Outsourcing is a crucial factor in running a business. It is the process of delegating tasks to several out-house service providers to handle various operations in the business. In the hotels and tourism sector, it is very common to find that the building or the land is being outsourced or rented by an external supplier. Companies rely on outsourcing primarily to cope with the complex dynamic environment of the business world and to leverage the human resources specializing in individual sectors of operations. This has become highly relevant in both large scale and small businesses to enhance the service sector where external service providers are better trained and equipped to perform certain tasks (Jensia, 2008). Hence, this essay will highlight the benefits and problems faced by hoteliers in the short run and long run from an economic perspective. Businesses turn to outsourcing to reduce costs, improve the quality of service provided and enhance efficiency. By outsourcing firms to undertake non-core functions of the hotel, the efficiency and profitability of the business can increase substantially. Outsourcing firms provides hotel managers a short term cost advantage by saving time, human resources and training costs. The external service suppliers have their own staff with various different areas of expertise and equipment needed to carry out a given task. Once firms are outsourced, they are responsible for the quality and service they provide to their customers. Moreover, the out-house suppliers are required to develop, maintain and upgrade their systems in order to promote efficiency and productivity. Since these duties are taken up by the external service suppliers it fundamentally translates to less management worries for... ... middle of paper ... ...costs are staff training, recruitment of staff and hourly wages. Works Cited Jensia, I. (2008). Advantages and disadvantages of outsourcing. Retrieved from http://voices.yahoo.com/advantages-disadvantages-outsourcing-1921370.html Reiss, B. (2010). Outsourcing Turns Fixed Costs into Variable Costs. Retrieved from http://www.entrepreneur.com/article/217487 Hudson, K. (2010). Luxury Chain Cuts the Flowers, Sends Out Wash at Some Hotels. Retrieved from http://online.wsj.com/news/articles/SB10001424052748704366504575278450170941876. Sani, A., Dezdar, S. & Ainin, S. (2013). Outsourcing Patterns among Malaysian Hotels. International Journal of Business and Social Science, 4 (9), p. 134-142. Retrieved from http://ijbssnet.com/journals/Vol_4_No_9_August_2013/13.pdf. The Economist. (2009). Outsourcing as you sleep. Retrieved from: http://www.economist.com/node/13145889.
Sophisticated gadgets, high standard of living and advanced technology are highly demanded in this modern and developing world. In the recent years, companies have fasten the pace within the industries by looking at constant improvements and entering ‘gaps’ in the market to attract consumers. Nowadays, not merely companies rack one’s brains to attract consumers, by hook or by crook, nations throughout the world are also trying to inform consumers that ‘Our nation is the best, please buy and wide-spread use our products or services’. These circumstance have led to consumers’ expectations and tastes increasingly homogenized, thus, the concept of globalization of nowadays economy is introduced. “Globalization is the free movement of goods, people and capital; of the three, it's the money that's had the most significant effect on our lives recently, for both good and ill.”(Schuman, 2013) In such a unpredictable economic climate, huge amount of small and medium- sized enterprises are enhancing its management model as well as its operations strategy to increase its revenues and the ability of survive. Junction Hotel is no exception. With many appearance of international hotels and related industries, junction Hotel is confronting with serious challenges. To break through barrier and obtain business success, excellent management and strategic are needed. However, present-day’s junction hotel hardly deserve to be called “success”.in spite of Junction Hotel once highly consider as a successful luxury hotel with a strong business background ,now has been under- performing for years duo to several factors such as piecemeal investments, irregular system and lack of clear objectives. To enhance efficiency and performant of Jun...
The significant level of outsourcing programs used across all business sectors is well documented in the literature (Bender 1999; Quinn 2000; Dun and Bradstreet 2000; Klaas, McClendon and Gainey 2001). Past research has progressed along several paths. First, some researchers have focused on motivations and reasons for outsourcing activities (Conner and Prahalad 1996; Greer et al. 1999; Sinderman 1995; Mullin 1996; Grant 1996; Frayer Scannell and Thomas 2000). According to this perspective, the global imperative for outsourcing accelerates as firms evolve from sellers of products and services abroad to setting up operations in foreign countries and staffing those operations with host countries or third party nationals (Greer et al. 1999). Most corporations believe that in order to compete globally, they have to look at efficiency and cost containment rather than relying strictly on revenue increases (Conner and Prahalad 1996). As companies seek to enhance their competitive positions in an increasingly global marketplace, they are discovering that they can cut costs and maintain quality by relying more on outside service providers for activities viewed as supplementary to their core businesses (Mullin 1996; Grant 1996).
Outsourcing relationships demand the same care and attention to sound management principles and practices as do in-house operations and valued employees. Managed well, continuous improvement, increasing value, and constant innovation can be expected. Managed poorly, the services and overall relationship deteriorates resulting in higher costs, operational disruption and lost business opportunities.
In light of recent growth of domestic and foreign countries outsourcing and off shoring over seas, companies been taken advantage of the cheap labor cost for outsourcing and off shoring manufacturing. Competitive business investing in domestic and foreign manufacturing have affects every part of the business industries from design, software development, finances and logistic management, i.e., customer and sales. Nevertheless, outsourcing been praised by businesses for outcomes of cost-effectiveness, efficient, productive and strategic, but damned as malicious, because of companies’ greediness, detrimental, and brutal in the public eyes.
fixed costs to total costs. The high level of these costs stem from the fact that hotels must constantly be managed to achieve the most costeffective usage of resources applied to decor, equipment, preoperational expenses and finance. The aim of hotels is to fill their rooms as profitable as possible as a result some of the most important thing that the hotel industry must realize is that it must be able to market themselves and provide quality services so that customers will want to return back to the hotel. The demands of these two characteristics are very high and it requires a lot of effort. In terms of building a hotel, the capital requirements for a hotel project are so high that hotel cannot easily be traded and must remain as a longterm investment purpose. As a result the industry is subjected to large amounts of cost advantages or disadvantages based on the size of the hotel. Furthermore the success of a hotel is also sensitive to the location, management, and the quality and expertise of the staff which is vital to the functionality of the hospitality industry.
The next competitive advantage is quality of service. Outsourced environment is quite different than that of the environment in an enterprise. Advertisers are different economic entity with profits at risk. External service provider will make every effort to deliver good quality; good service and everything will apply and will be tested. For example, the usage of the ITIL methodology. Service providers will also provide high output, and perform better output, needs, and change control. Thr...
Competitive advantage is mean a firm’s ability to create value in a way that is rivals cannot. While outsourcing is a business strategy that moves some of an organization’s functions, activities, processes, and also decision responsibility from an organization to outside providers. This outsourcing is done by doing negotiating contract agreements with a vendor who takes the responsibility for the quality, customer services, production process, and people management of the function. So, to allow organizations to focus on their core business and create a competitive advantage, the organization must use outsourcing. Outsourcing is use to reduce operational costs. However, outsourcing have a lacking or disadvantages such as quality risk, quality service, language barriers, labor issues, and legal compliance and security.
Outsourcing has been utilized by companies in sundry industries for many decades as a key business strategy (Ghodeswar and Vaidyanathan, 2008). Harmancioglu (2009) argue that several successful companies depend on outsourcing to continue being responsive in coping with market changes as well as to expand their operations globally. He also stated that outsourcing was primarily perceived and employed to reduce costs, however recently it has become a prevalent and essential tool to gain competitive advantage. There are various reasons that lead companies to outsource some of their functions, these include: cost cutting, entrance to new markets, and to concentrate on main activities (Ghodeswar and Vaidyanathan, 2008). Wright (2004) mentions a number of functions that a company can outsource, these include: human resources, customer care service, and information technology functions.
Back in 1978, China had only 137 tourist hotels. With the introduction of economic reform and the open door policy, this led to a rapid growth in the hotel industry for China. The InterContinental Hotel Group (IHG) was among the earliest international hotel chains to enter the China Market. The first hotel they introduced to China was the Lido Holiday Inn that was opened in Beijing. After the first year of the Holiday Inn in China, there was an outstanding performance by earning a big profit. This proved that the market for international owned hotels was good and with tourism and the economy growing every year, why wouldn’t you place a hotel in Chinas growing market. Just ten years later, there were ten more hotels managed by the IHG in major cities in China. The InterContinental brand innovated to the China market to set them apart from the competition. They were the first international hotel chain to launch a Chinese language website and the first to offer online reservations to guests who did not use credit cards. The premise of this paper is to provide the reader with insight on how the InterContinental Hotel Group implemented strategies in China to gain a competitive advantage. I will go further to discuss how it can maintain its advantage in the future. The IHG Company has
Traditionally, the hotel industry has catered to the lodging, dining and other amenities of travellers or guests. The industry operates across the different value chain by offering services and facilities as per the preferences and paying capacity of guests’. Typically, players in this industry own assets and or franchise their brands or manage third party assets. The hotel business is highly capital intensive but at the same time highly competitive, this is due to the presence of a large number of players across the different value chain. The industry being highly regional in nature, the hotel business is directly impacted by overall economic or business activity and tourist movement
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
A disciplined approach to management eying leading employees, improving the management team and building the business strategy. Instead of treating each problem as a one off. They design systems and structures that make it easier to handle in the future. (Techrepublic, 2015) 2.2. Risk of exposing confidential data: When an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party Synchronizing the deliverables: Some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced partner Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of multiple company at a time. In such situations vendors may lack complete focus on your organization 's tasks. 2.3. 1.Know the
...urcing services, the company operation will be became a mess. This is because one organization can’t run a lot of task or project at one time. Therefore an organization need outsourcing in the way to help their organization run smoothly.
Globalization has lead to increase in international trade and a greater role for multinational corporations. With the rise of globalization many companies are turning to either off shoring or offshore outsourcing. In India and China, companies like IBM, Microsoft, Hewlett Packard, and Novell choose to get services from sub-contractors in these countries or move their development and support jobs there.
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole