Importance of the defensive strategy for the hotel industry.

According Peelen & Beltman (2013) there are three kind of value discipline, which are significantly important for organization, who wants to be unique from their competitors. The values disciplines are called: operational excellence, product leadership, and customer intimacy. Firstly, Companies who are using the operational excellence approach are trying to combine the price of the competitors, quality and the ease of purchase together. Secondly, companies who are using the product leadership approach are aiming for innovative products and wants to provide their customers with the best features. Thirdly, companies who are using the customer intimacy approach are only focusing on their relation ship with their customer, they want to engage their customers in order to have loyal customers.

Customer intimacy can be further divided in 2 strategies: The offensive strategy & the defensive strategy. The offensive strategy focusses on gaining new customer while the defensive strategy focusses on increasing customer satisfaction (loyal customer). Both strategies are significant for the hotel industry. Nevertheless, the hotel industry is a service industry and customers are the king of the industry, thus, they should focus on the defensive strategy (Peelen & Beltman, 2013) .

The last decades, tourism industry is growing rapidly. The huge growth has a big impact on the hotel industry. Nowadays, hotel industry are competing with each other in order to differentiate themselves with the competitors. However, trying to differentiate with the competitors in terms of products is almost impossible. Nonetheless, hotel can differentiate themselves in terms of the customer relationship( loyalty programs). Therefore, the hotel industry came up with some loyalty programs (Chen, 2009).

There are different loyalty programs in the hotel industry. Every hotel develops their own loyalty program. For example, The Hilton honors loyalty program is on the top of the list for business and luxury travelers. Participants can convert credits for frequent flier miles at 40 different airlines, and as an extra bonus, can cash in their frequent flier miles. Another benefit is that Hilton is partner with Visa, American Express. They are working together in this Hilton program and allows members to earn points for every dollar they have spend (Blog, 2016).

In conclusion, loyalty programs are developed in order to build relationship with the clients. They want to have loyal customers through the loyalty program and the loyalty program is part of the defensive strategy which is really important for the hotel industry.

Bibliography
Peelen, E., & Beltman, R. (2013). Customer Relationship Management (2nd edition).

Blog, T. B. (2016, 2 1). Top 5 Hotel Loyalty Programs. Retrieved 9 9, 2016, from http://bigdoor.com/blog/2014/03/11/top-5-hotel-loyalty-programs/

Chen, C.-F. (2009). Tourism expansion, tourism uncertainty and economic growth: New evidence from Taiwan and Korea. 812-818.

Advertisements

One thought on “Importance of the defensive strategy for the hotel industry.”

  1. This blog seems to be separated in two parts: a part on the defensive strategy and a part on loyalty programs. To me the point you want to make is not completely clear. You might work out the part on the defensive strategy better, say for example something on the necessity to acquire new customers or more on relationship policies, loyalty and retention. There are also quite some mistakes in the text. Could you please use your full name and put the article in the right categories?

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s