Starwood Hotels has been keen on ensuring that they improve the performance of the entire system. This firm operates in various continents and targets the high-end part of the market. The market has a stiff competition posed by other high-end hotels like the Hilton Hotel. However, Starwood Hotels have managed to deal with costs and increase their profit margin within the market. Prevention cost is one of the strategies used by this firm. The firm has taken measures to reduce accidents within the facility. This has come at a cost, but in the end, the benefit generated from this outmatches the cost incurred in the prevention of such incidents.
This borrows a leaf from the Total Quality Management. Appraisal cost is another very important cost to incur in order to improve quality of the output. Starwood has been keen to ensure that defects are identified as soon as possible, and rectified before the process is brought to an end. This has ensured that most of the products offered by this firm are defect free, making it more profitable. This has also attracted more customers for the firm. Internal failure cost is another cost that this firm has been keen to incur in order to ensure that the firm offers customers total satisfaction. It has been keen to eliminate products that after processing, seems to have some defects. The last cost that this firm has incurred as a measure of reducing cost of production and increasing profitability are the external failure cost. When the product is delivered to the customers but it is realized that there are some defects, the firm would recall the product and incur the cost in order to ensure customer satisfaction.
Starwood Hotel management has employed Six Sigma as a means of improving the output of their facilities, including their labor force. Motorola invented this strategy in 1980s in an attempt to improve quality of their products. It gained fame in the mid 1990s. It is currently considered as one of the most important tools of managing the production process in an attempt to reduce the cost, but produce goods of high quality. To this hotel, Six Sigma can be used in an attempt to ensure that the products of this firm are as per the specifications desired by the quality management unit. Within the various chains of hotel that this firm runs, the management can integrate quality in its products. Six Sigma would help this firm avoid various costs identified above. Given the competitive nature of the market posed by other firms like Hilton Hotel, this firm must be in a position to produce products of very high quality.
The type of customers served by this firm laid more emphasis on quality than on the price. The quality of the products can therefore not be negotiated. The firm would charge premium prices for the products. However, this is should be directly reflected in the quality of the products that are delivered to the customers. In order to ensure that Six Sigma works properly, all the employees must understand its principles, irrespective of the positions they hold in the hotels. They have to appreciate the importance of the application of six sigma and the expectations from it. Done properly, the result would be pleasant, and the firm would manage to contain competition in the market.