Majestica was founded in Western Europe and focused exclusively on Europe and the United States initially, the expansion into China had been on. 5th team Majestica was founded in Western Europe and focused hotel in Shanghai, but there are 5 issues between Majestica and CPS. Majestica, a luxury hotel management service business began in in Western Europe. Majestica gradually expand to United Kingdom, United States, North.
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All over the world, owner and developer of luxury hotels are attracted by Majestica because of their excellent quality. Their key success factor is management pointed to a service culture that they had fostered for decade. Moreover, their service culture is personal service oriented. This unique service culture leads Majestica to icon in hotel management business in the world.
They had two strategies to expand their business shangai are cautious to increase number of hotel and resort in their portfolio and operating philosophy. Majestica follow other major international luxury hotel chain and enter in Asian market. InMajestica changed its strategy to enter Asian market because it was the alarming time for them.
China was sixth most popular destination for business and tourist and would be first positioned by Inthere were hotels with rooms which expected to increase 11 percent by Shanghai Tourism Administrative Commission also forecast that tourist visiting will increase by 5 percent. Mid international luxury hotel chains took the advantage of changed government policy soon they took place in Shanghai.
Shangri-la, Hyatt international etc established and imbued thoroughly Shanghai luxury hotel market. On that time Shanghai was mjestica best location for Majestica because of market demand, future benefit, resource, competition as well as government policy.
Majestica Hotel In Shanghai Essay Example for Free
While CPS was publicly listed in Hong Kong gave Majestica more confidence about business transparency and independence from government influence. As a result Majestica and CPS signed an intent and start negotiation.
The challenging issue was the length of the contract and the control over the management of the hotel. First of all, Majestica wants the agreement for 55 years while it was 10 years normal hotel management term in china.
So both CPS and Majestica had to change their policy and agreed to 30 years operation period with a option to extend operation period. Secondly, Majestica expect to design and construct by their senior people while CPS interfere to take decision. Than Majestica convince CPS that it is important to take senior people shanghzi keep chain of consistency of a world class luxury hotel construction.
Majestica Hotel in Shanghai? Case Study Analysis & Solution
Then, Majestica majesticq experienced person as general manager who will accountable for over all operation. CPS wants a Chinese person to be a general manager though majestic was not any enough experience Chinese person.
Then about expatriates, CPS wishes Majestica to train the local employees and eventually use them to replace the expatriates. In negotiation, CPS suggested to Majestica for purchasing all necessity from the local market. Majestica disagreed to CPS for allowing access to hotel rooms because of confusion. For foreign investment law of China Majestica had to take 25 percent equity by the Majestica had to change the upper limit minority investment policy. If Majestica could change their philosophy and business practice than not hootel china but it could lead whole world and become global.
To take this position Majestica need to change their management policy, market segmentation, human resource policy and aggressive expansion of hotel operating business. Majestica Hotel In Shanghai.
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