After studying Master of International Business in Hotel, Resort and Food & Beverage Management, I have an internship as F&B trainee supervisor in Cesar Ritz Colleges. The report aims to analyze the basic information of Ritz Lounge and its service,
Analysis of Cesar Ritz Colleges
Cesar Ritz Colleges located in Le Bouveret, a charismatic French-speaking town nestled on the shores of Lake Geneva, it is a popular summer resort and famous as beautiful beach and many outdoor attractions. The vision is “Where Hospitality Meets Business.” And the mission is “At Cesar Ritz Colleges, we provide our students with a truly Swiss journey through hospitality education. Our programs give students the best of both worlds: a ‘Ritzy’ Swiss hospitality education in campuses drenched in history and tradition combined with an American/British approach to business management and entrepreneurship.” Dating back to early 1900s, the former of college is a magnificent hotel. The new campus was built in 2002, providing four kinds of accommodation for students now, Double Standard Room, Double Deluxe Room, Single Deluxe Room and Single Superior Deluxe Room. There are many recreational facilities for students to relax, including a fitness room, table tennis, table football and a home cinema with up to date video gaming equipment, the students also can enjoy themselves by water skiing, sailing and motor boating during the summer months. The college offer two restaurants, Fine Dining and Lakeview Restaurant, and Ritz Lounge for students to buy coffee, snacks or warm dishes from morning to the late in the evening, also the underground that open on Friday, a students’ bar and night club. In addition, the college is equipped with laundry and luggage room.
To ensure the students have a safe study and living environment, the collages only open for the teachers, students, staff and a small number of visitors, so the customers of Lounge are unchanged. According to the pie chart, students occupy the largest proportion of customers segments (55%), teachers and staff account for 25% and 15% 74041046926500respectively.
In general, the college with fascinating view and fully facilities offer a tranquil and secure study environment for bachelor students. Students have the choice of eating in any of the food outlets on campus. However, the college lack more potential customers because Ritz Lounge only serve students and teachers.
According to the Porter’s Five Forces, there are five separate forces that shape the overall extent of competition in the industry, these are “Rivalry among existing firms”, “Bargaining power of buyers”, “Bargaining power of suppliers”, “Threat of new entrants” and “Threat of substitute products or services”.
1. Rivalry among existing firms
Porter (1980) reiterated that intensity of rivalry is dependent on number and size of direct competitors as numerous and equally balanced competitors may lead to intense competition. Ritz Lounge competes with café, Kebab, and supermarket where they have same pastries and snacks, so there is not a fierce competition. It is distance of 800 meters from school to these competitors. Comparing with current competitors, the Lounge has an obvious competitive advantage. The Lounge offers various coffees, beer, pastries, pizza, chips and open from 07:30 to 23:00 expect Saturday. Students can buy what they want at any time, it is convenient especially during the break time and the price of product is cheaper than the others. Moreover, the Lounge is part of school and the fixed cost is low, and the school do not have to pay advertisement fee or attract the customers by price-cutting.
2. Bargaining power of buyers
Porter (1980) mentioned that the buyers of goods and services from an industry may be powerful if they are more concentrated than the players in the industry and are able to force down prices as well as reduce the industry’s margin. The students are not price-sensitive, they prefer to buy what they really love and do not concentrate on the price. Unlike the other store, every single product of Lounge has a fixed price, there is no discount no matter how many products the customers buy. So the cost of switching suppliers to the customer is low.
3. Bargaining power of suppliers
Porter (1980) emphasized that suppliers to an industry may be powerful if they are more concentrated than their customers and their customers do not command a significant share of their business because their customers do not represent a potential long-term or major relationship. The main ingredients used in Lounge is coffee bean, beverages, pastries, snacks, chocolate, orange, sugar, coffee cup, napkin, etc. The lounge has stable suppliers and there is no differentiation of products to make sure it is a low switching cost.
4. Threat of new entrants
According to Michael Porter (1980), threat of new entrants is determined by barriers to entry which include several elements. For opening a small business in Switzerland, the owner need to complete the insurance of damages water and fire and the concept of HACCP, apply for the permit application, inform about the national collective agreement, register the VAT and AHV, etc. Switzerland’s economy constitutes a highly developed service sector, led by financial services, it has more advantages to do business in Switzerland because its economic and political stability, transparent legal system, vibrant infrastructure, efficient capital markets, and low corporate tax rates. But there are still challenges for small companies in the field of innovation and a huge challenge is ‘financing’.
5. Threat of substitute products or services
Michael Porter (1980) pointed out that alternative products can be existing or potential products and services that perform the same functions. For Ritz Lounge, the main substitute products and services are the small restaurant and vending machine. The students will have lots of diet options in small restaurant, they can pick up an order to bring back to school or enjoy their meal there with a picturesque view. There are two vending machines that sell soft drinking, chocolate, candy, cup noodles in the school, it provides comport and put students at ease because the students can buy what they want at any time, especially during the closing time of Lounge.
Switzerland is a federal republic with a directorial system under a direct democracy. Certain powers lie with the 26 cantons; others are reserved to the federal government. The Swiss political system is characterized by a high degree of decentralization and is delegated to 26 states or states. This loose federal structure reflects the evolution of the Swiss state since the Middle Ages, in part because of the high degree of linguistic division in Switzerland. Frequent referendums on major or controversial political issues are key elements of Switzerland’s unique and well-established “direct democracy” tradition. The Swiss system is recognized for its political stability. Since the governance system is based on consensus, no single party can strongly promote a single agenda, so the various ideologies are combined in the decision-making process.
Switzerland’s is one of the wealthiest countries in the world, it has a very stable and modern economy. Compared with most other economies, Switzerland has not been hit hard by the global financial crisis. Its unemployment rate has never been higher than 3.2% and remains more or less constant at this level. In 2017, the GDP in Switzerland grew by about 1.07 percent compared to the previous year and the expert forecast a pick-up to 2.3% in 2018 and 1.7% on average in 2019-22. The major expenditure on GDP are from Gross Fixed Investment and Imports of Goods & Services. In addition to its workforce earning some of the highest salaries in the world, Switzerland maintained one of the lowest unemployment rates in the Europe, despite being affected by the 2008 financial crisis. With higher wages and specialized jobs, economic growth as well as production within the country continued to grow, a fact most evident through values of GDP. As a result, Switzerland’s gross domestic product per capita was ranked among one of the highest in the world. However, economic growth did not occur too rapidly and wages were set at a reasonable controllable amount, which allowed Switzerland to maintain a low inflation rate.
Social factors included social behaviors, lifestyles, consumerism, demographics, education level, etc. In Switzerland, they do not have its own language but there are four officially languages, which are German, French, Italian and Romansh. A survey shows, the Swiss are serious culture and the educational level and household income play a main role in access to culture. Switzerland has a population of about 8 million among which 23% are foreigners. Now more than 25% Swiss got higher education (Federal Department of Foreign Affairs Presence Switzerland. 2013). According to a study published jointly on Monday by the Federal Statistics Office and the Federal Culture Office, 93 per cent of the Swiss population visit at least one cultural institution? museum, exhibition, cinema or concert every year. People in Switzerland are highly educated, modern, and culturally. However, there is a challenge of the problem of aging population in the future. According to MarketLine figures, the percentage of the population above 65 years increased from 15.4% in 2005 to 16.9% in 2011. This figure is expected to pass 18.0% by 2015. By 2030, Swiss residents will have an average age of nearly 48 years. Switzerland needs to be careful with healthcare and pensions expenditure to deal with the rising costs of an aging society.
According to the 2011 Innovation Alliance Scoreboard, Switzerland is considered as a global innovation leader although the country lacks natural resources. The private sector plays a leading role in the development of technology and bears the cost of over two-thirds of Swiss R;D expenditure. Patents are one of indicators for measuring innovative success. Between 1985 and 2014, the number of patent applications worldwide nearly tripled, to just under 2.7 million annually. Over 43,000 applications were submitted in Switzerland in 2014. In absolute terms, Switzerland ranks eighth in the world; on a per-capita basis, it is number one (source: WIPO). Excellent position is an important reason, also the Switzerland’s liberal, stability-oriented economic policy and traditional emphasis on hard work, dedication and education. In addition, the Swiss are very active in E-markets and E-banking, there are several self-payment counters in every supermarket, it is save time for customers and save labor costs for the employers.
Switzerland has its own interest in protecting the environment. Swiss environmental policy has achieved many successes since the 1980s and reduced the pollution of the environment by certain contaminants. As a result, the country’s air quality has improved considerably over the past 25 years. Switzerland still face some environmental problems. According to new climate scenarios, an unchecked rise in global greenhouse gas (GHG) emissions could increase temperatures by over 6°C compared to pre-industrial times by the end of the 21st century. The pressure on surface waters and landscape is growing through high energy consumption, this is mainly reflected in the decline of biodiversity. To response to the current environmental problems, the Federal Council published Green Economy Action Plan in 2013 and Swiss Biodiversity Strategy in 2012.
Switzerland has a highly developed system in legal framework and policies, in which laws are distinct and the judiciary is independent of any branch of government. The federal government has a relaxed attitude of noninterference toward foreign investment and give the 26 cantons right to set major policies. Swiss law provides for strict rules on consumer protection. The Swiss Federal Consumer Affairs Bureau supports and advances the interests and the protection of the consumers if the market does not respect them. The protection of consumers’ interests focuses on the commercial interests of consumers as to products and services, which means the company should respect legal rights of consumers and guarantee the products safety.
The Ritz Lounge located in the school with cozy and elegant furnishings, providing table tennis and badminton outside if the students need. It is a good place to relaxing and studying for students and teachers. Preparing check in table at the beginning of each term and check out table in the end of each term to make sure the students have a comfortable studying life. Open on Sunday and major holidays. The price of product is lower than the other competitors, like the pizza price is around 12CHF but the Kebab where the fast food outside is around 15CHF. The lounge offers Mocha and ice coffee that student’s favor as well.
There are three staff working in lounge to ensure it can open from 07:30 to 23:00 on six days a week. Moreover, it is free coffee for teachers and SEG staff and the students who live outside, so it is a high fixed cost and the profits are low during the slack season. It is not a professional service for the guests because only trainee works in the lounge, and the frequent replacement of employees cannot give guests a quality experience.
César Ritz Colleges is near the train station of Le Bouveret. Le Bouveret where is a known for its beautiful beach and amusement parks, offers a multitude of events in summer and people can enjoy themselves by water sports like motor boating, water-skiing or sailing, so the village attract lots of visitors to have a trip on weekends or holiday. If the Ritz Lounge can open for the visitors, it is going to have more potential customers and increase the revenue.
The competitor has delivery service. They put advertisement around the school and deliver the fresh food to school only the students order by phone. Also, the membership system of the competitor is a threat for Ritz Lounge, it is easy to cultivate customer loyalty by membership card. They give one stamp for every payment and handsel a discount after collecting ten stamps.
The Guest Experience
The Way to Enhance the Guest Experience