A Marketing approach on how continuous processes improvement can contribute to hotel business organic growth

• Author: Ivasciuc I.S., Epuran Gh.
• Pages: 185-200

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 8 (57) No. 2 - 2015

A Marketing approach on how continuous processes

improvement can contribute to hotel business

Organic Growth

Ioana-Simona IVASCIUC1, Gheorghe EPURAN2

Abstract: Generating sustainable growth and profits is like finding a unicorn for most

managers. Organic growth should be considered as an alternative for long-term growth in

the hotel business. Designing the service process to deliver what customers expect from the

hotel offer is a crucial component of encounter marketing. Hotels need to embrace the

changes and ensure that their internal processes are aligned not just to current trends, but

also to the expected future changes. Keeping up with global changes and trends of any kind,

evaluating their impact on your business, continuous improving of the services using PDCA

cycle, Six Sigma or Lean principles, are the keys to long-term organic growth.

Key-words: organic growth, hotel processes, continuous improvement, PDCA cycle, Six

Sigma or Lean principles

1. Introduction

Today running a business successfully is a difficult task. Many issues impacting

performance are outside the control of a manager’s in fluence. We are now in a slow-

growth world and the hospitality industry is also part of it. In a slow-to-no growth

economy, merging two slow growing firms equals a larger slow growing firm. Plus it’s

expensive, takes time, diverts resources and creates a whole bunch of internal issues. In

addition, some experts have claimed that even with favourable strategic financial and

operations assessments, mergers have less than a 50% chance of success. Mergers &

acquisitions options and cost cutting are always viable, but organic growth should be

considered (Epuran, Dovleac, Ivasciuc and Tescasiu, 2015).

Although managing the service process is the responsibility of operations

management, marketing managers need to understand the principles of service

processes. Customer satisfaction is dependent upon the hospitality operation

delivering. The key marketing role of managing demand is made significantly

1 Transilvania University of Braşov, simona.ivasciuc@unitbv.ro

2 Transilvania University of Braşov, epuran.gheorghe@unitbv.ro

Ioana-Simona IVASCIUC, Gheorghe EPURAN

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easier when the service process consistently delivers the experience and quality

customers expect. However, when the service process fails to deliver, marketing

the hospitality property and the hospitality brand becomes much more difficult

(Bowie, and Buttle 2004, 245).

2. Literature Review

2.1. What is organic growth?

Most business enterprises are faced with the challenge of growing their respective

businesses. At the most basic level, business growth can be divided into two broad

categories: organic and inorganic. Organic growth is achieved when a firm grows

from within. Assumed to be less costly, poses fewer cultural and adaptation

problems and usually less visible in the event of failure, most companies generally

used the organic growth model (Berg, 2011). Organic growth represents an

opportunity to leverage a company’s core competencies to expand both revenue and

profits. In organic growth companies focus on bringing innovation in the form of

new products and services, identifying opportunities for existing offerings in new

markets, or generating more revenue from existing offerings from current customers

(Atkinson, 2007).

In Smart Growth, Edward D. Hess challenges the commonly held beliefs that

businesses must grow or die, growth is always good. Smart growth replace the

axiom of growth “grow or die” with “improve to remain competitive“. The primary

objective of smart growth strategy is to build an enduring business using authentic

growth and managing all the risks created by growth. Smart Growth companies do

make acquisition but those acquisitions are driven by strategic reasons (Hess, 2010).

In my previous article “Organic Growth Marketing Strategies in Hospitality

Industry” (Ivasciuc, 2014), in the tradition of grounded theory (Strauss and Corbin,

1998) which attempts to build or discover theory from data, I presented a conceptual

model of the factors that influence organic growth in hospitality industry. These

factors are: people and culture, a growing business culture, performance

measurement, exceptional customer experience, and process focused initiatives.