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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