ORCHID ECOTEL CASE

Vithal Kamat completely overhauled a small chain of restaurants into a consortium of well-run and
ecologically sustainable hotels under his leadership. Kamat hotels have five major verticals, which range
from five star services to restaurants in the economy segments. Kamat formulated plans to expand each
vertical by using alternative targeted growth strategies. The economic downturn, however, hit his business
badly resulting in a sharp decline in hotel occupancy and competitive tariff rates offered by other
competing hotels. Amidst the impending crisis, Kamat planned to use the core competence of ecotel hotel
range in order to create a niche in the market and to separate his brand hotels from the competitors and to
leverage its position in the market. In this case we see all the problems faced by Kamat to enhance and
induce the core competence of Orchid to the other verticals. This case illustrates the challenges he faced
in enhancing the core competence of an ecotel hotel into the other verticals. In order to do that and to
expand the strategy, he should address the burning issues tactfully and as we see, Kamat executes his
strategies beautifully and very capably.
Financial challenges: Although he wanted to emulate the ecotel model into other verticals, Kamat soon
realized that his strategies had limitations that came in the form of financial infrastructure and capital
expenditures. Other major verticals under his brand name had their own brand personalities and they
targeted different customer segments. Hence operative strategies for each vertical were quite different
from each other.
Kamat hotels had a modest beginning, but it soon endeared itself to customers and carved a place for
itself in the market and invariably developed into an industry leader quickly. Along with certain strategic
ventures, it opened up certain newer vistas and newer establishments. Over a span of nine years it
established nine new vertical to operate on. It has global presence, with branches in major cities in every
continent, covering major hubs of economy. Now, they wanted to scale up this core competency to take
competitive advantage by augmenting all vertical of the company using its core competence and by
offering environmental friendly services. This concept was a big challenge to Kamat as this might
strengthen the Orchid brand, but might restrain the growth of the company in its other verticals.
Competitive Strategy: Orchid aggressively promoted its eco-friendly concepts and services and used
them as a competitive advantage. It added value to its core competence by providing eco friendly and
organic foods thus accentuating the Eco friendliness of the hotel. It also collaborated with international
eco friendly firms like HVS eco services. To make its employees more conversant with the concept and
more competent it conducted workshops and several training programs which by itself was a welcome
move. For aggressive brand promotion, it undertook several environmental friendly activities involving
varied sections of society. It got the ecotel certification, the first of its kind in Indian industry. Thus
hotels are no more considered merely in terms of luxury but an all-encompassing experience, Kamat
hotels raised the bar by making its customers realize that they are doing their bit for the society and
environment. Thus by playing by its core competence , hotel Orchid had a strong strategy to counter
competition.
Core Competence: Hotel Orchids core competence was in its environmental friendly hotels. They
wanted to build on this advantage even further by integrating the various physical infrastructure and
human resources. They actively promoted several green teams which undertook various eco-friendly
ventures. All the activities of the hotels were based on eco-friendly values and concepts. They took pains
to make the customer aware of the various environmental issues and initiatives of the hotel. The hotel was
designed keeping all values of environmental issues in mind. It further experimented with several
initiatives that would gather eyeballs and engage the customer further in environmental activities. Their
core competence slowly permeated to other segments and verticals, thus increasing the overall
profitability of the company as a whole, keeping the shareholders happy. They wanted to create the
unique marriage as it were between economy and ecology.
Sustainability and Sustainable competitive advantage: The scale versus value option was the biggest
concern to Kamat. The shareholders were of the view that while Kamats sustainability might have
strengthened the Orchid brand, but had hindered the growth of the company in its other verticals.
Accentuating all the other verticals by playing around with the basic core competence advantage of its eco
friendly hotels was the biggest challenge that Kamat and his associates were facing. They were the first
ones to introduce the concept and the hotels to India and thus had the first movers advantage. The holistic
version of a green planet, and starting programs encompassing local participation, creating awareness
among employees and all out conservation and cost cutting by internal conservation through energy
saving gadgets and environmental friendly materials. Lastly to encourage guests to participate in all
activities introduced the feel good and home away from home, factor, and thus added to the overall
appeal and experience of the guests. This gave and edge to the chain , enabling it to carve a niche for it in
the competition.
Group 8
Ashish Baniwal
Sandeep Chakrabarti
Sonali Sen
Veenu Shankar