Goodwin & Associates Blog
The most trusted name in hospitality.Archive for May 20, 2009
Best in Bed
The “ Heavenly Bed, ” fi rst launched by the Westin brand of Starwood
Hotels & Resorts, has transformed the bed, a basic feature of any hotel
room, into a luxurious object of desire, enhancing the revenues of the
chain and leaving many hotel operators to follow suit with copycat linens and
custom bedding of their own.
The strategic process at Starwood began with consumer analysis and product testing. First,
Westin commissioned a study involving 600 business executives who travel frequently. The
results showed that 84 percent said a luxurious bed would make a hotel room more attractive to
them. What is more, 63 percent said a good night ’ s sleep is the most important service a hotel
can provide. Half of those surveyed said they sleep worse in hotels than at home. After testing
50 beds from 35 lodging chains, Westin developed its prototype all – white Heavenly Bed with
a custom – designed pillow – top mattress, goose down comforters, fi ve pillows, and three crisp
sheets ranging in thread count from 180 to 250.
Once the product was designed and tested, the fi rm introduced the bed with a carefully planned
marketing strategy. USA Today ran a story on the front page of its business section. The same day,
20 pristine white Heavenly Beds lined Wall Street up to the New York Stock Exchange in New
York City. Inside the Stock Exchange, Barry Sternlicht, the then Chairman and CEO of Starwood
Hotels & Resorts rang the opening bell and threw out hats proclaiming, “ Work like the devil.
Sleep like an angel. ” Meanwhile, at New York ’ s Grand Central Station, 20 more beds graced one
of the rotundas there, and commuters disembarking the trains were invited to try them out.
Similar events were staged the same day at 38 locations across the United States, tailored to each
city. Savannah ’ s event featured a bed fl oating on a barge down the river with a landing skydiver.
Seattle ’ s event took place atop the Space Needle. And to reinforce the message, a concurrent
advertising campaign asked, “ Who ’ s the best in bed? ”
MCDONALD ’ S PLAN TO WIN
After 50 years of operation, McDonald ’ s is revitalizing its products, and pushing innovation
through a variety of initiatives. This foodservice giant with more than 30,000 restaurants
in 100 countries provides food to nearly 50 million customers each day, but decades
of expansion, sales growth, and profi ts made the burger giant complacent. By focusing
on getting bigger, not better, the company stumbled in 2002, recording its fi rst losing
quarter. By 2003, U.S. sales had fl attened, as many consumers were turning to healthier
options and restaurants with more upscale menu items, a segment sometimes referred
to as “ fast – casual ” . Morgan Spurlock ’ s fi lm Super Size Me , released in 2004, also seriously
diminished the public image of the quick – service chain, as moviegoers watched Spurlock
become ill and gain 25 pounds after eating only McDonald ’ s food for one month.
With pressure to get back on track, it was time for McDonald ’ s to rethink the business.
The chain devised a recovery strategy that included new menu items, redesigned restaurants,
and a focus on the consumer experience. Through a program titled “ Plan to Win, ”
McDonald ’ s focused on making a deeper connection with customers through the fi ve
business drivers of people, products, place, price, and promotion. Using its own fi ve P ’ s,
the company is developing and refi ning new strategies to deliver value, offering product
variety, developing updated and contemporary stores, balancing the delivery of value pricing
with more expensive items, and marketing through bold and innovative promotions.
Execution of this strategy has included mystery shoppers and customer surveys, along
with grading restaurants to help the company deliver on its people goals. New menu
items like the Fruit & Walnut Salad in the United States and deli sandwiches in Australia
are part of the commitment to serve high – quality products to satisfy customer demand
for choice and variety. Restaurants are staying open longer, accepting credit and debit
cards, enabling wireless Internet access, and even providing delivery service in parts of
Asia. As part of the program, franchisees and suppliers are asked to provide their opinions
and ideas on facility design, while the company benchmarks retail leaders, such as
Crate & Barrel, to help produce cleaner and smarter restaurants. The company is testing
small handheld devices to use on what it calls “ travel paths, ” a process for checking
operational failures such as the temperature inside the refrigerators. Experiments with
a new grilling concept from Sweden, which grills burgers vertically instead of horizontally,
offers space – saving possibilities for the chain. Product offerings like the McCaf é ,
a concept developed in the Australian market that provides gourmet coffee inside 500
existing restaurants, are proving to be successful.
The trouble experienced in the early part of the millennium has abated, and executives at
McDonald ’ s have declared success after several years of progress under the Plan to Win.
Company revenues are up, and the fi rm plans to remain focused on its core business. One
indication of its commitment to fast food was the divestiture of its seven – year ownership
stake in Chipotle Mexican Grill, a highly successful fast – casual burrito chain. With the
sale of around 5 million shares of Chipotle stock, the burger maker is now refocusing on
Brand McDonald ’ s.
Attracting more customers to McDonald ’ s remains its goal for growth. In the U.S.
market, the strategy is to leverage menu innovation; in Europe, upgrading the customer
experience and enhancing local relevance have driven management efforts; and the
Asia/Pacifi c, Middle East, and Africa markets have focused on building sales through
extended hours. The question remains whether focusing on the core business will yield
maximum return. At McDonald ’ s, the executives are betting on the core brand and hoping
that this strategy will pay off.
