Case Study on Nomura 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 MNCs.

Organization Structure
Board of Directors

CEO

Production in Charge

Finance & Accounts Manager

Counter Service in Charge

Take away in Charge

Banquet Manager

Senior Manager Corporate

HRD Manager

Repairs/Main tenance Manager

PRO

North & South Indian Cooks

Purchase & Store Dpts

Corporate Unit Manager

HACCP Manager & Admin Exe

Corporate Supervisors

F&B Service Staff

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?

Need Corporate Product Segmentation Need Based. Quality and Taste Service Corp Kitchen Right Caterers Left over food OTC Remarks Major Focus No specific target. Quantity not fixed. Orders may/may not be delivered. Building competition. Quality food at low cost. No USP. High Capacity 8kms away from Veg Kitchen.

Wholesale Home Delivery Banquet Non-Veg

Small Entrepreneurs Household Functions Non veggies

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.