Forte Hotel Design Harvard Case Solution & Analysis

Forte Hotel Design Case Study Solution

QUESTION 4

According to the calculations done in exhibit 1 Deluxe will be less preferred by the respondent because of its high cost estimates. Out of all the four products Deluxe has the highest incremental cost of $6400 and it is paying the least contribution per day. Tourists and professional have better liability than Deluxe as their incremental cost is around $4000-4100. Other than this their variable cost is low as well. The most preferred product is of professional 2 with least amount of incremental cost of $2500.

QUESTION 8

In an existing market it gets easier to develop a knowledge about what are the attributes level that are liked by our target audience which then helps us to forecast the future of our product that we are trying to introduce into the market. Despite the positive, this process doesn’t get realistic sometimes because when a new product is being launched, the company has to look for the innovation. The innovation gets hindered when the respondents are given only a fixed set of attributes to choose from. When launching a hotel business, the hotel management has to think of new out of the box ideas which can facilitate the customers. The innovation should be as such that customers haven’t heard or thought of so it can’t be included in the bundle of attributes. Therefore, I am agreeing to the manager’s statement.

EXHIBITS

Exhibit 1

Professional 1 Professional 2 Tourist Deluxe
Incremental fixed ($)  Average incremental contributionper day per room ($) Incremental fixed ($)  Average incremental contributionper day per room ($) Incremental fixed ($)  Average incremental contributionper day per room ($) Incremental fixed ($)  Average incremental contributionper day per room ($)
0 0 0 0 0 0 0
2500 3 600 2.5 200 2 2500 3
1500 -2 1500 -2 3500 -4.5 3500 -4.5
100 -5 300 -0.5 300 -0.5 300 -0.5
0 0 100 -5 0 0 100 -5
4100 -4 2500 -5 4000 -3 6400 -7
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