49NL Year 2 Business assignment

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Decisions on prices and costs year 2 & reflection point

Check the page Year 1-2-3-4. During the years you have to take a number of decisions

• on prices (five decisions)
• on costs to be made (five other decisions)

Situation

On the page operating review you can see now how the results of your actions and how the market responded to your earlier choices and decisions taken. You continue developing your new hotel concept and working on establishing its footprint in the market under your new chosen strategy. Look at the feedback and comments provided by your coach(es), and if applicable, the chosen marketing research. Keep your actions aligned with your strategy.

Now, you get to assess current prices and revise them accordingly (five of them) bringing again revenues and their respective costs according to other five specific choices. You will make all these decisions now for year 2. After seeing the results from this year 2, you will eventually get to take further decisions (“new amounts”) in year 3.

Your Team makes new decisions regarding year 2 in your Team File

Tab year 1-2-3-4 in your Team File. Just an example of the 5 decisions on prices. The same goes for decisions on costs. The 'active' year will be 'yellow', a year which has passed will be greyed-out. Mouse over in row B gives you more info on the decision. You will also get an alert if the input is not okay. Be sure to explain in depth, with sources! and arguments and preferably calculations.

Goal

Keeping your decisions in alignment with your new strategy and your new customer segment(s) and its evolving behavior. Remember that all five decisions on costs are new costs: behave on incremental basis to previously pre-determined fixed and variable costs as part of operational management strategy. Your focus remains on the execution of your strategy while positioning your hotel to drive and sustain business growth and profitability in the long run. So, keep your professional hat on managing a good balance between prices and its related total costs (incl. new costs). Sales prices can reflect your strategy (up-market?), your results (yield?) and your marketing (psychological?).

Deliverable

Fill out all ten decisions in your team File.
Most importantly, that you provide adequate and sound arguments behind every decision as entered in your Team File. i.e., Why did you choose them?
Try to find benchmarks, (comparative sources), put URL or links in, make basic calculations, try to predict the outcome of your decisions. Particularly, when you are looking at costs as these will be incremental:
• exactly what are you going to spend the money on? and,
• what benefit do you think it will bring to your hotel? Be concrete, also share your calculations if and when necessary.
This is the second year, so you will have to foresee and support the type of costs that would enable you to drive and sustain growth and profitability while learning from the market responses.

Assessed elements

• Are all choices made and within the boundaries set?
• Is there a clear link to the strategy?
• Are the arguments valid?
• Is clear on what the costs are spent exactly?
• Are there basic calculations done to show the effect of the choices at each choice?
• Is there is a link to year 1 and new business insights that you can support?

Help Files

• History
• Year 1-2-3-4 Decisions
• Operating review
• Demo Team File of a finished Game. Each competition is a bit different, but it will give you an idea of what a filled out Team File might look like
• Investments

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