Chapter 3. Current value configuration
Mofjell is focused on making opportunities for their investors, while creating long-term relationships that suggest success right now and well into the future. With 30 hotels in partnership and desire to expand beyond the borders of Norway, Mofjell can offer global strength and scale combined with local expertise that is relevant to the many markets they would like to serve. I suppose, Mofjell board understands the importance of taking care of investors and applying the expertise to create value through the design, construction and operation of a hotel. They also should understand the importance of looking ahead, and they may remain committed to their investors over the long term. Together, these tips provide investors with the latest tools, forward-thinking strategies and access to some of the most influential people in the industry to help enhance guest experiences, reward customer loyalty, drive revenues and maximize efficiency of operations. Spanning the entire portfolio of brands, the services that make up the Mofjell advantage deliver leading-edge support to drive consistently profits and efficiencies, so that is a powerful resource for owners and investors, unrivaled in the industry.
Nevertheless, the bigger value customers take in a market offering comparative to competing offerings and the lower the costs in producing the value comparative to competing producers, the supreme the efficiency of the business. (Frynas et al, 2015) Hence firms producing offerings with a high perceived value and low relative costs than competing firms are expected to have a competitive excellence in a particular market. This can be shown clearly on the competitive triangle (Appendix 2). There is no one-dimensional measure of competitive advantage, and perceived value (as you can see, compared to the price) and relative costs have to be evaluated at the same time. That two-dimensional nature of competitive advantage is not always clear which of the two businesses have a competitive advantage over the other. Looking at Appendix 3, Magnussen Hotels will clearly have an advantage over Scandinavian Select hotels in case I, and clearly have a disadvantage in case IV, while cases II and III do not immediately allow such a conclusion. Scandinavian Select Hotels may have an advantage in case II, if customers in the market are highly quality conscious and have differentiated needs and low price elasticity, while firm Magnussen Hotels may have a similar advantage in case II when customers have homogeneous needs and high price elasticity. The opposite will take place in case III. Even if Magnussen Hotels has a clear competitive advantage over Scandinavian Select Hotels, this may not necessarily, result in a higher return on investment for Magnussen Hotels, if Magnussen Hotels has a growth and Scandinavian Select Hotels a hold policy. Thus, performance may have to be measured by ROI (Buhalis et al, 2015). Whereas the relationship between perceived value, relative costs and performance is rather complicated, we are able to say definitely that these two variables are the cornerstone of competitive excellence.
The main goal is to supply more value to customer exchanges through clearer understanding of usage characteristic, exchange capacities, common interests etc. Data mining and visualization tools can be effectively used in order to distinguish both positive and negative bonds between consumers. Rival success often relies not only on performing your basic model fully. It could ask from you the delivery of extra complementary value. (Ayanso et al, 2014) Accepting properties of a second value configuration model may be a solid way to discern your value proposition or protect it from competitors pursuing a value model, which is different from yours. It is significant, though, to choose different model just because that leverage the primary model. Mofjell can learn the examples of present businesses: Harley-Davidson’s primary model is the chain – it creates and sells products out. The Harley's network of customers is the benefit to the primary model by strengthening the brand identity, increasing loyalty, and providing useful info and, of course, feedback about customers’ behaviors and wants. (Hammedi et al, 2015.) Amazon.com has a value chain like many other book dealers, and primarily makes the process vastly more efficient. With the help of specific interest groups, it is adding more value to network characteristics. (Deighton et al, 2013) Finally, I suggest Mofjell to improve value network in particular offers opportunities for many existing businesses to add more value to their customers, and for new entrants to grab market share from those who can suggest less value to the same customers.
Chapter 4. The expansion- and marketing strategy
After an comprehensive review of the academic and business literature on internationalization and franchising, supplemented with a review and discussions with a big amount of franchise leader with vast international practice, Aliouche and Schlentrich (2008) created an exhaustive three-section model of international evaluation assessment (Appendix 3).
Based on a strategical approach to international expansion, this model distinctly takes into account the main elements needed to elaborate an optimal international expansion initiative, as following:
Macro-environmental assessment.
Micro-environmental assessment.
Optimal market entry mode.
A great deal of countries or markets may be potential targets for widening for a Norway-based firm planning to expand overseas. Even the most resource-rich franchise firms do not have the financial and human resources needed to enter a large number of international markets at the same time. Franchise companies may have to strategically single out countries/markets in order of priority on which to concentrate their enlargement strivings and resources. For income and shareholder maximizing firms, priority countries have to have optimal ability/risk profiles. Choosing countries with high potential market possibilities and low market risks at the very beginning strengthens the chance for high revenues, profits and shareholder value, while turning down the risks of fail and loss. (Hollensen, 2007)
As for many other operational and strategic initiatives, a firm’s expansion to international market should in the long run reinforce its long-term shareholder value. Shareholder value is increased by appealing in projects and initiatives that create value as measured by a positive net present value.
When companies have distinguished a target country for penetration, they have to define, what organizational pattern and management strategy best helps them to keep in their competitive excellences and maximize their value development. The interaction between the features of the host country, the industry, and the firm itself (as mentioned upwards) will set the entry mode that is optimal for a particular firm planning to expand to a particular country. There is a lot of probable market entry modes, as direct ownership, franchising (in its different varieties like multi-unit franchising, master franchising, area development, etc.), management contracts, and a range of combinations of these primary modes. (Forsgren et al, 2014) However, if we talk about Mofjell, I would recommend them to turn their mind to the three basic market entry modes most prevalent in the hotel industry: equity (ownership), franchising and management contracts.