Competing Through Operations - Coursework Example

COMPETING THROUGH OPERATIONS Introduction Grand Destinations is a company which operates various establishments within the hospitality industries and in different locations. The organisation intends to open a new hotel near Park Place, in Cardiff. This region experiences increased number of visitors because of the various tourist destinations within the city. Demand for hotel services could therefore be relatively high based on the various sporting activities and other attractions for visitors to this region. The organisation must however, undertake intensive market research to establish the feasibility of the project before commencing. Top among the priorities remains the element of competition from existing hotels within the region. The organisation must ensure the competition aspect of the business becomes effectively addressed for successful entry into the market. This research seeks to undertake an analysis of the existing competition within the market, and enable the organisation to make informed decision about commencing with the project. This will involve conducting internet based research to establish the market situation within the target region. Literature review Competition among organisations can be conducted through different approaches, including the adoption of effective operations strategies. The development of an effective operations strategy involves undertaking research to understand the components and measures of efficacy in operations (Lewis et al. 2010). Efficiency of operations remains a fundamental component of cost-cutting which ensure organisations increase their profitability. Before the development of these strategies however, numerous conditions must become satisfied to ensure the strategies function effectively, within a competitive market (Brown et al. 2013). Operating efficiency remains a fundamental indicator of the operations capability within an organisation. Analysing the operating efficiency of competitors can enable an organisation to adopt better operation initiatives and improve the processes, for increased profitability. Market review Within any market, competition remains an ever present element when conducting business. Successful entry into a market involves conducting an analysis of the existing competition in order to develop competition strategies, which will ensure successful market entry. As a new entrant, the market dynamics utilised in enhancing competitiveness within the market become essential features, which organisations can utilise to compete effectively. Undertaking a competition review enables a new entrant to understand the competitors and the competiveness within the market. This becomes essential in seeking to ensure successful entry into a competitive market. The competition strategies utilised by businesses operating within the market remain the determinants of the intensity of competition. Much competition within the hotel industry occurs through the differentiation of products and price competition. This enables organisations to identify the target customers and effectively design products targeting the particular market. Many of the prices, which organisations sell their products, remain based on the prevailing market prices for the different products. The operations of an organisation become fundamental in enhancing competition through implementing effective production methods. The efficacy of the operations could enable an establishment to lower prices and maintain profitability of the business (Lewis et al. 2010). Intensified competition within the market necessitates adoption of effective strategies aimed at reducing the operations cost, hence increasing profitability of organisations. Overview of competitors The organisation expects much of the competition to come from the nearby hotels, many of which have been operational for a long period. The main competitors in the market will include the following Park Place Cardiff Thistle Cardiff city centre Both of these hotels have been rated as four-star establishments and operate within the same market, competing for the same clients. This has enabled the hotels to adopt operations strategy seeking to enhance the competitive advantage within the market. While the price remains the fundamental indication of the competition, different operational strategies are utilised in achieving the competitive edge of over each other Competition The existence of numerous hotels, within the region, remains an indication of presence of stiff competition within the market. Many of the hotels operating within the region have existed for a number of years, but with increased numbers of visitors to the city, there is still demand for hotel services. The organisation seeks to maximise on this aspect in ensuring entry into the market becomes successful (Crick & Spencer 2011). While other small hotels do exist, the organisation targets to establish a four-star establishment hence, much competition for guest will come from the identified hotels. These hotels operate within the vicinity of the Park place regions and cater for the many visitors coming into this region. Competition among these establishments is mainly on the prices and services provided within the hotel. The hotels within the region have been continuously involved in price-based competition, with the establishments charging between £42 and £89, for the lowest and highest room prices in the region. The differences in the prices could be attributed to the different operational strategies which the organisations have adopted in the development of various products (Salunke et al. 2013). The hotels commonly target the large numbers of visitors who come within the region to visit different popular destinations within the city. The effectiveness of the operational strategies remains a fundamental element occurring as a response to the changes within the competitive market. Competitive advantage All the firms operating within the market has been continuously seeking to gain a competitive advantage over the others. This has been the source of the intense competition between the existing hotels within this region. The hotels have been competing for the same clients and the different strategies adopted could be summarised into three different aspects of product differentiation, costs and response. These are all operational approaches which the organisations have adopted to ensure they gain a competitive edge over their rivals, within the market Differentiation The market remains heavily crowded and the provision of differentiated products remains the best approach for ensuring sustainable competition within the market. Each of the organisations within the market provides products which are differentiated with the others. The plaza park hotel, for example, provides additional free services to the clients, which include free Wi-Fi and internet access. Guests staying within the hotel also have free access to the hotel’s spa and Jacuzzi, which other hotels commonly charge guests to use. This has been a fundamental differentiating aspect of the hotel products from the Thistle Cardiff. The free services provided by the establishment have been a fundamental aspect for achieving increased sales and successful competition within a highly competitive market. This makes the services provided become comprehensive to the customer. Thistle Cardiff on its part has also effectively utilised differentiation as a strategy for ensuring competitive advantage within the same market. The hotel has increasingly focused on ensuring 24 hour access to almost all services to their guests as a manner of differentiating from the competitor hotels. This hotel, however charges for services like internet, in an attempt to maximise the profits and ensure clients who do not use the services, do not have to pay for them. Many clients commonly perceive the free services as being included within the room prices and this remains the fundamental differentiation strategy adopted by Thistle Cardiff. Cost This remains the major focus of the competition between these two hotels operating within the same market. The differences in the prices charged for rooms between the hotels remains relatively low. The average prices for the Park Plaza remain about £5 higher than those of Thistle Cardiff. Despite charging the higher prices of the two, Plaza hotel receives more clients than the competitor. The higher prices have been utilised to create a perception of better quality of products which has been effectively achieved. The hotel has more facilities to improve the customer experience while staying within the hotel. Within the hotel industry, higher prices become associated with improved quality of services, since both hotels are rated as four star hotels. The Park Plaza hotel remains located almost centrally to all the fundamental monuments within the city of Cardiff. This makes it the most reliable position for clients who need to visit different locations within the city. The hotels has effectively utilised this in maximising profits and adopted a price leadership strategy in the market. The hotel has the highest prices among all hotels operating within the region and remains the market leaders within the same region. Most of the monuments in Cardiff lie within a walking distance from this hotel. The customers visiting the hotel perceive the highly priced products at Park plaza hotel as of better quality than those from competitor hotels. Response Both hotels have adopted response strategies aimed at maximising profits during certain peak periods. The room rates are placed high on weekends, which remain peak periods of the week in an attempt to maximise the profits. Thistle Cardiff, however does not release the rates early just to ensure they make maximum utilisation of the events which might unfold. The events occurring within the markets determine the room rates which become applied during the peak times. This makes the operations of the establishment become relatively flexible to market changes through anticipating increased number of visitors. Conclusion Operations management can be a fundamental element through which new organisations can establish a competitive advantage within a market. This is because operation strategies cover the numerous elements of competition which should be considered when entering into a new market. Adoption of effective operational strategies remains a fundamental aspect for ensuring successful entry into a new market. The implementation of these strategies however involves critical and objective analysis of the market to identify the various elements of competition within the market (Morritt & Weinstein 2012). The strategies can then become developed based on the market analysis, which are aimed at ensuring the implemented structure deliver the required success. Achieving competitive advantage involves initiating product differentiation, cost leadership approach and rapid response to changing market conditions. References Brown, S., Bessant, J.R. & Lamming, R., 2013. Strategic operations management, London: Routledge. Crick, A.P. & Spencer, A., 2011. Hospitality quality: new directions and new challenges. International Journal of Contemporary Hospitality Management, 23(4), pp.463–478. Lewis, M. et al., 2010. Competing through operations and supply: the role of classic and extended resource-based advantage. International Journal of Operations and Production Management, 30(9-10), pp.1032–1058. Morritt, R. & Weinstein, A., 2012. Segmentation strategies for hospitality managers: Target marketing for competitive advantage, London: Routledge. Salunke, S., Weerawardena, J. & McColl-Kennedy, J.R., 2013. Competing through service innovation: The role of bricolage and entrepreneurship in project-oriented firms. Journal of Business Research, 66(8), pp.1085–1097.  Read More