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The Center for Hospitality Research Hospitality Leadership Through Learning 0 2 1 9 9 2 - 2 0 1 2 th ANNIVERSARY Cornell Hospitality Report Vol. 12 No. All CHR reports are available for free download, but may not be reposted, reproduced, or distributed without the express permission of the publisher. by J. Bruce Tracey, Ph.D., and Brendan Blood 7, April 2012 The Ithaca Beer Company: A Case Study of the Application of the McKinsey 7-S Framework

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The Center for Hospitality ResearchHospitality Leadership Through Learning

021992 - 2012

th

ANNIVERSARY

Cornell Hospitality ReportVol. 12 No.

All CHR reports are available for free download, but may not be reposted, reproduced, or distributed without the express permission of the publisher.

by J. Bruce Tracey, Ph.D., and Brendan Blood

7, April 2012

The Ithaca Beer Company: A Case Study of the Application of

the McKinsey 7-S Framework

Advisory Board

The Robert A. and Jan M. Beck Center at Cornell UniversityBack cover photo by permission of The Cornellian and Jeff Wang.

Cornell Hospitality Reports, Vol. 12, No. 7 (April 2012)

© 2012 Cornell University. This report may not be reproduced or distributed without the express permission of the publisher.

Cornell Hospitality Report is produced for the benefit of the hospitality industry by The Center for Hospitality Research at Cornell University

Rohit Verma, Executive DirectorJennifer Macera, Associate DirectorGlenn Withiam, Director of Publications

Center for Hospitality ResearchCornell University School of Hotel Administration489 Statler HallIthaca, NY 14853

Phone: 607-255-9780Fax: 607-254-2922www.chr.cornell.edu

Niklas Andréen, Group Vice President Global Hospitality & Partner Marketing, Travelport GDS

Ra’anan Ben-Zur, Chief Executive Officer, French Quarter Holdings, Inc.

Scott Berman, Principal, Real Estate Business Advisory Services, Industry Leader, Hospitality & Leisure, PricewaterhouseCoopers

Raymond Bickson, Managing Director and Chief Executive Officer, Taj Group of Hotels, Resorts, and Palaces

Stephen C. Brandman, Co-Owner, Thompson HotelsRaj Chandnani, Vice President, Director of Strategy, WATGEric Danziger, President & CEO, Wyndham Hotel GroupBenjamin J. “Patrick” Denihan, Chief Executive Officer,

Denihan Hospitality GroupChuck Floyd, Chief Operating Officer–North America, Hyatt

RJ Friedlander, CEO, ReviewProGregg Gilman, Partner, Co-Chair, Employment Practices,

Davis & Gilbert LLP

Tim Gordon, Senior Vice President, Hotels, priceline.comSusan Helstab, EVP Corporate Marketing,

Four Seasons Hotels and ResortsPaul Hineman, Executive Director, National Restaurant AssociationSteve Hood, Senior Vice President of Research, STRJeffrey A. Horwitz, Chair, Lodging + Gaming, and Head of Private

Equity Real Estate, ProskauerKevin J. Jacobs, Senior Vice President, Corporate Strategy &

Treasurer, Hilton WorldwideKenneth Kahn, President/Owner, LRP PublicationsKeith Kefgen, Chief Executive Officer, HVS Executive SearchKirk Kinsell, President, The Americas, InterContinental Hotels

GroupRadhika Kulkarni, Ph.D., VP of Advanced Analytics R&D,

SAS InstituteGerald Lawless, Executive Chairman, Jumeirah GroupSteve Levigne, Vice President, U.S. Strategy & Insights,

McDonald’s CorporationMark V. Lomanno Executive Board Member, newBrandAnalyticsDavid Meltzer, Chief Commercial Officer, Sabre Hospitality

SolutionsWilliam F. Minnock III, Senior Vice President, Global Operations

Deployment and Program Management, Marriott International, Inc.

Mike Montanari, VP, Strategic Accounts, Sales - Sales Management, Schneider Electric North America

Shane O’Flaherty, President, International and Ratings, Forbes Travel Guide

Chris Proulx, CEO, eCornell & Executive EducationCyril Ranque, SVP, Global Market Management, Expedia, Inc.Carolyn D. Richmond, Partner, Hospitality Practice,

Fox Rothschild LLPSusan Robertson, CAE, EVP of ASAE (501(c)6) & President of the

ASAE Foundation (501(c)3), ASAE FoundationMichele Sarkisian, Senior Vice President, MaritzJanice L. Schnabel, Managing Director and Gaming Practice

Leader, Marsh’s Hospitality and Gaming PracticeTrip Schneck, Managing Partner, District Hospitality PartnersK. Vijayaraghavan, Chief Executive, Sathguru Management

Consultants (P) Ltd.Adam Weissenberg, Vice Chairman, Global and U.S. Travel,

Hospitality & Leisure Leader, Deloitte & Touche USA LLP

Thank you to our generous Corporate MembersSenior Partners

Friends4Hoteliers.com • Berkshire Healthcare • Center for Advanced Retail Technology • Cleverdis • Complete Seating • Cruise Industry News • DK Shifflet & Associates • ehotelier.com • EyeforTravel • Gerencia de Hoteles & Restaurantes • Global Hospitality Resources • Hospitality Financial and Technological Professionals • hospitalityInside.com • hospitalitynet.org • Hospitality Technology Magazine • HotelExecutive.com • International CHRIE • International Hotel Conference • International Society of Hospitality Consultants • iPerceptions • JDA Software Group, Inc. • J.D. Power and Associates • The Lodging Conference • Lodging Hospitality • Lodging Magazine • LRA Worldwide, Inc. • Milestone Internet Marketing • MindFolio • Mindshare Technologies • PhoCusWright Inc. • PKF Hospitality Research • Questex Hospitality Group • Resort and Recreation Magazine • The Resort Trades • RestaurantEdge.com • Shibata Publishing Co. • Synovate • UniFocus • Vantage Strategy • WageWatch, Inc. • The Wall Street Journal • WIWIH.COM

PartnersDavis & Gilbert LLP Deloitte & Touche USA LLPDenihan Hospitality GroupeCornell & Executive EducationExpedia, Inc. Forbes Travel GuideFour Seasons Hotels and Resorts Fox Rothschild LLP French Quarter Holdings, Inc. HVS Hyatt InterContinental Hotels Group Jumeirah GroupLRP PublicationsMaritzMarriott International, Inc.Marsh’s Hospitality PracticeMcDonald’s USAnewBrandAnalyticspriceline.comPricewaterhouseCoopersProskauerReviewPro Sabre Hospitality SolutionsSathguru Management Consultants (P) Ltd. Schneider Electric Thayer Lodging Group Thompson HotelsTravelportWATGWyndham Hotel Group

ASAE FoundationCarlson HotelsHilton WorldwideNational Restaurant AssociationSASSTRTaj Hotels Resorts and Palaces

4 TheCenterforHospitalityResearch•CornellUniversity

ExECuTivE SuMMary

byJ.BruceTraceyandBrendanBlood

TheIthacaBeerCompany:

An analysis of the Ithaca Beer Company demonstrates how the McKinsey-developed 7-Smodelcanbeused toassessacompany’scompetitiveandstrategicposition.Themodelitselfproposesthatthefollowingsevenkeypointsshouldbeinalignment:strategy,structure,systems,staff,skills,style,andsharedvalues,thelastofwhichiscentraltotheothersix

elements.RelativelysmallbythestandardsoftheU.S.brewingindustry,IthacaBeerCompany(IBC)isacraftbeerbrewerwithagraduallyexpandingregionaldistribution.Basedoninterviewsandotheranalysis,fourofthesevenfactorsinthe7-Smodelclearlyarealignedandcriticalforthiscompany’ssuccess.Theyarestrategy,staff,skills,andsharedvalues.Briefly,IBC’sstrategyisoneofcommunityinvolvementandcarefulattentiontodistributors,retailers,andcustomers.Itsrelativelysmallstaffisenthusiasticabouttheproduct,hasstrongskills,andworkscollaboratively.AlthoughtheotherthreeSfactorsdonotseemtobesocriticalatthemoment,theymaycomeintoplayasIBCcontinuestogrowandexpand.Thus,whilethe7-Sanalysisisusefulinhighlightingacompany’sstrengthsandchallenges,a contingencyapproachmaybe themostappropriate,withcertain factorsbeingmore salient thanothersatanyparticulartime.

A Case Study of the Application of the McKinsey 7-S Framework

CornellHospitalityReport•April2012•www.chr.cornell.edu 5

abouT ThE auThorS

J. bruce Tracey, Ph.D., is associate professor of management at the Cornell School of Hotel Administration and is editor of the Cornell Hospitality Quarterly ([email protected]). He has conducted research on a wide range of strategic and operational-level HR topics, including the impact of training initiatives on firm performance, employee turnover, employment law and leadership. He has presented his work at numerous regional, national and international conferences, and his research has been published in diverse outlets such as the Journal of Applied Psychology, the Cornell Hospitality Quarterly, and the University of Pennsylvania Journal of Labor and Employment Law. His recent sponsors for research and consulting include Four Seasons, Hilton, ClubCorp and Uno Chicago Grill, and he has been cited in the New York Times, USA Today, and the Orlando Sentinel, among other popular press outlets.

A graduate of the Cornell University School of Hotel Administration, brendan blood is a systems integration consulting analyst at Accenture Education based in New York City ([email protected]).

6 TheCenterforHospitalityResearch•CornellUniversity

CornEll hoSpiTaliTy rEporT

Aclearunderstandingofafirm’scompetitivepositionisessentialforfacilitatinggrowthandachievinghigh levelsofperformance.Suchclarity isparticularly important forfirms that are competing in emerging industry segments where the environmentaldynamicsaretypicallyquiteturbulentandambiguous.Oneframeworkthathasbeen

widelyusedtoassessafirm’scompetitivepositionistheMcKinsey7-Sframework.Thepremiseofthismodel isthattheseven“S”factorscontainedinthemodelmustbealignedsothatacompanymayeffectively cope with the myriad of competitive forces that affect performance.1 Despite its wideapplication in the three decades since its introduction, no research has established the relativeimportanceofthesevenfactorsinthe7-Sframework.Sowhilethismodelmayhavesubstantialutilityfordiagnosticpurposes, it lacksprescriptiveguidanceforunderstandingprioritiesandactionstepsthat may be necessary for sustaining and enhancing firm performance in highly competitiveenvironments.

1T..J.PetersandR.H.Waterman,In Search of Excellence: Lessons from Americas Best Run Companies(NewYork:Harper&Row1982);andR.H.Water-man,T.J.Peters,andJ.R.Phillips,“StructureIsNotOrganization,”Business Horizons,June1980,pp.14-26.

TheIthacaBeerCompany:

byJ.BruceTraceyandBrendanBlood

A Case Study of the Application of the McKinsey 7-S Framework

CornellHospitalityReport•April2012•www.chr.cornell.edu 7

Thatsaid,themodelprovidesaframeworkthatallowsastructuredanalysisofacompany’scompetitiveposition.Inthispaperwedemonstratea7-SanalysisbypresentingtheresultsfromacasestudyoftheIthacaBeerCompany(IBC),whichexaminestherelativeimportanceofthe7-Sfactors.IBCiscompetingwithinanew,growing,andincreasinglychallengingsegmentofthehospitalitysector,thecraftbeerindustry.Wechallengethefocusonalignmentofthe7-Sfac-tors,anddemonstrateamulti-levelmodelthataccountsforthedifferentialimpactandimportanceofthevarious7-Sfac-tors.Bydoingso,weofferamoredetailedexplanationofhowthe7-Sframeworkcanbeusedtobetterunderstandafirm’scompetitiveposition,anddemonstratehowthisframeworkcanbeappliedtoimprovedecisionmakingeffectivenessandefficiency—and,indeed,offeraprescriptiveanalysis.

Webeginbypresentinganoverviewandcriticalanalysisofthe7-Sframework,followedbyadiscussionoftheprimarycompetitivechallengeswithinthecraftbrewingsegment.Next,usingthe7-Smodeltoanalyzethecompetitiveposi-tionoftheIthacaBeerCompany,wediscusstherolesandrelevanceofeachfactor.Theresultsdemonstratesupportforaconclusionthatfourofthe7-Sfactorsarealignedandger-manetoIBC’scompetitiveposition.Weconcludebyofferingacontingencyexplanationofthe7-Smodelthatcanbeappliedandvalidatedinotherhospitalitycontextsandsegments.

The7-SFrameworkThe7-Sframeworkisadiagnosticmodelthatattemptstoidentifythefactorsthatarenecessaryforeffectivestrategyexecution.Aswesaidabove,themodelispredicatedontheprinciplethatthesevenfactorsareinter-relatedandmustbealignedtoenhanceandoptimizeorganizationalperformance.2Exhibit1presentsagraphicalrepresenta-tionofthemodel.

Threeofthefactors—strategy,structure,andsystems—areknownashardSs.Strategyreflectstheplannedorintendedactionsofthefirmforrespondingandadaptingtothecompetitiveinfluencesintheexternalenvironment.Structurerepresentsthecoordinationmechanismsofthefirmandisdefinedbythedivisionoftasksandlabor,aswellasthehierarchyofpowerandreportingrelationships.Systemsarethemechanismsusedtomanageorganization-alprocessesandprocedures,suchasfinancialplanningandinternalcontrols,staffingandperformancemanagement,andinformationtechnology.

Theremainingfourfactors,calledthesoftSs,arestaff,skills,style,andsharedvalues.Staffdescribestheindividu-alswhoperformtheworkofthefirm—theirbackgrounds,

2M.E.Porter,“WhatIsStrategy?,”Harvard Business Review,November-December1996,pp.61-78.

Exhibit 1

The 7-S framework

8 TheCenterforHospitalityResearch•CornellUniversity

experiences,andcapabilities.Skillsreflectwhattheorganiza-tiondoesbest—thecollectivecompetenciesthatareutilizedtomanageorganizationalsystems,processes,technology,andcustomers.Stylerepresentsthecultureofthefirmandischaracterizedbycollectivelyheldassumptions,values,andnormativebehaviors.Thesharedvaluesfactor,whichisatthecenterpointofthemodel,reflectsthesuperordinategoalsofthefirmandprovidesemployeeswithasenseofpurpose.

Asnotedabove,the7-Smodeliswidelyusedinpracticeandconsideredtoprovidearobustapproachforexaminingorganizationalalignment.3Strangely,despitethelengthoftimesincethemodelwasintroduced,littleevidencesup-portstheutilityandveracityoftheframework,althoughafewstudieshaveexaminedthecontentvalidityofthemodel.Forexample,somescholarshavearguedthatthemodelomitsconsiderationofvariablesthatshouldbeincluded,suchasstrategicexecution,whichreflectstheprimaryoutcomeofthealignmentamongtheother7-Sfactors.4However,mostscholarsandpractitionershaveapparentlyassumedthemodel’svalidityandsimplyutilizeditasaguidetoinquiry.5

Althoughwequestionthepremisethatallsevenfactorsmaybeequallyrelevant,weadopttheframeworkforthefollowingreasons.Theefficacyofthe7-Smodelhasbeensupportedindirectlybyresearchfindingsacrossseveralaca-demicdisciplines.Forexample,studiespublishedintheeco-nomicandstrategicmanagementliteratures,includingsomethathavefocusedonthehospitalityindustry,haveshownthatthealignmentamongthethreehardSshasasignificantinfluenceonfirmcompetitiveness.6Inaddition,thereisevidenceinthehumanresources,organizationalbehavior,andpsychologyliteraturesregardingtheintegrativerequire-mentsamongthesoftSsforpromotingfirmperformance.Forexample,thereisfairlystrongandconsistentevidencethatthealignmentofkeypolicies,practices,andprocedures

3R.S.Kaplan,“HowtheBalancedScorecardComplementstheMcKinsey7-SModel,”Strategy & Leadership,Vol.33(2005),pp.41-46.4J.M.Higgins,“TheEight“S’s”ofSuccessfulStrategyExecution,”Journal of Change Management,Vol.5(2005),pp.3-15.5Forexample,see:P.Guenzi,L.M.DeLuca,andG.Troilo,“Organization-alDriversofSalespeople’sCustomerOrientationandSellingOrientation,”Journal of Personal Selling & Sales Management,Vol.31(2011),pp.269-285;R.A.D’Aveni,“CopingwithHypercompetition:UtilizingtheNew7-SFramework,”Academy of Management Executive,Vol.3(1995),pp.45-60;andI.BarcalyandM.Benson,“NewProductDevelopment:TheoryintoPractice,”Leadership & Organization Development Journal,Vol.11(1990),pp.24-32.6C.A.Enz,“Commentary:CompetitiveDynamicsandCreatingSustain-ableAdvantage,”inThe Cornell Hotel School of Hotel Administration Handbook of Applied Hospitality Strategy,ed.C.A.Enz(ThousandOaks,CA:SagePublications,2010),pp.297-305.

withinafirm’shumanresourcesfunction—fromstaffingtocompensation—islinkedtofirmperformance.7

Giventhatthe7-Smodeldoesnotspecifythecontin-genciesthatmaydictatetherelativeimportanceofthevari-ous7-Sfactors,wewantedtoseewhichofthefactorsmightbemostsalientforarelativelynewcompany.Toaddressthisgapandprovideinsightsregardingtheuseandutilityofthe7-Sframework,weusedthemodeltoexaminetheorgani-zationalalignmentandcompetitivepositionoftheIthacaBeerCompany,arelativelynewandsuccessfulcompanythatiscompeting,aswesaid,inagrowingandincreasinglychallengingsegmentofthehospitalityindustry.Basedonthisanalysis,weidentifytheprimary7-Sfactorsthatap-peartobecriticalformanagingIBC’scurrentcompetitivechallengesandsustaininglonger-termgrowth,andinturn,mayhaveapplicabilitytosimilarfirmsoperatinginsimilarenvironments.

TheCompetitiveContextTobeclassifiedasacraftbreweryintheUnitedStates,thebrewerymustbesmall,independent,andtraditional.Asde-finedbytheU.S.BrewersAssociation,“small”indicatesthatthebreweryproduceslessthansix-millionbarrelsperyear;

“independent”meansthatlessthan25percentofthebreweryisownedorcontrolledbyanalcoholicbeverageindustrymemberthatisnotacraftbrewer;and“traditional”meansthatthebrewerhaseitheranall-maltflagship(thebeerwhichrepresentsthegreatestvolumeamongthebrewer’sbrands)orhasatleast50percentofitsvolumeineitherallmaltorinbeerswhichuseadjunctstoenhanceratherthanlightenflavor.

Thecraftbrewingindustryisfurthersegmentedintofourseparatemarkets:brewpubs,microbreweries,regionalcraftbreweries,andcontractbrewingcompanies.Defini-tionsofeachmarketareasfollows:• Brewpubs:Arestaurant–brewerythatsells25percent

ormoreofitsbeeronsite.Thebeerisbrewedprimar-ilyforsaleandconsumptionintheadjacentrestaurantorbar.Whereallowedbylaw,brewpubsoftensellbeertogoordistributetooff-premisesaccounts.Brewpubswhoseoff-sitebeersalesgrowtoexceed75percentoftotalsalesarere-categorizedasmicrobreweries.

• Microbrewery:abrewerythatproduceslessthan15,000barrelsofbeerperyearandsells75percentormoreofitsbeeroff-site.

• RegionalBrewery:Abrewerywithannualbeerproduc-tionbetween15,000and6,000,000barrels.

7J.B.Tracey,S.A.Way,andM.J.Tews,“HRintheHospitalityIndustry:StrategicFrameworksandPriorities,”inHandbook of Hospitality Human Resources Management,ed.D.V.Tesone(Oxford,UK:Elsevier,2008),pp.3-22.

CornellHospitalityReport•April2012•www.chr.cornell.edu 9

• RegionalCraftBrewery:Anindependentregionalbrewerywhichhaseitheranall-maltflagshiporhasatleast50percentofitsvolumeineitherall-maltbeersorinbeerswhichuseadjunctstoenhanceratherthanlightenflavor.

• ContractBrewingCompany:Abusinessthathiresanothercompanytoproduceitsbeer.Thecontractbrewingcompanyhandlesmarketing,sales,anddistri-butionofitsbeer,whilegenerallyleavingthebrewingandpackagingtoitsproducer-brewery.

ThecraftbrewingsegmentreflectsarelativelysmallbutgrowingpartoftheU.S.beerindustry,whichisotherwisehighlyconcentrated.Twocompanies,Anheuser-BuschIn-Bev(ABInBev)andMillerCoors,accountedfor80percentoftheindustry’s2010sales(estimatedatbetween$60and$97billiondependingonthesource).8Aboutone-thirdoftheremaining20percentoftotalsales,or7.6percentoftotalsales,isgeneratedbycraftbrewingoperations.9

Thenumberofcraftbrewerieshasgrownfromfewerthan100in1985to1,753in2010.10Theexpansionofthecraftbrewingsegmentwasstimulatedin1979whenPresidentJimmyCartersignedabillintolawpermittingthehomebrewingofsmallamountsofbeer.Inthe1980s,entre-preneursopenedhundredsofmicrobreweriestocreateanddistributetheirproducts.Thesebreweriesattemptedtocom-petebasedonthecharacteristicsandqualityoftheirproductratherthanonpriceandmarketing.AmongthebrewerieslaunchedinthisperiodisTheBostonBeerCompany,whichhasgrownsubstantiallywithitsflagshipSamuelAdamsBostonLager.OwnerJimKochisconsideredapioneerinthecraftbrewingindustry.

KeyChallengesThesuccessofBostonBeerCompanynotwithstanding,enteringthebeerbrewinganddistributionbusinessisnotforthefaintofheart,duetothemajorcompanies’strengthinmarketing,distribution,andshelfspace,aswellastheirpricingpower.

MarkETing

Themarketingpowerofthemajorbreweriesrepresentsoneofthemostsignificantchallengesforthecraftbrewingsegment.11ABInBevandMillerCoorsadvertisementsare

8See:2010 Beer Handbook(Norwalk,CT:TheBeverageInformationGroup,2010);andwww.reuters.com/article/2011/05/04/us-abinbev-idUSTRE7430VY20110504.9www.bizjournals.com/milwaukee/news/2011/03/22/craft-beer-sales-jump-by-12-percent.html.10www.brewersassociation.org/pages/business-tools/craft-brewing-statistics/facts.11T.Goldammer,The Brewer’s Handbook(Centreville,VA:ApexPublish-ers,2008).

ubiquitous,andthesecompaniesgainattentionbysponsor-ingawiderangeofevents,includingMajorLeagueBaseballgamesandevenpresidentialdebates.12ThemarketingbudgetsofABInBevandMillerCoorsexceedthevalueofmostcraftbreweries.Asjustoneexampleofthismarketingstrength,in2010,ABInBevspentmorethan$1billiontomakeBudLighttheofficialsponsorofNFLforsixyears.13

DiSTribuTion

Anotherkeychallengeforcraftbreweriesisaccesstodistributionchannels,whicharedominatedbythemajorcompanies.14Althoughdistributorsare,byfederallaw,separatecompaniesfromthebrewers,manyhaveexclusivityagreements.Underthecurrentsystemtheproducersmustselltheirproducttodistributors,whoselltheirproducttoretailers,whothenselltoconsumers.Asthecraftseg-mentcontinuestogrow,thirty-onestateshaverevisedthesepost-Prohibitionlawstopermitsmallbreweriestodistributedirectlytoretailers.However,theNationalBeerWholesalersAssociation(NBWA),whichrepresentsmorethan2,850beerdistributorsintheU.S.,isitselfapowerfulforceinregulatorypoliticsandhastakenaratheraggressivestanceinstrength-eningthethree-tierdistributionsystem.

Withmanydistributorsnotavailableduetoexclusivityagreements,thespaceinremainingdistributors’trucksisatapremium.Inlargepart,theproductscarriedondistributiontrucksdependonwhichproductstheretailerschoosetosell.Soasmallbrewerthatdoesn’thaveaccesstothelarge-scaledistributionchannelsmustgodoor-to-doortoencouragedistributorstocarryitsproduct.Evenso,themajorplayershavesomanybrandsthattheirproductstakeupmuchofthespaceoneventhenonexclusivedistributiontrucks.Sowithalimitednumberofdistributiontrucksoperatingineachregion,craftbrewersmustbattlefortheremainingspaceleftonthesetrucksinordertogettheirproducttotheconsumer.

ShElf SpaCE

Justasbrewersmustfightforspaceinatruck,sotheymustfightforretailers’shelfspace.Ifacraftbrewerydoesmanagetogetitsproductpickedupbythedistributors,thenextchallengeisgettingandkeepingtheirproductontheshelvesatretailoutlets.Thelargebrewershaveastronginfluenceonhowtheirproductsareplacedatretailoutlets,thus,givingtheirproductsthebestvisibilityandpromotingsales.Fortu-nately,someretailersunderstandcraftbeer’spopularityandreserveasectionofthestoreforthesebeers.Unfortunately,aswedescribenext,someofthatspacealsoisoccupiedbythemajorplayers.

12www.allbusiness.com/government/elections-politics-campaigns-elec-tions/6370921-1.html.13sports.espn.go.com/nfl/news/story?id=5162445.14Goldammer,op.cit.

10 TheCenterforHospitalityResearch•CornellUniversity

and(b)comparedtheextentofagreementregardingthenatureandimportanceofthethemes.Inter-rateragreementexceeded90percent;remainingdiscrepancieswereresolvedthroughconsensus-baseddiscussion.

Secondarysourcesofdataincludedweb-andprint-basedinformationandcollateral.15Thefindingsofthesecondaryresearchandbenchmarkingcomplementthein-terviewresultsbyofferingadditionalinsightsregardingthenatureandimportanceofthe7-Sfactors,anddemonstratethedifferentialrelevanceofthevarious“hard”and“soft”characteristicsforthiscompany.

AProfileoftheIthacaBeerCompanyDanMitchellfoundedtheIthacaBeerCompanyin1998withtheintentionoffillinganemptynicheinthecraftbrewingsegmentoftheFingerLakesregionandupstateNewYork.MitchellsetouttocapitalizeontheattractiveIthacamarketwhichhasarelativelystableeconomy,favorslocalproducts,hasahighnumberofrestaurantspercapita,andconsumesalargepercentageofbeercomparedtootherregionalmarkets.16

Tominimizestartupcosts,IBCinitiallyoutsourcedtheproductionofitsbeer.Mitchell’sinitialmarketinganddistributioneffortsgarneredastrongregionalcustomerbase,ashesoldhisbeersoneaccountatatimethroughouttheIthacamarket.Assalesgraduallyincreased,Mitchellobtainedthenecessaryresourcestopurchasehisownbrew-ingequipment.Currently,IBCproductsarecarriedbyover

15See:T.R.HinkinandJ.B.Tracey,“WhatMakesItSoGreat?:AnAnaly-sisofHumanResourcesPracticesamongFortune’sBestCompaniestoWorkFor,”Cornell Hospitality Quarterly,Vol.51(2010),pp.158-170.16www.visitithaca.com/visitor-info/the-ithaca-experience.html.

DirECT ThrEaT froM MaJor playErS anD nEw EnTranTS

Therecentsuccessandcontinuinggrowthofthecraftbrew-ingsegmenthascaughttheattentionofthemajorplayers,whohavethemselveslaunchedproductstocapitalizeonthegrowingcraftsegmentandalsotocapturethebusinessofconsumersseekingdifferenttastingbeer.Inresponsetoconsumers’desiretotrynewanddifferentbrews,themajorplayersdevelopedoracquiredbrandsthataredisguisedascraftbeers.WildHopLager,anorganicbeerthatissoldundertheGreenValleyBrewingCompanylabel,isownedentirelybyABInBevalthoughthatnamecannotbefoundonthelabel.Likewise,thesuccessfulBlueMoonbrandisownedbyMillerCoors.

Withthatbackground,let’sdiscussIBC’scompeti-tivepositionusingthe7-Sframeworktodeterminewhichfactorsmaybemostcriticalforthecompanytoachieveitsobjectives.

ResearchMethodsTwoprimarysourcesofdataweregatheredandanalyzedforthiscasestudy—first-personinterviewsandsecond-arysources.Wealsoconductedabenchmarkingassess-ment.Weconductedsemi-structuredinterviewswithDanMitchell,founderandownerofIBC,andvariousIBCstaffmembersduringthespringof2011.Questionsfocusedoneachofthe7-Sfactors.Examplesinclude,“HowwouldyoudescribeIBC’scurrentbusinessstrategy?”;“HowwouldyoucharacterizethecultureatIBC?”;and“Whataresomeofthethingsthatyou,asacompany,doverywell?”Responseswerereviewedandinterpretedusinganindependentcod-ingprocedureinwhichwe:(a)assignedcontentthemestointerviewresponsesassociatedwitheachofthe7-Sfactors;

with both label design and beer names, ithaca beer Company evokes the relaxed vibe of its home town, as well as the rolling terrain of the finger lakes. for example, “CascaZilla” is a play on Cascadilla, the name of a local stream that plunges through a gorge to Cayuga lake.

CornellHospitalityReport•April2012•www.chr.cornell.edu 11

ticipateinvariousspecialeventsthatfeaturebeer,Mitchellhasdevelopedthenecessaryrelationshipsthatarecriticalforgettinghisproducttoawidearrayofretailoutlets.

IBCalsosupportsitsbrand-developmentstrategybyconnectingdirectlywithconsumers.Forexample,IBCisfea-turedattheBrewmaster’sDinner,whichisheldintheNewYorkWineandCulinaryCenterlocatedinCanandaigua,alittleoveranhourfromIthaca,aswellasaBeerandSpiritsDinneratCraftbarinNewYorkCity.Inaddition,IBC’stast-ingroomandbrewerytoursprovideadirectandongoingmeansforlearningaboutcustomerpreferencesthathelpMitchellandhisteamdevelopnewproducts.19

Finally,IBCreinforcesitsstrategyandhasgrownitsbrandbysupportingawiderangeoflocalcharitiesandnon-profitorganizations.Thisincludesin-kinddonationsthathelpraisemoneyfororganizationssuchastheCancerResourceCenteroftheFingerLakesandLoavesandFishes,whichisasoupkitchenthatoffersmealstoneedyindividu-alsintheIthacacommunity,andinvolvementintheIthacaPractitionersofAlemaking,alocalhomebrewersassociation.Thecommitmenttofocus“onopportunitiesthatbringourbrewery,employees,andcharitiestogether”20isakeyele-mentofIBC’sstrategyandplaysacriticalroleinenhancingitsvisibilityandreach.

Staff,Skills,andSharedValuesTheotherthree“Ss,”intheformofIBC’sstaff,theirskills,andsharedvaluesrepresentanotherreasonforthecom-pany’ssuccess.Asyouwillseeinthefollowingdiscussion,itisdifficulttoseparatethesethreefactors,whichseemtobetightlyaligned.Mitchell’scurrentteamoffourteenfull-timeemployeesisdiverse,buteachpossessesastrongbaseofjob-relatedexperienceandfunctionalknowledge,andallhaveagenuinepassionforcraftbeer.

Needlesstosay,thebrewersplayakeyroleinIBC’ssuc-cess.IBChasthreebrewersonitsstaff,with“Chief ”O’Neilservingasthebrewmaster.O’Neiljoinedthecompanyin2002afterspendingnearlyadecadelearninghowtomakebeerataward-winningbreweriesinCalifornia.O’Neil’sexpertiseandefficacyisevidencedbynumerousawardsthatIBChasreceived,includingagoldmedalin2010atthepres-tigiousGreatAmericanBeerFestivalforBrute,anAmerican-stylesourale.

Giventhedifficultcompetitiveenvironmentandthepushforcommunityinvolvement,IBC’ssuccessalsorestsonitssalesandmarketingemployees.Thesalesmanager,MarcSchulz,cametoIBCwithfifteenyearsofexperienceinthebrewingindustry.PriortoIBC,SchulzworkedattheBostonBeerCompanyandtheLakePlacidPub.Healsohas

19See:J.L.Heskett,W.E.Sasser,Jr.,andL.A.Schlesinger,The Service Profit Chain (NewYork:TheFreePress,1997).20www.ithacabeer.com/outreach.php.

thirtydistributorsandsoldthroughoutmanynortheasternstates(Connecticut,Massachusetts,NewJersey,NewYork,Pennsylvania,andRhodeIsland),aswellasOhio.

AmongIBC’sdiversebrewsarepaleales,lagersofvari-ousflavors,seasonalbeers,andsomedarkerbeers.SeveralofIBC’sbrewshavewonawardsfortheirquality,includingthelightandspicyCascaZilla–RedAle,FlowerPowerIPA,Excelsior!Brute,andExcelsior!alpHalpHa.In2008,IBCwasvotedthebestcraftbreweryinNewYorkState.17

Goingforward,IBCintendstoexpanditsproductioncapacitytoexpandthroughoutNewYorkandintootherneighboringstates.Simultaneouslythecompanyplanstomaintainastrongfocusoncommunityinvolvementanditscasual,funworkenvironment.However,eachofthechal-lengesdescribedaboveposessubstantivethreatstoIBC’scurrentoperationsandfutureplans.Inouranalysisofthe7-Sfactors,wesawfourasbeingparticularlyapplicable.ThoseareoneofthehardSs—strategy—andthreeofthesoftSs—staff,skills,andsharedvalues.Let’slookateachinturn.

StrategyMitchellstartedIBCwiththeaspirationofdevelopingaconceptthatreflectedthe“SpiritoftheFingerLakes,”asthecompanyslogangoes.Basedonthisideal,Mitchellstateshisprimarybusinessobjectiveasfollows:“tobrewdeliciousbeersforthepurposeofmakinglifemoreenjoyable.Westrivetomakethiscompanybetterandbuildourbrandnameandgoodreputationamongourcustomers.”18Tosup-portthisgoal,Mitchellhasadoptedamulti-facetedbusinessstrategythatfocusesondifferentiationthroughcommunityoutreach,withaspecialemphasisonphilanthropy,anddirectbusiness-to-consumersalesandmarketing.

Asweindicated,communityoutreachandinvolvementisafundamentalandsignificantpartofIBC’sstrategy.ThisfocusenhancesIBC’slocalvisibilityandprovidesMitchellandhisteamwithsignificantbusinessintelligence.Forexample,IBCisakeysponsorforseverallocalandregionalevents,includingtheIthacaBrewFest,whichdrawsmorethan3,000peopleforbeertastings,entertainment,andeducationalprograms.Inaddition,brewmasterJeff“Chief ”O’Neilisaregularguestspeakeratbeerandfoodeventsthroughouttheregion.TheseeffortsandrelatedactivitiesarecentraltopromotingIBCanditsproducts,andprovideaprimarybasisforaddressingthesignificantmarketingchallengesdescribedabove.Moreover,theemphasisoncommunityinvolvementprovidesanimportantmeansforacquiringinformationaboutcompetitors’productsandindustrytrends.Sincemanyofthedistributorsalsopar-

17www.ithacabeer.com/awards.php.18www.ithacabeer.com/index2.php.

12 TheCenterforHospitalityResearch•CornellUniversity

substantiveexperienceasarestaurateur,andisaCertifiedCiceroneBeerServer,aformaldesignationthatisawardedtoindividualswhoareprovenexpertsinselecting,acquir-ing,andservingawiderangeofbeers.Schulz’sexperienceandknowledgeareinstrumentalindevelopingandcultivat-ingrelationshipsIBC’sdistributornetworkandensuringthatIBC’sproductsmeetthevaryingdemandsofitsdiversecustomerbase.Inaddition,hemaintainsacloseeyeonallofthemajorretailoutlets—primarilysupermarketsandconveniencestores—toensurethatIBC’sproductsarehighlyvisibleandinabundantsupply.Schulznoted,“Beerdrink-ershavemorechoicestodaythanever,soit’scriticaltoworkcloselywithallofourretailstorestomakesurewe’retopofmind.”

Asheadofthemarketingfunction,AllisonGraffinisresponsibleforplanningevents,publicrelations,andadvertising.Facebook(andothersocialmedia)isessentialtothiseffortbecauseIBCcanpromoteeventsandannouncenewproductreleasesonitsFacebookpage,anditisalsoakeysourceofcustomerfeedback.GraffinalsomanagesIBC’sBrewer’sBlog,whichpromotesothercraftbreweriesintheregion,aswellasIBC’sbrews.

Aparticularstrengthisthewaythestaffcollaboratestofulfilltheirresponsibilitiesandcreateasuccessfuloperation.Thesharedvalue,orsuperordinategoal,atIBC—“makingyoursimplemomentsworthwhile”21—isfosteredbyasingularbeliefthatpeoplearethemostimportantassettothecompany’ssuccess.Assuch,allemployeesareinvolvedintheday-to-daydecisionsthataffectIBC’soperations,aswellasbigger-pictureissuessuchasproductdevelopmentandpromotionalcampaigns.Moreover,everyoneisacraftbeerenthusiastand“bringsazestforlifetoIthacaBeer.”22Thus,astrongconsensushasdevelopedaboutthecompany’sidentity,whichdrivesindividualbehaviorinaconsistentandhighlyproductivemanner.AsMitchellstated,“Mostofall,IwanttocontinuetowakeupeverymorningandenjoywhatIdo,andhopemyemployeescandothesame.”

Insum,IBC’scommunity-oriented,brand-focusedgrowthstrategyandpeople-firstapproachtooperationalmanagementappeartobetheprimarydriversofIBC’ssuc-cessandkeystoachievingthecompany’slonger-termgoals.Inaddition,eachofthesefactorsareclearlyconnectedandaligned,whichisconsistentwiththecentralpremiseofthe7-Smodel.However,whileIBC’sstrategy,staff,skills,andsharedvaluesrepresentthemostimportantprioritiesforcopingwiththefirm’scompetitiveenvironment,theremain-ingthree7-SfactorsprovideanothertierofsupportforIBC’scontinuedsuccess.

21www.ithacabeer.com/index2.php.22www.ithacabeer.com/about.php.

Style,Systems,andStructureStyleisthemanifestationofIBC’ssharedvaluesthataresupportedbytheintenselyinteractiveworksettingdescribedabove.Inaddition,Mitchell’sopenandengagingleadershipisinstrumentalinpromotingconsensusaboutIBC’smis-sionandhascreatedacultureofcontinuouslearningandimprovement.Forexample,asthebrewerslearnmoreabouttheircraft,theysharewhattheyhavelearnedwiththesalesandmarketingstaff,whichenablesthatgrouptoworkmoreeffectivelywiththedistributorsandretailersandtolearnaboutcustomers’evolvingneedsanddemands.ThesalesandmarketingstaffthenrelaythefeedbacktheyreceivefromthedistributorsandretailerssothatthebrewerscanfurtherdevelopIBC’sproducts.ThisongoingexchangeofinformationprovidesIBCwithcriticalbusinessintelligenceandhelpsthestaffadapttothecompetitivedynamicsinatimelymanner.

MostofthesystemsthatIBChasimplementedtosup-portitsoverarchingstrategyandhelpmaintainanefficient,coordinatedworksettingarefairlyinformal.Forexample,IBChasadopteda“culture-first”approachtotheirstaff-ingprocedures.Theprocessisnotbasedonstructuredinterviewingproceduresorteststomakehiringdecisions.Instead,Mitchellputsapremiumonspendingsubstantialtimewithindividualstodeterminewhethertheypossessanauthenticpassionforcraftbeerandasincereinterestinworkingforacommunity-focusedcompany.Forexample,MikeBenzwasafrequenton-sitecustomerandaregionallyknownbeerenthusiast.Therelationshipsthatwerecre-atedduringMike’sstorevisitsweretheprimarybasisthatMitchellandhisteamusedtohirehimasthetastingroommanager,akeycustomer-facingrolethatisimportantinmaintainingandgrowingIBC’sbrand.

However,whenitcomestothebrewingprocess,IBChasdevelopedseveralformalproceduresthatensuretheydevelopthehighestqualityproducts.Forexample,IBCadherestoastrict90-daybottle-to-salestandard.Tocomplywiththisstandard,thebrewersmustdeterminehowmuchofeachtypeofbeertheyshouldproduce.Todosoinatime-lyandcosteffectivemanner,thesalesstaffmonitorsweeklysalesfigurestodeterminehowwellthevariousIBCproductsaresellingineachmarket.Thesalesstaffthencoordinateswiththebrewers,distributors,andretailerstomaintainanappropriatesupply—neithertoolargenortoosmall.Thisprocessrequiresahighlyorchestratedeffort,andtheproce-duresthathavebeenadoptedintheforecasting,production,anddistributionprocessareconsistentwithcontemporaryqualityassuranceprogramsthatincludeprocessmappingandproductionandsalesforecasting.23

23See:J.M.JuranandA.B.Godfrey,Juran’s Quality Handbook,5thEdi-tion(NewYork:McGraw-HillProfessional,1998).

CornellHospitalityReport•April2012•www.chr.cornell.edu 13

IBC’sstructureisareflectionoftheirsystems.Whilethecompanyisorganizedintosixdepartments—administra-tion,brewing,packaging,sales,marketing,andretail—thesedivisionsarefarfromstrictinlightofIBC’scollaborativeapproach.Moreover,thefirm’scollaborativeworksettingischaracterizedbyintensivecommunicationandongoingprofessionaldevelopment,whichensuresthateveryonemaintainsanunwaveringfocusonIBC’smission.Thesmallnumberoffull-timeemployeesmeansthatIBCcanrespondquicklytocompetitivechanges,andfixedcostsarelowsothatprofitabilitycanbeachievedatarelativelylowlevelofsales.

AContingencyApproachtoforthe7-SModelOuranalysisofthecompetitiveconditionsinthecraftbrewindustryandIBC’scurrentpositionsuggestthatthealign-mentamongstrategy,staff,skills,andsharedvaluesarethetopprioritiesforthecompany,althoughtheotherthree7-Sfactorsareclearlyrelevant.The7-Smodelimpliesthatef-fectiveperformanceandalignmentamongallofthefactorsarerequiredformaintainingastrongcompetitiveposition.Thiscasestudydoesnotdiminishthatproposition,butitisevidentthatthefourof7-SfactorsthatwehighlightedaremoreimportanttoIBC’ssuccessthantheotherthree.

Thisanalysisarguesforacontingencyperspectivewhenutilizingthe7-Sframework.Inthiscase,IBC’sstrategyisthemostimportantprerequisiteforsuccesssinceitprovidesafoundationforallotherorganizationalfunctions—andotherstudieshavecometosimilarconclusions.24Beyondstrategy,thecompetitivenatureofthecraftbrewsegmentandIBC’scurrentpositionsuggeststhatthe7-Sfactorsthatarelinkedtohumancapital—staff,skills,andsharedvalues—areintertwinedandcriticalinsustainingperformanceandenhancingfuturegrowth.Thisfindingisconsistentwithhumanresourcesmanagementresearchregardingtherolesandimportanceofhigh-performanceworksystems,25par-ticularthosethathavedemonstratedthepositiveimpactofemployeeinvolvement.26

24See:Enz,op.cit.;M.P.Joshi,R.Kathuria,andS.J.Porth,AlignmentofStrategicPrioritiesandPerformance:AnIntegrationofOperationsandStrategicManagementPerspectives,”Journal of Operations Manage-ment,Vol.21(2003),pp.353-369;R.Kathuria,M.P.Joshi,andS.J.Porth,OrganizationalAlignmentandPerformance:Past,Present,andFuture,”Management Decision,Vol.45(2007),pp.503-517.25See:B.E.BeckerandM.A.Huselid,“HighPerformanceWorkSystemsandFirmPerformance:ASynthesisofResearchandManagerialImplica-tions,”inResearch in Personnel and Human Resources Management,ed.G.R.Ferris(Stamford,CT:JAIPress,1998),pp.16,53-101;Traceyet al., op.cit.;andS.E.Way,“HighPerformanceWorkSystemsandIntermediateIndicatorsofFirmPerformancewithintheU.S.SmallBusinessSector,”Journal of Management,Vol.28(2002),pp.765-785.26HinkinandTracey,op.cit.;andS.J.WoodsandT.D.Wall,“WorkEnrichmentandEmployeeVoiceinHumanResourceManagement-Per-formanceStudies,”International Journal of Human Resource Management,(2007).Vol.18(2007),pp.1335-1372.

Ouranalysisisasnapshot,notatimeseries.Thus,itmaywellbethatasthecompetitiveconditionschange,at-tentiontotheotherthree7-Sfactors—style,systems,andstructure—mayberequiredforIBC.IfIBCcontinuestoexpand,itmayneedtoincreasethestaffsize,whichmightmakeitdifficulttomaintainitsintenselyconnectedworkenvironment.Assuch,itmaybeimportanttofocusonIBC’ssystems(e.g.,distribution)orstructure(e.g.,salesterritories)toenhancecoordination,andmaintainoperationaleffi-ciencyandquality.

ConclusionAllfirmsfaceamultitudeofenvironmentalchallenges.Assuch,theneedtoestablishprioritiesiscriticalforcreatingandsustainingastrongcompetitiveposition.Ouranalysishasfoundthatthe7-Sframeworkprovidesanexcellentstartingpointforanalyzingtherequirementsforacom-pany’ssuccessandgrowth.However,giveneachcompany’sdistinctiveposition,acontingencyapproachmaybeap-propriateto7-Sanalysis,asitwasclearfromthiscasestudythatsomefactorsaremoreimportantthanothers.WehopethatourassessmentprovidessomeinsightsandguidanceformakingchoicesanddevelopingactionplansforfirmslikeIBCthatarecompetinginemergingmarketssimilartothecraftbrewindustry.n

with its “partly Sunny” seasonal brew, ibC refers to a hoped-for but sometimes elusive weather forecast.

14 TheCenterforHospitalityResearch•CornellUniversity

Celebrating 20 Years of Hospitality Research

021992 - 2012

th

ANNIVERSARY

Download our free research at:

www.chr.cornell.edu489 Statler Hall · Ithaca, NY 14853

[email protected] · 607-255-9780

Friends4Hoteliers.com • Berkshire Healthcare • Center for Advanced Retail

Technology • Cleverdis • Complete Seating • Cruise Industry News • DK Shifflet & Associates • ehotelier.com • EyeforTravel • Gerencia de Hoteles & Restaurantes • Global Hospitality Resources • Hospitality Financial and Technology Professionals (HFTP) • hospitalityInside.com • hospitalitynet.

org • Hospitality Technology Magazine • HotelExecutive.com • International CHRIE • International Hotel Conference • International Society of Hospitality Consultants (ISHC) • iPerceptions • JDA Software Group, Inc. • J.D. Power and Associates • The Lodging Conference • Lodging Hospitality • Lodging

Magazine • LRA Worldwide, Inc. • Milestone Internet Marketing • MindFolio • Mindshare Technologies • PhoCusWright Inc. • PKF Hospitality Research • Questex Hospitality Group • Resort and Recreation Magazine • The Resort

Trades • RestaurantEdge.com • Shibata Publishing Co. • Synovate • UniFocus • Vantage Strategy • WageWatch, Inc. • The Wall Street Journal • WIWIH.COM

Senior PartnersASAE Foundation, Carlson Hotels, Hilton Worldwide,

National Restaurant Association, SAS, STR, and Taj Hotels Resorts and Palaces

PartnersDavis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan

Hospitality Group, eCornell & Executive Education, Expedia, Inc., Forbes Travel Guide, Four Seasons Hotels and Resorts, Fox Rothschild LLP, French Quarter Holdings, Inc., HVS, Hyatt Hotels

Corporation, InterContinental Hotels Group, Jumeirah Group, LRP Publications, Maritz, Marriott International, Inc., Marsh’s Hospitality

Practice, McDonald’s USA, newBrandAnalytics, priceline.com, PricewaterhouseCoopers, Proskauer, ReviewPro, Sabre Hospitality Solutions, Sathguru Management Consultants (P) Ltd., Schneider

Electric, Thayer Lodging Group, Thompson Hotels, Travelport, WATG and Wyndham Hotel Group

CornellHospitalityReport•April2012•www.chr.cornell.edu 15

Cornell Center for Hospitality Research

Publication Indexwww.chr.cornell.eduCornell Hospitality Quarterlyhttp://cqx.sagepub.com/

2012 ReportsVol.12No.6StrategicRevenueManagementandtheRoleofCompetitivePriceShifting,byCathyA.Enz,Ph.D.,LindaCanina,Ph.D.,andBreffniNoone,Ph.D.

Vol.12No.5EmergingMarketingChannelsinHospitality:AGlobalStudyofInternet-EnabledFlashSalesandPrivateSales,byGabrielePiccoli,Ph.D.,andChekitanDev,Ph.D.

Vol.12No.4TheEffectofCorporateCultureandStrategicOrientationonFinancialPerformance:AnAnalysisofSouthKoreanUpscaleandLuxuryHotels,byHyunJeong“Spring”Han,Ph.D.,andRohitVerma,Ph.D.

Vol.12No.3TheRoleofMulti-RestaurantReservationSitesinRestaurantDistributionManagement,bySherylE.KimesandKatherineKies

Vol.12No.2Compendium2012

Vol.12No.12011AnnualReport

2012 ToolsVol.3No.1ManagingaHotel’sReputation:JointheConversation,byAmyNewman,JudiBrownell,Ph.D.andBillCarroll,Ph.D.

2012 ProceedingsVol.4No.1TheHospitalityIndustryConfrontstheGlobalChallengeofSustainability,byEricRicaurte

2012 Industry PerspectivesVol.2No.2EngagingCustomers:BuildingtheLEGOBrandandCultureOneBrickataTime,byConnyKalcher

Vol.2No.1TheIntegrityDividend:HowExcellentHospitalityLeadershipDrivesBottom-LineResults,byTonySimons,Ph.D.

2011 ReportsVol.11No.22EnvironmentalManagementCertificationandPerformanceintheHospitalityIndustry:AComparativeAnalysisofISO14001HotelsinSpain,byMaría-del-ValSegarra-Oña,Ph.D.,ÁngelPeiró-Signes,Ph.D.,andRohitVerma,Ph.D.

Vol.11No.21AComparisonofthePerformanceofIndependentandFranchiseHotels:TheFirstTwoYearsofOperation,byCathyA.Enz,Ph.D.,andLindaCanina,Ph.D.

Vol.11No.20RestaurantDailyDeals:Customers’ResponsestoSocialCouponing,bySherylE.Kimes,Ph.D.,andUtpalDholakia,Ph.D.

Vol.11No.19ToGrouponorNottoGroupon:ATourOperator'sDilemma,byChekitanDev,Ph.D.,LauraWinterFalk,Ph.D.,andLaureMougeotStroock

Vol.11No.18NetworkExploitationCapability:MappingtheElectronicMaturityofHospitalityEnterprises,byGabrielePiccoli,Ph.D.,BillCarroll,Ph.D.,andLarryHall

Vol.11No.17TheCurrentStateofOnlineFoodOrderingintheU.S.RestaurantIndustry,bySherylE.Kimes,Ph.D.

Vol.11No.16UnscramblingthePuzzlingMatterofOnlineConsumerRatings:AnExploratoryAnalysis,byPradeepRacherla,Ph.D.,DanielConnolly,Ph.D.,andNatasaChristodoulidou,Ph.D.

Vol.11No.15DesigningaSelf-healingServiceSystem:AnIntegrativeModel,byRobertFord,Ph.D.,andMichaelSturman,Ph.D.

Vol.11No.14ReversingtheGreenBacklash:WhyLargeHospitalityCompaniesShouldWelcomeCrediblyGreenCompetitors,byMichaelGiebelhausen,Ph.D.,andHaeEunHelenChun,Ph.D.

Vol.11No.13DevelopingaSustainabilityMeasurementFrameworkforHotels:TowardanIndustry-wideReportingStructure,byEricRicaurte

Vol.11No.12CreatingValueforWomenBusinessTravelers:FocusingonEmotionalOutcomes,byJudiBrownell,Ph.D.

Vol.11No.11CustomerLoyalty:ANewLookattheBenefitsofImprovingSegmentationEffortswithRewardsPrograms,byClayVoorhees,Ph.D.,MichaelMcCall,Ph.D.,andRogerCalantone,Ph.D.

Vol.11No.10CustomerPerceptionsofElectronicFoodOrdering,bySherylE.Kimes,Ph.D.

Vol.11No.92011TravelIndustryBenchmarking:StatusofSeniorDestinationandLodgingMarketingExecutives,byRohitVerma,Ph.D.,andKenMcGill

Vol11No8Search,OTAs,andOnlineBooking:AnExpandedAnalysisoftheBillboardEffect,byChrisAndersonPh.D.

Celebrating 20 Years of Hospitality Research

021992 - 2012

th

ANNIVERSARY

Download our free research at:

www.chr.cornell.edu489 Statler Hall · Ithaca, NY 14853

[email protected] · 607-255-9780

Friends4Hoteliers.com • Berkshire Healthcare • Center for Advanced Retail

Technology • Cleverdis • Complete Seating • Cruise Industry News • DK Shifflet & Associates • ehotelier.com • EyeforTravel • Gerencia de Hoteles & Restaurantes • Global Hospitality Resources • Hospitality Financial and Technology Professionals (HFTP) • hospitalityInside.com • hospitalitynet.

org • Hospitality Technology Magazine • HotelExecutive.com • International CHRIE • International Hotel Conference • International Society of Hospitality Consultants (ISHC) • iPerceptions • JDA Software Group, Inc. • J.D. Power and Associates • The Lodging Conference • Lodging Hospitality • Lodging

Magazine • LRA Worldwide, Inc. • Milestone Internet Marketing • MindFolio • Mindshare Technologies • PhoCusWright Inc. • PKF Hospitality Research • Questex Hospitality Group • Resort and Recreation Magazine • The Resort

Trades • RestaurantEdge.com • Shibata Publishing Co. • Synovate • UniFocus • Vantage Strategy • WageWatch, Inc. • The Wall Street Journal • WIWIH.COM

Senior PartnersASAE Foundation, Carlson Hotels, Hilton Worldwide,

National Restaurant Association, SAS, STR, and Taj Hotels Resorts and Palaces

PartnersDavis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan

Hospitality Group, eCornell & Executive Education, Expedia, Inc., Forbes Travel Guide, Four Seasons Hotels and Resorts, Fox Rothschild LLP, French Quarter Holdings, Inc., HVS, Hyatt Hotels

Corporation, InterContinental Hotels Group, Jumeirah Group, LRP Publications, Maritz, Marriott International, Inc., Marsh’s Hospitality

Practice, McDonald’s USA, newBrandAnalytics, priceline.com, PricewaterhouseCoopers, Proskauer, ReviewPro, Sabre Hospitality Solutions, Sathguru Management Consultants (P) Ltd., Schneider

Electric, Thayer Lodging Group, Thompson Hotels, Travelport, WATG and Wyndham Hotel Group

www.chr.cornell.edu