Ip Based Technologies By Guest Tek Commerce Essay

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Founded in 1996, Guest-Tek is the worlds largest provider of IP based technology solutions to the hospitality industry. Guest-Teks OneView â„¢ platform provides hotels with converged data, video and telephony services. Guest-Tek is a preferred vendor to major hotel brands, providing services including network design, procurement, implementation, and post sales customer support to over 2,900 properties and over 506,000 rooms worldwide.

The company's head offices are in Calgary, Alberta, and it has major support facilities in Irvine, California, and Warsaw, Poland as well as Sales offices located throughout North America and Europe.

Company History

Guest-Tek was founded in Calgary, Canada, in March 1997.Guest-Tek established itself as a leading provider of high-speed Internet access in hotels in North America. Guest-Tek market was mostly in North America compared to its market share abroad. Guest-Tek sold its Internet solution, which was branded as Global Suite, to three-, four- and five-star hotels and installed access points in guest rooms, meeting rooms and common areas. Global Suite is later renamed as Guest-Tek's OneView â„¢. Guest-Tek then maintained a post-installation network and provided technical support for Global Suite users through a toll-free, 24-hour telephone line. It was typically a premium high-speed Internet access solution that was easy to use for travelers and convenient for hotel managers. Global Suite's industry-leading 99 per cent user success rate, together with Guest-Tek's comprehensive service package for both guests and hotel managers, had secured some of the world's finest hotel chains and management groups as clients.


Guest-Tek has the following three major operating subsidiaries:

Guest-Tek Interactive Entertainment Inc., formerly known as Golden Tree Communications Inc. GTK Inc. is incorporated and located in Irvine, California, USA. And Guest-Tek owns 100% of the issued securities of GTK Inc.;

Guest-Tek International Group Ltd. GTK Intl is incorporated and located in London, UK. Guest-Tek owns 100% of the issued securities of GTK Intl. GTK Intl. has one wholly-owned subsidiary, Guest-Tek Interactive Entertainment of Warsaw, Poland

Sigpro, LLC is incorporated in the state of Delaware, USA, and located in Mountain View, California, USA. Guest-Tek owns 100% of the issued membership units of Sigpro.

Business Description and Strategy

Guest-Tek's service offerings are

OneView High Speed Internet

OneView Video On Demand & IPTV

Voice & Converged Media

Support Services

In short Guest-Tek operates in a market that helps the hospitality industry free up its resources which would be otherwise tied-up working on the supporting operations providing the in-hotel services. Guest-Tek helps the hospitality industry in concentrating on their core-competency which is hospitality. Guest-Tek works like a utility and this way helps the hotels in budgeting their operating costs more accurately. Guest-Tek OneView platform is the best bet between the having a control on the operating costs and the opportunity cost of giving the best in-hotel experience to the guests.

Customer Overview

Guest-Tek targets the lodging segment of the hospitality market. The majority of Guest-Tek's customers to date have been in the upper and mid-market segments of the hospitality market. Increasingly, mid-market, economy and limited-service properties are demanding HSIA resulting in a shift in Guest-Tek's customer base to include this segment. Penetration into timeshare markets as hoteliers begin to combine condo style housing with hotel lodging rooms is also targeted. Overall, Guest-Tek has installed OneView Internet in properties across major hotel brands as well as over independent boutique hotels. Guest-Tek is a certified supplier with major hotel brands. Although Guest-Tek's customers may be from a common brand, frequently they are owned individually.



Guest -Tek Offers an end-to-end HSIA solution including Hardware, Software, implementation, training and support

24/7 Network Operations Centre and a multi-location customer call center providing support in English, Spanish and French on full-time basis and 15 other languages on a part-time basis.

Dedicated R&D department

Listed company and Established brand name

Premium product focused on premium market

Easy to use Global Suite / One View Solution

Proprietary software best in class

Turnkey solution for easy deployment


Narrow market focus (97% of 2003 revenue from one market)

Centralized structure (everything run from HQ)

Sales and Operations are centralized from head office

8-12 week installation lead times for Hardware and Software program deployment, Customer Training and Integration with the customer's other existing system.

4 to 12 month sales cycles before signing up new customers

Low recurring revenues ($3-£4 per room per month)

Dependence on Key Personnel


14000 Hotel Properties and 6,70,000 rooms in Middle East and Africa

On average, 87% of travelers check emails

Indirect sales through partnerships and / licensing in Middle East and Africa


North American market saturated

Stiff competition

Partnerships and licensing options may compromise service quality and dent product and Guest Tek image.

Global Suite/ One View user interface only available in 3 languages

Intellectual Property Risk since Guest-Tek primarily relies on Trade Secret, Trademark, copyright law and confidentiality procedures


Political Factors

The Government of South Africa is committed to open markets, privatization, and a favorable investment climate. Trade liberalization also has progressed substantially since the early 1990s. And to prove this commitment Finance Minister Trevor Manuel introduced the GEAR strategy in 1996.Since the first democratic elections in South Africa in 1994 there has been a lot of efforts on the reintegration of South Africa into the Global economy after a long time in isolation. South African government is governed by a constitution.

South African economy is ranked as an upper-middle income economy by the World Bank. Infrasturture development is largely provided by the National Government of South Africa and is a politically stable country.

Economic Factors

Under Economic factors we are going to consider the interest rates, exchange rates, Taxation. We are not going to consider the national income since most of the Hospitality industry is dependent on Tourism in South Africa which originates outside the country.

The historical prime interests are on a decline and have largely been stable in the past two years. Currently it is at 9% from November, 2011.

The Exchange rate between Rand and Dollar is also consistent. The South African Rand is one of the most traded currencies.

The principal source of direct taxation revenue in South Africa is Income Tax and is administered by SARS - South African Revenue Service. The taxation in South Africa is fair and is governed by the Income Tax Act, 1962.

Social Factors

The focus in South Africa at present is on meeting basic needs like ensuring that all citizens have proper housing, water supply and sanitation, electricity, health care. There have also been a lot of changes in the Constitution, so that it now reflects the interests of all sectors of the population, creates empowerment of individuals and communities, and upholds the rights of humans and the environment. Though unemployment has been on the rise in South Africa the workforce availability is good and the in general they show keenness towards work.

Technological Factors

There has been a substantial overhaul of infrastructure fuelled by the FIFA tournament that will stretch beyond and will have a significant impact on both the social and economic development in South Africa.

The Public Private Partnerships (PPP) is focused on facilitating the provision of Industrial Infrastructure through investments in Electricity generation, transmission and distribution, telecommunications and transport.

Environmental Factors

The department of water and environmental affairs is the lead agent for environmental management in South Africa. There are other departments like Mineral resources, Energy, Transport, Health, Agriculture, Forestry and Fisheries that administer and enforce the environmental laws. But these would not majorly affect the decision making in our case.

Legal Factors

Like in most developed countries the state has the power to make regulations, determine tariffs, provide services, allocate benefits, and grant exemptions. This is more economy oriented and focused at the social improvement.


Political Factors

Egypt is politically stable, but there is a lot of unrest recently. Egypt has only a limited democracy. Increasing foreign investment has become a major goal to foster private-sector growth by the Egyptian government. There has been considerable effort by the Egyptian government to improve the transparency of government policy but has mixed results. There have been significant obstacles that have hindered investment in the private sector.

Economic Factors

The Egyptian government has made increasing foreign investment a major goal of its economic reform program and strategy for fostering private sector-driven growth. Procedures for obtaining approval to establish new companies are becoming simpler and waiting times shorter than in the past. The GDP of Egypt is $188 billion and an annual growth rate of 4.7%.The Egyptian economy experienced some steady growth rates before it came down.

The interest rates remained steady amid the turmoil. But the recent turmoil has decreased a lot of inflow of foreign exchange which is generated mainly from foreign investment and tourism. There has been a steady weakening of the Egyptian currency against the dollar in the past one year.

Social Factors

The resource pool in Egypt has grown steadily each year. Around 500,000 new resources enter every year. Majority are employed in the private sector. The Unified labor law generally considers the well-being of the employee in terms of safety and discrimination. The labor laws also allow the down-sizing of employees in view of economic reasons.

Technological Factors

Egypt has embraced technology in its own way. The telecommunications has been thoroughly modernized. Though internet has been down during the recent unrest, technology is given importance. There has been lot of planning for investment in infrastructure the uncertainty might slow down the implementation of the plans. But comparatively Egypt's infrastructure is relatively under-developed. Electricity is supplied by state-owned Egyptian Electrical Authority (EEA).

Environmental Factors

Egypt has environmental legislation but we are not going to take them into consideration since our business does not directly involve adherence to environmental legislations.

Legal Factors

By Egyptian law, firms both foreign and domestic can establish and own business enterprises and engage in business activity.  Establishing, acquiring and disposing of interests in business enterprises can be done freely. But in all practicality, private firms sometimes find themselves at a disadvantage when contending for resources with state-owned firms. There have been instances of some companies having experienced difficulties in dissolving companies.





Information Technology and Telecommunication are best prospect sectors in South Africa. As we see from the organization structure it is evident that the business operations of Guest-Tek are centralized. For the kind of industry that Guest-Tek operates in it is very important that certain business functions are centralized. The business functions that need to be under the direct control of the organization are

Finance & Corporate Services

Research & Development

Client Services

The Business functions that can be expanded to other locations are

Sales, Marketing & New Business Development


Taking into consideration the SWOT analysis of Guest-Tek and the PESTEL analysis of South Africa we can consider the following Market Entry Strategies.

Establishing Sales and Operations Office

Value Added Resellers

Sales Agents

For each of these entry strategies we are going to look at the impact on the various business operations and the business process.

Establishing a Sales and operations office in South Africa

Establishing a sales and operations office in South Africa would be feasible for Guest-Tek in a scenario where it has substantial funds at its disposal. It will help Guest-Tek in capturing new customers but it also comes with the disadvantage of having fewer sales resource on ground which in turn would mean the customer acquisitions will not be rapid. But it would also give an advantage which is none can sell the better than the direct sales from Guest-Tek because Guest- Tek knows their product, the target market and understand the customer requirements better and fulfill them. Guest-Tek also has an experienced sales team who has been in business for the last decade. Having an operations team ready would also help in quicker implementations and considerable savings in the logistics cost involved. A dedicated operations team for South Africa would also be the first step in reducing the implementation and more optimized use of resources.

Value Added Resellers

Recruiting Value Added Resellers would be another entry strategy for South Africa. But in scenario of taking this approach Guest-Tek would need to establish a new business function like a Centre of Excellence who immediate responsibilities would be Training the Sales and Operations team of the VAR and supporting them in all the functions and the customer life-cycle starting from pre-sales to the Go-live.

From a strategic point of view we will still have the support or the customer services business function centralized. But as the VAR matures in the business we can give him the additional responsibility of support in turn giving him an additional revenue generation model. One of the greatest advantage of this model would be Guest-Tek can concentrate more in terms of research and development and can focus on the product road map with insights from the VAR. In my opinion this would prove to be a better long-term strategy.

We would address the issue of poor implementations and poor scoping by seeing that the VAR and the VAR resources confirm to the standards set by the Centre of Excellence which could be certifications for the resources. This way we would also minimize the risk of Guesk-Tek's image getting dented.

Sales Agents

Recruiting Sales Agents who would solicit the customers and then in turn pass the leads to the regional sales team would be the most cost effective approach of entering a new market. But this would also mean slower customer acquisitions because Guest-Tek would not have full control on generating leads which can be taken further through the sales cycle.


I would suggest a mix of these entry strategies for a long-term presence in capturing the South African market. I would suggest establishing a sales and operations office with initial skeletal Resources. Guest-Tek would then concentrate on acquiring new customers and implementing the Solution. Once Guest-Tek has a few success stories under its belt in the South African market, Guest-Tek can concentrate on building a partner ecosystem of Value-added resellers who can take it on from there. Simultaneously we would also recruit sales agents who hold considerable influence with the customers in bringing us the business which will be serviced by VARS or Guest-Tek itself depending on the strategic importance of the account.



Though Egypt has been going through a relatively unstable political situation, Telecommunications are much modernized. The prospect of a relatively virgin market also cannot be ignored. But owing to the current political instability it is strategically advantageous for Guest-Tek to look at expanding into Egypt together with South Africa.

Taking into consideration the SWOT analysis of Guest-Tek and the PESTEL analysis of Egypt we can consider the following Market Entry Strategies.

Value Added Resellers

Sales Agents

For each of these entry strategies we are going to look at the impact on the various business operations and the business process.

Value Added Resellers

Entering the market through value added resellers would not require any capital investment in Egypt. This would mitigate a huge risk of losing a capital investment and value organizational time. We would create a partner eco-system which would serve the customers on behalf of Guest-Tek. This is the best strategy because doing business in Egypt would require the right political connections and none can be good at it than a local organization which has considerable political clout.

Sales Agents

Sales Agents who would work for Guest-Tek on a commission structure is also a riskless entry strategy. Guest-Tek should concentrate more on this strategy initially so that customers can be acquired. The implementation can be done by Guest-Tek South Africa operations team. These initial customer successes can be then be references for the VARS.


As the PESTEL analysis confirms that there are some political and legal disadvantages I would suggest that the Sales Agents and Value Added Resellers are the best entry strategies to the Egypt market. This strategy can also be easily aligned into the future global marketing strategy where Guest-Tek would completely operate on the basis of a partner ecosystem. Guest-Tek would be concentrating more on the product road map and revenue generation than implementations and support which would be monitored by the Guest-Tek Center Of Excellence.