Hotel du Vin,
Corporate Strategic Management,
The innovative nature of its initial development and expansion,
Entrepreneurial Life Cycle
Strategic choices
Diffusion S-Curve
Differentiation
Strategic customer’s needs
Focus Strategy
Product and Process
Income from diversification
1. CASE STUDY: HOTEL DU VIN
SUBJECT: CORPORATE STRATEGIC MANAGEMENT
PRESENTED BY: MOHIT GANDHI, 21809
2. INTRODUCTION
Hotel Du Vin Chain is pioneering, award-winning boutique hotel group in UK.
Established in 1994, by Gerard Basset; Robin Hutson
Company Name: Alternative Hotel Group, with 13 bed hotel in Winchester
Both the Director were employee of the Hotel Industry as Managing Director and Head of Sommelier
(Waiter)
Intention: Fill the market gap in England: by providing quality driven, affordable provincial hotels
Initial Proceedings: More Focus on Brand Building by quality and affordable in-house Bistro
Achieved Remarks: 90% occupancy rate within few months of opening
Within 3 years, open another branch with 34 beds in Tunbridge Wells
3. OTHER MILESTONES
2001, By
raising fund
form new
investors,
expanded
chain by 4
more hotels.
2002, ‘Hotel of
the Year’
2003 the
Guardian’s
and the
Observer’s
‘Best UK
Hotel’
2004, added 2
more hotels and
covered 6 sites
throughout the
country,
Further development of a former
brewery in Henley-on-Thames,
and had purchased the rights to
develop a highly attractive 41-
bed site in Cambridge.
2004
Acquihired by
Malmaison
(MWB)
Upto, 2011, new 8
hotels got started
and turnover
reached to £160
million .
4. THE INNOVATIVE NATURE OF ITS INITIAL DEVELOPMENT AND
EXPANSION
HduV was an iconic pioneer of the UK boutique hotel market.
HduV sought a blend of quality design and service which was able to respond to changing consumer cultures.
(affordable and better quality)
‘Restaurants with rooms’
For Finance: They included two important venture capital investors, Ashley Levett and Charlie Vincent, who had
guided them through their business expertise and also provide small fund.
Tying Hospitality and wine, to get more competitive advantage of growing wine market in UK.
Business partner and co-founder Gerard Basset, a former World Champion holder of ‘Sommelier of the Year’,
pro- vided the core capability for the HduV wine branding and was commended by Hutson for his knowledge,
which brought ‘credibility’ to the business concept.
With increasing price of wine all-over the UK, introduced brand-building events such as wine classes and
tastings.
Many of the hotels are neglecting the food, beverages with Rooms, whereas HduV had chosen that Innovative
Idea, which business model is called ‘Lunch, din- ner, hotel, week, weekend, weekday – 365 days a year.’
5. BUILDING THE BRAND AND APPRECIATING ITS PROPERTY ELEMENT
Highlighted by Finance Director Peter Chittick in Business South Magazine in June 2003: ‘The HduV
brand is all about beautiful buildings, fabulous food and wine, a relaxed, informal atmosphere and
sensible prices.’
For further expansion: Huston had selected the quirky property and restore them with classical and
contemporary designs with the help of his wife.
‘distressed assets, in the middle of good towns’: Intuitively: based on the types of cars parked at the
railway station, or the presence of ‘brass plaques’
Each new HduV site was sophisticated but relaxed cosmopolitan-style hotels Owing to Huston’s Intrinsic
sense of demand.
Taking advantage of First mover by placing sites at Tunbridge Wells, Bristol, Birmingham, Harrogate
Cambridge and Henley and get advantage of ‘ahead of the curve’.
6. THE CHALLENGE: BALANCE INNOVATIVE ENTREPRENEURSHIP AND BRAND
MANAGEMENT
As HduV began to reach that target and its 10-year milestone, the co-founders began to voice concern
that the company was becoming too large and unyielding for them to control, to the detriment of the
service offer.
Go for ‘incubation’ strategy, which was helpful for ‘keep the culture going’.
Solution: Each new hotel that opened was run by a manager who had previous experience of running the
Winchester HduV. In this way managers were initiated in Winchester and the directors had the
opportunity to over-see their proficiency before promoting them to the responsibility of running a newly
opened part of the chain.
7. ENTREPRENEURIAL LIFE CYCLE
Start up: Sources of Capital
Growth: Transitioning from manager to
Entrepreneur
Maturity: Retaining Enthusiasm and
commitment and generating new growth
Exit: Seeking to release capital as a reward
for input and risk-taking
8. STRATEGIC CHOICES: FOR EXPANSIONS OF HDUV
Choices about
business
positioning
relative to
competitor
Choices of
products,
industries and
market to
pursue
How to pursue
strategies:
Organic,
acquisition or
alliance
9. KEY ISSUES
Diffusion S-Curve
Differentiation
Strategic customer’s needs
Focus Strategy
Product and Process
Income from diversification
10. INNOVATION DIFFUSION
Diffusion is the process by which innovations
spread among users.
The diffusion S-curve
Taking advantages of first
mover
11. DIFFERENTIATION
A firm following a differentiation
strategy attempts to convince
customers to pay a premium price
for good or services by providing
unique and desirable features.
Pioneer of hotels with
bistro facility, with classic
and contemporary
Interior for cosmopolitan
12. INCOME FROM DIVERSIFICATION
Company focused to generate the income from various sources like:
Rooms
Restaurant
Wine
Party and Event organization
13. S W
O T Threats
Increasing debt of MWB (Parent
Company) might affect the
merged companies
After merger, centralized
organization may get affect to feel
the local staff and cultural value of
visitors
Opportunities
Satisfy new customer needs: There is demand
for traditional French wine
Passion and desire succeed
Fresh marketing ideas competing with
traditional
Opening new branches with better hospitality
and facilities and more capacity
Due to centralized organization,
procurement and management decisions
may be favorable for new development and
further expansion
Weaknesses
Lake of control over hotel staff due to
multiple branches
Diverse culture and values at the time
of acquisition of both the hotels:
Malmaison and HduV
Managing significant growth of 16
hotels and 1500 new employees
In 2012, Poor Governance, 24% stock
was hold by Hong-Kong based
company and director had resigned.
Strengths
Leading Innovator
Unique Wine and Winemaker
story
Prestigious wine school training
Distressed assets, in the middle of
all the good towns of UK
Affordable prices of room
Fine dining Restaurant with room
Multiple Income Stream
Before merger, decentralized
organization succeed, by Huston’s
Strategy