About the company

Sarovar Hotels & Resorts is a privately owned hotel chain in India. It is the 3rd largest hotel
chain in India with 70 hotels across India and overseas. The company is affiliated with
Carlson Hospitality Worldwide. Carlson Companies are active in hospitality services,
comprising more than 1570 hotels, resorts restaurants, and cruise ship operations in 81
countries. Mr. Anil Kumar Madhok, founded Sarovar Hotels Private Limited (Also known as
Sarovar Hotels And Resorts Ltd) in 1994 and serves as its Managing Director. Sarovar Hotels
Pvt currently operates over 75 hotels in India and abroad with a total 6,000 rooms under
various brands.

Our Brands
There are many reasons you travel. And there is a Sarovar Hotel for each one of them.
Whether premium, mid-range or value, all hotels are uncompromising in their commitment to
genuine

hospitality,

service

and

facilities.

Sarovar Premiere offers upscale 5 star properties which resonate with a cosmopolitan vibe.
Sarovar Portico offers full-service 3 and 4 star hotels that offer convenient access to
commercial and tourist centres.
Hometel is a vibrant value brand that redefines the concept of an economy hotel.
The Oriental Blossom, specialty Chinese restaurant chain that serves a rich repertoire of
authentic Szechwan and Cantonese cuisine.
Geoffrey's The Pub, a metro centric pub chain which is a contemporary interpretation of a
typical old world English Pub.
Brands We Manage
Radisson.
Park Plaza
Park Inn by Radisson

International Hotels
As part of the global expansion plan, Sarovar is venturing into other continents to create
properties that transform the Sarovar brand values into impeccable service and hospitality
standards.
The Heron Portico is Nairobi's finest and best known business hotel that caters to
uncompromising global clientele who seeks services that are efficient and convenient.
New Africa Hotel in Dar Es Salaam combines the city's rich history and excellent service.
The Premier Nairobi, a 144 room upscale hotel is under development and is scheduled to
open in 2016.

Vision
Our vision is to be the brand guests love coming back to. We deliver this with a portfolio of
service spectrums that resonate with superior standards in accommodation, cuisine, employee
behaviour and facilities. Sarovar Hotels is recognised for its spirit to serve and commitment
to distinctiveness, which assures better guest satisfaction.

Tourism & Hospitality Industry in India

Introduction
The Indian tourism and hospitality industry has emerged as one of the key drivers of growth
among the services sector in India. The second-largest sub-segment of the services sector
comprising trade, repair services, hotels and restaurants contributed nearly US$ 295.7 billion
or 19.2 per cent to the Gross Domestic Product (GDP) in 2015-16, while growing at 8.9 per
cent year-on-year. Tourism in India has significant potential considering the rich cultural and
historical heritage, variety in ecology, terrains and places of natural beauty spread across the
country. Tourism is also a potentially large employment generator besides being a significant
source of foreign exchange for the country.

The industry is expected to generate 13.45 million jobs! across sub-segments such as
Restaurants (10.49 million jobs), Hotels (2.3 million jobs) and Travel Agents/Tour Operators
(0.66 million). The Ministry of Tourism plans to help the industry meet the increasing
demand of skilled and trained manpower by providing hospitality education to students as
well as certifying and upgrading skills of existing service providers.

Market Size
Indias rising middle class and increasing disposable incomes has continued to support the
growth of domestic and outbound tourism. Total outbound trips increased by 8.7 per cent to
19.9 million in 2015. Inbound tourist volume grew at a Compound Annual Growth Rate
(CAGR) of 6.8 per cent during 2010-15.

Effect of globalization

The globalization of products and services has been increasing as the companies take
advantage of lower barriers to international trade and investment to disperse important parts
of their production processes and the services they provide around the globe. Doing so
enables them to take advantage of national differences in the cost and quality of factors of
production such as labour, energy, land, and capital, which allow them to lower their cost
structures and boost profits. Sarovar hotels are also looking for global expansion of their

hotel chain. Already having a good presence in India, the company is expanding its operation
in African continent. It is now the third largest player in Africa in hospitality industry.
African continent constitute more than a billion populations just after china and India.
According to the latest figure the Hospitality industry grew more than 30% last year. With
the growing engagement with the world the African countries seems to be in the sweet spot. It
is providing tremendous opportunities to various global players.

Africa is steadily developing into one of the worlds great regions for travel. With its
exceptional, unfiltered fusion of breath taking, life-inspiring offerings history & heritage,
culture & tradition, wildlife, natural beauty, and most importantly, the innate spirit of the
continents people Africa never fails to create an imprint on the minds and hearts of
travellers from across the globe.

POSITIVE EFFECTS
1. Exposure to different cultures:
Due to Globalization the managers of the hotel industry are able to learn about different
cultures as they get to mingle with people from various walks of life and thus, increase their
knowledge.
2. Larger Market:
Due to Globalization the customer base has increased greatly. People travel not only for
holidays, but business, health and various other purposes too. Thus, this has increased the
market for the hospitality industry, which gets its major income is from international visitors.
Which result in increased the market or to expand the market as well.
3. Boosts the economy:
Visitors come in and spend money multiplier effect and foreign exchange increases. Thus itis
of great value to the economy as Globalization helps to pump in money into the country.
4. Technology Advancement:

Since one wants to attract as many tourists as possible, hospitality organizations constantly
need to upgrade and improve their products and services
5. More Job Opportunities:
Due to Globalization, more visitors come into the country and thus more people are needed
to serve and cater to their needs. So, with the advent of globalization, there are a lot of more
jobs available for people within the hospitality industry.
6. Boosts the Travel Industry:
Due to globalization more people move around, to facilitate this, the travel industry needs to
grow as well. People who come into our country by air, or ship, or land use the transport
services offered as well.

7. Variety of International Services:

Since there are a lot of different visitors with various cultures, customs, cuisines, and
languages, the hospitality industry includes recipes and various other services to cater to
them. These services are available to the locals too, which makes it even better.
NEGATIVE EEFECTS
1. Language Barriers:
Due to Globalization in the hotel Industry we can employ people from different countries as
it is usually different language they may sometimes have problems in communicating with
the customers. Many customers get quite irritate as a result of this. So Language is a big
barrier of globalization.
2. Cultural Barriers:
Same as discuss in language barrier as there are people from various cultures, one needs to be
careful not to offend them.
3. Events in other Countries:
A disaster or event taking place in one country may affect our country also. For example, the
financial crisis makes less people want to spend money or travel due to increase in terrorism
some visitors get are not ready to travel to certain countries.

4. Seasonal Employment:
During peak periods, a lot of jobs are available but as soon as the tourists go back the jobs
disappear as well.

SWOT analysis of Sarovar Hotels

Strength:

Indias fourth largest hotel chain

High quality product
Good after sales service
Excellent product line
Motivated employee in the Sarovar portico hotel they have good & soft spoken
employee over there.

Weakness:
This hotel is in very slum area
Look of hotel is not so much attractive
Opportunity:
Growing income of people
Govt. policy is to ward the hotel industry.
Growth of population in Ahmedabad
Threats:
Strong competition
Threats of terrorism

Porters Diamond of National Advantage of Sarovar Hotels & Resorts

Classical theories of international trade propose that comparative advantage resides in the
factor endowments that a country may be fortunate enough to inherit. Factor endowments
include land, natural resources, labour, and the size of the local population.
Michael E. Porter argued that a nation can create new advanced factor endowments such as
skilled labour, a strong technology and knowledge base, government support, and culture.
Porter used a diamond shaped diagram as the basis of a framework to illustrate the
determinants of national advantage. This diamond represents the national playing field that
countries establish for their industries

The individual points on the diamond and the diamond as a whole affect four ingredients that
lead to a national comparative advantage. These ingredients are:

1. Factor conditions. The nations position in factors of production, such as skilled

labour or infrastructure, necessary to compete in a given industry.
2. Demand Conditions. The nature of home demand for the industrys product or service.
3. Related and supporting industries. The presence or absence in the nation of supplier
industries and related industries, which are internationally competitive.
4. Firm Strategy, Structure and Rivalry. The conditions in the nation governing how
companies are created, organized and managed, and the nature of domestic rivalry.

Factor Conditions
In case of hotel industry, these are:
Human resources availability of trained, skilled personnel and management and its
cost
Physical resources the nature (coast and sea), geographical location, climate,
availability of natural resources (electricity, natural gas, petrol
Knowledge resources general stock of scientific, technical and market knowledge
relevant to the hotel industry. Availability and quality of relevant statistical databases,
measuring

tourist

arrivals/nights

etc.

Availability

of

industrial

non-profit

organizations, carrying out market research of current tourist demand conditions etc.
Capital resources availability of capital both local and international. Attitude and
interest of investor towards the hotel industry
Infrastructure first of all, air transportation. Road and maritime transportation.
Electricity, water, sewage, natural gas supply. Health care system is rather important
factor for tourism. Overall development of real estate, national parks and other
cultural institutions.

Sarovar Hotels & Resorts

Sarovar are blessed with all the factors which makes his expansion decision favourable to
achieve its dream. African economy has been growing steadily over the last 10 years
providing ample opportunities to local and international players to tap this unleash sector.
With the abundance talent pool and abundance of natural resources easily available Tourism
industry has a bright future as more than 22 million tourists visit African countries.
Demand conditions
Home demand conditions have influence in almost every industry. However, what concerns
the Sarovar hotel industry; it is the foreign demand conditions, which have the major
influence. On the other hand, home demand conditions pay certain role in other related
industries
In the Diamond Model Porter pays significant attention to product industries. He describes
various important characteristics in demand for products, which could be exported and
distributed around the world.
In case of a hotel industry, which is a service industry attached to particular geographical
location, most of the demand characteristics described by Porter are of minor importance. In
this sense, what really matters for a hotel industry is how many foreigners choose African
countries in particular as their travel destination.
Related and supporting industries
This fact represents another determinant of national advantage in an industry and stands for
the availability in the nation of supplier and related industries, which are internationally
competitive. As has already been mentioned major product of a hotel industry is a part of the
whole tourist experience. Moreover, seldom are hotels the reason, why tourists choose to
come to a particular destination. Therefore, a hotel industry is more of a supplementary type
and it relies heavily on the development of other parts of tourism system.
The supply side of the tourism industry includes accommodation, transport, agency services,
food and souvenirs. In addition, argue that there is a close relationship between leisure and
tourism industries.

Tourism has three broad categories of purpose:

1. Leisure and recreation, including holidays and social events
2. Other tourism, including educational and health reasons
3. Business, including conferences, meetings and exhibitions

Firm strategy structure and rivalry

The last, but not least, determinant of national competitive advantage in an industry is the
nature of the ways firms are organized. This includes typical structure, goals and methods of
running local companies and rivalry between them. This determinant is relying on cultural
and historical background of a nation.
Regarding Sarover hotel & resorts , this fact of the Diamond would include analysis of
managerial abilities and style, their relationship with employees and owners as well. Another
important factor for analysis would be the level of competition between the hotels

Government and its role

Porter stressed the importance of government and its ability to influence all facets of the
Diamond. Indeed, it is the government that creates policies and governs how the natural
resources are exploited, how firms interact within industries and how businesses are run in
general. One of the key relationships between government and the facets of the Diamond is
the governmental policy for preservation of natural resources. Government is free to decide
how the most suitable for tourism parts of a country will be developed

Scope of Increasing Profitability through global expansion

1. Expand their market

sell in international markets
2. Realize location economies
disperse value creation activities to locations where they can be
performed most efficiently and effectively
3. Realize greater cost economies from experience effects
serve an expanded global market from a central location
4. Earn a greater return
leverage skills developed in foreign operations and transfer them
elsewhere in the firm

With the plan of expanding in the international market like Africa sarover hotels can
bring down their cost significantly due to lowest labour cost and a large population.
This continent is going through a transformation on which the hotel industry can
capitalize. Africas private sector is increasingly attracting investment from the United States
and Europe, with China, India and others also investing heavily in the region. Private capital
flows are higher than official development assistance and foreign direct investment is higher
than in India. Returns to investment in Africa are among the highest in the world. Africa is a
key market where a lot of Indian companies are expanding. So to cater to those needs the
company have been aggressively expanding its footprint so as to provide these travellers an
Indian taste in the foreign land.

Indian hospitality group Sarovar Hotels plans to launch ten properties in Africa in the next
five years. The group has taken over the management of Panorama Hotel (3-star) in the
capital of Republic of South Sudan.

Expanding the market

The success of Sarovar hotels will be based not only on the services that they provide in
Africa but also on the distinctive competencies that underlie the marketing of those services.
Expanding the market for their services often means replicating their business models in
foreign nations which was successful in home country. With India getting more & more
engaged with Africa the influx of Indian travellers will increase & Sarovar can capitalize on it
by providing them with Indian culture and taste.
Realize location economies
Location economies are the economic benefits that arise from performing a value
creation activity in the optimal location for that activity, wherever in the world that
might be
Locating a value creation activity in the optimal location for that activity can have one
of two effects:
(1) it can lower the costs of value creation, helping the company achieve a low-cost
position;
(2) It can enable a company to differentiate its product offering, which gives it the
option of charging a premium price or keeping price low and using differentiation as a
means of increasing sales volume
The choice of the Kenya as location for Sarovar hotels and groups was influenced by its
combination of low labour costs, a skilled workforce, and tax breaks given by the
government. The firms objective at this point was to lower costs by locating value
creation activities at an appropriate location. As the economy and market matures and
wages goes high along with the per capita income of the African economy, company can
charge premium because of brand & reputation it has created over a span of time.
Leveraging the Skills
Initially, many multinational companies develop the valuable competencies and skills
that underpin their business model in their home nation and then expand
internationally, primarily by selling services based on those competencies. Leveraging

the skills created within subsidiaries and applying them to other operations within the
firms global network may create value.

Competitive Pressure to be faced by Sarovar hotels

global standardization strategy focus on increasing profi tability by reaping the

cost reductions that come from economies of scale and location economies; that
is, their business model is based on pursuing a low-cost strategy on a global
scale. The production, marketing, and R&D activities of companies pursuing a
global strategy are concentrated in a few favorable locations. These companies
try not to customize their product offering and marketing strategy to local
conditions because customization, which involves shorter production runs and
the duplication of functions, can raise costs.

A localization strategy focuses on increasing profitability by customizing the

companys goods or services so that they provide a good match to tastes and
preferences in different national markets. Localization is most appropriate when
there are substantial differences across nations with regard to consumer tastes
and preferences and where cost pressures are not too intense. By customizing
the product offering to local demands, the company increases the value of that
product in the local market
Transnational strategies are trying to develop business models that
simultaneously achieve low costs, differentiate the product offerings across
geographic markets, and foster a flow of skills between different subsidiaries in
the companies global networks of operations. As attractive as this may sound,

the strategy is not an easy one to pursue because it places conflicting demands
on a company. Differentiating the product to respond to local demands in
different geographic markets raises costs, which runs counter to the goal of
reducing costs
International strategy is when the company wants to create value by transferring
valuable skills and products to foreign markets where indigenous competitors
lack those skills and products. Majority of functions remain centralised and tight
controls are retained for marketing and product strategy.
In our opinion Sarovar hotel which is targeting mid-size travellers and focussing
more on cost reduction rather than customization will choose transnational
strategies to cater to different segments. Decisions will vary in order to pursue
the correct entry mode, based on the variety of products that different hotel
organisations develop. Depending on the market segment it wants to attract and
pursue, selected service and budget hotels can explore the benefits of a global
strategy as there will be no customisation in its products. As a whole the
transnational strategy seems best
as it encompasses all the benefits and objectives from the strategies mentioned