Roles of the Executive Team



Conversation between the Top Executives

HCO: I hope you all have read the Memo from the CEO regarding the acquisition of hotel chains in Italy. Today we are gathered here to discuss our future strategy, and whether purchasing the hotel chain will be viable or not.

CFO: Yes, we have read the memo. Purchasing the hotel chain in Italy seems very attractive, and it will result in a considerable increase, in revenue, but there are some serious issues to be discussed.

CMO: Let's start the meeting and discuss the challenges that are to be dealt with, in case of purchasing the hotel chain.

CHCO: First of all, I will discuss the challenges that the operations department might face in case of acquisition of the hotel chain. The quality of our services in the United States is very high, and it took a long time to achieve this standard. We have a certain image in terms of the quality of food and the services we offer. The circumstances in Italy are very different, and the employees lack proper training. Our rigorous training programs have achieved exceptional results, which ensured remarkable services, and improved customer satisfaction. Many of our clients may use our hotel chains in Italy, and if the services are not according to their expectations, it will reflect negatively on our business.

The most important task is to make sure that the employees have the necessary abilities and skill to make the hotels a success. One significant factor to analyze is that the employees work under trade unions, and their salaries are relatively higher as compared to the US. We have to devise a strategy to ensure that our hotel chains earn profit, and the quality of our services also remains high.

COO: Yes, in addition to the higher wages, there is another problem that will impact the profit margin; the existing hotel buildings are a bit old and lack the facilities enjoyed by our customers in US. We have to refurbish the buildings so that our brand image is not affected. The trade unions might affect smooth running of the hotel operations, in case, they call for strikes. Ensuring smooth running of the Hotels should be our top priority, and to achieve this, a solution regarding the trade unions has to be finalized. Also, the CFO should devise a plan to ensure profits, keeping in view that current buildings need an upgrade.

CFO: It would be very difficult to ensure a good profit margin, with the high salaries, and the need for building upgrade. The up gradations of the buildings are necessary, but the salaries and the room costs have to be considered. If we improve our services, our building infrastructure, and the overall outlook of our hotels, customers might be willing to pay extra charges. I suggest that we should maintain the same standard as in US, and increase the room rates. The increase should be moderate so that our services remain affordable, and does not affect ...