THE HARILELA ENTERPRISES Harvard Case Solution & Analysis

THE HARILELA ENTERPRISES Case Solution

INTRODUCTION

Harilela Enterprises is a family business where the majority of wealth is divided between real states and hotels. Mr. Harilela and his brothers are the shareholders and director of this large enterprise the business expanded over and over again thorough acquisitions and developments of new hotels in different geographical areas.

 The group first hotel  was Imperial hotel and operational base is Holiday Inn Golden Mile Hong Kong which was constructed on the acquired land it’s a fully owned hotel it was acquired in 1975 and Mr. Harilela invested a lot of time in the development and design with other architectures after that the group was involved in number of acquisitions they also diversified their business in real estate market the last acquisition of the group was in the year 2000 the Harilela Group acquired W.hotel in Sydney Australia this hotel is fully owned this was acquired when it was partially built then they further developed it and converted it to five star hotel it was their first major move in Australia for business expansion.

 They already have Hotels all around the globe in major cities and busy metropolitan areas like London, Honk Kong, and Singapore. They have hotels some are fully owned and some are on leases and other are partly owned. They have also made investment in real estate from 1951 to 1960 in Canada, Honk Kong and United States.

Currently the value of business is HK $3.5 Billion. As compared to the last measured value of the group in 1980 which was HK$250 millions the value of the business is increased to HK$3.5 billons in the past twenty years. Currently the business is divided 90% in hotels, 5% in Real Estate and 5% other management contract areas.

PROBLEM STATEMENT

The Harilela’s are currently facing the issue of succession planning as who will lead the Group in future they are finding it hard to identify the individual with the potential business leadership skill to ensure continued success of the whole group.

INTERNAL AND EXTERNAL ANALYSIS

SWOT MODEL

STRENGHTS

Strong bonding between brothers which are also executives of the group is strength of the company which can be seen as a fact that they successfully managed to run business and add value to the whole group, in family owned business the decision making is quick. The locations of their hotels are near places full of crowd and also near tourist destinations , busy metropolitan areas where tourist choose their hotels to stay it is their strength in hotel business a location matters a lot.

Being a family hold business the group one major strength is that there is agreement on majority of matters unlike with the formal structure such as non executive directors who oppose and challenge executive director ideas to make something best out of it.

Another strength of the business is that which is linked with large family such as they can do forward or backward integration by using their family members in different areas to take advantage of complete control over supply channels and to have a better understanding of the business they are dealing with. Another strength which deserves special attention is that the professional manager who deal with hotels and business day to matters and finance and responsible for innovation and its implementation are experienced in what they do and are transparent with board which in turn helps the leaders to take timely decisions. The motivated employees are strength of the Harilela group............

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