West Elm Strategy

Read the article “West Elm to Launch Its Own Boutique Hotels,” Wall Street Journal, 09/26/2016. Drawing only on evidence in the article, assess West Elm’s entry into the hotel industry. Be sure to weigh both the pros and cons and give your overall evaluation of the strategy. Make sure to focus on using various ideas from this Business Strategy course. Do not bring in outside information about this industry. Be sure to make specific references to the article to support your claims. Answer in no more than 18 lines.

West Elm has decided to open boutique hotel as part of their expansion strategy. With this move, West Elm is trying to tap into following opportunities: 1. Boutique hotel just represent 2% of growing demand of unique experiences than customers demand from hotel (para 5 ) 2.Finding alternative ways to sustain growth than just opening stores(para 3). 3 Allowing customers to buy the items found in their rooms/hotels (para 2).

Allowing customers to test drive the furnishing items before they buy is a brilliant idea to disrupt the industry it currently operates in. But for this strategy to work, West Elm needs to master all aspects of boutique hotel experience from reception, to house-keeping to room service (para 6). Only then will they be able to provide a completely enthralling and extraordinary experience to customers.

        West Elm has already tested the waters by launching a commercial furniture division and creating décor for 30 SpringHill Suites by Marriott hotels (para 11). Their strategy to target cities with relatively under-developed hotel industry market such as Savannah and Detroit seems to be well though-of (para 2). Allowing managers to infuse local culture by buying goods from local artists will give their hotels same distinct flavor as what the current stores at different location offers (para 9). But, there is also a risk of distraction w.r.t stores and what if customers have bad experience? How will it reflect on their current brand? In-spite of these risks, I liked the overall strategy as it seems to be a well though of and calculated risk.