Majestica was founded in Western Europe and focused exclusively on Europe and the United States initially, the expansion into China had been on management’s agenda since 1999, the opportunity emerged in late 2003, Majestica’s proposal to operate the luxury hotel satisfied CPS’s ambition to build a pre-eminent hotel in Shanghai, but there are 5 issues between Majestica and CPS.
First, the length of contract term, Majestica asked for a contract term of 55 years, it was based in its typical management contract term in the world, CPS just had been prepared to offer 12 years, it based on the level of licensing in China. After consideration, CPS made a concession, CPS …show more content…
Last but not the least, the name to get into the new market is vital, so we will stick our opinion and not to change .
On the other hand, if Majestica refuses to make concessions, what the action will we take as CPS?
We won’t walk away emotionally because the Chinese market is opening to the whole world now; it is a good opportunity for CPS to get some more experiences with big company such as Majestica. To make up this business connection, it is not only benefiting for these years, but also help them to find out what kind of position they can be fitted in.
In another way to talk about it, the hardest part of this situation is both of them have different operating philosophy. We can say there is not only one way to lead success, however doing the right thing, giving the customers what they expect will always be the same rules for no doubt.
Actually, CPS should pay more efforts to understand why Majestica can get on the top place in this industry. And then, they would know why Majestica asks for so many requests. Only if CPS and Majestica get the complete information which both of them should know, they can start to discuss about making concessions. Otherwise, it could be a chemistry situation without any reaction as no one takes in other’s shoes.
The brand-new market, the brand-maintaining firm with principles and