Four Seasons Hotels and Resorts. Illustrate your essay with specific examples.

1.1) Assess how and why the First Pillar strategy has evolved as it has. Assess the Four Seasons brand positioning and location strategies. Also evaluate Four Seasons entry mode choices.

At the time of the inception of the Four Seasons Hotels and Resorts in 1961, the concept was to provide customers a feeling of both hotels and motels.
Isadore Sharp, the founder president and CEO of Four Seasons Hotels and Resorts therefore, according to Report of Foreign Private Issuer (2006), took many decisions that made the company carve a niche for the group in the market. It was these strategic decisions that were referred to as the Four Pillar Strategy.
As the First Pillar of the strategy, Sharp began by striving to focus on midsize hotels of extremely good quality and tried to be the best in every area where it operated.
The First Pillar Strategy saw Sharp focusing on the small and medium sized hotels with a view to increase their profitability. The ventures that were given due importance were the ones that were centrally located and that enabled the provision of a high level of service to customers.
The strategy also focused on spreading inter-continentally and opening five to seven hotels a year. This was done with a view to double the number of hotels of the company in the next ten years of introducing the strategy (Report of Foreign Private Issuer, 2006)
The large number of foreign locations that the company chose was developed according to local tastes. In fact, even hotels in the same town were given unique identities of their own that differentiated them from other hotels. The company CEO wanted to make each hotel seem special and cater to varied tastes of the customers, rather than dwelling on a clichéd model that would be followed in all of the company’s hotels.
In fact, Sharp, in Report of Foreign Private Issuer (April 2006), said that he wanted to make the services of the hotels have a competitive edge. He wanted to provide services to guests that were unparalleled. The care that guests received in the over 30,000 employees was unmatched.
Isadore Sharp’s first hotel outside Canada was in Hyde Park in London. The amazing thing about the venture in London was the fact that the hotel enjoyed a 95 % occupancy rate despite its room rates which were rated by many as being higher than average (Fantaci, J. et al, n.d.). This was mainly because of the excellent services that the hotel provided and the strong positioning of the company.
The brand positioning of the company has been of prime importance to the company. The management has been taking steps to position itself strongly in the minds of the consumers. For example, while the hospitality industry worldwide was impacted by the September 11 terrorist attacks on United States, four Seasons Hotels and resorts gave a very well thought of response. Sharp said, “basic ethical values, culture, trust, leadership and employee commitment- these are the underlying determinants of corporate success on which we based our decisions this past September.” Sharp added that plans of his company remained on track for further openings through 2002 and 2003. “We are well positioned for the economic recovery and subsequent increase in business travel expected later in 2002,” said Sharp. These words increased the trust that customers had in t eh company and helped in a stronger positioning and creating a strong brand (Fantaci, J. et al, n.d.).
Another important strategy followed by the Four Seasons Hotels and Resorts is the stress on demographics and social values. The internet is being used increasingly by consumers to research, book and make payments (Fantaci, J. et al, n.d.).
Apart from this, the internal computerized systems of the hotels are kept up to date. Alberto Landero, industry researcher said that constant evolution of new systems in terms of safety and security and some facility designs enhance the customer appeal of the Four Seasons Hotels and resorts. In fact, according to Landero, “Information technology is a key facilitator for enabling organizations to make new assumptions on which their business processes rest. This, in turn, helps the companies in establishing appropriate strategy” (Fantaci, J. et al, n.d.).
Various academic journals talk of the implications of the actions of various players in the hotel and tourism industry. The management of Four Seasons Hotels should keep the following points in mind while deciding on their strategies for branding, positioning and mode of entry:
According to Kosta et al (2003), the kind of service quality in terms of sports and recreation is a major deciding factor about the brand of a group of hotels.
According to Tambedkar et al (2006), the hygiene factor in hotel is a major determinant in the customer choosing a particular hotel over the other.
According to Downie (2002), the players in the hospitality, leisure and tourism industry should ascertain that the services being given to customers make the experience impeccable.
Acording to Este (2008), the kind of quality of life that hotels give an insight to also acts as a differentiating factor between hotels.
According to Koenig et al (2009), the business of tourism and hotels thrives on the goodwill that a brand creates among customers
According to Michael (2003), it is important for hotels to ensure that their biological wastes are kept to the minimum to ensure that the environmental wastes emitted by hotels are controlled.
Berger (2008) was of the view that the attached frills in tourism are increasingly becoming important for customers.
According to Rodriguez et al (2008), the tourism industry in Mexico developed and became a major factor for modernization. Small and medium hotels that catered to the customer’s needs well were the propellers of the growth.
According to Lomine (2002), the myths associated with hotels are generally instigated by the negative experiences that few customers might have had with the hotel.
Sirgy (2007) said that both the quality and the experience of service are important for customers of hotels.
Meehan (2007) spoke of the relevance of the constant up gradation of facilities in tourist destinations.
According to Lusseau, D. (2004), hotels and the other players in the tourism industry should make a conscious effort to account for the hidden costs that tourism industry may hold.
According to Kanga (2009), it is important for companies operating in the hotel and tourism industry to pay a lot of heed to the way services are provided to customers. There is a growing concern for corporate social responsibility (CSR) in various industries including the hospitality industry. But, the relationship between CSR activities and financial performance is a rarely examined subject in the hospitality context. Kanga there fore suggests that hotels should take care of the CSR aspects well too.

1.2) Evaluate the strategic and financial performance implications of the Fourth PillarStrategy?

As a part of the Fourth Pillar Strategy, the company shifted its focus from hotel ownership to management services. The strategy stemmed from the fact that the company should no longer hold majority investments in the hotels owned but to control a minority position. The minority positions within the first five tears were also being exited through sale (Report of Foreign Private Issuer, 2006).
As a result of the strategy, hotel management activities of the company contributed to around 90 % of its earnings. For instance, the Pierre in New York was leased and managed and the lease was renewable for ten years. Similarly the lease of the hotel at Vancouver was renewable for 15 years and for Hotel Berlin, there was an additional obligation to fund shortfalls in minimum lease payments.
The maximum amount of € 11 million to be funded as shortfalls was met in 2003 and after that, the chain of hotels stopped funding shortfalls of stipulated minimum lease payments and limited payments to the cash flow generated by the hotel. This meant that at the beginning of the first quarter, the landlord had the right to finish the lease. The ownership operations of the hotel were adding losses to the hotels for $30.1 million in 2003 as compared to $ 19.6 million in the previous year.
The Fourth Pillar Strategy gave room to the company for strategic decisions and ventures. The services included strategic management services like increasing sales by applying sales, marketing and advertising strategies, having a central reservation system, information systems, database applications, advising with respect to design and construction of new renovated hotels.
The strategic performance of Four Seasons Hotels and Resorts is based on its brand name. According to George Stalk Jr., Senior Vice president of Boston Consulting Group’s Toronto’s office (at the time the article was written, from which this part is referred), wrote in the 1999 publication The CEO as Brand Manager that “Total Brand management is the essence of the Four Seasons Hotels and resorts (Fantaci, J. et al, n.d.).
The company’s focus on brand management is not only a feature of how the company became successful, but is also an integral part of the expansion strategy that the company has been undertaking over the years. (Fantaci, J. et al, n.d.)
Sharp believes that a successful brand experience depends on a successful brand experience of its customers. It also depends on the people who create the experience and the way they are treated by the company’s management. (Fantaci, J. et al, n.d.)
In fact, in their annual report of 2001, the company authorities mentioned, “The core business strategy of Four Seasons continues to be to enhance its industry position and overall profitability through a focused, international expansion programme that capitalizes on their strengths of its core management operations and the value of its brand name.” (Fantaci, J. et al, n.d.)
In fact, the management believes that the strength of its brand name, its global marketing operations and operational expertise help the company win a competitive advantage in obtaining new management contracts worldwide. The company offers high level of personal service and creation of quality experiences for their guests. Their high quality of personal service that they offer and the creation of quality experiences for guests make the company name stand out among the service industry players. (Fantaci, J. et al, n.d.)

1.3) In terms of all four Pillar strategies, evaluate whether they appear to strategically ‘fit’or not. Evaluate whether the brand positioning, location and entry mode choices appear to strategically ‘fit’ or not.

According to Isadore Sharp, CEO Four Season Hotels and Resorts in Report of Foreign Private Issuer (April 2006), at the hotel, the impetus is on aligning short term plans with long term goals and strategies. Having a sound knowledge of targets in view is important to attain goals. Therefore, in 1972, the company started implementing the first of the four strategic decisions of pillars that have been responsible for the group’s success.
Sharp said that the first pillar was meant to specialize in small to medium sized hotels. This strategy was aimed at making the hotel the best in whichever location it operated in.
The Second pillar, that was about treating each employee with respect, dignity and giving them services at par with customer also paid off. This is reflected from the fact that every few employees actually left the company. Report of Foreign Private Issuer (2006)
The Third pillar that hovered around providing uncompromising customer service also paid huge dividends. This was so as there was a kind of customization of hotel services for each individual customer. Also, there were specific details paid to for each area that the hotel was functioning in. The concepts like “mystery shoppers”, “kids for all seasons program” ensured that guests got the best of services, were made to feel special and therefore return to the hotel again and again in future too.
Also, the business model of the fourth pillar that shifted focus of the company from hotel ownership to hotel management services ensured that stress was laid on managing the needs of customers and therefore carves a niche in terms of services, management and customization.
There was a roadblock that stood in the way of Missouri getting its first Four Seasons hotel has been the Lodge of the Four Seasons. The step tells us about the value that the company attaches in its name.
These four pillars were strategically very wise decisions to make. This was because the hotel business is in the service industry. Therefore, the most important thing is servicing the customers and talking care of their needs efficiently. This is exactly what the hotels did and this is how they positioned themselves in the customers’ minds.
The brand positioning, entry strategies and location of the company were “strategically fit”. This is evident from the fact that despite the downswing that had come in the hotel industry worldwide after the September 11 attacks, the business of the group of hotels did not dwindle much.
According to Simon (2004), Sharp was awarded the ALIS Lifetime Achievement Award for Sharp’s accomplishments in the lodging industry and his commitment, leadership and service to the community.
The brand positioning, location and entry modes that the hotel has adopted are strategically fit. This is because the hotel’s management has an eye for detailing. The initiatives like ensuring that the hotel locations at various places are according to local tastes, or entering the small and medium sized hotels, stress on ethical values, demographics, technology, services, demographics, social values and timely review of services and positioning has made the company innovate continuously. This has, in turn improved the positioning and brand image of the company.

1.4) Assess whether the way the company is structured hinders or enables the effectiveimplementation of these Four Pillars.

Four Seasons’ major businesses revolved around business travelers, corporate groups and leisure travelers. Thus, the location of the hotels near commercial and financial areas was a sound decision. The regional management structure was simple which facilitated quick, effective decision making.
Also, the responsibilities were clearly assigned to everyone in the organization which meant there were no overlaps or friction with respect to sphere of activity of each employee. The fact that the size of the team was based on the scale of operations and was not standard meant that the company carefully analysed the needs of each of the hotels and cater accordingly.
The GM communicated the plan regarding the budget and daily operations of the hotel to its employees and also sought their approval on the same. This ensured that employees were well involved in the business and were also treated with dignity. Report of Foreign Private Issuer (2006)

2) Assess Four Seasons approach to international management, applying the concept ofcentricity.

According to Katie Taylor, President and Chief Operating Officer, Four Seasons Hotels and Resorts, published in Waterstone Human Capital (2008), the company is always thinking about how the business model and the culture needs of employees align with each other. In other words, the centricity of the business of the company is both- customers and employees.
The central philosophy of the hotels was to treat others as the hotels wished to be treated. Leadership initiatives in the company included quarterly spotlight learning series where senior business leaders trained employees on topics covering hotel operations, industry trends and global trading. (Waterstone Human Capital, 2008)
Mar Parker, Managing Director, Waterstone Human Capital said that Four Seasons Hotels and Resorts is a company with an amazing culture. He added that the company has been successful in delivering the culture globally. In fact, he went on to the extent of saying that any Canadian business person should look at Four Seasons Hotels and Resorts as the benchmark gold standard for success.
Four Seasons made the decision to focus on high end customer and concentrate on hotel management rather than real estate. They made a decision to pursue global strategy. This added to their brand image and improved their strategic relationships to tap market potential in the rest of the world. (Fantaci, J. et al, n.d.)
The strategic relationship extended to investors and this helped the company to gain key positions across the world. Also, the group is very particular about maintaining the standards of the hotels in the group. The hotels in the chain occasionally go for redos to get the business going.
In terms of the rewards, recognition and innovative business achievements, there are numerous accolades that the company has got for the best-in class achievements for guest services and hotel design. The company is very serious about paying a lot of attention to every detail that makes its guests happy (Waterstone Human Capital, 2008).
This further corroborates the stance that the company is both employee and customer centric. In fact, the company also takes care of Corporate Social Responsibility with respect to initiatives that include the Global Values Taskforce. This would increase the positioning of the company in terms of global awareness of the company. The group has raised over $ 7 million since 1981 for the Terry Fax Run in Wiket Creek Park (Waterstone Human Capital, 2008).
In fact, the golden rule in the company is based on human values and mutual respect all over the world, across all hotels that the company runs. The company have been try to become a hallmark all round the world. It is this factor that has led the company to become one of the largest operators of luxury hotels with an intuition that is unmatched and a service level that is highly personalized (Report of Foreign Private Issuer, 2006)
In 2006, in fact, the company also became one of the five award receivers of Respect Awards. This award was conferred for the management orientation that inculcated the values of credibility, respect, fairness, pride and camaraderie (Report of Foreign Private Issuer, 2006).
A Reuters report (2009) mentioned how the service of the hotel is its most important playing card, vis-à-vis other players in the hospitality industry. The report also talked of the complimentary extras that guests experience at the hotel. These, according to Sharp, are facilities that not many hotels are able to provide with the finesse that his group delivers.
A Telegraph (2008) article also throws light on the facilities provided by the hotel chain.

3) Identify two alternative strategic choices that you recommend the company shouldconsider given present-day economic, market and competitive conditions globally.

Going by the present day economic, market and competitive conditions prevailing globally, the company should look to recruit its managers from a pool of best and most eligible applicants. The pool of its managers should include people from the best hotel colleges, and also the best from the industry. This needs a thoughtful interviewing process that is taken care of by people at all levels.
Another important strategy could be to promote employees to higher positions from within the organization instead of hiring from outside. This would enable employees to be internally motivated. This would also ensure that people with experience rise to the helm of affairs so that they have a sound understanding the company already so as to enable them to take quick decisions.
Also, the company should continue with its strategy of treating each employee specially and training them well.
Apart from this the group should keep innovating so as to remain on top always. The innovation may be in terms of employees or customer service. This may even include measures in which customers are requested to come forward and train employees in ways they feel would be beneficial for other customers as well.