Case Study onNomura Hotel Ltd

Introduction

• Krishna Hegde had 18 years of experience of working with several five star hotels in various countries.

• In Feb 2002, he started Nomura Hotel in Bangalore with 3 employees and limited financial resources.

• The business strategy was to provide quality food of international standards to local customers at reasonable prices.

Growth of Nomura Hotel

• In Sep 2007:– The hotel had over 1000 employees.– Rs 400 million in revenue.– Unique system of centralized food production and

delivery.– Serving over 30 multi-national companies.

• Corporate customers accounted for 80% of the revenue.

Segmenting and Targeting

• The innovative and unique system of centralized food production and delivery was meeting the needs of different customer segments.

• Market segments targeted were:– Counter Sale– Wholesale– Home Delivery– Banquet– Corporate Service

Counter Sale

• Introduced to minimize wastage due to excess food which remained after providing food to industrial customers.

• Excess food sold across counters to individuals who want good food at affordable costs.

• The pricing policy was cost plus 3%

Wholesale & Home Delivery

• Wholesale:– Catering to the needs of small entrepreneurs who made money

by buying from Nomura Hotel and reselling the same.

• Home Delivery:– Catering to the needs of household consumers by providing

home delivery service.

– Helped to generate word of mouth communication

Banquet

• Provided meals for many people during meetings and functions conducted by various organizations.

• Some of the major projects executed:– LIC National Meet serving 10,000 meals a day– Bangalore Habba providing lunch and dinner for 25,000 people a

day

Corporate Service• Major segment generating 80% of the revenue.

• Included 30 business organizations from software, BPO, textle and engineering industries.

• Nomura created a separate ‘corporate kitchen’ under the brand name “Right Caterers” to meet HACCP standards of NASA, USA.

• Gave Nomura a competitive edge.

• Krishna Hegde managed the relationships with all the 30 MNC’s.

Board of Directors

CEO

Production in

Charge

North & South Indian

Cooks

Finance & Accounts

Manager

Purchase & Store

Dpts

Counter

Service in Charg

e

Take away

in Charg

e

Banquet

Manager

Senior

Manager

Corporate

Corporate Unit

Manager

Corporate Supervisor

s

F&B Service

Staff

HRD Mana

ger

HACCP Manager & Admin Exe

Repairs/

Maintenan

ce Mana

ger

PRO

Organization Structure

Competition• No direct competition because of the unique centralized

food production & delivery.

• Right caterers though had competition from other caterers.

• Right caterers however had an edge because of its ‘corporate kitchen’.

• To sustain competitive advantage:– Nomura focused on innovation– Ensured consistency of quality and taste.– No synthetic colors and additives as well as harmful chemicals

were used.

Retaining Employees and Customers

• As the hotel was considering expansion into restaurants and lodging retaining employees and customers was important.

• For Employees:– Nomura offers free food, shelter and medical service to its employees.– Started opening stock options and loans without interest for its

employees.

• For Customers:– Depended on satisfied customers word of mouth.– Radio & T.V. programmes on cooking conducted by Krishna Hegde gave

a good publicity for the hotel.

Challenges – 1. Our views on Segmentation and Targeting on Namura?

• Product Segmentation – Need Based.• Quality and Taste

Need Service Remarks

Corporate Corp Kitchen – Right Caterers Major Focus

OTCLeft over food No specific target.

Quantity not fixed.Orders may/may not be delivered.

Wholesale Small Entrepreneurs Building competition.Quality food at low cost.

Home Delivery Household No USP.

Banquet Functions High Capacity

Non-Veg Non –veggies 8kms away from Veg Kitchen.

Q.2 – If u were the consultant what strategy and actions would u suggest to retain the existing employees and corporate clients ?

Equal focus on Intrinsic and Extrinsic benefits.

Greater responsibility – accountability.

Appreciation of work in both tangible and intangible terms.

Focus on career development within the organization.

And Making them feel as a part of the family.