What Are the Main Factors That Have Contributed to Banyan Trees Success - Essay Example

What are the main factors that have contributed to Banyan Tree's success? Banyan tree owes its success to many different factors – the fact that it is socially responsible, and they emphasize this to the guests by getting them involved in their socially responsible activities. The fact that they are heavily invested in the local community, which means that, instead of being a nuisance to the natives, they will be considered to be an asset to them. Their amenities are luxurious, creative and well researched. Their marketing plan emphasizes marketing to high-end clientele. That said, these factors are important, but the main factor which contributes to Banyan Tree's success is the way that they treat their employees. Banyan Tree allows its employees to vary service delivery according to the local customs and practices, and this gives the employees investment and ownership in the company. The same goes for the fact that employees are able to be creative with bed decoration. Staff welfare is paramount to the company – they provide luxurious amenities, as well as prosaic, but necessary, amenities, such as child care facilities. Therefore, the employees have ownership, in that they really care about the facilities. This fits in with the concept of shared vision. A shared vision is one in which the leader, and all the followers, have the same vision for the company. Every person cares about this vision, and everybody has the desire to carry out this vision. Every member of the organization has the same vision, therefore will be truly committed to make the vision happen (Senge, 1990, p. 206). What Banyan Tree is doing right is that it has created the shared vision by acknowledging the strengths of the employees. This acknowledgment of each individual member is a powerful factor in creating a shared vision. Having a shared vision enables the employees to know that they own a piece of this vision, and that they are a part of the vision (Senge, 1990, p. 212). This probably the most important aspect of Banyan Tree's success. Other resorts may have the same luxury amenities, and other resorts might have the same marketing strategy. However, when a resort gets every employee to commit to the vision of the resort, and every employee works hard to carry out the resort's vision, then this is what makes the resort truly special. After all, a resort with all the amenities possible, but a disengaged and disinterested staff will ruin this resort. 2. Can Banyan Tree maintain its unique positioning in an increasingly overcrowded resort market? The communication strategy and brand positioning for the company focuses around high end clientele. They offer luxurious amenities, such as private pools, jacuzzi and spa treatment rooms. Their villas are individualized to the clientele. Their accommodations are private and intimate, which sets them apart from their rivals, who do not offer the same accommodations. Moreover, they are unique in that they emphasize their environmentally friendly designs. They are socially responsible in everything they do, from procurement to hiring natives for their positions. As for their marketing, they advertise in high-end travel magazines and cultivated relationships with travel editors and writers. They have also chosen to work with only agents which specialize in high-end travel arrangement with wealthy customers. Banyan Tree can maintain its brand and its positioning, because they are apparently the only resort which has the amenities which are offered there. For instance, they have total privacy for their guests. Guests may skinny dip in their private pool and hot tubs if they want to, because it is totally private and secluded. They emphasize this in their marketing materials, so this is a big plus and it sets them apart from their competitors. Wirtz (2009) states that the competitors in the market, Hilton and Shangri-La, do not offer the same privacy that Banyan offers. Moreover, as indicated in other areas of this essay, Banyan is unique in that it gives ownership to its employees, in that it allows employees creativity and treats them very well, and the environmental aspects of the Banyan Tree operation are also a big draw to consumers who want to support businesses which share their values. Because of these unique aspects of the Banyan Tree experience, they will continue to experience growth, if they keep marketing the unique aspects of their resort in a careful manner. 3. Do Angsana, Colours of Angsana, and Allamanda fit as a family, and how should Banyan Tree manage these brands and products in the future? 4. These new brands fit into the family, particularly the Museum Shop by Banyan Tree. This museum shop is designed to educate and inspire shoppers. The reason why this Museum Shop fits in to the Banyan Tree family so well is that the Banyan Tree makes it a point to emphasize local – local employees, local resources, etc. Moreover, they encourage their clientele to get involved by organizing activities such as taking part in coral transplantation programs and marine biology sessions. Banyan Tree is also focused upon giving back to the community, in the form of education and conservations efforts. Instituting a museum would be an extension of the holistic approach taken by the resort – they involve the guests, they involve the community, and they give a history of the community to the guests. This benefits the guests, in that they are probably curious about the community, after finding out through the Banyan efforts about the community and the locality, and it helps the locals, in that people are enlightened about their culture. 5. The other brands, such as Angsana, Colours of Angsana and Allamanda do not fit as well into the brand family, in that they are focused upon lower end clientele. That said, they can still be effective as long as they are run properly and professionally and still provide amenities. Banyan Tree should manage these in the future by ensuring that the employees of these branches of the resort are properly managed, that the employees have the same vision that Banyan Tree has, so that the employees of these other branches are just as invested as the Banyan Tree employees, and that the amenities are always in good repair. There must not be anything that occurs in these other branches which might besmirch the Banyan Tree name. This is the most important aspect. If they are properly managed, then they may be positioned as a lower priced alternative to Banyan Tree. This would be good for the brand name of the other branches, to be associated with a resort as well-regarded as Banyan Tree, and it would also be helpful to Banyan Tree, as it will attract a different set of clientele, therefore expanding their base. What Effect Does the Practice of Corporate Social Responsibility Have on Brand Equity? Corporate social responsibility is important to today's world. In the case of Banyan Tree, the corporation is becoming known for their “socially responsible business values and practices caring for the social and natural environments” (Wirtz, 2009, p. 438). Specifically, they build with local materials, and cut down as few trees as possible from their local rainforest. They obtain their water through the process of desalination, which is a more ecologically friendly method of procuring water. All their toiletries are biodegradable and non-toxic. They also use eco-friendly and recycled materials, and recycle their refuse. They are also socially responsible in that they are providing employment for indigenous peoples by highlighting, in their Banyan Tree Gallery, crafts which are procured by local artisans. Community outreach to these native peoples is another part of the Banyan Tree socially responsible strategy (Wirtz, 2009, p. 442). Whether Banyan Tree's efforts to be socially responsible will bear fruit is a matter of controversy. There is no indication that Banyan Tree uses their socially responsible practices as part of their marketing campaign. If they are not actively promoting their social responsibility, they should, because research shows that marketing socially responsible practices is effective (Morsing, 2003, p. 146). In this case, Banyan Tree can emphasize their social responsible practices, and this will let their potential guests know that Banyan Tree cares about the environment and about the plight of indigenous peoples. If the potential guests share these same values, this will make Banyan Tree more attractive, knowing that, by giving their money to Banyan Tree, they are promoting a cause to which they believe (Howard & Allen, 2006, p. 439). This is called cause related marketing (Bronn&Vrioni, 2001, p. 207). That said, there is some limits to marketing campaigns such as this. Banyan Tree must make sure that they are consistent with their stated policies regarding the environment and the community. Maignanet et al. (2005) states that socially responsible marketing campaigns are only effective when the campaigns are consistent with the company's actual values (Maignanet al., 2005, p. 967). If this is not the case – say, Banyan Tree exploits the indigenous employees by paying them low wages- then the campaign will backfire, and the public will become cynical about the brand and assume that the socially responsible marketing is self-serving, not public serving (Becker-Olsen & Hill, 2006). There is also a limit to the amount of goodwill corporate social responsibility actually engenders. One study found that the paramount concern is with quality and value. Luo& Bhattacharya (2006) further found that corporate social responsibility initiatives did positively influence consumers, but only if the customer was satisfied with the product as well (Luo& Bhattacharya, 2006, p. 14). If these variables of quality and value are missing, cause related marketing can only go so far (Li & Tang, 2010, p. 27). Moreover, Belk et al. (2005) indicates that positives about a company are not as powerful as negatives (Belk et al., 2005). This means that, if Banyan Tree emphasizes its positives in terms of socially responsible practices, this is not as important to potential guests as negatives. Negative publicity will hurt more than positive marketing will help. Therefore, Banyan Tree must make sure that it does not generate negative publicity about anything with which it is associated. What potential problems do you foresee in bringing Banyan Tree to America, Europe and the Middle East? How could Banyan Tree address those issues? The major issues will be cultural and issues regarding PEST analysis and Porter's Five Forces. A PEST analysis takes the political, environmental, social and technical climate into account of each country (Mellahi, 2005, p. 33). These may be general factors, which means that they affect the country as a whole, or specific, which means that they only affect the firm's particular industry presented by the country’s culture. Political means aspects such as regulation, political risk and legislation. Economic means such aspects as currency exchange, the cost of capital, and, in the case of Banyan Tree, the costs of raw materials which will be necessary to build their resorts. Social means culture, social changes and global convergence. “T” stands for technology, and this would include the availability of the Internet and the threat of computer viruses (Mellahi, 2005, pp. 37-49). Porter's Five Forces is the other analysis, and these five forces deal with the threat of rivals, by examining how intense rivalry/competition is in these countries; by examining how difficult it would be for new rivals to enter the countries; and what the threat is that these rivals can supply substitutes for the product in question. Further, Porter’s Five Forces looks at the power of buyers verses the power of suppliers, in that either the buyer or the supplier would have more power in a particular country, and, obviously, the countries that afford more supplier power to entrants into the countries would be more advantageous to these new entrants. (Ungson & Wong, 2008, p. 59). Culture is another potential barrier. The cultural differences are those between the corporation and the local clientele (Copeland & Griggs, 1985, p. 52). There are six different cultural dimensions, and they are 1) how society sees the nature of its people; 2) how society sees the relationship between its people and nature; 3) how society sees the relationship between people; 4) do the people accept the status quo in society, or do they concentrate on making things better?; 5) how does the society conceptualize space, such as personal space and whether meetings are held in public or private? And 6) how does the society conceptualize time, and is it oriented towards the past, the present or the future (Carroll & Gannon, 1997, p. 39). So, for instance, in the Middle East, Banyan Tree might have problems because of the culture and religion. The countries in the Middle East are Muslim, and Banyan Tree is in Asia. Therefore, the executives of Banyan Tree might not be aware of the customs – Muslim holidays are observed, and the Muslim work week is strictly adhered to (Stanat, 1998, p. 290). Other protocol that must be observed is to not use one's left hand for dining, passing documents or greeting; never allow the sole of one's shoe to be exposed to someone, as when sitting; avoid touching the head of anybody, even small children; do not drink alcohol or eat pork; always respect the religion. (Stanat, 1998, pp. 292-293). These are examples of some problems that they might encounter in the Middle East – America and Europe will also have similar problems posed by cultural distance, as these are both Western countries, with diffirent cultures and religions then Banyan Tree, which is located in an Eastern country. Culture and customs are a matter of informal distance, and Banyan Tree should partner with a local firm with the knowledge about the culture and customs of the country. Informal distance refers to cultural distance which cannot be circumvented simply by reading and studying the country – one must live in the country to truly know the culture (Estrin et al., 2007, p. 4). This local firm can contact local suppliers, authorities and distributors and help create legitimacy for the foreign company. On the other hand, formal aspects of institutional distance, such as regulations and legalities are often transparent, so it is just a matter of studying regulations and legalities, can be understood by the entering firm, because these and reading. (Estrin et al., 2007, p. 4). However, formal distance may also provide a hurdle because the business practices of the entering firm may be inhibited to a certain degree by local laws and regulations (Estrin et al., 2007, p. 12). Bibliography Belk, R., Devinney, T. &Eckhardt, G. (2005) “Consumer Ethics Across Cultures” Available at: http://escholarship.org/uc/item/08h9j3f4#page-1 Maignan, I., Ferrell, O.C., Ferrell, L. (2005) “A Stakeholder Model for Implementing Corporate Social Responsibility in Marketing” European Journal of Marketing 39.9/10: 956-977. Mellahi, K., Frynas, J.G. & Finlay, P. 2005, Global Strategic Management, Oxford University Press, Oxford. Morsing, M. (2003) “Conspicuous Responsibility” Available at: http://www.kommunikationsforum.dk/Log/morsing.pdf Howard, P. & Allen, P. (2006) “Beyond Organic” International Journal of Consumer Studies 30.5: 439-451. Li, S. & Tang, Z. (2010) “Understanding Green Marketing With Marketing Mix – The Case of the Body Shop” Available at: http://hig.diva-portal.org/smash/get/diva2:373861/FULLTEXT01. Luo, X. &Bhattacharyra, C. (2006) “Corporate Social Responsibility, Customer Satisfaction & Market Value” Journal of Marketing 70: 1-18. Bronn, P. &Vrioni, A. (2001) “Corporate Social Responsibility and Cause-Related Marketing: An Overview” International Journal of Advertising 20: 207-222. Ungson, G. & Wong, Y. 2008, Global Strategic Management, M.E. Sharpe, London. Copeland, Lennie & Lewis Griggs (1985) Going International: How to Make Friends and Deal Effectively in the Global Marketplace. New York: Random House. Carroll, Stephen & Gannon, Martin (1997). Ethical Dimensions of International Management. London: Sage Publications. Estrin, S., Ionascu, D. & Meyer, K. (2007). Formal and informal institutional distance, and international entry strategies. Retrieved from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=665110 Read More