Mc Gill Bsh Final 97

McKenzie ConsultingA. Bech Bruntse, L. Lawaetz, L. Pedersen, S.

Troll

Issue Complication Question Answer

• Unexploited potential of the Bon Star Hotel due to mismanagement

• Non-transparent business practices.

• Unprofessional management

• Run down facilities

• Unutilized space

• How can Krieg Corp. utilize its core competencies to reposition BSH more profitably in the market?

• Refurbish the building complex

• Hire new hotel management

• Outsource additional services

• Reposition BSH as Bon Star Business Center

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4*

3*

2*

1*

5*

BSH

Hotel Quality

Hote

l P

rice

High

HighLow

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Industry Standard Bon Star Hotel

Experienced Management Basic Accomodation Night entertainment Additional Services Sauna/gym facilities Online booking Office facilities

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Sell BSH immediately

Turn BSH into Offices

Reposition BSH

Revenue

Initial Costs

Demand

Difficulty of Operations

Profit from Sale

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HotelOffice BSBC

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4*

3*

2*

1*

5*

BSBC

Hotel Quality

Hote

l P

rice

High

HighLow

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Dismiss Kaplan and layoff excessive staff

Phase 1

Increase current office prices

Focus on core competency:

Refurbishment

Hire business lawyer

Renovate hotel

Outsource training and education of staff

Negotiate outsourcing deals

Phase 2

Integrate office section

Hire local GM with hotel expertise

Develop incentive scheme

Launch new webpage

Phase 3

Evaluate and reward performance

Reposition BSH to Bon Star Business Center

Phase 4

Create strategic alliance with office lessees

Evaluate opportunity to sell BSBC

Phase 5

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2010 2011 2012

Phase 1

Phase 2

Phase 3

Phase 4

Phase 5

2015

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Industry Standard

Bon Star Hotel

Bon Star Business Center

Experienced Management Basic Accomodation

Night entertainment

Additional Services

Sauna/gym facilities

Online booking Office facilities

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Refurnishing activitites Cost in $Rooms 5.258.440 Kitchen/laundry 1.045.000 Gym 150.000 Spa&Sauna 40.532 Lobby, Hallway etc. 1.000.000

Total 7.493.972

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Issue Complication Question Answer

• Unexploited potential of the Bon Star Hotel due to mismanagement

• Non-transparent business practices

• Unprofessional management

• Run down facilities

• Unutilized space

• How can Krieg Corp. utilize its core competencies to reposition BSH more profitably in the market?

• Refurbish the building complex

• Hire new hotel management

• Outsource additional services

• Reposition BSH as Bon Star Business Center

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Questions?

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Poor Hotel Conditions

Ownership Structure

TheftRun down facilities

Management

Lease of land

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Bon Star Hotel

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BSBC

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Issue Ease of implementation

Importance

IT Accounting System

Refurbishing hotel

Gym & Spa area

Increase Office Space

Additional services

Casino

Facility Management

Online booking

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Gym equipment and maintenanceBasic gym equipment lease,

maintenance, operations

Integrated Facility ServicesCleaning, Facility

Management, Security, Catering

Casino operationsRefurbishing of casino space,

running of casino business

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Bon Star Hotel Bon Star Business Center

• Run down 3* Hotel• 4* quality with

comparatively low pricing

• Poor Management • Professional Management

• Well equipped office facilities

• Expanded and integrated office facilities

• Local Customers• International Business

Travelers

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Data Worst Medium BestOccupancy rate 15 17,5 20office rate 14 17,5 21Hotel rooms 208Office rooms 112Price for Room 175

Office 47.040 58.800 70.560 Hotel 163.800 191.100 218.400

95% revenue 210.840 249.900 288.960 5% (Restaurant and shops) 11.097 13.153 15.208 100% revenue 221.937 263.053 304.168

Energy 88.775 105.221 121.667 Salaries 82.117 97.329 112.542 Utilities 37.729 44.719 51.709 Miceallenous 13.316 15.783 18.250

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Revenue from Office and Hotel (4-5 star Benchmark)

Rooms: 120 Price 250Office rooms 280

Revenue from office (monthly) (Price = 30 $)Worst (95%) Medium (97,5%) Best (100%)

239.400 245.700 252.000

Occupancy 30 %Revenue (monthly) 270.000

Occupancy 60 %Revenue (monthly) 540.000 -

Occupancy 75 %Revenue (monthly) 675.000 -

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