Strategies of Mandarin Oriental Hotel Group Using Five Forces Theory - Essay Example

MOHG Table of Contents External Strategy of Mandarin Oriental Hotel Group using Five Forces Theory 3 Internal Strategy of Mandarin Oriental Hotel Group using Five Forces Theory 5 Reference List 9 External Strategy of Mandarin Oriental Hotel Group using Five Forces Theory Five Forces Theory is generally used by the business managers of different organisations for comprehending its strengths as well as weaknesses in this highly competitive business market. The theory comprises certain imperative factors that can be better understood with the help of the following graphical representation. Source: (Siegemund, 2009) Threat of New Entrants This particular factor affects the organisations in terms of raising extreme pressures particularly in different important aspects like product costs and capital among others (Roy, 2011). In this similar concern, it has been apparently observed that the competition relating to the segment of hotel industry is likely to increase in future that ultimately depicts that Mandarin Oriental Hotel Group (MOHG) would face the difficulty new participants in the industry (Scribd Inc., 2012). By taking into concern this imperative aspect, MOHG effectively develops effective business strategies in the form of external plans. The group emphasises upon advancing its working people as well as enhancing teamwork as a structure of external strategy with the intention of dealing with the aforementioned problem (TMIUS, 2001). Bargaining Power of Suppliers The suppliers’ bargaining power is expected to be moderate in recent day context as the reputed or renowned hotels do not desire to compromise their delivered services with quality (Scribd Inc., 2012). In this regard, MOHG execute the strategy of buying products in bulk quantity from its different suppliers that ultimately supports the group to lessen suppliers’ bargaining power (HKMA, n.d.). Competition amongst Existing Players There have been numerous operators or hotels in the global hospitality industry, which eventually augments huge competition amid the existing market players (Alpen Capital, 2011). In a similar concern, MOHG adopts as well as implements effective business strategies in order to accomplish significant competitive position over its chief business market contenders. The group has been noted to frequently develop its various products or services and most significantly it organises dynamic promotional campaigns of its different services in order to remain competitive in the hospitality industry (HKMA, n.d.). Bargaining Power of Customers The customers possess broad assortment of options that are readily accessible to them due to the introduction of internet as a form of online channels. This particular aspect not only supported the customers to take appropriate choices for their destinations but also enabled them to review as well as compare hotels along with their services by a greater extent. Thus, it can be stated that customers’ bargaining power is quite high in the hotel industry (Alpen Capital, 2011). In this connection, MOHG possesses its own attractive online site for the motive of attracting the customers to visit in its hotels (HKMA, n.d.). Threat of Substitutes Substitutes relating to hotel industry have been viewed to be quite low due to the inclusion of various alternative leisure accommodation forms that encompass recreational vehicles and camping among others. In this case, the switching costs may play a decisive part in generating threat of substitutes in the hotel industry (Alpen Capital, 2011). In this similar context, MOHG has been viewed to be delivering its services in a dynamic form as an effectual strategy so that it can retain its customers by a considerable level (HKMA, n.d.). Internal Strategy of Mandarin Oriental Hotel Group using Five Forces Theory The perception of value chain theory which is also known as value chain analysis is fundamentally regarded as a concept linked with business management. This particular theory or analysis generally depicts the fundamental value-adding activities of a specific organisation. The different activities involved in this analysis can be better explained with the help of the following graphical representation. Source: (Siegemund, 2009) Firm Infrastructure This particular activity is primarily concerned with supporting several important operational functions that comprise quality control along with planning and finance among others (Sekhar, 2009). In this regard, it has been apparently observed that MOHG possess an effective as well as a dynamic team of senior management who holds the accountability to adopt as well as develop the aforementioned operational activities. The focus of the management team in advancing its different key business along with operational areas in various destinations situating worldwide ultimately results in constructing an efficient firm infrastructure (Mandarin Oriental Hotel Group, 2013). Human Resource Management This activity typically deals with advancing, stimulating, recruiting and most significantly rewarding the personnel within a specific organisation. In this connection, it has been viewed that MOHG has remained very committed to becoming the preferred choice for the customers. Relating to this activity, MOHG has been committed to selecting premium hospitality professionals and ensuring that every working member of staff is treated with admiration, politeness and dignity while performing their respective operational functions (Augustin, 2011). Technology Development This activity represents the actions that are generally associated with managing as well as organising information processing and advancing technically related infrastructures within a particular organisation. In this similar context, it has been viewed that MOHG adopts as well as implements Wi-Fi technology for the purpose of serving its guests effectually and most importantly to govern its various administrative and related services. Procurement This particular activity determines the acquired resources for smooth conduct of business. In this regard, MOHG possesses efficient workforce who are mainly tasked with performing different operational functions. The company strongly believed that its entire workforce could be regarded as one of the valuable resources that supported the group to enhance its business reputation to a considerable level. Inbound logistics This activity refers to those particular activities that are involved in receiving as well as storing any sort of material that is externally sourced. In this regard, MOHG is regarded to be one of the foremost hotel groups across the globe. The group has been viewed to perform the functions related to inbound logistics by making effectual manpower planning. Operations The operational activity linked with the analysis of value chain determines the functions that are involved in delivering different products or services to the customers. In this connection, MOHG uses advanced technologies such as Wi-Fi with the intention of enhancing its various operational procedures by a greater degree. Outbound Logistics This aspect considers certain major activities that are linked with the delivery of finished products or services to valuable customers. In this similar context, MOHG handles its customers on taking orders by engaging several dynamic professionals. Marketing & Sales This particular activity is typically concerned with informing the customers or the buyers regarding any specific product or service. In this regard, MOHG greatly uses its own online channels as well as organises effective promotional campaigns for informing the customers about its different products. Service This activity signifies those factors that are mainly linked with preserving the performances of a specific product or service. In this connection, the introduction of service manual designed by MOHG for its customers has been viewed to maintain the performances of its different products or services (Mandarin Oriental Hotel Group, 2013). . Reference List Alpen Capital, 2011. GCC Hospitality Industry. Porters Five Forces Analysis. [Online] Available at: http://www.alpencapital.com/downloads/GCC-Hospitality-Report-13-April-%202011.pdf [Accessed February 26, 2013]. Augustin, A., 2011. Bangkok: O-Zone - An Employees’ Heaven. Hotels. [Online] Available at: http://www.famoushotels.org/article/1229 [Accessed February 26, 2013]. Mandarin Oriental Hotel Group, 2011. 2011 Sustainability Report. Our Commitment To Sustainability. [Online] Available at: http://files.mandarinoriental.com/sustainability/files/inc/50014369.pdf [Accessed February 26, 2013]. HKMA, No Date. Report Summary. Mandarin Oriental Hotel Group. [Online] Available at: http://www.hkma.org.hk/qa/past_winner/summary_pdf/mandarin_oriental.pdf [Accessed March 04, 2013]. Roy, D., 2011. Strategic Foresight and Porters Five Forces: Towards a Synthesis. GRIN Verlag. Scribd Inc., 2012. Porters 5 Forces Analysis for Hotel Industry. Documents. [Online] Available at: http://www.scribd.com/doc/50458203/Porters-5-forces-analysis-for-hotel-industry [Accessed March 04, 2013]. Sekhar, G. V. S., 2009. Business Policy and Strategic Management. I. K. International Pvt Ltd. Siegemund, C., 2009. Blue Ocean Strategy for Small and Mid-sized Companies in Germany: Development of a Consulting Approach. Diplomica Verlag. TMIUS, 2001. Mandarin Oriental Hotel Group. Customer Spotlight. [Online] Available at: http://www.tmius.com/mandarin.HTML [Accessed March 04, 2013]. Read More