilled labour who would be helping company in
achievement of their targets and goals.
3. Competitive advantage
Competitors are the part of organisation and markets who would be becoming more and
more important for firm so that they could be analysing their presence within markets are who
the market sharer are. On the other hand having it is essential for firms that they are having
competitive advantages over their rivals or they are having something especial within their
products, services or organisation which is making them stand differently within market place.
Policies and strategies of competitors are also important for companies to know so that it is easy
for Baglioni hotel what their rivals are planning to do and what they need to do. So this is
helping company in gaining over their competitors which is essential for them to analysis their
current market positions. So the most important part within this will be identification of
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competitors of hotel who are operating within UK and then knowing their unique selling point or
what kind of products they are offering within market.
Then other than this it will be essential that hotel is knowing their own customers from
within markets or expectation and demand of consumers. As the demand could be ever changing
and could be unstable due to economic conditions as well. Once company is knowing their
customers it will be easy for them to set up differentiation strategies or setting up of their
marketing plan. It is vital that Baglioni is been forming up strategies for fighting up with
competitors who are there into market of London so company could be using Porter’s generic
competitive strategies (Márquez and et.al., 2017). This strategy is used for competing or taking
out methods of reducing competition within market as well.
Porter’s generic competitive strategies-
The position of firm within industry is determined that whether it is profitable into
industry or not either they are gaining below or above average of industry. The basis on which
above industry average is determined is that after profitability within sustainable competition of
market. The competitive advantage of company within organisation could be related to that of
two factors like that of lower cost and differentiation so both of them could be included within.
Both the two type of advantages of company should be in linkage with scope and goal which is
been set by management of organisation that they are achieving them (Porter's Generic
Competitive Strategies (ways of competing), 2018). There are majorly three generic strategy used
which is focus, differentiation and cost leadership all of them will help company to achieve
competitive advantage within market area. Focus in this of two types stating cost focus and
differentiation focus.
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Figure 1: Porter’s generic competitive strategies
[Source: Porter's Generic Competitive Strategies (ways of competing), 2018]
Differentiation-
This is the most commonly used strategies company use in order to remain within market
which is making them to survive with all their competition. Differentiation strategy will be
helping company to identify what unique they are having in terms of their service or products
which is making them stand differently in the market. While purchasing of products customers
always include the positive or unique feature of that particular company or their services which
is offered by them (Nardon and et.al., 2018). So it is important for company that they are also
laying stress on their strength where they are ahead of others in same industry or market. But it is
not necessary that company is not following only one of their product or positive aspect rather
they should be including almost 3 to 4 steps. Differentiating service or product of company will
be making them stand in unique way among their competitor. This should be other than pricing
strategy of company as they could not lay more stress on their low price than others in market.
While differentiation strategy is not used for small business which are been operating as they are
not having any uniqueness into their products. So Baglioni hotel should be having their focus on
quality of service which they are good at but price or cost to firm on their operations are
incurring must not be part of differentiation strategy of company.
Cost leadership-
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This is when firm is able to set low cost of their products in market than that of other
competitors which will then be enabling company to reduce their price and profits are also
increased (Roblek and et.al., 2016). But if company is only reducing their cost and not the price
of products then they will be having higher profit margin so their share of market will also be
more. This cost leadership is not that much easy for any company to achieve as they are been
able do this only after they are attaining maturity stage in market. but once company is been able
to achieve this stage of maturity then it will be easy for them to lower down their cost of
manufacturing and producing products and services. This lower down in cost will be done with
various tools and techniques adopted by company like that of technological advancement, using
economies of scale and also having access to raw materials. With the help of these factors which
are been included company could be easily lowering down their cost of manufacturing, selling
and promotion of their products and services into markets. If Baglioni hotels are able to achieve
this cost leadership into market then it becomes easy for them to attain higher number of profits
and will be becoming best performer in industry as well.
With Baglioni hotels there are three major ways to accomplish this cost leadership in
market which will be able to make them increasing their return on investment. High asset
utilisation is one of the most commonly used approach which is there into cost leadership. This is
representing that all types of fixed cost to assets will be spend by Baglioni hotels on large units
of products or assets of firm which will then be lower down unit cost of products and services of
firm. Then they could also be using lower indirect and direct operating cost of firm which is been
achieved only if company is been able to offer all customer higher standard of products. Other
than this company will also be offering their customers good quality of products at lower price
and also the personalise service to them (Schoffstall and Arendt, 2016). the third dimension will
be that of controlling value chain into all functional group with ensuring lower down cost like
that of finance, inventory, IT and marketing related.
Focus-
This will be having focus on various aspect of quality of product either on targeted
segment on or price or lowering down of cost of products. So this focus is having 2 variables
which are cost and differentiation focus if firm is seeking to gain more market share within
industry. Both the above stated strategy of company will be making difference between targeted
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segment and what is the other segment within industry. All the targeted segments should be
potential buyers who are having need of products and also able to buy that particular products.
4. Capabilities and skills required
In way to achieve focus, differentiation and cost leadership which will be leading to
attainment of competitive advantage into market or industry Baglioni hotel will be requiring to
have certain capabilities and skills required (Trappey and et.al., 2017). These skills and
capabilities is thus helping company to achieve their targets and goals of firm like that of cost
leadership or differentiating uniqueness in quality of products. Other than this there are also
required resources which will important for company to carry out so that their targets are been
met that too on timely basis. These skills, capabilities and resources will be required to be there
with company that is suitable for Baglioni Hotel especially that linked with technological
advancement within industry.
Using technology-
This is than most important capability which must be there with company that they are
using best form of technology within their working and operations. Technology is the most
important part of company as it will be helping them to set their targets and then attaining them
all. Baglioni hotel can also use social media channels for advertisement and promotion of their
products and services which is the mostly used platform for marketing.
Management of staff-
This is also a skill which is required by company which should be there into their staff
and employees of firm. Management and administration of employees is including various aspect
like that of motivating them, giving them compensation and then helping them to retain within
company for longer duration of time. Staff management is related to setting their goals which
will be linked to goal and objective of firm as well.
Enhancing experience of customers and clients-
This is the most important part of service industry that is related to customers, giving
them quality of products, handling them in most efficient manner and lastly enhancing their
experience so that they are been retained within company for longer duration of time. This
enhancement of their experience could be done at time when company is having good quality
and skilled labour force (Ustundag and Cevikcan, 2017). Experience of customers is most
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important for company which is enabling Baglioni hotel to include more number of clients who
are then associated with firm.
5. Management systems required to build, operate and maintain these capabilities
Management of technology is also important for company which is allowing Baglioni to
manage discipline and thus creating competitive advantages. There are number of systems of
management which is building, operating and maintaining the capabilities of staff and their skills
development as well. There is also an included part of technology management which is enabling
Baglioni hotel to make and formulate strategy and forecasting as well.
Other than this there are many management theories which need to be applied by
company so that their staff could be motived and managed as well. The management theories
which Baglioni Hotel should be using theories like that of systems theory. Under this theory the
aim will be that of overall achievement of organisational goals and targets which is thus helping
company in their effective working and understanding of functions and cycles related to the
organisation.
6. Impact of new management system on service delivery system
The new management which will be related to achievement of goal and targets of
company which will be essential for them to use the System Theory of management (Nardon and
et.al., 2018). It will also be impacting or changing service delivery method choice and products
of company as well that is used profiling of services. The new system if is used and implemented
in correct manner then only will be impacting the service and products of Baglioni hotel. The
only way is to correctly and authentically setting up of system theory of management so that it is
helpful for company in their longer run.
CONCLUSION
It is concluded from the above report that:
 In order to track the goal and objective of firm it is required that they are firstly setting up
targets based on each department and then using appropriate tools and methods.
 The tools and methods which could be used are like that of conversion rate, overall
employee turnover and operating cash flow. All of them could be useful for company in
long and short run as well.
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 Other than these company must be choosing human resource management which is the
most potential field and area for development and growth of firm. This will be useful and
helpful for Baglioni hotel to efficiently manage their staff.
 In order to gain competitive advantage firm must be using Porter’s Generic model which
is telling them to enhancing their unique identity of product in market, lowering down
cost for attaining leadership and focusing on either of them.
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REFERNECES
Books and Journals:
Agarwal, N. and Brem, A., 2015. Strategic business transformation through technology
convergence: implications from General Electric's industrial internet
initiative. International Journal of Technology Management. 67(2-4). pp.196-214.
Cheng, Y.J., and et.al., 2017, May. Enhance the processing and management efficiency of Dental
Laboratory by the strategy of Productivity 4.0. In Applied System Innovation (ICASI),
2017 International Conference on (pp. 1098-1101). IEEE.
Dalmarco, G. and Barros, A.C., 2018. Adoption of Industry 4.0 Technologies in Supply
Chains. Innovation and Supply Chain Management: Relationship, Collaboration and
Strategies, pp.303-319.
Lu, C.C., and et.al ., 2016. The Review of Work and Family Balance among Employees in
Hospitality Industry in Taiwan. International Business Research. 9(9). p.51.
Márquez, A.C., and et.al., 2017. Advanced Maintenance Modelling for Asset Management:
Techniques and Methods for Complex Industrial Systems. Springer.
Nardon, L., and et.al., 2018. Developing multicultural competence. Reliance.
Roblek, V.,and et.al., 2016. A complex view of industry 4.0. SAGE Open. 6(2).
p.2158244016653987.
Schoffstall, D.G. and Arendt, S.W., 2016. Hospitality students’ work experiences and an
examination of their perceptions of the future. Journal of Human Resources in
Hospitality & Tourism. 15(2). pp.209-229.
Trappey, A.J., and et.al., 2017. A review of essential standards and patent landscapes for the
Internet of Things: A key enabler for Industry 4.0. Advanced Engineering
Informatics. 33. pp.208-229.
Ustundag, A. and Cevikcan, E., 2017. Industry 4.0: Managing The Digital Transformation.
Springer.
Online:
Porter's Generic Competitive Strategies (ways of competing). 2018. [Online]. Accessed through:
<https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/>.
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