Strategic Position of Thistle Hotel - Assignment Example

Strategic Management Table of Contents Question Strategic Position 5 Mission 5 Vision 5 Goals 5 Objectives 5 Core Values 6 Question 2: Market Position 6 Market Segmentation 6 Target Market 7 Customer expectation and market position of Thistle Hotel 7 Question 3: Internal Environment Analysis 9 Strengths 9 Weaknesses 9 Key Resources, capabilities and competencies 9 Impact on future strategic direction 10 Question 4: External Environment Analysis 10 Opportunities 10 Threats 10 PEST Analysis 11 Question 5: Porter’s Five Force Model 12 Buyer’s Power 12 Supplier’s Power 12 Substitute’s Threat 13 New Entrant’s Threat 13 Industry Rivalry 13 Analysis 13 Question 6: Porter’s Generic Strategy 14 Cost-Leadership 14 Differentiation 14 Focus 15 Question 7: Ansoff’s Growth Strategy 15 Market Development 15 Market Penetration 15 Product Development 15 Diversification 15 Question 8: Recommendations of three strategic options 16 Reference 17 Question 1: Strategic Position This part of the essay will discuss about the strategic position of Thistle Hotel including its mission, vision, goals, objectives and core values. Mission Thistle Hotel will continually monitor and review its overall standards in order to offer effective guest service at a reasonable price without compromising high standard of service and quality. Vision Thistle Hotel will transform what the hotel does and how they used to do it. Goals Thistle Hotel is going to invest over 100 million pounds in the next two years in order to increase its overall market share in UK (Thistle, 2014, p.1). The organisation is operating with its 31 new hotels across the globe in order to increase its global market revenue. Objectives Positive business outcome is the major objective of Thistle Hotel. The organisation is trying to ensure several certain aspects in order to gain potential competitive advantages over its competitors in the global market place. Thistle Hotel is trying to become leading organisation within the global hospitality and leisure industry in next five years by providing high quality guest service at reasonable price level. Core Values Customer satisfaction and quality service are the core values of the business operation of Thistle Hotel. The organisation always tries to provide relaxing comfortable ambiance to all its guests in order to meet the customer satisfaction level. Effective service differentiation strategy can be considered as one of the important and valuable core competencies of Thistle Hotel. The management of the organisation believes that the business success of each and every organisation depends upon effective and high quality customer service management process. Question 2: Market Position The organisation has developed 31 hotels across the globe under the brand name of Thistle Hotel. The organisation operates in global hospitality and leisure industry. The organisation has developed luxurious hotels and restaurants in Central London, Malaysia and several happening places across UK. Market Segmentation Market segmentation is important for each and every organisation within global hospitality industry. Thistle Hotel has segmented its market into three categories, such as demographic, psychographic and geographic segmentation. In terms of demographic segment, the organisation tries to target households and family members. Young adults and middle aged people of all genders are the major target customers of this hotel. In addition to this, people of higher middle class and upper class income level are the major target customers. In terms of psychographic segment, people who expects high quality hospitality services against their paid money; are the major target customers of Thistle Hotel. In terms of geographic segmentation, people around the globe who love to visit renowned places with the experience of comfort and luxury; are the major target customers. The Thistle Hotel always provided traditional customer services in respective areas across the globe to make the guests’ stays memorable. Target Market People aged between 25 and 65 are the major target customers for this hotel. In terms of gender, all men and women are the major target customers of this hotel. Income class of people needs to be considered by the management of the hotel while determining the possible target audiences of the hotel. People of higher and upper-middle class income level are the major target customers of this Thistle Hotel. Customer expectation and market position of Thistle Hotel Recently, the global hospitality and leisure industry is becoming highly competitive as several leading organisations are adopting and implementing unique strategies in business process in order to gain potential competitive advantages over competitors. Over the next 3-5 years, the needs and expectation level of customers may change slightly. Customer may demand high quality hospitality services at economic price level due to several aspects, such as growing market completion, affected disposable income of people, market saturation and global economic tension. Following perceptual positioning mind map will help the readers to determine the current market position of the organisation with respect to the above mentioned changes in customer needs and expectations. It is clear from above perceptual mind map that Thistle Hotel offers high quality hospitality and leisure services at a reasonable price level. The organisation has adopted and implemented cost-based premium pricing strategy. It is true that expectation of target customers about high quality services will met, but the price factor may affect the business performance of the organisation in near future. Question 3: Internal Environment Analysis SWOT analysis can be considered as an important strategic marketing tool that helps an organisation top determine its internal strengths, weaknesses and external opportunities, threats. This part of the report will discuss about the internal strengths and weaknesses of Thistle Hotel. Strengths High brand image, effective customer service management process and skilled employees are the major strengths of the organisation. The organisation always tries to invest significant amount of its revenue in further improvement of hospitality services. Effective stakeholder engagement always helps the organisation to make effective decisions and develop significant strategies. High differentiation and aggressive global expansion strategy helps Thistle Hotel to increase its global market share. Weaknesses Lack of effective adoption and implementation of cost leadership strategy is the major weakness of the organisation. Now-a-days, people try to get effective hospitality services at economic price level due to their affected disposable income. Lack of cost leadership strategy can hamper the future growth rate of the organisation across the globe. Key Resources, capabilities and competencies There are several key resources, competencies and capabilities of Thistle Hotel. Skilled human resources and sufficient financial resources are the major resources of the organisation. In terms of capability, significant adoption of customer service management process and effective differentiation business level strategy helped the organisation to increase its business growth rate across the global hospitality and leisure industry. In terms of competencies, strong work force, high quality services and aggressive global business expansion strategy helped the organisation to increase its global market share. Impact on future strategic direction It is clear from above mentioned strengths of the organisation that Thistle Hotel always tries to offer high quality services at cost-based pricing without compromising quality and customer expectations. It is going to become one of the most decisive factors in global hospitality and leisure industry as the target customers always expect high quality services and amenities against their paid money. Continuation of this process will help Thistle Hotel to gain more success in global market places in near future. Question 4: External Environment Analysis This part of the report will discuss possible opportunities and threats for Thistle Hotel. Opportunities Adoption and implementation of cost leadership strategy can be considered as an important opportunity for Thistle Hotel to capitalise on since recent economic crunch is affecting the purchasing power of consumers. Threats Intense market competition, high market saturation, recent European financial crisis and global economic recession are the major threats for Thistle Hotel in global market places as these aspects can hamper the global business expansion strategy of the organisation in near future. PEST Analysis PEST analysis can be considered as a significant strategic marketing tool that helps an organisation to determine the impact of external environmental factors on its business performance. Political Political environment is favourable for Thistle Hotel as the government of operating countries support the organisation to implement new business operation strategies as it significantly contributes to the economic growth and social growth of the country. Economic Economic environment is unfavourable for Thistle Hotel as recent economic recession and financial crisis affected the purchasing power and disposable income of the common people. These economic issues somehow affected the sales growth rate of the country. Social Social environment is favourable for Thistle Hotel as social demand for high quality and effective hospitality and guest services is increasing significantly. The organisation always provides services according to the needs and expectations of customers. Technological Technological environment is favourable for Thistle hotel as the organisation can get appropriate technological resources for the business operation. The organisation installs and implies advanced technological instruments in the hotel to meet customer expectation and satisfaction level. Question 5: Porter’s Five Force Model Porter’s five force model can be considered as an effective strategic marketing tool that helps an organisation to determine the impact of external competitive forces on business environment. Buyer’s Power Recent financial crisis and global economic recession affected purchasing power of buyers. Therefore, the organisations within the global hospitality industry are trying to offer high quality services at economic price level. All the target customers are trying to get effective services at low price. Looking into this aspect, it can be stated that the buyer’s purchasing power is high for Thistle Hotel. Supplier’s Power There are huge numbers of suppliers are available in this world to supply resources at low cost. Therefore, the hotel has the possibility to source raw materials and resources at limited competitive cost. Looking into this aspect, it can be stated that supplier’s purchasing power is low for Thistle Hotel. Substitute’s Threat Motels, guest houses and government holiday homes are the substitutes of Thistle Hotel. Recently, demand for these substitutes is rising due to several factors, such as low price level and increase in the numbers of these substitutes. Looking into this aspect, it can be sated that threat of substitute is moderate for Thistle Hotel. New Entrant’s Threat A new player needs to invest huge money to enter in this industry. In addition to this, several entry regulations and risk factors can create difficulty for new organisations to compete with the existing organisations. Therefore, it can be stated that threat of new entrant is low for Thistle Hotel. Industry Rivalry The global hospitality industry is highly competitive and saturated. Several organisations are trying to implement new strategies to gain potential competitive advantages over competitors. Looking into these aspects, it can be sated that degree of industry rivalry is quite high for Thistle Hotel. Analysis It is clear from above porter’s five force model that, growing bargaining power of customers and high degree of industry rivalry are the key competitive factors. Constant market saturation and growing market competition can affect the business growth rate of Thistle Hotel in global market places. Growing bargaining power and industry rivalry can be considered as important forces for Thistle Hotel to focus on in near future. Recent financial crisis affected the purchasing power of common people. On the other hand, this specific industry is becoming more competitive due to increase in numbers of hotels and other substitutes. If Thistle Hotel failed to take proper steps, then it may lose its global market share to its competitors. Question 6: Porter’s Generic Strategy Porter’s generic strategy can be considered as an important marketing tool that helps an organisation to determine its adopted business level strategy. This strategic tool can be divided into three elements, such as cost leadership, focus and differentiation. Cost-Leadership The management of Thistle Hotel does not adopt this cost-leadership strategy as the organisation focuses on cost-based premium pricing strategy. Differentiation The management of Thistle Hotel only focuses on differentiation strategy as the organisation always tries to provide differentiated services and amenities to its guests. Moreover, different types of customer services and facilities helped the organisation to effectively adopt and implement differentiation business level strategy. Focus The management of Thistle Hotel does not adopt focus business level strategy as sometimes the organisation offers its differentiated services at economic price level during lose season. Therefore, it is better to say that the organisation only considers differentiation business level strategy. Question 7: Ansoff’s Growth Strategy Ansoff matrix can be considered as an important strategic marketing planning framework that helps management to develop future strategies. This framework consists of four growth alternatives that are mentioned below. Market Development Thistle hotel effectively adopted market development strategy as the organisation has successfully launched 31 hotels across the globe. Market Penetration Thistle Hotel has succeeded to penetrate its existing market with introduction of new restaurants, cafes and other leisure services. This activity has helped the hotel to increase its market share. Product Development Thistle hotel is going to invest 100 million pounds in next two years in order to increase the number of products, amenities and services to enhance customer management services. Diversification Operating with hotels, resorts, SPAs and restaurants in global market places can be considered as a significant example of business diversification strategy of Thistle Hotel. Question 8: Recommendations of three strategic options It is clear from the above analysis that intense market competition and high cost-based premium pricing are the major issues for Thistle Hotel. Following recommendation plans will help the management of Thistle Hotel to address the analysed and evaluated issues. First of all, it is highly important for the organisation to adopt and implement cost-leadership business level strategy in business operation process. This strategy will help the organisation to reduce its overall business operation cost. Therefore, reduction in tariffs cannot hamper the revenue generation aspect of the organization. Secondly, it is highly important for the organisation to continue with the business expansion strategy in both developed and developing countries. The management should focus on growing consumer markets, such as China, Brazil and India. This aspect may help Thistle Hotel to increase its overall market share. Last but not the least; it is highly important for the organisation to focus on promotional strategy. Adoption of aggressive and contemporary promotional campaigns, such as sponsorship and social media marketing will help to increase its brand awareness. This strategy will help the organisation to address above mentioned growing market competition and saturation aspect. Reference Thistle., 2014. About Us. [Online]. Available at: http://www.thistle.com/en/group/about_us/index.html. [Accessed on October 30, 2014]. Read More