Porter Five Forces Model Of Taj Hotels Tourism Essay

A Hotel may be defined as per the British law as A place where abonafide traveler can receive food and shelter provided he is a position to pay for it and is in a fit condition to be received.

The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces and is recognised as one of Asia’s largest and finest hotel company. Incorporated by the founder of the Tata Group, Mr. Jamsetji N. Tata, the company opened its first property, The Taj Mahal Palace Hotel, Bombay in 1903. The Taj, a symbol of Indian hospitality, completed its centenary year in 2003. 

Taj Hotels Resort and Palaces comprises more than 60 hotels in 45 locations across India with an additional 15 international hotels in the Malaysia, United Kingdom, United States of America, Bhutan, Sri Lanka, Africa, the Middle East and Australia.

Spanning the length and breadth of the country, gracing important industrial towns and cities, beaches, hill stations, historical and pilgrim centres and wildlife destinations, each Taj hotel offers the luxury of service, the apogee of Indian hospitality, vantage locations, modern amenities and business facilities.

IHCL operate in the luxury, premium, mid-market and value segments of the market through the following: 

Taj (luxury full-service hotels, resorts and palaces) is the flagship brand for the world’s most discerning travelers seeking authentic experiences given that luxury is a way of life to which they are accustomed. Spanning world-renowned landmarks, modern business hotels, idyllic beach resorts, authentic Rajput palaces and rustic safari lodges, each Taj hotel reinterprets the tradition of hospitality in a refreshingly modern way to create unique experiences and lifelong memories.

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Taj also encompasses a unique set of iconic properties rooted in history and tradition that deliver truly unforgettable experiences. A collection of outstanding properties with strong heritage as hotels or palaces which offer something more than great physical product and exceptional service. This group is defined by the emotional and unique equity of its iconic properties that are authentic, non- replicable with great potential to create memories and stories.

Taj Exotica is resort and spa brand found in the most exotic and relaxing locales of the world. The properties are defined by the privacy and intimacy they provide. The hotels are clearly differentiated by their product philosophy and service design. They are centered around high end accommodation, intimacy and an environment that allows its guest unrivalled comfort and privacy. They are defined by a sensibility of intimate design and by their varied and eclectic culinary experiences, impeccable service and authentic Indian Spa sanctuaries.

Taj Safaris are wildlife lodges that allow travelers to experience the unparalleled beauty of the Indian jungle amidst luxurious surroundings. They offer India’s first and only wildlife luxury lodge circuit. Taj Safaris provide guests with the ultimate, interpretive, wild life experience based on a proven sustainable ecotourism model.

Upper Upscale Hotels (full-service hotels and resorts) provide a new generation of travelers a contemporary and creative hospitality experience that matches their work-hard play-hard lifestyles. Stylish interiors, innovative cuisine, hip bars, and a focus on technology set these properties apart. 

The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a pan-India network of hotels and resorts that offers business and leisure travelers a hotel designed, keeping the modern nomad in mind. At the Gateway Hotel, we believe in keeping things simple. This is why, hotels are divided into 7 simple zones- Stay, Hangout, Meet, Work, Workout, Unwind and Explore.

As travel often means more hassle than harmony, more stress than satisfaction, modern travelers are looking for smarter choices. Driven by passion for perfection, Taj welcomes its customers to a refreshingly enjoyable and hassle-free experience, anytime, everywhere. Offering the highest consistency in quality, service and style the hotel set new standards and take the unwanted surprises out of traveling. Taj’s warm welcomes make guests feel at home, away from home and its crisp and courteous service empowers them to get more done with greater effectiveness and control. And through Taj’s unrivalled network it provide service that is effortless, simple, never overwhelming, always warm.

Ginger (economy hotels) is IHCL’s revolutionary concept in hospitality for the value segment. Intelligently designed facilities, consistency and affordability are hallmarks of this brand targeted at travelers who value simplicity and self-service.

Taj Hotels Resorts and Palaces is committed to replicate its domestic success onto international shores with plans to build an international network of luxury hotels, which will provide an exemplary product-service combination and in the process create a global brand. The current international portfolio includes luxury resorts in the Indian Ocean, business and resort destinations in the Middle East and Africa, serviced apartments in the UK, the first hotel in Australia and three a top-end luxury hotels in the US.

Throughout the Company’s expansion, its mandate has been twofold: to infuse a sense of Indian heritage and culture within each diverse property, while also anticipating the needs and desires of the sophisticated traveller. Over the years, the Taj has won international acclaim for its quality hotels and its excellence in business facilities, services, cuisine and interiors.

The Taj strengthened its presence in the Indian Ocean rim with the Exotica Brand. The Taj Exotica was evolved as part of Taj Hotels Resorts and Palaces intent to position it as a brand that is clearly differentiated by its product philosophy and service design. The Taj Exotica Resort and Spa, in Maldives is centered on high-end accommodation, intimacy and an environment that allows its guest’s unrivalled comfort and privacy.

Taj Hotels further expanded its global footprint by securing management contracts at Palm Island, Jumeirah in Dubai, Saraya Islands in Ras Al Khaimah, Aldar Group in Abu Dhabi, UAE Langkawi in Malaysia and Thimpu in Bhutan. The most significant additions to the portfolio have been The Pierre, the iconic landmark hotel on New York’s Fifth Avenue, Taj Boston and Blue, Sydney.

The presence of Taj Hotels Resorts and Palaces internationally has been developed through a network of Taj regional sales and PR offices in the United Kingdom, France, Germany, Italy, Dubai, Singapore, Australia, Japan, Russia and the United States of America.

At the Taj Hotels Resorts and Palaces luxurious living and fine dining find common ground. Whether it is introducing exotic world cuisines to India or taking authentic Indian fare to the world, the Taj Hotels Resorts and Palaces is renowned for the eclectic culinary experiences it brings to its guests. Through a vast repertoire of award-winning restaurants, legendary recipes from royal kitchens and celebrated food festivals, the Taj has pioneered innovation in fine dining across the world.

Taj Hotels also promise a whole new experience of tranquillity and total ‘wellness’, through Jiva Spas a unique concept, which brings together the wisdom and heritage of the Asian and Indian Philosophy of Wellness and Well-being. Rooted in ancient Indian healing knowledge, Jiva Spas derive inspiration and spirit from the holistic concept of living. There is a rich basket of fresh and unique experiences under the Jiva Spa umbrella of offering, Yoga and Meditation, mastered and disseminated by accomplished practitioners, authentic Ayurveda, and unique Taj signature treatments. Royal traditions of wellness in service experiences, holistic treatments involving body therapies, enlivening and meaningful rituals and ceremonies and unique natural products blended by hand, come together to offer a truly calming experience.

IHCL operates Taj Air, a luxury private jet operation with state-of-the-art Falcon 2000 aircrafts designed by Dassault Aviation, France; and Taj Yachts, two 3-bedroom luxury yachts which can be used by guests in Mumbai and Kochi, in Kerala.

IHCL also operates Taj Sats Air Catering Ltd., the largest airline catering service in South Asia, as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines.

Additionally, it operates the Indian Institute of Hotel Management, Aurangabad since 1993. The institute offers a three-year diploma, designed with the help of international faculty and has affiliations with several American and European programmes.

CORPORATE SUSTAINABILITY AND SOCIAL RESPONSBILITY

As a part of Tatas; India’s premier business house; Taj Hotels, have always believed in society and environment being integral stakeholders in our business along with its shareholders, customers, vendors and others. Over the last decade, the movement towards ecologically sound tourism has gained urgency and importance across the globe and we recognize that responsible practices in vogue are as diverse as the geographies. 

Taj promote corporate citizenship through our strategic public-private partnerships which encourage building livelihoods of less-advantaged youth and women. The causes they promote include reducing malnutrition, promoting indigenous artisans and craftsmen and enhancing employability of identified target groups by sharing our core competencies as a leading hospitality company.

Taj have the unique scope and opportunity to develop raw potential into a skilled workforce that is immediately employable by various players in the industry. A majority of its community projects are focused around extending its key strengths in food production, kitchen management, housekeeping, customer service and spas to promote economic empowerment of candidates from vulnerable socio-economic backgrounds. The group is fully committed to the cause of building a sustainable environment by reducing the impact of its daily operations on the environment and improving operational efficiencies, resource conservation, reuse and recycling of key resources. 

A glimpse of indicative projects undertaken by Taj group 

Taj’s sixth Corporate Sustainability Report was submitted to the United Nations Global Compact society in August, 2009. The United Nations Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, safety & security, environment and anti-corruption. This Corporate Sustainability report also serves as their GRI (Global Reporting Initiative) as well as Triple Bottom Line report. The report focuses on identified priorities at IHCL and responds to key stakeholder needs. Taj plan to continue and further strengthen its commitment to the environment and societies in which we operate. 

EARTH

In an endeavour to reinstate its vision and efforts to boost sustainable tourism, Taj Hotels Resorts and Palaces presented EARTH (Environment Awareness & Renewal at Taj Hotels) this year. Implementing schemes such as the Gangroti Glacier Clean-Up Expedition, as well as designated Earth rooms, which minimise environmental impact, Taj is one of Asia’s largest group of hotels to commit to energy conservation and environmental management. EARTH has received certification from Green Globe, the only worldwide environmental certification program for travel and tourism.

The Taj began a century ago with a single landmark – The Taj Mahal Palace Hotel, Mumbai. Today, the various Taj hotels, in all their variety and historical richness, are recognised internationally as the symbols of true Indian hospitality. The Company’s history is integral to India’s emergence into the global business and leisure travel community; and looking to the future, Taj Hotels Resorts and Palaces is well positioned to meet the increase in travel activity with the rapid expansion of the Indian economy. 

Hotel Leisure and Other Services include:

24 hrs Front Desk

Airport Transfer – On Request

Astrologer On Call

Banquet Facility

Bar & restaurants

Barber Shop

Beauty Salon

Bell – Desk Services

Car Rentals

Currency Exchange

Express Check in Check out

Facilities For the Physically Challenged

Florist

Health Club

Health/Ayurveda Centers

Hotel Safe

Internet Access Available in Rooms

Internet/E-mail/Fax Facilities

Interpreter Services

Laundry Services

Library

Lounge

Luggage Storage

Medical Services-Doctor on Call

Phone-Two Telephone Lines in Rooms

Postal/Parcel Services

Room Service-24 Hrs

Shopping Arcade

Travel Desk – Ticketing, Tours

MARKETING MIX STRATEGY OF TAJ HOTELS

Products

Room

Restaurant and Bar.

Meeting room and Banquet facility

Amenities

Services

Safe deposit box

Special services

Courier

Child care

Laundry

Pet

Internet

Travel desk

Babysitting

Wake-up call

PRICE

Taj hotel has set its price of the room on the basis of Business, Leisure and Luxury class.

PLACE

Location of the hotel is the most important business decision for the hotel.

Present in metro cities in India

Global presence (Maldives,London,Dubai,Colombo)

PROMOTION STRATEGY

Promotional schemes are carried on regularly the hotel has many loyalty programe,clubes,membership,previlage etc some of them are

The Taj Inner Circle.

The Taj Junior League.

The Taj Club.

Taj also offer Taj surprises including weekend savers,value vouchers,book early get more,

ADVERTISEMENT

Business news paper(E.T, Financial Express, Bombay Times)

T.V channels like STAR NEWS,CNN and CNBC.

Magazines like THE OUT LOOK TRAVELAR,GO NOW and TRAVEL.

Porter’s 5 Forces Model

The state of competition in an industry depends on five basic forces, which are diagrammed above. The collective strength of these forces determines the ultimate profit potential of an industry. Whatever their collective strength , the corporate strategist’s goal is to find a position in the industry where his or her company can best defend itself against these forces or can influence them in its favor.

Contending Forces

Threats of Entry:

New entrants to an industry bring new capacity, the desire to gain market share, and often substantial sources. Companies diversifying through acquisition into the industry from other markets often leverage their resources to cause a shake up. The seriousness of the threat of entry depends on the barriers present nd on the reaction from existing competitors that the entrant can expect.

There are six major sources of barriers to entry. These are:

Economies of scale

Product differentiation

Capital requirements

Cost disadvantages Independent of size

Access to distribution channels

Government policy

Suppliers:

Suppliers can exert bargaining power on participants in an industry by raising prices or reducing the quality of purchased goods and services. Powerful suppliers, thereby, can squeeze profitability out of an industry unable to recover cost increases in its own prices. The power of each important supplier group depends on a number of characteristics of its market situation and on the relative importance of its sales or purchases to the industry compared with its overall business. A supplier group is powerful if it is dominated by a few companies and is more concentrated than the industry it sells. Also if it poses a credible threat of integrating forward into the industry’s business. This provides a check against the industry’s ability to improve the terms on which it purchases.

Buyers:

Customers likewise can force down prices, demand higher quality or more services, and play competitors off against each other- all at the expense of industry profits. A buyer group is powerful if it is concentrated or purchases in large volume. Large volume buyers are particularly potent forces if heavy fixed costs characterize the industry- as they do in metal containers, corn refining, and bulk chemicals, for example- which raise the stakes to keep capacity filled. The product it purchases from the industry are standard or undifferentiated. The buyers, sure that they always can find alternative suppliers, may play one company against another, as they do in aluminium extrusion. Another case can be when the products the buyer purchases from the industry from a component of its product and represent a significant fraction of its cost. The buyers are likely to shop for a favorable price and purchase selectively. When the products sold by the industry in question is a small fraction of buyers’ costs, buyers are usually much less price sensitive.

Substitutes:

By placing a ceiling on the prices it can charge, substitute products or services limit the potential of an industry. Unless it can upgrade the quality of the product or differentiate it somehow, the industry will suffer in earnings and possibly in growth. Substitutes not only limit profits in normal times but also reduce the bonanaza an industry can reap in boom times. The producers of fiberglass insulation enjoyed unprecedented demand as a result of high energy costs and severe winter weather. But the industry’s ability to raise prices was tempered by the plethora of insulation substitutes, including cellulose, rock wool and Styrofoam.

Rivalry of Taj among established firms:

Oberoi hotels

Leela hotels

ITC Grand

Le Meridien

Bargaining power of buyers is very low.

Bargaining power of suppliers is moderate.

Threat of new enterants:

For Taj, competition in Mumbai has turned fierce as a result of new hotels,

such as ITC Grand Maratha, Le Meridien and Hyatt, coming up close to the

airport, and enjoying tax benefits too.

However in Bangalore, Taj continues to remain at the No.1 position because

of the booming IT sector and lack of five-star rooms, chiefly to accomodate

international passengers.

Potential Entrants

Global hotel groups entry

Buyers

Global tourists

Medical tourists

Industrialist people

Substitutes

Small lodges

THREAT: HIGH (because of new class, Low otherwise)

Customers Need

Good Hospitality

Hygiene food and environment

Success factors for Taj hotels:

Technology related:-Used of advance technology in hotel premises.

Manufacturing- related:- High utilization of fixed assets.

Quality control know-how.

Serving customer according to their specification.

Distribution-related:- Presence of hotel chain at various places.

A strong network.

Marketing related:- Breadth of product line and product selection.

Personalized customer services.

A well-known and well-respected brand name.

SWOT Analysis of TAJ Hotels

Strengths :

Brand loyalty

Credibility

Huge Reputation

Patent protection

Weakness:

High cost service

Not proper network in semi- urban

Lack of safety measure

Opportunity : Rising income

Globalization

New Geographical location

Threats :

Fluctuations in international tourist arrivals

Increasing competition

Terrorism

CONCLUSION

Taj Hotels Resorts and Palaces is one of Asia’s largest and finest group of hotels. The Company is rapidly emerging as a global brand by integrating an international network of luxury hotels within the chain. Taj Hotels is part of the Tata Group, India’s premier business house. Taj Mahal Palace Hotel in Mumbai, India was the subject of many newscasts since November 26,2008.The terrorist attacks not only killed and wounded many, but also caused major damage to the iconic hotel. Tata, a pioneer industrialist and philanthropist, conceived the idea of building a hotel in the wake of the bubonic plague which had devastated Bombay in the late 1890s.Tata’s sole wish was to attract people to India, and incidentally to improve Bombay. The severely damaged hotel has to be rebuilt. The sixth floor is gutted, and many of its restaurants, including the famous Wasabi, burnt and the splendid dome is shaken because of the many explosions. The antique chandeliers and priceless artwork are all lost forever. 

But the Taj Mahal Palace and Tower stands as an icon of the city of Mumbai, a symbol of both independence and dignity. It will also stand in the future as a representation of the indomitable human spirit of the people of Mumbai displayed in the face of the greatest adversity.