After reading the case below, read the statements that follow it and put an S next to the decisions that are strategic and an O next to the ones that are operational.

Innkeepers of America, a medium-sized national hotel chain, has operated successfully for many years in the economy segment of the lodging industry. Its chain of hotels provides rooms that are comfortable and roomy. To keep costs low, the company locates its properties near a major restaurant instead of providing that service itself. The rooms and lobby areas are comfortable with normal accommodations, but extra frills are avoided. Although the company has its own staff of security guards, cleaning and landscaping services are contracted out to local companies. During the past three years, several new competitors have entered the economy segment of the industry using aggressive pricing strategies. To meet the new competitive threat, management responded with a series of steps over the past two years. 

They lowered the price of the hotel rooms by 10% last year and again this year with the goal of matching competitor prices. They also created a new advertising campaign that targeted budget-conscious customers by giving them discount coupons for weekend stays. This promotion increased occupancy on the weekends, and plans are to continue it this year. Three new positions were created and filled in the customer service department. Employees were given shares of the company stock as part of a bonus plan. A continental breakfast menu was created. Guests could get bread rolls and breakfast drinks in the lobby or they could get them delivered to their room for an extra fee. Over 50% of the guests used this service. The reservation system was fully computerized, and front-desk employees received four half-day training sessions on the new system. However, despite these changes, the company’s overall market share did not increase, and in the last quarter it dropped slightly. The company’s net profit margin also declined from the previous year. Management was concerned, and a meeting was held to review and recommend courses of action. The head of marketing proposed a new company Web site where customers could book reservations online. 

The operations vice president noted that with the additional customer service staff and features, such as the continental breakfast, the company’s image was beginning to change. She recommended that all of the new hotels planned for construction next year be designed with more features to appeal to an upscale market segment. The marketing vice president agreed and noted that an upscale property would allow management to charge higher prices for the rooms to cover the higher costs associated with the upcoming campaigns. The president shared a letter with the group were a major competitor, Economy Lodge, Inc., wanted to merge with Innkeepers of America. According to the president, “This merger would increase our market share by a sizable amount, and we would be able to compete more strongly in the economy segment of this industry. However, before we decide on this and other actions you’ve recommended, we should rewrite our mission statement so that we have a sense of our core purpose and which decisions we should make to achieve that purpose.”

_ 1. Innkeepers of America’s position in the economy segment of the lodging industry.

_ 2. Locating properties next to a restaurant rather than having food and beverage in-house.

_ 3. The price of rooms was lowered further to meet competition.

_ 4. New advertising campaign with discount coupons for weekend stays.

_ 5. Three new customer service positions.

_ 6. Shares of company stock are issued for employee bonuses.

_ 7. Providing continental breakfast in the lobby.

_ 8. Room service (for continental breakfast only).

_ 9. Computerized reservation system.

_ 10. Training program for front-desk employees.

_ 11. Web site where reservations can be booked online.

_ 12. New hotel properties are built with additional features to appeal to an upscale market.

_ 13. Merger with Economy Lodge, Inc.

_ 14. Rewrite the mission statement.

_ 15. Contracting cleaning and landscaping services.

Answer rating: 100% (QA)

1 Innkeepers of Americas position in the economy segment of the lodging industryThis is a strategy b... View the full answer