The case study aims to facilitate a deep understanding of the strategic decisions in the context of asset-light model, its competitive advantage and industry dynamics within the context of the Indian hospitality sector. Suggested teaching objectives for the case study are as follows:▪ Analyze the strategic decisions made by Lemon Tree Hotels in the context of the Indian hospitality industry.▪ Evaluate the challenges and opportunities associated with the transition from an ownership-centric model to an asset-light strategy.▪ Discuss the competitive advantage built by Lemon Tree Hotels and the implications of its unique market offering.▪ Explore the impact of the post-pandemic era on the hospitality sector and the strategic adjustments made by the company.▪ Encourage critical thinking about the future trajectory of Lemon Tree Hotels, considering the ownership dilemma and evolving market dynamics.
The case study explores the strategic decisions made by Lemon Tree Hotels, a mid-market hotel chain in India, at the intersection of ownership and asset-light strategies. The founder, Patanjali Keswani, faced a dilemma of whether to persist with the ownership-centric model that propelled the company’s success or to pivot toward an asset-light approach, acknowledging the capital-intensive nature inherent in the industry. The case delves into the complexities of expansion, the adoption of an asset-light model and the challenges and opportunities encountered. Keswani’s calculated decisions and the company’s unique offering established its competitive edge. However, the shift to an asset-light model raised questions about the sustainability of this advantage in the more competitive mid-segment hospitality sector. The case discusses the challenges in the mid-market hotel industry in India, the transformative changes in consumer expectations and the strategic significance of the company’s transition to an asset-light model. The narrative unfolds through a lens that considers the competitive advantage built on a positive brand image, operational efficiency and a unique market offering. The case concludes at a strategic juncture, leaving Keswani and Lemon Tree Hotels grappling with the dilemma of ownership versus asset-light strategies, with implications for the company’s future trajectory.
The case study is designed for postgraduate students studying management, business administration and strategic management.
Teaching notes are available for educators only.
CSS11: Strategy.
