As a company moving within a new integrated market it is necessary to evaluate what their impending strengths, weaknesses, opportunities and threats are. This process is referred to as a SWOT analysis and plays an integral role within the daily operations of marketing teams. Successful market penetration becomes a greater possibility when a company can efficiently analyze their marketing environment and specify how it will relate to their own exclusive product. The goal is to match the company’s strengths to attractive opportunities in the environment while eliminating or overcoming the weaknesses and minimizing the threats” (Bowen et al, 2010). When analyzing the Golden Arch Hotel launch, it is important to consider the reasons why they decided to merge within the hotel industry and the pending opportunities it provided. This segment of the SWOT analysis will determine if the company will be able to capitalize and succeed within the intended market. One definitive opportunity for the Golden Arch Hotel was the booming hotel industry within Switzerland during the time of their product launch.
The designated region of Zurich boasted a total of 17 newly constructed hotels alone. As Michel’s article explains, “their occupancy rates were high, and there was much diversity. ” (Michel, 2005). Surely a well-respected and loved company such as McDonalds would thrive within a flourishing and diverse market such as this. Furthermore, Zurich was seen as a trendy environment; a perfect candidate for a new, modern and innovative concept that McDonald’s Golden Arch Hotel would exemplify. The assimilation of McDonald’s Golden Arch concept within Switzerland’s hotel and lodging industry did not present an easy transition.
As a result, McDonalds was required to use all of their available strengths and abilities in order to achieve success. It is important that when focusing on strengths, the company perceives it from the point of view of their customers. McDonalds ability to brand their product and cater to a family oriented consumer base is a major strength and crucial part of their image. Therefore, maintaining a family oriented image and concept within their Golden Arch Hotel would be vital for their success. McDonalds major strengths revolve around their ability to serve their customers a fast, onvenient, enjoyable and affordable product while still exemplifying a high level of professionalism. The elements of convenience and quickness would be integrated through the use of self check-ins. This essentially would allow the guests the opportunity to bypass the formality of the regular check-in process and provide them an efficient yet easy way to access their rooms. Having the hotelier background of CEO Urs Hammer was also a major strength as it provided a link to the hotel industry of Switzerland and demonstrated a high level of professionalism.
The hotel would also maintain the friendly service demonstrated within their restaurants by implementing a set of consistent service standards that employees would undertake. The concept of McDonalds creating a new innovative hotel product and expanding their market growth was potentially a very profitable and realistic idea. Unfortunately, the manner that it was undertaken was incorrect. As stated by Kathryn Medico, “an effective SWOT analysis will be conducted through the eyes of the customer” (Medico, 2012).
McDonalds relies heavily on their “family image” yet they failed to illustrate this within their room types as they only offered rooms that accommodated only a maximum of two people at a time. Pricing and strategic placement were also inappropriate. A family oriented hotel company would ideally be placed within a three-star market, affordable for families and a wide variety of guests. However, the Golden Arch Hotel was a four-star brand situated in one of the most expensive demographic areas of Europe, charging a rack rate of $120 USD minimum per night. This pricing method would be more reflective towards business segmentation.
However, business clients generally do not associate themselves with the lower priced products that McDonalds generally offers. This major flaw, combined with the limited availability of domestic Swiss workers, resulted in major weaknesses that the Golden Arch Hotel currently faces. There is also the threat of an over situated market that they are competing within, featuring a multitude of world-renowned international hotels. With the inability of the Golden Arch Hotel to establish themselves inside the hotel industry, it is quite possible that this lack of success may become a permanent reality moving forward.
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