Tuesday, March 27, 2012

What are the advantages and disadvantages of standardizing the product offerings for a branded hospitality chain?

Major
branded hotel chains have the choice of standardizing their offerings across the brand or of
letting individual properties customize their offerings to meet the needs of local
markets. 

The most obvious advantage of standardization is quality control,
guaranteeing the customer of a uniform experience across the brand, irrespective of the
ownership of the individual franchise. A second advantage is that it can reduce costs by
enabling all hotels in a chain to take advantage of economies of scale and negotiate lower
prices from suppliers. 

The main disadvantage to standardization is that it
reduces the flexibility of a chain to cater for regional tastes and expectations. As hotel
chains increasingly rely on global revenue, this becomes a problem, as the needs and tastes of
customers in areas as diverse as Nigeria, India, China, Dubai, Canada, Germany, and Chile, for
example, are quite different. 

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