Strategic Alignment - Assignment Example

Strategic Alignment: Mandarin Oriental Mandarin Oriental Hotel Group is an international management and investment group. This group has deluxe and first-class hotels, residences, and resorts. The group has 41 hotels in 25 countries. Mandarin Oriental plans to invest in Hong Kong in its branded residence project. The project starts in 2013 and the group slates to finish the project in 2015 (Group Communication 1). Investing in branded residence is a competitive method for the Mandarin Orientals to get an upper hand in the profitable luxury business in Hong Kong.

Hong Kong has been a major strategic location for the Mandarin Oriental. Hong Kong is the heart of for the group with three properties in this city. These include the Landmark, Excelsior, and Mandarin Oriental. These properties have registered a greater performance despite the competition in the hotel segment in Hong Kong. Landmark, Excelsior, and Mandarin Oriental generate 38 percent of the total revenues of the group. Mandarin Oriental performs best and utilizes well the market space in Hong Kong contributing an approximate of 15 US dollars per square meter.

The group has witnessed a heavy growth of visitors from the mainland China to Hong Kong. In the year 2011, China attracted about 28 million of visitors to Hong Kong. Mainland China recorded 28,100,129 in 2011 and 22,684,388 in the year 2010 (Group Communication 2). It was 67 percent of the total clients of the Mandarin Oriental. Relaxation for individual Visa Scheme in China to people visiting Hong Kong will benefit Mandarin Oriental in its ambitious project of investing in branded residences.

This is the principal value driver, which will support Mandarin Oriental competitive method in the hotel industry in Hong Kong. The competitive method capitalizes on the growth of tourism industry in Hong Kong. Tourism industry contributed to growth of Hong Kong GDP by 15.2 percent. There are projections that GDP in Hong Kong will increase by 2.4 percent in 2012. The rate of visitors’ expenditure is favorable for this future and ambitious project of Mandarin Oriental. In 2011, the visitors’ spending was 6,094 US dollars.

This was approximately 21 percent increase of the record of 2007 (Group Communication 1). This consistent growth in tourism expenditure will be an advantageous to Mandarin Oriental in Hong Kong.Currently, the Mandarin Oriental uses creative marketing strategy that lays a lot of emphasis on the strengths of the group. The marketing plan addresses a comprehensive set of factors that influence the marketing for the hotel. Sound market research directs the senior management of the group to make prudent decisions for the success of the Mandarin Oriental.

Mandarin Oriental group forecasts that in it will have the following number of rooms; 62830 in 2012, 68172 in 2013, 72436 in 2014, 72508 in 2014, and 72628 in 2016. The average prices of houses per square meter in Hong Kong are ranges between 28,300 and 47,500. Mandarin Oriental believes that investing in branded residences will give big returns and strengthen their competitive position (Group Communication 1).Hotel industry of Hong Kong registers a steady and tremendous growth. Luxury industry holds a share of about 24 percent.

The competiveness method of Mandarin Oriental to invest in branded residences seeks to leap benefits out of this large hospitality industry. Mandarin Oriental seeks to utilize the Wealth Report of 2012 and purchasing patterns of HNWIs. HNWIs high demand for houses drives the future project of Mandarin Oriental to venture into branded residences. HNWIs places Hong Kong second in the least of top nations of prime second homebuyers. Therefore, HNWIs directs Mandarin Oriental plans to secure premium locations where the branded residences can get enough customers.

The group intends to place the branded luxuries next to the existing hotels. High purchasing power of Hong Kong residents and the action of United States to decrease the risk of Hong Kong Dollar presents a the city as a favorable destination of investors (Group Communication 1). Mandarin Oriental aim to invest in Hong Kong is to amass profits and recognition as the best group of luxury hotels providing oriental charm in each of its services. The competitive method to select the untapped opportunities to expand their services around the world is a prudent one.

This future project responds to lower occupancy and room numbers. Investment of Mandarin Oriental in branded residences in Hong Kong will ensure continued success of the group.Work CitedGroup Communication. Mandarin Oriental Announces Luxury Residences And Apartments In Macau. Web. 30 May 2012 http://www.mandarinoriental.com/about_mo/media/press_releases/development/macau_res_apt.aspx.