Case 12-4 Wayside Inns, Inc.
Summary
Wayside Inns, Inc. was formed located in Kansas City, Missouri in 1980. The company was successful and operated several franchised motels under licensing agreements from two national motel chains. The Wayside Inns were usually constructed in one of three sizes - 76 rooms, 116 rooms, or 156 rooms. In addition, the inns had 10 to 20 percentage higher average occupancy then the competitors. Additionally, the targeted market was not affected by seasonal or environmental factors. The company definitely was one of the successful companies in United States.
However, the management of the company considered to develop its own motel chains under Wayside Inns, Inc. to be a long term investment which should have more flexibility and profitability and also help the company’s marketing plan. The company’s basic strategy aim for those who didn’t care sp about common areas such as decorated lobbies or delicate interiors, but clean room, dependable service, and lower rate. Another strategy the company used is to have more locations, five or six, within the city for total prepared 600 rooms. The strategy certainly helped to raise the common stock price.
Furthermore, Wayside also wanted to develop compensation system for unit managers because the company understood that unit managers played important roles to the over-all performance. At first, salary should be calculated by years of service, dollar volume of sales, and adherence to corporate goal. Then, the incentive bonus was calculated based on the increase of sales. For an additional incentive bonus, the Wayside Inns’ return on investment was the basis to calculate. ROI bonus was equal to ROI time performance factors. At last, a fringe benefit was an important factor in package.
In Addition, the company also had its prospects for future growth, and came out with expansion strategies. There were mainly three issues for the strategies, which were to pursue new...