The dominant economic feature in the industry is that it is experiencing a recession. This has discouraged more luxury brands from setting up because the market’s growth rate is lower and is likely to remain so in the next three years. Many firms in the industry focus on business, family tourists and other categories of tourists who guarantee a higher occupancy rate of their establishments. Many firms in the industry do not have elaborate marketing campaigns due to low levels of purchasing power by local consumers (Kotler & Armstrong, 2013, p. 35). Therefore, some firms have opted to cater for specific consumer niches to address different challenges they face in their operations. In addition, forward integration is very low because many firms are not interested in market expansion plans. However, the level of backward integration is higher because many firms are looking for ways of reducing their overall expenditures in the industry.
The competition from other rival firms in the industry is high because many firms are looking for ways of attracting new customers and this has caused a price war. The threat of new entrants in the industry is very low because new firms are likely to find it difficult to get positive returns on their investments. However, there is a higher threat from existing substitutes. Many service packages offered by firms that operate in the industry are similar and they only focus on attracting customers who perform different activities in groups (Kotler & Armstrong, 2013, p. 37). The bargaining power of suppliers is low because there is low demand for their products and other firms have reduced their overall expenditures. Lastly, the bargaining power of customers is high because they have a wide variety of competitively priced accommodation packages to choose from.
Driving Forces
The main driving force that is likely to impact on the operations of the firm is digital technology (Kotler & Armstrong, 2013, p. 39). Many important processes depend on the internet to increase efficiency and to attain high output. The firm has to rely on software tools which can improve the quality of its enterprise systems in the long run. As a result, digital technologies should be made part of the firm’s long term strategies in the industry to increase its competitive advantage. The firm will use these technologies to carry out marketing, planning, finance, human resource management and communications. Many of the technologies to be used will enable the firm to integrate its payment systems to make it possible for different customers to use their credit cards to make important bookings before they visit.
A2a. Provision
More importantly, firms in the industry need to liaise with other important players in the industry such as tour agents, airlines and government agencies to encourage more consumers to try out their products. In addition, they need to invest in cultural awareness tools to make them appeal to diverse customers from other regions and countries. In the last three years, the company has registered positive customer satisfaction ratings in the market (Kotler & Armstrong, 2013, p. 41). The travel site plan will include: airline ticketing arrangements the firm has with tour companies. Basic information about government regulations will also be provided in different languages to make potential visitors understand legal requirements they need to adhere to. The website will be linked with government and other corporate websites to enable potential customers to get additional information from other sources.
The social media plan will focus on communicating messages to different people that have an interest in visiting the region where the firm is located. The firm will set up Facebook and Twitter accounts to communicate easily with its customers. As a result, the firm needs to coordinate its social media initiatives with other activities it undertakes to ensure customers’ enquiries are responded to promptly. The firm’s in-house marketing plan will focus on providing customers with mementoes and booklets which contain different types of information about the activities it does in the industry. The booklets will also contain prices charged on different types of services which the firm offers to enable customers to understand the value they are likely to get.
Differentiating Competitive Characteristics
The two key factors that will impact on the firm’s success will be personal services and amenities. The firm needs to model its marketing strategies on these two factors to help it attain a larger market share in the industry. The quality of these two factors will shape the perceptions consumers will have towards the firm’s operations in the industry. Personalized services make customers to feel special and this encourages them to recommend the service to their families and other people they know (Kotler & Armstrong, 2013, p. 47). High quality amenities increase consumers’ comfort making them more interested in extending their stays in a particular location. The firm needs to take these two factors seriously because they are likely to impact on its long term results in the industry.
After establishing its brand in the international market, the firm will be in a position to attract high income customers who will be willing to pay for high quality service. In the first year, the firm’s profile as a high quality brand will still be low and it will need to do more to make customers to have better experiences. After three years, the firm will be in a position to understand the needs of its loyal customers better and as a result, it will make investments in high quality amenities. This will expand personal service options it will be able to offer its customers. After four and half years, the firm will be benefit from its marketing plans which will enable it to offer a lot of value to its customers, thereby catering more effectively to their unique preferences.
Competitive Forces
The Porter’s Five Factor model can be used to explain conditions that exist in the industry. The threat posed by substitutes is low because many firms focus only on price leadership strategies and this approach is not sustainable in the long run. However, some firms are using focus marketing strategies and this is likely to help them to remain competitive in the long run. Market rivalry between firms is a key factor that the firm needs to be aware of. Firms that offer highly differentiated services will be able to attract new categories of customers and thereby turn around their long term performance. Barriers to entry in the market are high and this makes it unattractive to new firms because they require large capital investments to make a meaningful impact.
Supplier bargaining power is low because the firm has a large network of both local and foreign suppliers who sell it different types of products. Therefore, firms that have long term agreements with their suppliers are able to get high quality products at a lower cost thereby giving them a competitive edge over other firms. The bargaining power of buyers is high because their purchasing decisions are influenced by the value they feel they are likely to obtain from different services offered by various firms in the market. This shows that business firms need to have strong customer relationship management strategies to enable them to make a positive impact on their customers in the long run.
The firm needs to adopt innovative systems to help it improve the quality of its products in the market. It also needs to streamline its marketing processes to ensure it targets appropriate customers from different markets. Another area the firm needs to focus on is to create cultural specific strategies which attract particular customers. Therefore, this requires the firm to invest in effective marketing communications to help it to strengthen its performance in the industry. This will make it possible for the firm to create value based relationships with all its stakeholders to strengthen its long term brand value. Lastly, the firm needs to invest in strong market research programs to make it more responsive to different challenges it faces in its operations.
Vision Statement
The vision statement for the firm will be: “Offering a service that leaves customers asking for more.” This vision statement will enable the firm’s management to institute comprehensive changes in its long term customer service processes. As a result, the firm will be in a position to influence its employees positively to make it easy for them to achieve strategic objectives it has set for itself in the industry. More importantly, this will guide the firm to assess the value of relationships it will form with its internal and external stakeholders. This will allow the firm’s management to institute knowledge based management practices which enable all employees to learn about different trends that impact on the firm’s competitiveness in the industry.
Mission Statement
The mission statement for the company is: “Building and sustaining relationships with all key stakeholders to enable us to satisfy their expectations effectively.” This mission statement will influence the organizational culture and behavior which will guide the firm’s employees as they perform their duties. Therefore, this mission statement will enable the firm to develop a more appealing brand message that will have a positive impact on its customers, suppliers and other stakeholders it relates with in the industry. As a result, value based management principles will be used by the firm to stimulate positive reactions from its customers in different locations. This mission statement shows that the firm will institute high standards of operations which it will expect all its employees to adhere to. This will help the company to have its own identity in the industry.
Distinctive Competency
The distinctive competency the firm will rely on to distinguish itself from its competitors will be to offer customers high levels of convenience to make them have positive perceptions about the quality of the service the firm offers. To achieve this, the firm will need to certify all its products and processes to conform to external quality standards. Therefore, labor, environmental and corporate responsibility awareness will be some of the key areas that will need to be assessed to determine if they conform to high quality industry practices. In addition, other important factors that will be looked at will include: work processes, adherence to legal and regulatory standards and general responsiveness to customers’ issues. The certification of internal processes and work systems will give the firm a higher level of competence in the industry (Kotler & Armstrong, 2013, p. 50). As a result, this will help to increase its credibility in the industry.
The main strategic elements which the firm will focus on will be to develop products which are able to have longer life cycles in the industry. It needs to develop a spa which will offer consumers an opportunity to relax and feel valued whenever they visit to turn around its performance in the industry. In addition, some customers need to develop premium class suites for customers who are willing to pay for luxurious services to make them appreciate it in the long run. This approach will enable the firm to be more competitive in the industry to help it overcome the threat posed to its operations by its competitors. More importantly, this will enable the firm to use feedback obtained from customers to improve its internal processes to enable it to improve the manner in which it relates with its customers in the industry.
Market Opportunity/Crafting & Executing Strategy
There are many customers from China and Middle East who are interested in consuming luxury services. Therefore, the firm needs to come up with new ways of appealing to these customers to increase its performance in the market. The firm needs to recruit customer service employees who are fluent in Arabic, Chinese and other international languages to serve diverse needs of foreign customers more effectively. In addition, the firm needs to design marketing strategies that identify cultural issues which appeal to customers from this market segment to encourage them to sample some of its services. This approach will help the firm to develop culture specific marketing campaigns that attract high value customers from these two demographic groups (Kotler & Armstrong, 2013, p. 53). In the long run, the firm will be able to develop appropriate packages which satisfy foreign customers to encourage them to extend their stays whenever they visit. This will help it to overcome low profitability risks.
External Threats/Crafting & Executing Strategy Text
One external threat that is likely to affect the performance of the company is volatile foreign exchange rates. The local currency’s performance against other international currencies such as the dollar and the euro has been weak and this has increased the levels of inflation in the economy. Therefore, this issue may force the company to increase its prices to remain competitive in the local industry. In addition, the weakening value of the local currency will result in higher prices of imported luxury commodities which the firm sells to its customers. Therefore, the firm needs to put in place effective strategies which address this issue urgently. One of the ways in which the firm can solve this problem is through increasing the quantities of foreign currency reserves it possesses (Kotler & Armstrong, 2013, p. 59). This will help it to deal with different risks associated with a weak local currency.
Threat Recommendation/Crafting & Executing Strategy
The firm will develop a comprehensive human resource manual which all employees will be expected to follow in discharging their responsibilities. This manual will outline different standards of excellence which all stakeholders will be expected to attain to enable it to increase its competitiveness in the industry. More importantly, training methods will be enhanced to transfer high quality skills to employees. On the job training will allow the firm to familiarize its new staff with its key systems to make them ready to provide high quality services to its customers. Learning approaches will be used to encourage employees to make them more creative in their workstation to make it easy for them to attain good results in different activities they will be doing. Consequently, this will allow the firm to increase its competitive advantage in the industry (Prahalad & Ramaswamy, 2013, p. 60).
Team building approaches will also be used to encourage employees to collaborate more on different assignments. As a result, this will help the firm to review its internal work plans to make it easy for employees to share ideas with one another. In the long run, this will improve group cohesion in the firm because all its employees will be in a position to attain good outcomes from different activities they will be doing. Consequently, the firm will be able to implement effective problem solving techniques to enable it to respond to different types of challenges it is likely to face in its operations promptly. More importantly, the firm will be able to encourage its managers to delegate important duties to their subordinates to make them more confident and dedicated. As a result, the firm will benefit from employees who will be willing to make different types of sacrifices to attain good results in different activities they will be assigned.
The firm will use different market analysis methods to monitor if customer wants and needs are being satisfied. It will monitor social media pages to find out customers’ perceptions towards its services and how they can be improved to increase its long term value in the industry. In addition, the firm will also encourage customers to share their thoughts with its customer care representatives regarding what they feel about its operations in general. Customers will be provided with forms containing questions on different aspects of the firm’s operations and they will be requested to rate the firm’s services. This approach will enable the firm to find out if its internal operations satisfy the expectations of customers that visit it and exact improvements that need to be made to boost its profile in the industry.
Financial Objective/Crafting & Executing Strategy
The business financial objective which has been set by the firm is to increase its net profit by 20%. This approach will help the firm to increase room occupancy rates and sales revenues from various products it sells to its clients. The main method the firm will use to measure the attainment of this objective will be through an analysis of its profit and loss accounts after six months to find out if there any changes. This approach will help the firm to find out if it has implemented suitable business strategies which respond to the needs of its customers. Before implementing this strategy, the firm will need to conduct a market survey to find out customers’ interests and expectations and how they can be satisfied (Prahalad & Ramaswamy, 2013, p. 71). In addition, the firm will also need to find out additional products and services it can offer to appeal to diverse consumer groups.
One functional level objective which is suitable for the current situation faced by the firm is the improvement of its internal processes to gain 68 % of the market share. The firm will put in place high quality measurement systems to ensure products and services it offers to clients undergo rigorous quality checks to ensure they conform to their needs. More importantly, the firm will use technological tools to measure the safety of foods and beverages sold to clients to minimize any form of contamination. In addition, the firm will make it mandatory for employees who handle food products to undergo medical checks after every six months to prevent them from passing on dangerous infectious diseases to customers. Lastly, the firm will encourage its employees to go for seminars to increase their knowledge on modern hospitality industry trends and issues (Prahalad & Ramaswamy, 2013, p. 74). Consequently, this will enable the firm to expose its employees to high quality hospitality systems to make them more competitive in their duties. As a result, this will enable it to increase its appeal in the industry in the long run.
Principle Managerial Objectives/ Crafting & Executing Strategy
The company will recruit managers and employees who understand what they need to do to attain positive performance in their duties. This approach will enable the company to rely on highly qualified staff to increase its market share. In addition, the firm will invest in high quality human resource strategies which are aligned with its long term mission and vision in the industry (Prahalad & Ramaswamy, 2013, p. 77). In the long run, the firm will be in a position to train all employees to understand its corporate values. Employees will be made aware of values which are cherished by the firm such as: increasing market value, developing high quality services and sustaining strong customer loyalty. Consequently, this approach will help the firm to adopt appropriate human resource strategies which are responsive to its long term strategic objectives in the industry.
The firm will improve its organizational capabilities to enable it to execute key areas of its strategic plan successfully. It will focus on improving the manner in which different functions are coordinated to help it achieve higher performance in the industry. In addition, the firm will encourage all employees to share information and skills to help them to attain good results in different activities they are undertaking. The firm also needs to develop appropriate organizational learning models to enable it to utilize the talents of its employees more effectively. This will improve the manner in which the organization allocates different tasks to be performed to its employees to enable them to attain positive outcomes in different duties they are doing. Consequently, managers need to be encouraged to delegate responsibilities to employees to encourage them to take on more responsibilities in their workstations (Prahalad & Ramaswamy, 2013, p. 80). The adoption of flexible human resource and organizational development strategies will help the firm to execute its strategies more effectively.
The adoption of change management strategies will help the firm to develop a strategy-supportive organizational structure. This will require the firm to improve the manner in which it communicates with its employees to make them feel that they are part of its mission in the industry (Prahalad & Ramaswamy, 2013, p. 85). As a result, they will be able to see specific benefits that they are likely to achieve by accepting the firm’s change management strategies. In addition, the firm will be able to undertake other beneficial improvements in its operations by taking time to understand different trends in the market which impact on its operations. In the long run, the firm will be in a position to streamline its departments to make them more responsive to its strategic objectives.
The firm will put in place effective budgets to ensure that its key strategic plans are met in the long term. This will require the firm to set priorities on how it is going to use its resources to achieve its long term objectives in the industry. In addition, the firm will be required to identify key areas of its operations that need to be funded and how this is likely to impact on its financial projects in the long run. Therefore the firm will have to conduct a cost benefit analysis to find out which functions are important to its long term strategic outlook and which ones are not. This approach will help the firm to get important knowledge which will be used in developing appropriate plans for its operations in the industry (Prahalad & Ramaswamy, 2013, p. 87).
The firm will institute performance management policies and human resource appraisal procedures to increase the quality of internal results obtained from its processes. Performance management policies will be used to measure the individual performance of every employee to find out if they understand their roles in the firm. In addition, the firm needs to use feedback obtained from its customers to appraise to find out if its employees offer high quality services. This will enable it to use information generated from its internal operations to improve the quality of service it offers to its customers (Prahalad & Ramaswamy, 2013, p. 90). In addition, the firm will be able to motivate employees who achieve good results in their workstations to encourage them to be more responsive to clients’ needs. Consequently, this approach will help the firm to turnaround its performance in the industry.
The main motivation theory which the firm will rely on in its operations is the Maslow theory. This will enable the firm to understand the needs and expectations of its employees to come up with an appropriate way of satisfying them. More importantly, the firm will assess specific benefits which it can introduce to make employees more loyal and dedicated in their duties. This will enable the firm to develop more valuable relationships with them to encourage them to put in more efforts in their workstations. More importantly, the firm will also offer employees valuable holiday packages to encourage them to increase their dedication in their workstations. This approach will show them that they are valued by the firm and will encourage them to attain positive outcomes in their workstations. As a result, the firm will be able to excel in its functions in the industry in the long run.
The firm will encourage its employees to get involved in different workshops and events to keep themselves updated on important issues which are related to the hospitality industry. As a result, they will be aware of different trends that impact on consumer purchasing behavior in the long run. In addition, this will also require the firm to come up with short term targets which have to be met by all employees in their workstations. These short term targets can provide the firm with an important approach to evaluate if it is on track to achieve its agenda in the industry (Prahalad & Ramaswamy, 2013, p. 92). If managers find out that the firm is deviating from goals it has set, they will be able to propose appropriate solutions to make all employees understand that all goals set have specific time limits.
The installation of information and operating systems will allow the firm’s employees to perform their duties more effectively. This will enable the firm to automate its functions to help it improve the quality of its performance in the industry. For instance, processes like bookings, customer care functions, communications and security will be made more efficient through the firm’s adoption of appropriate technological solutions. These solutions will help the firm to understand the strategic direction it is moving in and how this will help it to improve the overall value of services it offers to its clients (Prahalad & Ramaswamy, 2013, p. 95). As a result, this will help the firm to understand how it can integrate different technological solutions into its internal operations more effectively.
Employees who are able to achieve good outcomes in their workstations can benefit directly from company rewards and incentives to boost their morale. The firm also needs to develop loyalty programs which offer positive benefits to its loyal customers to show that it acknowledges their valuable contributions. As a result, the firm will be able to retain its long term employees and it will also be in a better position to respond to the needs of various stakeholders it relates with.
The firm has to instill a corporate culture that promotes good strategy execution. This can be achieved through participation in corporate responsibility initiatives to enable the firm to strengthen the relationships it has with its stakeholders. The firm also needs to integrate its mission and vision statements with its human resource policies to make employees feel that they have an active role to play to achieve its objectives. This will help it to come up with proactive solutions which address different types of challenges it is facing in the industry (McAfee, 2009, p. 105). More importantly, the firm should focus on streamlining its key processes by implementing an appropriate management model for the situation it is facing in the industry.
Lastly, the firm needs to develop internal leadership functions to ensure workers understand the direction in which they are moving and how this is closely related to its business strategies. Therefore, this will help the firm in developing appropriate mentorship programs to enable it to identify and develop the talents of employees who exhibit strong leadership qualities (McAfee, 2009, p. 108). This will also help the firm to find out the best way in which it can handle different crises it is likely to face in its operations. As a result, it will be able to protect itself against risks which are likely to cause poor financial performance.
The main action that needs to be taken to align the company’s efforts to its mission is to implement transformational leadership strategies. The firm needs to change the manner in which it communicates with its employees at all levels to facilitate quick decision making. This will enable all employees working in different workstations to use critical thinking skills to perform their duties to help them attain good results. More importantly, the firm needs to change its internal organizational culture by making its employees understand its long term vision in the industry and how they can contribute in achieving it. Transformational leadership strategies will compel the firm to measure the quality of output attained by its employees from different activities they are involved in (McAfee, 2009, p. 110).
The firm also needs to implement effective integrated marketing communication strategies to make its stakeholders constantly aware on various activities it is engaged in. This will help the firm to communicate appropriate information to its customers by utilizing personalized marketing approaches to strengthen relationships it has with its customers in different markets. As a result, the firm will be able to use the feedback it gets from its employees to identify specific functions that need to be improved to help it satisfy the needs of its clients in the long run. The firm needs to develop long term social media strategies to respond more effectively to different issues which affect its customers (McAfee, 2009, p. 112). Consequently, interactive forms of communication will enable the firm to attract younger customers who are interested in paying for services that appeal to their lifestyles.
The goal theory of motivation focuses on setting challenging goals which encourage workers to work harder to actualize them. Therefore, the organization needs to set goals which are easy to understand, challenging and attainable (McAfee, 2009, p. 115). Goal setting will encourage individuals to focus on attaining good results in their workstations to help them develop their skills and capabilities. Therefore, they need to be encouraged to align their goals to long term organizational objectives to make them more satisfied with their jobs. In addition, the firm needs to improve its human resource systems to make them more responsive to employees’ personal and professional interests.
The incentive theory of motivation focuses on the way people are attracted to activities that are likely to offer them material rewards and other benefits. Therefore, at the workplace employees can be encouraged to change their behavior to make them collaborate with one another on complex tasks. The company needs to offer them material benefits inform of promotions, rewards and bonus payments to change their feelings towards different work processes. As a result, this will enable them to share knowledge on various complex tasks which they are required to perform in their workstations (McAfee, 2009, p. 117). In the long run, this will enable the organization to use collective decision making processes to solve different problems which workers face in their workstations.
The manner in which the work effort will be structured will have a large impact on the firm’s ability to execute its strategic plan. Therefore, the firm needs to find out the best way in which specific responsibilities can be allocated to its employees to obtain good results from its important processes. In addition, the firm needs to put in place appropriate measures it can use to estimate the value of each job profile in the long run. This will help the firm to increase the quality of results obtained from its internal processes. Consequently, this may compel the firm to conduct a restructuring process to merge departments which do not offer a lot of value to its long term operations in the industry (McAfee, 2009, p. 120). Moreover, the firm needs to find out which work processes are redundant to ensure it allocates resources to tasks that increase the quality of its performance in the industry.
Current organizational characteristics focus on delegating responsibilities to help the firm to achieve quality results from its operations. In addition, the firm intends to develop high quality communication tools to help its managers and employees to interact freely. This approach will enable the firm to improve the time in which crucial processes are performed to help it attain good results from its operations. In addition, it will help the firm to use different types of learning models to transfer skills and knowledge to its employees in the long run. Consequently, this will allow the firm to develop internal and external business strategies that are responsive to various situations it is exposed to in the industry (McAfee, 2009, p. 123). More importantly, improved communication systems in the firm will make all stakeholders to be more willing to embrace different types of changes that are implemented by the firm’s management. Therefore, the firm will be able to increase the value of its operations in the industry and this will go a long way in strengthening its brand in the market.
Leaders must rely on information obtained through market research to understand specific improvements they can make to strengthen the performance of the firm in the industry. Information obtained from market research will help the firm’s managers to increase their awareness on important factors which affect the firm’s operations in the industry. In addition, the firm will be in a position to evaluate the market perceptions that are associated with its operations and how they contribute to its performance. This will encourage managers to identify specific trends in the industry which are likely to affect the quality of results the firm attains from its operations (McAfee, 2009, p. 127). As a result, they will be in a position to evaluate the firm’s employees to find out if they are capable of executing different responsibilities assigned to them. It will also be able to understand different types of regulatory challenges that are likely to affect its financial results in the long run. Therefore, the firm will be able to increase the value of its internal processes to achieve the aspirations it has set for itself in the industry.
References
Kotler, P., & Armstrong, G. (2013). Principles of marketing. Upper Saddle River, NJ: Pearson.
McAfee, R.P. (2009) Competitive solutions: The strategist’s toolkit. Princeton, NJ: Princeton University Press.
Prahalad, C. K., & Ramaswamy, V. (2013).The future of competition: Co-creating unique value with customer. Boston, MA: Harvard Business Press.