Hospitality Industry Value Chain Analysis

1 INTRODUCTION

Logistics is concerned with getting the products where they are needed and when they are desired. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished where required at the lowest cost possible. Logistics is practiced for ages since organized activity began.

Franchising is a major expansion strategy for hospitality firms into a global market, especially hotels and restaurants to name a few Marriott 's, Hyatt, Hilton Accor, IHG, McDonalds, KFC are a very few examples. Franchise play a very important role in tourism industry. In global markets franchising add value to the chain by enhancing and understanding the local values culture and customs. Franchising

Many companies on the list cross modal boundaries. DHL, for example, is a parcel carrier but derives most of its revenue from logistics, according to Pittsburgh-based SJ Consulting. Likewise, UPS and FedEx, the second- and third-largest companies on the list, with $54.1 billion and $43.5 billion in revenue, respectively, are parcel giants that also have logistics and trucking operations.

An analysis of the 2012 list by revenue class shows the largest transportation operators getting bigger, with four companies shifting up to higher classes.

2 HOW LOGISTIC SYSTEM WORKS

Logistics is the process of planning, implementing and controlling the efficient and effective low and storage of goods and services from the point of origin to the point of consumption. Logistics management includes the design and administration of systems to controls the flow of material, work in process and finished inventory to support business unit strategy.

In short, logistics system are made up of three main activities: order processing, inventory management and freight transportation.

2.1 Order

He used to sell his products to large geographical areas. Baby boomers began to come in the age of 60s and it demand helps to increase the modern franchising.

• Franchising today – It is the most popular way for the people to run business, there are 760,000 franchised businesses and 13 million jobs.

 Based on sample representing more than 70 percent of all franchised units at the end of 2011, the number of franchised increased at a compound annual growth rate of 2 percent between 2005 and 2011 (refer figure 1.5). As we know, the graph clearly shows, growth significantly slows starting in 2008, the year the financial crisis hit.

3.2 Benefits of Franchising

In today’s world franchising has become a very important factor for any growing business this is perhaps because of the various benefits. The very first benefit is, it creates brand value which attracts a large number of customers. Secondly, larger number of capital inputs comes into the business. Thirdly, it creates owner-operator effect and also wide variety of human resource management.

Hence, franchising is a great asset and benefit to any business to grow at a large