Chacha Inn Situation Analysis - Coursework Example

 Running Header: Chacha inn situation analysis Student’s Name: Lecturer’s Name: Course: Date Submitted: Table of Contents Abstract 4 Introduction 5 Internal environment analysis 5 Dominant economic characteristics 6 Forces of change 6 Hotel’s resources 7 The value chain analysis 7 Capabilities 8 Core competencies 8 Financial condition 9 Current strategies and objectives 9 External environment analysis 10 Political/legal force 10 Economic force 10 Social force 11 Technological forces 11 Environmental force 12 SWOT Analysis 12 Strengths 12 Weaknesses 13 Opportunities 13 Threats 13 Strategic marketing 14 Chacha inn Marketing mix 14 Product 15 Price 15 Place 15 Promotion 16 Conclusion 16 References 17 Abstract Chacha Inn is a garden retreat in India which deals in a variety of products and services for its customers. This report explains the background of the hotel, brand details and the marketing plan to attract potential customers both locally and internationally. The hotel is spread on a green garden that covers over 2acres. It has beautiful flowing plants, pathways and shrubs that are suitable for leisure activities such as camping, walking and picnics. Chacha Inn is located in Mount-Abu which is 750 kms away from Mumbai and Delhi. Mount Abu is also known as the Pearl of Western India because of the quiet and beautiful nature that surrounds it. The corporative objective of Chacha Inn is to expand to new markets both locally and internationally. Introduction Chacha Inn covers over 2 acres of land which is filled with beautiful green landscape with lotus ponds, park for children and waterfalls. Chacha Inn (2011) shows customers find comfort and luxury in the hotel and they can also shop at Chacha Museum which has been operational since 1955. The garden retreat has beautiful pathways and green landscape. The garden has waterfalls that invite clients for an outdoor relaxation for many hours due to the hypnotizing effects. Barmer (langa), singers, music show and puppet shows make customers remember the good moments during their holiday in the hotel. This study involves analysing the external and the internal environment of the Chacha inn Hotel. The hotel has parks for children and a rocky garden for trekking. The services in Chacha Inn include; room service all hours of the day and night, laundry, travel assistance, guided trekking and banquet preparation for 500 guests among others. The hotel offer exclusive parking, indoor games, and accepts major credit cards. There is a restaurant and bar in the hotel that is opened all hours for customers. The aims of this report include the following; develop a marketing strategy that will attract potential clients and also retain loyal customers, discuss the hotel’s key objectives and improve the quality or both services and products the hotel offers. The marketing strategy includes; situation analysis, market needs and market demographics. The structure of this report starts from the historical background of the hotel, mission statement, corporate objectives, products details and the marketing strategy plan of the hotel. Internal environment analysis Chacha Inn located in Mount-Abu, India started its operations in 1955 as a museum at first. Chacha Museum has a show room that has been operational since 1955 and guests shop at this museum when they visit Chacha Inn (Chacha Inn 2011). The mission statement of the hotel means that the hotel takes important measures to meet the wants and needs of the customers so as to keep loyal customers and attract potential customers worldwide. The corporative objective of Chacha Inn is to expand to new markets both locally and internationally. The short-term objectives of Chacha Inn include; having frequent customers every day, improve the hotel’s profits and improve their services. The hotel deals in entertainment services in the hospitality industry. The products for this business include; parks for children, green and rocky gardens, waterfalls and buffet for business or personal meetings (Chacha Inn 2011). There are rooms for all visitors with affordable price tags on all products that make visitors enjoy a holiday, a wedding or a business meeting. These products make the hotel’s objectives a reality. The hotel has also adjusted the products portfolio to reflect new priorities in the hospitality sectors hence having a competitive advantage over other competitors. Dominant economic characteristics The dominant economic characteristics of Chacha Inn are identified by the market size, scope of competitive rivalry, number of competitors in the market and the presence of exit and entry barriers. Moore (2010) shows they also include the profitability of the industry, capacity utilisation and pace of technological change that influence customers’ decisions. Forces of change Recently, there has been a growing interest on the impact caused by the porter’s forces and especially the effect that provide a competitive advantage to the organisation. Various ideas and models have shown the ability to earn a return on investment in the industry sector. According to the Porter’s 5 forces analysis, the external factors affecting an industry also influence the nature of competition with in the business environment. These forces also show the nature of competition within the industry. It also shows internal forces that influence competition. To analyse these forces, the business has to understand the dynamics of the industry and the market forces. There are forces that drive competition with in the industry for example the rivalry among existing firms and the threats of new entrants into the market. The other forces that drive competition with in the industry include suppliers bargaining power, the power of buyers and finally the threats of new substitutes. According to Porter, the intensity of competition in the market is determined by the strength of the above forces. Hotel’s resources Chacha Inn Hotel faces a tight competition from other hotels in the industry. This is as a result of the increasing market competition and due to threats of new entrants for example the increasing markets from Middle East and China for example hotel Leela palace and Taj Krishna Hotel in Mumbai. The other threat that the hotel is exposed to is the risk of movement for example in the price of raw materials used by the Hotel. These include food and fuel (Hanson et al. 2008). The hotel’s resources include human resources and physical resources. In human resources, the Chacha Inn directly employs about 1,200 employees as a result of the large investments in the area (WREC, 2010). The value chain analysis The value chain analysis groups the hotel’s activities into two which include the primary activities and the support activities. These activities are used to determine the competitive advantage if a firm for example in Chacha inn hotel the value chain analysis is used to determine global strategies which would give the firm a competitive advantage. Ohmae (2002) argues that the hotel has to set strategies to beat other foreign operations of the Hotel. Chacha inn now focuses on recovering its competitive position in the local market which makes the hotel survive in the competitive market. The issues that apply across the value chain include population growth, urbanization, poverty and others that the Chacha inn Hotel attends to in order to maintain a sustainable competitive advantage. Capabilities The Hotel’s capabilities include a number of structural and institutional factors. These have enabled the hotel to shape the strategic response necessary to keep up with the new rules introduced in the industry and be capable of dealing with the short term challenges in the market which include competitor’s strategies. The Hotel’s human resource department has to ensure that they employ individuals capable of meeting the needs of clients. This is where workers have skills necessary to build a product according to how the customer prefers. Capabilities are developed through training or being involved in more activities therefore learning through experience. Core competencies There are various core competencies that make the hotel gain advantage in the market and gain market leadership. Moore (2010) describes that one of this is the brand management where the Chacha inn brand is known globally even in parts where cars are not the common mode of transportation. The other core competency is supply chain management. The hotel maintains a steady supply of its products such as food, booking rooms and beverage therefore drawing more people to purchase products from the hotel. The logistic system of the hotel has been outsourced to various dealers therefore improving inventory management as well as scheduled production activities. Financial condition The Chacha inn hotel financial condition involves income statement, cash flows, balance sheet and statement of retained earnings that the hotel has been operating under. The financial condition of the Hotel has been stable for a long period due to the production of various brands for example in 2006; Chacha inn is currently among the best hotels in Mumbai. Moore (2010) describes that the Hotel aims at attracting more customers through offering products for holidays, wedding events or business meetings. These products have significantly increased revenues from the financial service and the operating income rose significantly. This represented a satisfying increase in revenues and profits for the Hotel. Current strategies and objectives The Hotel’s current strategies include optimizing their capital on investment in order to transfer technology more effectively. The manufacturing and the material handling processes will be removed from their original use and factories will be equipped and designed through the use of other consulting engineering firms. The hotel industy will then focus on forming strategies of being competitive in the market since competition will be rigorous as more hotels are emerging from the area. More attention will be focused in profit making processes, maintaining customers and marketing. External environment analysis Political/legal force The Chacha inn as a luxurious Hotel, it is considered attractive especially due to the quiet and beautiful nature that surrounds it. These include the green landscape with lotus ponds, park for children and waterfalls which provide leisure services to its customers. Political pressure influences the Chacha inn Hotel in various ways. This is due to the link between the hotel and the government policies as well as the earnings of banks. Since many countries have are keen to develop the hotel industry, the government protect the Chacha inn Hotel from other competing countries by increasing the barriers of entry into the industry. According to Trout and Rivkin (2006) the hotel has however found difficulty in dealing with political institutions. This is due to the increased government policies. In terms of the legal influence, the Chacha inn Hotel has had various directives and regulations. Such regulations include areas such as competition law, consumer protection law, taxations and emissions. The hotel therefore introduced a system of local suppliers who will help to cope with the increasing legal needs necessary to ensure national integration. Economic force The Chacha inn Hotel has been the leading hotel in the automobile industry therefore leading in the economic progress. This means that the hotel has facilitated development of various industries for example the plastic industry and the steel industry. Trout and Rivkin (2006) describes that the industry has also developed as a result of the Chacha inn Hotel showing that the hotel has a major impact on the economic status of the countries that the hotel has dominated. This shows how the hotel has been a unique economic phenomenon and therefore contributed to the economic stability. On the other hand the hotel has suffered various economic fluctuations lead by structural rupture and instability. The hotel for example has been losing money to the capital markets and the financial sector due to declining profits and stable sales (Chacha Inn, 2011). Social force The Hotel offers the best place for leisure where customers find comfort and luxury. This is demonstrated by how the hotel directly employs many of people to work in the industry therefore promoting social development through the provision of job opportunities. Jose (2009 shows the products of the Hotel have therefore transformed the society as whole for example by changing the living standards of most individuals. The hotel has also been advocating for social discipline among society members and it also offers support to people through corporate social responsibility. However, some social issues that affect the hotel in most developing countries for example those that emerges from the undertone of religious faith. Technological forces The Chacha inn Hotel has been increasingly developed its technological systems for example it is easier for customers to book rooms online through the hotel website. The hotel for example provides room for about thousands of guests in a week and since this is a complex product mass production becomes difficult. The hotel therefore has to use manufacturing technology which assists in production of high volumes. The Hotel however has not fully exploited the potential for developing coordination skills and emotional sensitivities. Improved technology is necessary as it facilitates more customers into the hotel and also is necessary in maintaining loyal customers through provision of their needs and expectations (Mulcaster 2009). Environmental force The Chacha inn Hotel provides a wide range of products apart from the rooms there is also products that positively attract more customers. The indirect influence to the environment is provision of products such as parks for children, green and rocky gardens, waterfalls etc. To achieve the requirements for safety regulations, the hotel should establish research and development centre which will improve infrastructure. The hotel does not affect the environment but instead maintains a beautiful environment to offer a better view and ambience (Development Capital Management, 2008). SWOT Analysis Strengths Chacha inn has been a powerful hotel brand and therefore has a good reputation for its value for money. Its convenience and the provision for a wide range of products have contributed to its strengths in the market. Development Capital Management (2008) puts it that Chacha inn has also grown substantially over the recent years therefore has experienced global expansion. The hotel has a core competence which involves the use of improved information technology that supports international logistics systems for example the hotel carries out a market research that enable the hotel to see hoe the products perform countrywide and store by store. The improved technology is also necessary as it supports the hotel’s efficient procurement. The other strength that enables the hotel to survive in the competitive market is having a focused strategy for human resource management and development. The major key factor to Chacha inn business is people where the hotel invests time and money in training, development and in retaining employees. Weaknesses As the garden retreat in India and despite the advantages its offers to its customers and the economy, Chacha inn is weak at certain areas as a result of its huge span of control. Since the Hotel provides its services across various sectors such as leisure, food and rooms it becomes flexible to its more focused competitors. The hotel’s other weaknesses include language barrier as various visitors coming from all over the world find difficulty in communication. Opportunities Some of the opportunities that has enabled the hotel to position itself in the hotel industry in India for example through the various competitive advantage such as having a beautiful flowing plants, pathways and shrubs that are suitable for leisure activities such as camping, walking and picnics. Chacha Inn has incorporated the Indian culture because of the geographic location and local customers. There is an opportunity of future business expansion to other consumer markets. The availability of affordable products offers opportunities for exploitation of market development which enables the hotel to diversify. Threats Located in Mount-Abu which is 750 kms away from Mumbai and Delhi means that there are various target of competition both locally and globally and is exposed to various political issues the operate in different countries. These factors include the threats the hotel faces while trying to market and position its stores globally. The intense price competition which results from reduced cost of production and manufacturing cost is also a threat to the hotel. Strategic marketing Much of Chacha inn’s success has been attributed to its stockless warehouse and the use of Just in Time (JIT) distribution system. This systems works effectively as goods delivered are picked for reshipment and later sent to the stores. Chacha Inn (2011) shows Chacha inn also enjoys economies of scale by purchasing full truckloads from various suppliers therefore gaining about more cost advantage over other competitors. The goal of the hotel is to give customers the best value and therefore customers trust the hotel for its lower prices and for the best selection of quality rooms, food and other services relevant to their needs and provision of the most convenient leisure experience. Chacha inn also attracts its customers by offering unbeatable prices and exciting surprises which builds loyalty between the hotel and its customers. Every business is analysed by the factors that affect its functions and these factors are attributed for the success or failure of the business. In light of this, certain techniques are considered to contribute to improved competition in the market. These include customer orientation and coordinated marketing and profitability. In market penetration, Chacha inn focuses on its market and the products its offers to the public. It also has good information on competitors and customers needs. Chacha inn also has a Museum which offers a one stop shop for all consumer needs and this improves reliability to its customers. Chacha inn Marketing mix The stores locations make it convenient to its customers who visit the Mount-Abu and the museum. This is a strong marketing mix and other hotels may compete with the hotel by increasing offering more services but this does not compare to the low price strategy used by Chacha inn. Product According to Tichy (2003) this is a top priority in the marketing mix for example companies selling real innovative products attracts more customers into their stores. The hotel offer services such as quality food, entertainment, better view to the mountain and other leisure activities according to the needs of its customers. There is also a huge facility of online booking as well as provision of safe shipping. The hotel uses a reliable and warranted system of bookings. The hotel has taken initiatives for food value and the use of environment friendly technologies. Price Chacha inn does not produce any brand but is an exhibitor and therefore its huge network globally is as a result of discount packages that are attractive and tempting to its customers. It is an economic force as it runs the pricing policy where it provides low rates which are not available in any other store. The culture of the hotel is also the bench mark of the hotel and a major achievement of the hotel as it provided power shift from other Indian competitors. Hanson et al. (2006) describes that the prices offered by Chacha inn are lower and this acts as a competitive advantage for the hotel. A relaxed environment with luxurious foods, fashion clothes and entertainment will be provided in the hotel as the new marketing strategy. Place Chacha inn is located between major towns: Mumbai and Delhi in India. The market demographic is composed of households with two to four children. These children are either in school or at home and the parents are educated. The market psychographic consists of ethnic Indian communities who have small family owned businesses that have been successful for many generations. The community considers green garden as peace and tranquility and this also means that the hotel contributes in environment preservation. Promotion Advertising is important in marketing mix as people have to know the kind of products offered. It is therefore necessary for companies to find an effective way of advertising for example by conducting little market research and learning from big market sellers. Chacha inn advertises its goods and services through its official website or through other publications such as magazines. Conclusion Chacha inn Hotel has been driven by improved technologies which have enabled the hotel to introduce new service delivery systems. The second business objective is developing creativity and innovation. The third objective is to maintain market positions and developing new techniques of attracting potential customers. The hotel is valued as a strategic community partner due to its mission of enabling people to save money to better their lives. The hotel also aims at maintaining the aspect of availability. This is by opening series of stores in different locations of one country. This improves convenience and hotel’s image and has therefore contributed to the reasons why the hotel is doing very well in the industry. References Chacha Inn. (2011). Amenities and Facilities, viewed on 12 August 2011 Chacha Inn. (2011). Chacha Garden Retreat, viewed on 12 August 2011 Development Capital Management (2008). Investment proposal banyan tree luxury villa and hotel development, pp. 1-12. Hanson, D, Dowling, P, Hitt, M, Ireland, R & Hoskissson, R 2008, Strategic management, Competitiveness and globalization, Pacific Rim Third Edition, Melbourne, Thompson. Moore, H 2010, Creating public value, Strategic management in government, Cambridge, Harvard University Press. Mulcaster, W 2009, Three strategic frameworks, Business strategy series, vol. 10, no. 1, pp. 68 – 75. Ohmae, K 2002, The mind of the strategist, McGraw Hill, New York. Tichy, N 2003, Managing strategic change, technical, political, and cultural dynamics, John Wiley, New York. Trout, J & Rivkin, S 2006, The new positioning : The latest on the worlds #1 business strategy, McGraw Hill, New York. WREC. (2010). Official Hotels. Journal of Armed Forces Officers Club & Hotel (5 star) – Conference Hotel, pp. 1-5. Read More