Construction and Countermeasures of Hotel Service Value Chain (Literature Review)

In recent years, with the continuous expansion of the scale and influence of China's famous hotel group (hereinafter referred to as CFHC) and the worldwide popularity of network economy, academia and industry began to pay attention to and study it as a new enterprise organization form. CFHC is neither an enterprise group with assets as the link in the general sense, nor an industry association organization with the purpose of protecting the interests of the industry. We can't define it by the traditional enterprise organization form, but its strategic alliance characteristics have the typical value orientation of modern network organizations. This paper tries to explain the value basis and development direction of famous hotel organizations in China with the principles of network organization and value chain in contemporary management theory, and also hopes to clarify the rationality of their existence in theory.

First, the form and significance of the existence of network organizations

The mode of production in modern society itself has undergone profound changes, and it is also changing the way of life and work of modern human beings in an all-round way. Not only that, the change of production mode and lifestyle has brought about the change of the circulation mode of goods and resources. The market is closer to the reality and potential demand of customers in the way of resource allocation. In order to maximize the interests of enterprises and customers more effectively, the organizational form of enterprises is also changing. Enterprise network organization is a new form of typical modern enterprise. Its foundation may be capital, market or information, technology or raw materials. There are various forms of network organization, which mainly depend on the choice formed by the enterprise's own resource characteristics and development strategy requirements. Both enterprises and individuals are ready to accept the reality that our society is entering the network society in an all-round way, and enterprise organizations are consciously or unconsciously building or choosing their own network organizations. This kind of enterprise organization has brought a new economic form-network economy to the society with a new mode of production. Network economy is based on information technology, centered on knowledge economy, guided by customers' reality and potential needs, and provides services to customers in the most direct way. Thomas Peters, after inspecting many excellent enterprises, came to the conclusion that the cornerstone of modern enterprise management is to be close to customers, meet their needs and further predict their future needs. Driven by the network economy, the networking trend of traditional economic behavior is becoming increasingly obvious, and the network has become an important carrier to realize enterprise value.

Throughout the history of capitalism, the role that network organizations once played in the market economy may still be vivid. The following enterprise organization alliances branded with monopoly are actually different forms of network organization. From the perspective of modern economy, monopoly is not the whole nature of these enterprise organizations. In order to better understand the historical context of the development of network organizations, it is necessary to briefly state the characteristics of major network organizations that have appeared in history.

Trust is an organizational form adopted by enterprises that produce similar products or are closely related to each other in order to obtain high profits from production to sales. The enterprises participating in the trust have lost their legal and production and marketing independence.

Cartel is a kind of monopoly alliance formed by enterprises producing similar products in order to obtain high profits by reaching agreements in one or more aspects such as defining market, specifying output and determining price. The enterprises involved in the cartel remain independent in production, sales, finance and law, but those who violate the agreement will be fined, and their patent rights will be revoked.

Syndicate is a monopoly organization established by a monopoly capital enterprise in the same production department in order to obtain high profits by concluding agreements on selling products and buying raw materials.

Kang Zeen, a monopoly capital enterprise belonging to different departments, is a monopoly alliance with the most powerful enterprise as the core.

As mentioned above, some outdated enterprise network organizations have faded out of the historical stage because of the constraints of the times and even laws and regulations, but network organizations have not disappeared because of this, but have penetrated into various fields of production, consumption and circulation and people's daily lives in new forms. After World War II, mixed enterprise consortia came into being. Various enterprise groups, multinational companies, enterprise alliances, chain operations, enterprise outsourcing and other network organizations have profoundly and comprehensively changed the traditional resource allocation model with their rapid momentum.

Nike no longer produces its own jerseys and sneakers, but sticks its goodwill on the products produced after the designated manufacturers set standards, thus obtaining rich profits; McDonald's, which covers almost every corner of the world, is deeply rooted in people's hearts with its unified and unique image. Perhaps consumers who enter McDonald's restaurants don't know that it is not Americans who run McDonald's restaurants. People who are engaged in hotel specialty must know the existence of international chain hotels, but they may not have a thorough understanding of the reasons for their existence and operation. As consumers, whether we know the nature of network organizations or not, the influence these organizations bring to our daily life is so concrete and universal; However, as enterprise investors and business operators, if we still don't understand the network organization or have no impulse to embrace it, it will be difficult for us to meet the needs of customers with limited resources and create more value for the enterprise. The basic significance of the existence of network organization is to obtain greater effectiveness by borrowing the power of external resources from the resources of a single enterprise.

The evolution of management theory is actually closely related to the change of enterprise organizational structure. Therefore, every management school studies organizational forms from different angles. The classical organization theory represented by Taylor, Fa Yueer and Weber expounds the division of labor and activities within the organization. Later theoretical systems such as systematic school, contingency school and organizational reengineering all involved organizational innovation. Different forms of network organizations have different governance structures, but one thing is different from traditional economic organizations, that is, the operation mode of network organizations is based on trust rather than contract. Michael. In the book "Torch Brand-Brand Casting in the Network Economy Era", Moon asserts that credit network will become the organizing principle of the new era in the network economy field. The characteristics of network organization determine that its governance structure and operation mode are different from other economic organizations. Its governance structure and management methods are beyond the traditional management theory, and there are great differences in organizational structure, specific business processes and ways of enjoying benefits. In modern corporate governance theory, enterprise theories such as property right theory, transaction cost and principal-agent theory cannot be simply used to interpret network organization. The network organization revolution beyond the boundaries of enterprises challenges the traditional theory that there is a clear boundary between enterprises and markets.

Second, the value chain is the foundation of the existence of network organizations.

Michael Porter discusses the value chain in detail in his book Competitive Advantage, but the value chain he discusses is based on the value that a single enterprise should generate in every link from design, production, marketing to circulation when it uses its own resources to gain competitive advantage. Porter believes that a certain level of value chain is a combination of various activities of enterprises in a specific industry. The value chain of an enterprise and the way it engages in individual activities reflect its history, strategy, the way to implement the strategy and the economic benefits of these activities themselves. No matter whether the enterprise's competitive strategy is overall cost leadership, differentiation or target focus, it should have a corresponding relationship with the value chain. The following figure clearly shows the composition of the value chain:

Porter revealed a basic principle, that is, a single enterprise needs to cultivate value in all aspects of economic activities to form a value chain, and any enterprise must be superior to other enterprises in the industry in one or several aspects if it wants to gain an advantage in competition. But he ignored the difference between industrial enterprises and service industries when distinguishing basic activities from auxiliary activities, because in service industries, the basic activities and auxiliary activities of enterprises are closely related, and in some enterprises, what Porter even identified as auxiliary activities may be transformed into basic or decisive activities of enterprises. For example, in the hotel industry, the importance of human resource advantage cannot be overemphasized.

In the case of independent enterprises, the vitality of network organization lies in the value network woven by various value nodes. Johnson and Lawrence (1988)' s "value-added partner" theory further clarified the value-added chain of strategic alliances, that is, a single enterprise obtains a competitive advantage by establishing a partnership, and each enterprise completes part of the value-added chain, forming overlapping proliferation activities. Enterprise network organization, whether based on capital or market, information, technology and raw materials, has a specific value orientation, which is not only the driving force for the development of network organization, but also constitutes the competitive strategy of specific network organization. The inducement of most network organizations is to gain advantages in competition, so how to design the core competitiveness of network organizations is the main function of network organization governance.

If the source of enterprise competitiveness is divided into internal source and external source, external alliance is one of the important external sources for enterprises to gain competitive advantage. With the technological revolution and market globalization, the "internalization" or "market substitution" of enterprises in Coase era is changing to "externalization" or alliance. Especially in the process of global economic integration, this trend has been strengthened.

Third, the network organization characteristics of CFHC

Strategic alliance organizations are divided into vertical alliance and horizontal alliance. Vertical alliance mainly refers to the long-term cooperative partnership established by suppliers, producers and sellers according to industrial division of labor. The advantage of vertical strategic alliance lies in the specialization of concentrated resources; Reduce management costs; Establish an incentive mechanism; Flexibility of organizational structure, etc. Horizontal alliance is the cross-space resource sharing of similar enterprises, which is mainly manifested in the cooperation mechanism of market, information and technology. The main reasons of strategic alliance are the interdependence of resources and the diversification of economic activities among enterprises, which can be combined and extended in the alliance, so that enterprises can reduce transaction costs and obtain more profits; Enterprise alliances can learn from each other and acquire new knowledge and skills. Some scholars believe that enterprise network organization is a knowledge alliance for enterprises to learn from each other to some extent. Through this network, members of an organization can share knowledge, and enterprises can acquire the knowledge and skills of other members. Complementarity of core competence and knowledge makes enterprise network organization more competitive. (Li Weian 2003)

Established in 199 1, CFHC is a typical horizontal strategic alliance network organization. It is a strategic alliance cooperation platform established between state-owned hotels (or state-owned holding hotels) on the basis of trust and resource sharing. Individual hotels that have joined the organization still enjoy independent management status. When designing the organizational structure according to the competitive characteristics of the hotel industry, each city only chooses one hotel as its organizational member, considering that there is only unlimited cooperation space between enterprises that are not competing with each other. From the definition of organizational purpose in CFHC's articles of association, we can see the basis and value orientation of its cooperation.

1, China Famous Hotel Organization is a combination of famous high-star hotels and famous related tourism enterprises in major cities of China.

2. China Famous Hotel Organization adheres to the tenet of "brand building, resource sharing, mutually beneficial cooperation and common development", and on the basis of equality and mutual benefit of all member units, it concentrates its resource advantages and pursues the overall interests of the organization and the individual interests of its members.

3. Well-known domestic hotel organizations are market-oriented and operate and develop according to market rules.

If we use Porter's industrial competition model to examine the development process of CFHC, we can clearly understand the inevitability of choosing the current strategic positioning.

The establishment and development of CFHC is closely related to the evolution of macro and micro environment of China hotel industry. When the founder of 199 1 CFHC built its organizational prototype with a simple idea, the hotel market in China was basically a seller's market. Although international hotel groups have begun to enter China, the purpose of the alliance is not to compete completely because the relationship between supply and demand has not changed fundamentally, but to obtain a need for information exchange by simply imitating foreign hotel groups. With the great changes in China's tourism industry under the impetus of reform and opening up and market economy, the relationship between supply and demand is also changing. The growth rate of hotel rooms is much faster than that of tourists, so there is a phenomenon of macro-reporting good news and micro-reporting bad news in China tourism. 1979 between 2000 and 2000, the number of tourist hotels and rooms in China increased by 50-60 times. From 1979 to 2000, the total number of hotels increased from 150 tourist hotels and 17000 rooms to 1048 1 tourist hotels and 948200 rooms in 2000. From 1995 to 2000, the number of tourist hotels in China increased by 23%, but at the same time, the room occupancy rate dropped sharply, and the average annual occupancy rate of tourist hotels in China was only 5 1.67%. In recent years, the wine industry in China has suffered losses.

Not only that, the number of potential hotel visitors is also increasing. Real estate developers believe that the hotel industry is a safe haven for the real estate industry. Without the macro-control of the government, one office building after another has been transformed into a hotel. In order to show their achievements or find a paradise for themselves, government departments are also pursuing a fashionable and political hotel. State-owned enterprises regard the hotel industry as an extension of their own rights, and the born hotels have become derivatives of other industries; International hotel groups have also entered the China market, with great potential. China hotel industry has really entered a turbulent and complicated market environment where a hundred flowers blossom and a hundred schools of thought contend. The market competition pattern of the hotel industry in the major cities where CFHC member hotels are located has entered a white-hot stage.

From the point of view of consumers, with the increase of market supply and the maturity of consumers, the choice of hotel industry is more rational. Price factor and hotel conditions become the basis of choice at the same time. Because hotel products are highly substitutable as a service industry, price war is inevitable in the process of customers' vacillating choice of hotels.

In the most difficult time, the supplier may be someone who can help the hotel industry in the same boat. The falling prices of hotel supplies and raw materials and the conditions of deferred payment have made the hotel industry go through a more difficult period. Of course, suppliers are also facing increasingly fierce market competition and making painful choices.

In the face of fierce market competition, CFHC had to adjust its strategic positioning, re-established its purpose and organizational structure at the 200 1 Taiyuan Meeting, changed its original friendship organization into a new network organization directly pointing to the market, and built its strategic foundation from four aspects.

1. Market: In order to give full play to the overall resource advantages of the organization and enhance the competitiveness of individual hotels, the organization decided to set up a marketing committee and set up a CFHC room reservation center in Beijing, with a view to bringing direct economic benefits to its members. In 2003, China's famous hotel organization (Hong Kong) Hotel Management Company was registered in Hong Kong to make legal and organizational preparations for CFHC's further market-oriented operation in the future. Moreover, the company's registration in Hong Kong shows the determination and ideal of the organization to realize internationalization and marketization.

2. Information: In order to strengthen the information transmission among the members of the organization and between the organization and the market, CFHC has established an Internet site, and made full use of information through the secretariat and website. The information exchange among members of the organization plays an irreplaceable role in grasping the competitive situation of the industry in time and finding the appropriate market positioning.

3. Technology: In order to improve the overall management level among the members of the organization, eight professional committees were set up to exchange and supervise the improvement of hotel management technology. The establishment of professional committees indicates that the operation mechanism of CFHC is more specialized and diversified, so as to maximize the overall resource advantages of the organization into industrial advantages.

4. Managers' needs: In order to make managers of CFHC member hotels understand different hotel management concepts and technologies, cultivate market economy concepts and master market skills, it is very important to establish bilateral and multilateral communication mechanisms inside and outside the organizational framework. Especially for the operators of the state-owned hotel industry, how to change the hotel from an economic organization to an enterprise organization to achieve economic goals is the guarantee for the organization to advance along the correct organizational goals. Shengji put forward the idea of establishing a learning organization in the fifth period. Individual control, improving mental model, establishing common vision, team learning and systematic thinking are all challenges to modern managers and every enterprise organization. The aggregation of organizational intellectual resources is conducive to reducing organizational learning costs. Through the progress in concept and technology, members of organizations with low management level can complete the leap-forward development of their management level through shortcuts.

On the basis of these four strategic pillars, CFHC has developed into an influential hotel alliance organization with wide representation in China, covering major cities such as Hong Kong, Macao and Taiwan. At present, CFHC has more than 50 members. If we use a simple graph to represent its network form, we will find that every valuable and creative network node weaves hotels into a profitable network organization. Of course, this organization is also an open organization. In addition to the advantages of internal network, it is planned to establish external strategic alliances with other domestic and foreign enterprise organizations or social organizations, such as alliances with airlines, domestic and foreign hotel organizations, alliances with domestic and foreign hotel management colleges or training institutions, and alliances with other tourism organizations, so as to extend the resource boundaries of the organizations.

The organization and operation mechanism of CFHC, which consists of Council, Standing Council, Secretariat and eight committees, is being explored and gradually improved.

The alliance organization form of CFHC has neither the bond of property rights nor the traditional principal-agent governance mechanism. The existence and operation of organizations are carried out under the conditions of trust and mutual need. If such a strategic alliance organization has no foundation of trust, its governance cost will be very high. The high cost of governance will lead such a non-profit operation mechanism into a dead end. At present, the governance structure of CFHC is also designed according to the characteristics of network organizations. In strategic alliance organizations, information cannot be completely symmetrical, because the relative cost of pursuing complete symmetry of information is too high. In the model of asymmetric information and incomplete contract, allocating decision-making power to the agent who can have the greatest marginal effect on the success of cooperation can achieve the best economic effect. Decentralized ownership requires decentralized decision-making power to alleviate the agency problem caused by information asymmetry. Because specialization leads to the division of knowledge, the property ownership of network organizations is scattered among partners, rather than concentrated in one enterprise like traditional companies. Therefore, it is objectively required that the decision-making power must be dispersed accordingly, which is the coordination of group decision-making and distributed decision-making on the basis of decentralization. (Li Weian, Sun Guoqiang, 2003) At present, the professional committee system adopted by CFHC can solve this problem well. Therefore, the efficiency of the operation of professional committees will directly affect the effect of the whole organization.

Fourthly, the network value chain of CFHC.

Enterprise strategic alliance is formed to adapt to the spatial differentiation of products and the integration of market space value chain, and has become an effective link between them. Through the value connection of the network, CFHC expands the connotation and extension of products, thus breaking the independence of independent hotel products, which is very important for the hotel industry as a service product. Because in a consumer-oriented market economy era, the regional products of independent hotels can hardly meet the demand of mobile customers for product consistency, therefore, how to make product consistency shape consumer confidence is an important mission of network organizations. The direct effect brought by the rich connotation and extension of products is the infinite expansion of market space, and the market potential is infinite. The key is whether an enterprise can invest unlimited customer service with limited resources. Peter F.Drucker, a master of management theory, thinks that enterprises are organizations that create customers. The existence of enterprises is not only to meet the real needs of customers, but more importantly, to create needs. The process of creating demand is the process of creating market.

Brand creation is the commercial and cultural link between CFHC and customers. The relationship between brands and consumers can be investigated from the motivation of buyers: brands can help consumers simplify the selection process, thus reducing procurement costs and achieving faster transaction speed; The quality assurance and more product choices represented by the brand make consumers reduce the risk; Brands can help consumers show their identity and social status, and at the same time show their personal pursuit. The brand effect of CFHC not only endows consumers with value, but also enhances the enterprise value of a single hotel.

The networking construction of CFHC is integrated with the value chain construction, that is to say, while building a strategic alliance, CFHC sets the goal of building a value chain as the simultaneous construction of internal value chain and external value chain. In fact, the functions of these two types of value chains are complementary. Internal value chain refers to a "value field" composed of four basic values, and the organizational tension formed by this "value field" constitutes the core competitiveness of CFHC.

But the starting point and end point of this value chain should be the market, or consumers. First of all, consumers recognize the brand image of CFHC and its implied value, and then make a decision to choose to spend in hotels of members of the organization; Due to the processing of CFHC's internal value chain, the customer's consumption process has received unique high-quality systematic services, and the customer's value has been realized. The external manifestations of customer value realization are willingness to pay and willingness to repeat consumption. The process of customer value realization is also the process of hotel individual value realization, so in this sense, the value of hotel and customer is the same; The realization of hotel value means that the overall value of the organization is naturally transferred to a single hotel through the consumption process of customers, and the protection of the organization by a single hotel is the highest value of the organization; The value chain enters the next cycle, and the organization transfers the value to the customers, thus completing the cycle of a network organization value chain. In this cycle, CFHC plays the role of customer value processor or value amplifier, even if customer value is realized and added through CFHC's systematic and high-quality service program processing. As a network organization, the value of docking with the market will be realized.

Here, it is necessary to determine the value formed in this value chain. As an enterprise, its value is both realistic economic value and potential economic value. As customers, it is not only a value-for-money consumption experience, but also an improvement of their quality of life; For an organization, its value is not only reflected in the contribution of enterprises as social organizations to society, but also in the sublimation of organizational image and the enhancement of organizational vitality.

As an alliance network organization, CFHC is similar to the international hotel group in the basic structure of the value chain, but it also shows different characteristics in the connotation of the value chain because of the different richness of its internal value chain and the tightness of its organizational structure. From the structure diagram of the value chain of international hotel groups, we can see that its value processor has stronger value-added ability than other alliance hotel organizations.

Whether CFHC or international hotel group, the basic principle of its network value chain operation is the same, but because of the existence of the resource-based advantages of international hotel group as a network organization, its ability to systematize and standardize customer value is obviously stronger than that of non-group network organizations, and the result is the comparative advantage of bringing value-added benefits to customers. Another advantage is that the operating efficiency of organizations is much higher than that of non-group network organizations. However, there are disadvantages in the operation of international hotel groups, which is the basic reason why international hotel groups cannot completely replace network organizations such as franchising or famous shops in China. Because the cost of group operation is higher than that of network organizations such as CFHC, the high cost will inevitably be transferred to consumers. As a highly substitutable hotel product, price is undoubtedly one of the important criteria for selection. Under certain conditions, the standardization of hotel industry may have the opposite effect to specialization and personalization. In an era of more and more personalized consumption, it is necessary to pay attention to the personalized needs of customers. A network organization that maintains the operating characteristics of single hotels like CFHC can better solve the differentiated needs of customers.

The structure and center of gravity of strategic alliance value chain are not static. With the progress of science and technology or the change of industry competition mode, many things in the original value chain may be changed. Alliance organizations should not only get opportunities in all links of the value chain, but also have goals and key breakthroughs.

Verb (abbreviation of verb) conclusion:

As a modern business operator, if he still tries to close the business he controls and admire himself, then the business is isolating itself from the market and will eventually be abandoned by the market. Due to the rapid development of science and technology that supports the progress of modern society, people's concepts of life and consumption are undergoing revolutionary changes predicted by toffler in The Third Wave. The existence of enterprises is to provide products and services for the society. If the products we provide lag behind people's value demand, then this enterprise is essentially worthless. If modern enterprises want to be in an invincible position in the competition, they must establish their own network or use other people's network resources.

Secondly, without the support of social resources, this enterprise cannot be regarded as a modern enterprise, and how to effectively use social resources is a realm of modern management. Social resources are limited, and the resources available to enterprises are also limited. How to use limited resources to establish an infinite network architecture, thus extending the ability of enterprises to obtain resources, is the performance of contemporary management art.

Thirdly, in a non-monopoly competitive industry, we can't avoid competition, especially in the hotel industry, which is highly replaceable. Competition is all-round, and competition in management culture, management mode, management talents and market is almost daily. When the competition enters the stalemate stage, it is impossible for all competitors to gain absolute advantages in the competition, and a game choice will be the best choice for all competitors to pursue the maximum marginal utility. Cooperation in competition will be another theme of management art.

Fourthly, the key to the successful operation of network organization lies in whether its governance mechanism can ensure that the cooperative parties do not take advantage of each other's information asymmetry and incomplete contracts to cause moral hazard. In terms of organizational operation efficiency, members of the organization are required to interact synchronously and cooperate in an orderly and efficient manner. Network mechanism is an informal governance mechanism different from formal mechanism. Social mechanism defines cooperative behavior from macro and static angles, and operational mechanism regulates cooperative process from micro and dynamic angles, thus forming a governance mechanism system. Relationship, interaction and cooperation are the governance logic of network organization, and network mechanism plays a role on the basis of network organization governance logic, thus ensuring the orderly operation of network organization and the smooth realization of governance objectives. (Li Weian 2003)

As a pioneer enterprise organization of hotel industry in China, CFHC's governance mode and operational efficiency are far from the real strategic alliance, but this directional choice is undoubtedly correct and advanced, and this exploration is conducive to finding another road of network economy for improving the quality of hotel industry in China. It is necessary for us to thank the founders of the original organization and all sectors of society for their concern for CFHC. What we need to do is to establish a value chain system to create more value for customers and enterprises on a wider network.