Limitations to only Looking at Your Comp Set
One limitation to looking only at one’s compset is that is that a company is not able to innovate beyond what its competitors are doing. In contrast, if a company looks at improving itself and competing against itself, then it may have better chances of innovating and differentiating. In addition, the compset is not the only basis for a company’s performance. More importantly, a company should look into its customers’ feedback as their customers’ preferences may be different from their competitors’.
Comparison to Article
The information provided by Lababedi and Bader (2007) in their article entitled Hotel Management Contracts in Europe is generally in agreement with the points made by Ken Widmaier in his lecture. Both the lecture and the article pointed out how hotel owners employ the services of a hotel management operator to run the operations of their hotels in order to gain a competitive advantage. Both sources indicated that the hotel owners and hotel operators enter into a contract where the hotel operator manages the owner’s business in a manner that results in increased profits and increased revenues for the owner. Both sources also indicate that the contract contains various terms and conditions that center on the performance measures that the owner expects the operator to meet, the fees, and the approval processes.
One aspect in which the article authors and Widmaier differ is that according to the former, the initial term for contracts are long lasting -- from 15 to 30 or even 50 years. On the other hand, Widmaier asserts that only the operators are in favor of long-term contracts and that hotel owners prefer shorter contracts so that they can easily terminate the contract if the hotel operator fails to perform. According to Widmaier, long-term contracts are usually made between owners and operators that have been engaged in long-term relationships that prove beneficial for both parties.
Another difference in the information provided by Lababedi and Bader (2007) and Widmaier is that the former indicated that the base fees usually range between 2 percent and 4 percent of the total revenue whereas Widmaier indicated that the base fee is generally between 2.5 percent and 3 percent, although it can go as low as 2 percent if the business is highly profitable yet easy to manage.
References
Lababedi, A. & Bader, E. E. (2007, Jun 20). Hotel management contracts in Europe. Retrieved
