External Factors of Success - of Aman Resorts Company - Case Study Example

Aman Resorts Case Study Analysis Name of Student: Name of Professor: Name of Course: Code of the Course: Date of Submission: Aman Resorts Case Study Analysis Introduction Aman Resorts are one of the reputable luxurious hotels in the world. Aman resorts are a hotel group which has operations in various parts of the world. Started in 1988 by Adrian Zecha, Aman Resorts have grown to be destination of great customer experience (Aman Resorts 2013, p.1). The great customer service and the simplicity in design are a key element of the resort group. Aman, meaning peace upholds a strategic organizational philosophy, the Aman Philosophy, which is based on three key elements; peace, uniqueness and family. Ideally, a visit to any of Aman hotels leaves a guest with an experience of the three key elements. The cool and great location offers peaceful experience to a guest, the great simple design has a unique feeling and the home environment gives a family experience. The following paper gives a case study of the Aman hotels. Q 1. Were there any external factors that allowed Aman resorts to be successful in the early years of the company? Aman Resorts was started in the year 1988 in Thailand. Since then, the hotel group expanded fast within the Asia region and the global market. There are several external factors which made it to be successful in its early years of operation. First of all, the resort gave their guest something of its kind in the market. The organizations did not just provide a hotel feeling to the guests, but instead it provides them with a resort feeling; something which was not there in the market. For this reason, the hotel group did not have to deal with any intense competition in its early years since it was targeting an unexploited target market. The founder of the hotel, Mt. Zecha had vast knowledge in the hotel industry which enabled him to give the hotel a table foundation (Sessia 2011, p.3). In addition to this, his management style took keen of specific aspects in the hotels, for instance even in the arrangement of the flowers which made it possible for the founder to cultivate and develop a good organizational culture. The locations of the hotels were also strategic. The founder handpicked these locations solely with intent of ensuring that the hotel would be able to satisfy the specific needs of the target customers (Sessia 2011, p.5). Lastly, the word of mouth marketing approach benefited the organization to a large extent. The customer loyalty which was develop as a result of this increase the number of return customers in addition to increasing the number of guests, hence enabling the resorts to generate more revenue. Q2. Did any external factors drive any changes in the way Aman did business over their lifetime? Over time, Aman had to change the way it did business in order to take into consideration the changes in the market. One of the external factors which compelled Aman to change the way it did business was the changing customer expectations. Initially, the design of the villas and suites was simple (Sessia 2011, p.4). It lacked the elegance lighting and the entertainment facilities which customers associated with reputable hotels. In order to take care of this concern, Aman placed entertainment facilities in specific rooms and parts of its resorts with an aim of satisfying the needs of the specific market which needed them. Another external factor which made it necessary for Aman to change the way it operated was growth. Owing to the rapid growth which occurred in the organizations, the founder Mr. Zecha was no longer able to coordinate directly with the hotel managers. This called for a change in the management structure of the organization which saw the establishment of management level between Mr. Zecha and the hotel managers, the regional managers, who were responsible for the coordination of activities in the hotels which were located in their regions (Sessia 2011, p.6). Q3. What industry is Aman Resorts in? Would you suggest they are in an attractive industry? (use Porters 5 forces to answer this question) Aman Resorts operate in the hospitality industry. Generally, this industry is relatively competitive. However, the profits and lifestyle associated with it makes the industry one of the attractive industries in the world. Taking a scrutiny of the industry with respect to the Porters 5 forces which shape strategy, the following can be deduced. The bargaining powers of the customers are relatively high. The customers have a say on to what amount of payment is equivalent to the services offered by a specific organization (Grundy 2006, p.214). Customers always want to have value for their money which in turn tends to increase their bargaining power. Secondly, the bargaining power of the suppliers is low. The suppliers include people who supply such services and products such as transport, food stuffs, beddings and furniture among others. Thirdly the threat of substitute services and products is high. This is due to the large number of hospitality organizations which offered the same services. The threat of new entrants into the market is also high. However, it is usually hard for new entrants to attract substantial numbers. This is due to the fact that reputation in this industry is very important in enabling an organization to sell. Lastly, the rivalry among the existing competitors is relatively high. For instance, Aman has to compete with the likes of Marriot hotels among others. The competition in this industry has led to the development of innovation (Christou & KarAmandis 1999,p.43). From the above analysis, it can be seen that the competition in the industry. For this reason, the competitive strategies which organization operating in this industry have to establish must be based on the above five competitive forces (Porter 2008, p.1). Q4. What resources do Aman utilise best? Are they mainly tangible or non tangible? The resources which Aman utilizes best are human resources. The organization values the need for good customer care services which explains the reason as to why it is focused on having a collection of competent employees. In its strive to ensure that customers get the best service, the ratio of staff to guest is relatively high; sometimes up to a 6: 1 ratio. The organization subjects its employees into rigorous training which equips them with the organizations philosophy in addition to empowering them to work in the organization. The human resources are tangible but their acts such as the great customer care are intangible. Q5. Could you argue that Aman are in possession of core competencies that can be leveraged in order to gain competitive advantage? For an organization to be able to manage in a competitive market, it has to develop key competencies. Key competencies are specific elements of operation which give an organization a competitive advantage (Snyder & Ebeling 1992, p.26). They are usually hard to imitate reusable in several markets and contribute to customer’s satisfaction (Shaabani, Ahmadi & Yazdani 2012, p. 308). Aman is in possession of great core competencies which have enabled it to succeed over the years. One of its key competencies is its great customer service. The resort has a one of a kind customer service. Its able human resources have in them a key aspect of professionalism which empowers them to give excellent customer services. Another of its key competencies is its great design. The design of the rooms in addition to the design of the customer service is aimed at ensuring that the organization has a touch of family, uniqueness and peace, which offers it a competitive advantage over its competitors. The last key competence of the organization is its great human resource management. The organization draws majority of its employees from the local population, hence enabling the organization to fit in the society. It then develops the employees in line with its key objectives which ultimately enables it to attain a competitive advantage (Sessia 2011, p.6). Q6. Do they need to develop any new competencies for the future? It is important for the organization to develop new key competencies in the future. In the wake of the increased use technology, it is important that the organization develops competencies which are aimed at embracing key elements of the digital age. In addition to this, the organization needs to develop cultural competencies owing to the increased globalization. Q7. How would you describe their Business level strategy? The business level strategy of Aman resort is great. The hotel group has been able to develop and maintain a strong brand over time. The hotel group is associated with great customer services which is constituted of peace, family and uniqueness as per with the organisation’s philosophy. This has enabled the resort to deviate from the commercial approach which many players in the hospitality industry have adopted towards a customer experience based approach. With this, Aman has emerged to be one of the major hospitality organisations in Asia and the globe. Q8. Based on the above what direction should Aman take in the next 5 years? Based on his case study, Aman Resorts should establish a strategic plan which aims at integrating information technology and cultural competencies in their operations. As indicated earlier, information technology is playing a major role in the modern society (Sakellaridis & Stiakakis 2011, p.1). The organization must come up with information technology based products and services which realize with the modern market. Such a move would see the installation of wireless internet in its hotels, the development of Aman applications and extensive the use of social media. With respect to social competencies, the resort should realize that it has gone global. For this reason, its operations and management must give a global reflection. For instance, its human resources should be constituted of people who hail from the countries and regions where it gets the majority of its guests from. This will have to be done strategically so as to not compromise on the organizations main objectives. Conclusion In conclusion, this case study has been successful in giving an insight into the Aman Resorts. From the case study, it has come out clearly that an organization should take a careful consideration if the external factors which affect business in its early years of operation. This enables it to streamline its operations in line with its goals. It is also important for an organization to analyze the industry in which it operates in. this enables it to develop competitive strategies which are best suited for the prevailing market conditions. Lastly, it has been seen that it is important for an organization to develop key competencies which give it a competitive advantage in the industry and constantly adjust them in order to stay relevant with changes in the market. References Aman Resorts, 2013. Aman Resorts, Retrieved on 7th May 2013 from http://www.amanresorts.com/ Christou, E., & KarAmandis, I., 1999. Enhancing competitiveness in the hospitality industry: Revisiting Porter's generic competitive strategies in Greece, Tourism Review, Vol. 54, No. 1, pp.42 - 50 Grundy, T., 2006. Rethinking and Reinventing Michael Porters Five Forces Model, Stra Change, Vol. 15, no.1, pp. 214-225 Porter, M., 2008. The Five Competitive Forces That Shape Strategy, Harvard Business Review, Retrieved on 7th May 2013 from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ Sakellaridis, K., & Stiakakis, E., 2011. Business Model Change Due to ICT Integration: An Application to the Entertainment Industry, International Journal of Computer Information Systems and Industrial Management Applications, Vol. 3, no.1, pp. 1-13 Sessia, E., 2011. Aman Resorts, Harvard Business School, pp.1-10 Shaabani, E., Ahmadi, H., & Yazdani, H., 2012. Do Interactions Among Elements Of Knowledge Management Lead To Acquiring Core Competencies?, Business Strategy Series, Vol. 13, no.6, PP. 307- 322 Snyder, A., & Ebeling, H., 1992. Targeting a Company's Real Core Competencies, Journal of Business Strategy, Vol. 13, No.6, pp.26 – 32 Read More