Regal Carnation Hotel Case Study

Register to read the introduction… Recurrence of Japanese tourists only account for one third of the annual tourists. The Japanese population dominates such a huge share of the market that any change in the Japanese tourist trend would have a drastic consequence on the situation of the industry. Unfortunately, the Japanese people are less likely to go on vacation because it is proven that Japanese citizens work a larger proportion of hours compared to other countries abroad. According to an Expedia.com – 2012 International Vacation Deprivation Survey, Japanese citizens tend to take only five days out of their average 10 days of vacation. That is less than any other country in the survey. Korea has similar outlooks on vacation and do not return to destinations. This is not favorable to be in the business of destination vacations if your closest customer base uses the least amount of vacation days of any country in the …show more content…
I thought of how other “me too” companies operate. For a given product or service, if a company enters into the market late, there is usually fewer options to differentiate because of late entrance and the demands of the market. Then again “me too’s” generally don’t enter the market to innovate or bring anything substantially new (a quick consideration of product offerings or features would point this out), but to follow a trend and siphon off profits from those companies that have entered the market earlier. The problem with this model of business is there is usually a finite amount of market share. Because of changing tastes and preferences of society, market share for a particular product or service can erode fairly quickly. Because the “me too” company entered into the market for reasons listed before, the company has to either develop a new innovative product or service, find another market to enter (repeat of “me too”), or fade away. Similarly, the Regal Carnation seemingly brought nothing new to the industry, besides being nearly the only hotel located in the center of the positioning map (exhibit 7) and priced competitively. We were not sure if the choice in location was a “good” innovation or differentiation as there is no direct beach access. And if a company decides or is forced to differentiate on price, there is the danger of a price war between those in similar circumstances. A price war without the solution to underlying problems (that tend to impede success), leaves no winners. And to add insult to injury, we find that the McKenzies had trouble getting the confirmed “deal” price. It would seem the owners of the Regal Carnation were motivated to enter the market because of a trend, and now that the trend is practically gone it appears the Regal Carnation will follow