{"id":18720,"date":"2023-04-03T12:55:50","date_gmt":"2023-04-03T07:25:50","guid":{"rendered":"https:\/\/gstguntur.com\/?p=18720"},"modified":"2023-04-03T12:55:50","modified_gmt":"2023-04-03T07:25:50","slug":"ca-final-scmpe-question-paper-nov-2022","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/ca-final-scmpe-question-paper-nov-2022\/","title":{"rendered":"CA Final SCMPE Question Paper Nov 2022"},"content":{"rendered":"

CA Final SCMPE Question Paper Nov 2022 \u2013 CA Final SCMPE Study Material<\/a> is designed strictly as per the latest syllabus and exam pattern.<\/p>\n

SCMPE CA Final Nov 2022 Question Paper<\/h2>\n

Question 1.
\nRejuve Hotel is an Indian hotel chain of luxury hotels, based in New Delhi. With over 100 hotels, it is one of the largest hotel chain of the 5 Country. It has a franchise agreement to operate most of its hotels as part of \u201cThe Luxury Collection of Fruition International”. It is the biggest hotel business operator within the domestic and a well-established player in the international hotel business segment. From the past many decades, the hotel has been catering primarily to the business and premium segment travellers.<\/p>\n

To create one-of-a-kind style experiences for the domestic and international travellers, the hotel offered exquisite services along with additional segment of services like in-room styling services by a local luxury boutique, provide exclusive hotel photo opportunities, create super personalized hotel amenities, include kid-friendly surprises, in house forex change services.<\/p>\n

The hotel is liberal with the room stay timings such as early check-in and late check-out. They also offered option of auto-upgrade from deluxe joint room to suite class rooms, if available for free. A free shuttle pick up and drop services were provided for passengers from the domestic\/ international airport.<\/p>\n

Indian Hotel industry has been growing exponentially in the recent years due to growing economy. Consequently, there have been many new entrants in the domestic segment, offering low-cost rates to customers. These hotels have been offering rooms at huge discounts, thereby attracting a sizable chunk of customers away from the Rejuve Ho’ Vo counter this and maintain its market share, Rejuve Hotels also followed counter strategy.<\/p>\n

For a period of six years, rooms for various domestic travellers were offered at low competitive prices. At the same time, low rates were offered only if it was profitable to do so. Therefore, certain cost management measures were undertaken. The hotel converted itself from \u201cCreate One-of-a-Kind Style Experiences\u201d to limited services hotel.
\nMost of the previously offered exclusive free services by Rejuve Hotels were moved to \u201cpaid section\u201d. Other measures taken were to immediately terminate the free shuttle pick-up and drop services and to offer last-minute deals for rooms at a heavy discount if the hotel was not fully booked for that date. Vacant rooms are \u201cperishable\u201d, therefore instead of letting them go empty, the hotel can be filled at cheaper rates. This yield management measure based on capacity utilization was expected to increase market share and also the hotel\u2019s revenue. Rooms could be booked online using the internet or through any associate hotel reception maintained by the hotel group at various locations in selected cities.<\/p>\n

In order to quickly respond to a competitor\u2019s move, the pricing and marketing staff of the individual hotel were given sufficient autonomy to make this price war work. Therefore, in many situations, decisions could be taken even without the prior approval of the top management. Meanwhile adding to the stiff competition, prices due to inflation have been soaring in the last few years. Maintenance of Hotels, staff compensation and other overheads have also been increasing. Given this scenario, after six years of operations, the management at Rejuve Hotels found that they were not able to generate sufficient profits on many of the domestic hotel offers. A price discount by a competitor had to be matched with a similar price discount by Rejuve Hotels and vice versa. Offering last minute deals to fill up hotel to full capacity did not generate additional revenue. The volume of last-minute hotel bookers was low. It was found that most travellers booking at the last minute were anyway \u201cprice indifferent\u201d. Had the deals not been offered, the traveller would have been willing to pay more money anyway to book the hotel. Therefore, neither did these deals generate extra customers nor any extra revenue.<\/p>\n

Rejuve Hotels has always been perceived to cater the premium segment traveller, therefore participating in this price war had been contrary to its image of a luxurious hotel. This left a section of the customers confused about the product offering.
\nTherefore, the management of Rejuve Hotels decided to discontinue its discount pricing strategy and exit the \u201clow cost\u201d hotel business. The rooms are now being offered at its usual \u201cfull service\u201d rates. This strategy is proposed to be followed for both current and prospective projects and operations.
\nIn order to improve tourism within the country, the government has been formulating policies that are aimed at changing the landscape of the hospitality sector. Hotels are being built in smaller cities and towns that did not have any one till date. Concurrently with the expansion of its luxury hotel chain in the major metropolitan cities, the Rejuve Hotel Group also expanded its business hotels division in the secondary cities in India. The Rejuve Hotel Group continued to expand its geographic and market coverage in India. It developed specialized operations (such as wildlife lodges) and consolidated its position in established markets through the upgrading of existing properties and development of new properties.
\nIn a new competitive market move, Rejuve Hotels proposed to develop a model where-in travellers booking rooms at smaller towns are redeemable at other hotels within the group in the same price range and category, subject to availability.<\/p>\n

Under this policy, the hotels at the major metro cities will serve as a main hub for travellers touring different cities\/towns in a sequence. Rejuve Hotels also proposes to develop few budgeted small rooms with limited amenities in its metropolitan hotels to cater budgeted travellers from small cities. The ultra-luxurious amenities in the hotel will remain paid for such budgeted travellers.<\/p>\n

The travellers will have the advantage to relish the ultra-luxurious hotel environment in the metropolitan cities at a very budgeted price. More hotel options within the Rejuve Hotel group will now be available for 4 travellers. For example, a tourist from a smaller city, wanting to travel to X another smaller city can take a break at the nearest hub with Rejuve hotels under the same booking plan. For the tourist, this is a better alternative z as compared to staying in the hub at a small hotel with limited facilities. For Rejuve group of hotels, the proposition broadens its customer base.
\nTo implement this effect, Rejuve began scouting the market for smaller hotels in small cities that can be operated more economically on the hub- spoke route under its brand.
\nAlong wise, it discussed role for partnership with airlines, car rentals, city tour operators in order to offer attractive holiday packages to customers. Since most of the other hotels do not have the scale of operations to achieve the \u201chub-spoke\u201d model or the ability to offer holiday packages, Rejuve Hotels identified this as a unique proposition that it can offer to its customers. The hotel proposed tag line for its advertisement as \u201cREJUVENATE at REJUVE ANYWHERE, ANYDAY, ANYTIME”.<\/p>\n

Room booking continued to be offered over the internet using various online digital payments services. In the past, customers liked this option due to the convenience it offered. Dedicated customer service lines available 24X7 to resolve issues is proposed. Pay@Hotel services were also proposed to ease and facilitate bookings by customers. The free shuttle pick-up and drop services were reinstated for passengers from the domestic\/international airport and extended to city railway stations and city bus stands.
\nThe management of Rejuve hotel wants to have a seamless implementation of this project. This could be a game changer for the company that will help it to consolidate its position in the hotel industry. Therefore, a meeting has been called to discuss critical reporting that needs to be in place for ensuring a successful launch.
\nRequired :
\n(i) Evaluate the strategy adopted by Rejuve Hotels in becoming a \u201clow-cost\u201d hotel with limited services. (6 Marks)
\n(ii) Identify the strategy adopted by Rejuve Hotels for the proposed project. (4 Marks)
\n(iii) Recommend the company to adopt a mechanism to avoid errors in its strategy. (5 Marks)
\n(iv) Suggest a control reporting mechanism for timely corrections in the strategy. (5 Marks)
\nAnswer:
\n(i) Evaluation of Strategy:
\nRejuve Hotel is a premium segment hotel charging-full service \u201crates for its rooms. However, due to intense competition in the domestic market, it adopted a-low-cost advantage strategy. Low-cost advantage or cost lead-ership was achieved through following measures:<\/p>\n