An analyss of The Four Seasons Hotel Guangzhou - Essay Example

The Pearl River city is China’s economic pillar because it performs better economically in China. Ideally, this hotel’s location is a breathtaking cite as it offers a perfect view of the Pearl River Delta. The hotel also occupies the seventy-fourth to the ninety-eight floors totaling to almost thirty floors. Remarkably, the hotel boasts of having a twenty-four hour operational centre with executive club lounge facilities. With all these attributes in mind, the objective of this paper will be to analyze and evaluate the Strategic decision making for the Four Seasons Hotel.

It will illustrate the design of the strategy, the implementation of the proposed strategy by factoring in the implications of the intended management change. Finally, it will evaluate the risks of the strategically choice and its performance. Various analysis models to ascertain the company’s current position 1. The PEST analysis The PEST analysis in business is the entails the Political, the Economic, the Social, and the Technological factors that influence the external components of strategic management and market research (Griffin, 2010, p. 127). It helps a business to understand its market growth and potential in order for it to make advancements in its finances (Kayne, 2005, p. 227). Therefore, this part of the report will give explanations on the entire four components concerning Guangzhou Hotel. a) Political factor Essentially, the political factors refer to the level of government participation in its economy.

These factors include taxes, labor laws, and trade regulations. In this case, China’s greatest political factor is being among the few remaining communist states in the world. China is a single party state in that property ownership is public. This is the fundamental rule in the communist form of leadership. This serves an advantage to the hotel since the chances of the hotel running bankrupt are relatively low. For instance, the government has the right s to intervene in all financial aspects of the hotel enabling it to continue being the best performer in the hospitality market.

Secondly, the Guangzhou Four Seasons hotel enjoys the government policy on taxation for foreign companies where they were to pay twenty-five percent income taxes (Brown, 2010, p. 16). The foreign company policy mentioned that they had to pay a twenty-five percent income. The fact that this tax implementation plan was gradual meant that Four Seasons hotel had adequate time to administer the government policy. b) Economic factors This is the second factor, which encompasses economic development, currency rates, and interest rates (Kayne, 2005, p. 231). The basic aspect of this factor is the ability to influence business functions and decision-making.

As per this hotel’s setting, the economic factors crucially make them inevitable. In this regard, China’s economic growth dwindled in a scope of three years making the rates of investments being substantially low. This meant that the hospitality industry felt the strain, as there was little access to hotel facilities by both foreigners and locals. The business cycle dropped to a low of almost eight percent (BBC, 2012). The demands by the consumers decreased drastically as the main target for the Hotel were the foreign business guests who frequented the hotel.

In addition, the exchange rate policy imposed by the government translated