Strategic Management in Tourism and Hospitality - HIFI China's SWOT Analysis - Case Study Example

SWOT ANALYSIS FOR HIFI CHINA HIFI China travel agency Student Name： Student ID： Introduction HIFI China is a very famous Chinese travel agency in Melbourne. I was among the founders of the company. We can provide full range of multi-functional tourism service of international of Chinese travel agency. HIFI China main business and service including tourism, cultural exchanges, booking tickets, visa and business advisory services. The company has professional staff and our employees can provide one to one service and help Chinese tourism solve the problem of tourism in Melbourne. In the case of our travel agency business, our primary market is actually Chinese tourists who travel to China, Tai Wan, Hong Kong or international countries from all over the world. Our secondary market is local Chinese. Our target customer base is the middle-class consumers who are aged between 15-60 and study or live in Melbourne, such as overseas student, Chinese-Australian and migrant worker. Planning process The planning process consists of a number of stages. First, the organization staff develops a product line and a sales plan, and then sends the information to each sales personnel. Then sales staff can introduce tourist information to visitors according to our product line. If there are some visitors who make some personalized travel requirements, the planning department staff will assist sales staff to identify customer needs. Then, the sales staff can sign the travel contract with customer. After the completion of sales, sales staff needs to do sales records. Finally, financial department staff will provide a receipt for visitors and complete the service process. Goals HIFI China is a young tourist company that hopes to make great achievements in ten years. A few years after its establishment, HIFI China has integrated with the world's highest tourist information, in line with the international most advanced service standards. In ten years, we hope to become the largest Chinese Australia tourism company. The main purpose or the mission for the Travel Agency in Australia is to develop, support and strengthen their relationship with customers. The company focuses on the provision of efficient and effective solutions to their esteem customers. This mission statement is very essential to Travel Agency because it increases the chances of success through diligent planning and describing the basic goals of the company. Currently, HIFI China provides services to Chinese in Melbourne's tourism business. After a few years, the company hopes to develop more services and tourist routes. In the aspect of ticket booking service, we hope that focus on providing package tours around the world as well as provide to guests with the most favored travel service in the future. In the next few years, HIFI China also expects to develop more product lines, such as hotel booking and business meetings. We also have the ability through cooperation and other travel agencies, to provide a full Australian tourism services for tourists. HIFI China will provide the whole Australian tourism route, Chinese tour guide and premium services like the limousine service for each one who comes to Australian for the purpose of touring the country. Business structure Each department in the above chart has tasks and responsibilities which they perform in order to achieve Travel Agency Company’s objectives and goals. This simple structure is very suitable for our small travel agency. The structure can ensure that our employees understand the goal and that they are clear, smooth communication is enhanced and stability is assured. SWOT analysis The organization environmental consists of the political, economical, Socio- cultural, technological, and environmental and the legal environment each has its strengths and weaknesses that occur from within and also has its opportunities and threats that are forces from the external environment of the organization. It is upon HIFI China to identify the strengths and opportunities in every environment within the organization and work towards suppressing the weaknesses and threats that are in the organization to ensure that they improve the performance and profitability and also increase on the size of their market. SWOT analysis is a strategy in the management that was developed by Albert Humphrey in the late 1960’s. SWOT analysis was structured for the purposes of management planning. The structure is used to evaluate the strengths, weaknesses, threats and opportunities that a business faces in its daily activities (Nadine & Anne, 2009, p. 1). The strengths and weaknesses of the business have internal origin while the threats and opportunities have an external origin. The strengths of a business are characteristically the advantages that a business has over others that make it more profitable. Weaknesses refer to the characteristics that make a business to lose its advantages over the other businesses. The SWOT analysis would provide the management of HIFI China travel agency with the best ways that they can respond to the external forces exerting pressure on the business. It therefore provides the management team of HIFI China travel agency with the necessary required tools to assist them in the planning process. SWOT analysis identifies new options for the business such that it gives the business a variety of options to choose. Such include the probability of exploring new markets for the company and new distribution routes for the sale of HIFI China products. Thus, having adopted the best option provided by the SWOT analysis, HIFI China can improve in terms of profitability and even expand into new markets (Graeme Drummond, 2007, p. 140). Threats are the troubles that face HIFI China that the need to be addressed; otherwise the company will lose its value and there will be a reduction in the revenue collection. Identifying the problems and finding solutions to such problems help the companies to retain their competitive advantage. SWOT table Strengths Weaknesses Wide range of services: HIFI China provides its consumers with a wide range of services ranging from tour and travel tourism, cultural exchanges, booking tickets and visa and business advisory services. The company also provides planning services to its consumers on request of the consumers to ensure that the consumers enjoy their stay from the time they arrive until their departure. High labor costs: HIFI China has been spending a substantial size of their earning to pay their workers. Australia is one of the countries that possess the greatest manpower and skills thus making the cost of labor to be high [Anj09]. Many distribution channels: HIFI China has a variety of channels that it uses to serve its consumers. When it comes to travelling, the consumers are allowed to travel using any means as they deem fit for them. The agency also cooperates with a number of hotels to accommodate their consumers easily. Few years of experience: HIFI China has been established recently and thus its operations have not set root in the country. Although the organization has employed experienced employees, it has not yet received proper recognition from the consumer, both the local and the foreign consumers. HIFI China thus has to innovate new means to improve on its goodwill to enjoy the loyalty of its consumers [MdR13]. Improved consumer service: HIFI China have launched a digital program to serve customers and obtain their feedback and have expanded the personal shopping program online. Lack of platform customers to provide their feedback. HIFI China has not been keen to provide a platform for consumers to air their views, opinions and dissatisfactions of the consumers that they have served before. Unique and quality services: The wide variety of services by HIFI China makes the corporation unique as it is hard to find many varieties of services under the same roof [Bes09]. Poor employee training activities. HIFI China has not been keen to promote employee training activities thus the quality of services offered by the employees do not meet the high expected standards. Loyalty programs: HIFI China has created a platform to promote swift communications between the company and the consumers of the services. It enhances growth of services that are already in existence and promote the innovation of new services and promotes customer loyalty Opportunities Threats Service development: The services that HIFI China provides for the consumers could be improved upon to improve the quality of services that they offer. They could also develop new services to complement those that are already in existence to help improve on the corporation’s performance. Lack of innovation: Guangxi Yunde International Travel Agency Ltd is a major rival of HIFI China. It has improved its operations since they have promoted innovation activities in their departmental offices. HIFI China has been reluctant to promote innovation in their services and markets. Market development: Most of HIFI China stores only operate in a few cities in the country thus leaving other cities without the corporation’s activities. Market development could be a vital opportunity for the corporation as it could help the corporation create new offices in the northern and western territory of Australia. Competition: HIFI China has increasingly been facing competition from companies within Australia like Australian federation of travel agents, STA travel Subiaco and pan Australia Travel. It is a major threat as the competitors have been establishing new offices around Australia and thus the market size of HIFI China has been decreasing as they share the splits with the other competitors [DrT10]. Consumer wants: listening to the consumers’ requirements and wants could help improve the corporation’s performance and, as a result, lead to the increase of sales and sales revenue of the company’s services [Bes09]. Regulations by the authorities: Government tariffs and other related regulations are a threat to HIFI China as they continuously record lower profits after tax where the tariffs are increased towards the services that they offer. Optimizing the office network: HIFI China managers should plan and ensure that the actions that they take towards improving on the corporation’s performance are profitable to the corporation both in the long term and short term [Bes09]. Technology: technology changes on a daily basis and maintain the most advanced technology could be expensive to the consumers, and thus the technology possessed by HIFI China could make it not provide the best quality services to the consumers Research and development: HIFI China should encourage research and development to ensure that the services that they offer to the market are of the best quality and that they are better than those of the competitor companies. Presence of online company retailers: HIFI China operations are mostly on the ground. The presence of online operators with the same products as those of HIFI China has been a threat to the corporation’s performance as such operators command a great size of market size in the Australian economy. Target market: the primary market for HIFI China is actually the tourists who come to the country from China. However, the company also encourages other tourists and consumers from other countries to use their services. Other consumers that are targeted by the company include the students and business people. Such a market is unique as no other agency company offers the same type of services in the country. Findings: Explanation of the SWOT table Findings from the SWOT table have shown that although HIFI China is a newly established agency that operates in a country that is populated by many agency companies, the unique services provided by the company would easily allow them to grow and become market leaders. Currently, the organization is a market follower but if the managerial staff would improve through the means provided by the analysis, they would easily turn the organization into market leaders. The SWOT table has identified that it is possible for HIFI China to turn its weaknesses into strengths and opportunities and reduce their threats they receive from the external environment or turn them into opportunities to improve on the company’s performance and profitability [Nad09]. Although HIFI China has on been in the market for a few years as compared to their competitors, they have already established a wide range of services that they offer their consumers. Similarly, the services offered by HIFI China are unique to their consumers. HIFI China has achieved this through their continuous support to innovation by promoting continuous research and development in the service delivery process. Improvements should also be ensured in the sale and after sale service that are provided by HIFI China in their routine activities. In sale and after sale services like discounts, promotions and advertisements are vital to the company as they provide the consumers with assurance of the services of the company thus winning their loyalty. Improved consumer service among other strengths that the company enjoys will aid them to enhance their financial performance through growth. The company has been keen to respond to the different unique preferences that the consumers loyal to the organization pose to them. The consumers will in most cases be concerned of about the quality of services that the organization renders as well as security of arriving at their destinations safely. The organization with the best combination of such consumer wants and preferences is most likely going to win their loyalty. In order to keep the consumers loyal to the organization, the company should encourage innovation to establish new services to encourage the consumer to come back for more. The table also identifies major weaknesses and threats that the company faces that undermine their performance. Through proper management, the organization should ensure that they continuously work on the threats and weaknesses of the company towards eradicating them totally and ensure minimal threats and weaknesses from both the internal and external environment [MdR13]. Recommendations HIFI China should increase their number of office outlets to different cities in Australia as well as in other countries. The introduction of new offices in the different countries will ensure that the organization is able to reach more consumers easily as the consumers are able to interact with the organization freely thus improving their market base. The welfare of the customers should be considered as they determine the performance of the organization. HIFI China should, therefore, ensure they offer quality goods to consumers and later on offer after sale services to ensure consumer satisfaction is achieved. The pricing and quality of products mainly interests the customers. Utility consumers would want to have the best quality products at the lowest possible prices. Conclusion Over the years, competition has enabled the fittest companies to survive the murky waters of the dynamic business World. What keeps companies going is their competitiveness rather than their sales. A company may have higher sales revenues in the short run but if it fails to remain competitive, it is bound to be overtaken by its competitors. As companies are embroiled in cutthroat competition, new methods emerge in the business practice. New production processes also emerge as the companies try to reduce their costs of production while innovation changes each time a market player introduces new technology. As companies try to outdo each other, the biggest winner amidst these is a consumer as he benefits from higher quality products with improved functionality and better technology than ever before. The adoption of the SWOT analysis by HIFI china in its operations could help the company to continue being competitive in the market as well as increase their market share for both the long term and short term profitability of the company. REFERENCES Anj09: , (Anja, 2009), MdR13: , (Hassan, 2013), Bes09: , (Bessant & Tidd, 2009), DrT10: , (Nguyaen, 2010), Nad09: , (Nadine & Anne, 2009), Read More