A Situation Analysis for Visit Britain - Case Study Example

Marketing Management Table of Contents Situation Analysis 3 Internal Analysis 3 External Analysis 4 Identification of Specific Challenges 6 Evaluation of Current Situation 7 Positioning Strategy 9 Identification and Justification of Selected Strategy 10 Target Audience 11 Market Segmentation 11 Key Aspects of Marketing Mix 12 4Ps of Marketing Mix 12 3Ps of Service Marketing Mix 14 References 16 Appendix 17 Situation Analysis British Tourist Authority is also known as Visit Britain. It is the national tourism agency of Britain. The mission of this agency is to develop potential value of tourist economy of Britain by generating significant revenue. This part of the report will conduct a situation analysis for Visit Britain. Internal Analysis SWOT analysis can be considered in order to conduct an internal analysis for Visit Britain. SWOT Analysis SWOT analysis in an important strategic marketing tool that helps an organisation to determine its internal strengths, weaknesses and external opportunities, threats. Following is the SWOT analysis of Visit Britain (Table 1- Appendix). Strengths It is one of the leading tourism agencies in Britain run by public body and funded by the Culture, Media and Sport Department of Great Britain. This tourism agency effectively promotes Britain and its visitor economy across the world. The agency has succeeded to attract more than its targeted visitors from the world through the development and implementation of effective marketing and promotional strategies (Visit Britain, 2013, p.1). Effective global expansion strategy and availability of skilled employees increased its competitive edge. Weaknesses Lack of employee engagement and low employee motivation can affect its overall business performance. Lack of effective training for employees and too much centralisation is affecting the performance level of employees. The management of this organisation is facing service related issues in new global areas due to lack of orientation. Opportunities The management of the organisation needs to adopt and implement new technological resources in order to develop the potentiality of business practices. Increase in global population and growing demand for these services need to be considered by the management of the organisation in order to attain an effective business growth rate. The organisation should try to develop and implement unique promotional strategies in order to create significant brand awareness among the target customers around the globe. Threats Intense market competition can be considered as major threat factor for Visit Britain. Moreover, global recession, financial crisis and economic crunch can affect the sales growth rate of Visit Britain across the world. External Analysis Five Force analysis model can be considered in order to conduct an external analysis for Visit Britain (Figure 1- Appendix). Five Force Analysis of Porter Five Force Analysis model is an important marketing tool that helps an organisation to determine its industry competitiveness. Following is the Five Force Analysis of Visit Britain. Buyers’ Power It is true that global tourism industry has become highly competitive as several organisations are operating within this specific industry. Moreover, recent economic downturn has affected the buying power of people. Therefore, people are trying to avail or purchase economic priced or cheap tourism services. Therefore, it can be stated that buyers’ bargaining power is high for Visit Britain. Suppliers’ Power The tourism industry of Great Britain avails sufficient number of suppliers. Each and every supplier tries to get tender of leading tourist organisations. Therefore, the suppliers always try to offers and supplies required resources at competitive price to the suppliers (Vanhove, 2012, p.81). Intense competition among the suppliers addresses that suppliers’ bargaining power is quite low for Visit Britain. Threat of Substitutes The presence of substitutes of travel agencies is quite limited in number. Therefore, the management of the travel agencies always do not bother much about the threat of substitutes. Local guides and several private agencies are the major substitute competitors for these publicly7 governed travel agencies. Looking into these aspects, it can be stated that the threat of substitute is quite low for Visit Britain. Threat of New Entrants The organisations within the Britain travel industry have to face several risk factors and challenges due to the developed strict policies by government. It is highly difficult for a newly developed organisation to achieve success immediately as the industry is highly competitive and saturated. New organisations have to face the legal entry barriers while starting off new business venture. In addition to this, high market entry capital can affect the revenue generation and business growth rate of the organisation. It is important for the agencies to have important stakeholders and strong contacts to enhance positive sales growth rate. Therefore, it can be stated that threat of new entrants is quite low for Visit Britain. Industry Rivalry It has been discussed earlier that the Britain travel industry is highly competitive as well as saturated due to the presence of several leading organisations. It is true that Visit Britain is publicly governed travel agency. Therefore, the organisation gets lot of backing from government, suppliers and other stakeholders. But, intense competition from several private travel agencies and global travel management organisations has created several difficulties for the organisation (Ritchie and Crouch, 2003, p.14). In addition to this, this intense competition has taken away some important clients of Visit Britain. Looking into these aspects, it can be stated that the degree of industry rivalry is quite high for Visit Britain. Identification of Specific Challenges It is clear from above internal and external analysis of Visit Britain that the organisation is suffering from several internal and external issues. First of all, it is clear that the organisation is following centralized decision making process in order to control each and every business process. It is actually affecting the morale and motivation level of employees as the employees are failing to share their views and opinions with top level management. Moreover, the organisation has adopted an aggressive business expansion strategy to increase its overall global market share. But, the management is facing service related issues due to lack of market orientation that may affect its future business growth rate. In terms of external issues; intense market competition, high market saturation can affect market share growth rate of Visit Britain. Moreover, inadequate economic environment and recent economic crunch can affect sales growth rate of the organisation due to growing bargaining power of the target customers. These are the real issues that need to be considered by the management of Visit Britain in order to avoid the consequences of these specific issues. Evaluation of Current Situation It is clear from above situation analysis that development and implementation of several unique marketing programmes has increased its client base across the globe. In addition to this, effective support from the government and other external stakeholders motivated the management of organisation to adopt aggressive marketing strategies. However, inadequate market orientation in new operating market and low employee motivation level may affect the future business growth rate of Visit Britain. In addition to this, external environmental issues, such market saturation, market competitive, high barging power of buyers and inadequate economic environment is affecting the sales growth rate Visit Britain. This is the current situation of Visit Britain. Following strategies will help the organisation to overcome these issues. It is true that recent financial crisis and global economic recession affected the economic environment of entire world. Limited disposable income and low purchasing power of common people are the major consequences of this global economic crunch. Each and every individual tries to spend less and save more in order to back their affected purchasing power. Especially, the service industries are highly affected by this economic slowdown as people are only bothering about buy necessary products at economic price level, not extra services. Travel agencies come under the service providing industry as the business growth rate of these organisations highly depends upon the degree of customer services. It is highly essential for the management of Visit Britain to understand these issues quite effectively to develop fruitful strategies. Cost leadership business level strategy needs to be considered by the management of the organisations in order to reduce overall business operation cost. As the organisation comes under service providing industry, it is highly essential for the organisation to improve its service turn-around strategy in order to attract more number of customers towards the brand. Adoption and implementation of cost leadership strategy will help the management of Visit Britain to reduce the unnecessary operational cost. Therefore, the organisation can provide each and every service at a low price level. This cost leadership strategy cannot affect the business profit of the organisation as it will reduce the resource management and other operational cost. Therefore, offering services at economic price level cannot hurt the financial position of the organisation. Most importantly, it will help the organisation to gain potential competitive advantages. It is clear that Britain travel and tourism industry has become highly competitive and saturated. Therefore, offering quality services at competitive price level can help the management of the organisation to secure its competitive edge and global market share. Low employee morale and lack of motivation level of the employees are two major internal challenges for the management of Visit Britain that can hamper the business growth rate of the organisation near future. Therefore, it is the responsibility of the management of the organisation to take care of the individual and professional needs of employees. Transparent performance appraisal can help the organisation to enhance effective performance management process. In addition to this, rewarding the performing employees will boost the morale of employees. Employees can be considered as major business growth drivers for the organisation. Therefore, the management of the organisation will try to motivate employees. Decentralised decision making process and bottom-up communication process will help the employees to share their views and thoughts with the top level management of the organisation. In addition to this, it is also important for the organisation to adopt and implement democratic leadership style in business operation process in order to motivate the employees to do well. Positioning Strategy The organisation should also try to conduct effective primary research in global market places before implementing any kind of market entry strategy. It is true that external environment of a country used to differ from another country. Therefore, effective market research will help the management of Visit Britain to minimise the possibility of occurrence of any error. Effective cost-leadership strategy, decentralised decision making process and adequate market research in several global market places will help the management of the organisation to overcome current ongoing issues. Looking into the growing market demand and economic environment of the globe, it is highly important for the management of the organisation to position the services of Visit Britain as High-Quality but Low-Priced services (Figure 2- Appendix). It will help the organisation to maintain its competitive edge in global market places (Hitt, Ireland and Hoskisson, 2010, p.137). Identification and Justification of Selected Strategy It is clear from above discussion that cost-leadership business level strategy has been adopted for Visit Britain in order to attract the target customers and attain a positive business growth rate. Low per capita income and limited disposable income are the major consequences of recent economic slowdown. People are trying to save more and purchase less due to their affected purchasing power. Travel industry is facing some serious issues since last five or six years due to this inadequate global economic environment. As a result, the organisations within the travel and tourism industry are losing potential target customers and client base. Several organisations are trying to implement unique strategies in order to maintain their competitive edge within the industry. Some organisations are going into price war strategies. But, only price war strategy cannot improve the situation. It is highly important for the organisation to consider the significance of reduction of business operation cost. Cost leadership business level strategy will not only help the organisation to reduce business operation cost, but also will help to offer services at competitive price, which may support the affected purchasing power of common people (Peng, 2013, p.45). Moreover, it will help the organisation to target more consumers towards the brand. It can positively reflect in the sales growth rate of the organisation. It is also true that the organisation is facing internal issues like low employee morale due to too much centralisation process within the organisation. Adoption and implementation of decentralisation process and bottom-up communication process will influence the employees to speak directly with the top level management of the organisation. As a result it will help the organisation to engage the employees in the business operation process, which may increase motivation and performance level of the employees. Target Audience Young adults, poets, artists, tour loving individuals and sports loving individuals are the major target customers of Visit Britain. It is true that Britain is full of several attractive tourist spots. Therefore, it is the responsibility of the management of the organisation to understand the current market demand, characteristics of the target customers and develop marketing strategy based on those characteristics. Great Britain is a cultural place to visit. Film cities, theatres, sports heritages and several natural spots are popular among the global visitors. Moreover, it is true that recent financial downturn and economic recession affected the purchasing power of the people. Therefore, economic pricing strategy will help the organisations to target these groups of customers quite effectively. It is also clear from the situation analysis that the management of the organisation has adopted and implement aggressive global business expansion strategy in order to increase market share growth rate. Therefore, this cost leadership and economic pricing strategy will help the organisation to support the affected income level of global target consumers (Robinson, 2009, p.121). Market Segmentation The management of the organisation should try to segment its target market according to the nature of target customers and market positioning strategy. It is clear that high-quality but low-price market positioning strategy will help the organisation to target people whose economic condition has been affected due to inadequate global economic environment. Therefore, the organisation should try to implement demographic market segmentation through its cost leadership strategy by targeting people of upper-income group and middle-income group. The organisation should also try to take the location advantages. Britain is full of several popular tourist spots and heritages that are main attraction for the tourists. Geographic segmentation will help the management of the organisation to attract regional or domestic target customers quite effectively (Boone and Kurtz, 2011, p.279). People who love to tour are also needed to be targeted by the management of the organisation. Several people used to tour popular spots in order to maintain their status and lifestyle. Looking into these factors in mind, the management of the organisation should also try to implement psychographic market segmentation to enhance business growth rate. Key Aspects of Marketing Mix Marketing mix can be considered as an effective marketing tool that actually helps an organisation to develop effective product, pricing, promotional and distribution strategy based on the nature of target market, types of market segmentation and degree of market positing strategy. Following is the marketing mix of Visit Britain. 4Ps of Marketing Mix This part of the report will propose a marketing mix strategy for Visit Britain based on application and evaluation of proposed marketing strategy. Product Infrastructure and amenities are the major products of Visit Britain that are considered in its business operation process. The management of the organisation should try to maintain its high quality by ensuring effective quality control process. Price Recent financial crisis and economic slowdown has affected the purchasing power of people. Therefore, the low-priced and high-quality market positioning strategy will help the management of the Visit Britain to support the reduced buying power of global consumers. Adoption and implementation of cost leadership strategy will help the organisation to offer quality products and tourism services at economic price level to the target customers. Most importantly, this strategy will help to reduce the overall business operation cost. Therefore, it would not effect in business profit maximisation of the organisation. As a result, the management of the organisation should implement economic pricing strategy for the products and services. Place (Distribution) The management of Visit Britain should try to reduce supply chain lead time by improving turn-around timing. Effective supplier engagement in the logistics and supply chain activities will help the organisation to source products or services and serve customers quite efficiently. Promotion Promotion is an important marketing tool that needs to be considered by the management of the organisation. It is true that the management of Visit Britain has adopted and implemented global expansion strategy. Therefore, unique promotional strategies will help the organisation to create significant brand awareness among the target customers across the globe. The organisation should hire expert promotional agencies in different countries. Moreover, adoption and implementation of social media promotional activities will help the organisation to aware target customers in limited time period. 3Ps of Service Marketing Mix Service marketing mix is important for the service providing organisations to enhance effective customer service. It is true that Travel industry comes under service industry. Following is the service marketing mix of Visit Britain. Process It is true that management of Visit Britain is developing several marketing programmes in order to create significance brand awareness. Apart from these activities, it is highly important for the management of the organisation to improve the structure of business operation process. Visit Britain should try to source advanced technological resources and install effective CRM tool in order to enhance consumer-employee communication process (Faed, 2013, p.2). It will help the organisation to improve its overall business operation process and enhance customer service management process. People Here people can be considered as the employees of the organisation. It is clear from above discussion that low employee morale and limited motivation level of employees due to centralised decision making process affected the performance level of employees. Therefore, it is highly important for the organisation to change communication approach and decision making structure to maintain high performance level of employees and conflict free workplace environment. Decentralisation and bottom-up communication approach should be considered in order to improve employee performance management process. Physical Evidence Physical evidence is highly important for the service providing organisations. The management of the organisation should ensure that same colour, logo and employees’ uniforms are maintained across the globe. Moreover, the infrastructure design and amenities should be similar in each and every unit across the world. Similar physical evidence will help the organisation to increase brand identity. References Boone, L., and Kurtz, D., 2011. Contemporary marketing. Stamford: Cengage Learning. Faed, A., 2013. An intelligent customer complaint management System with application to the transport and logistics industry. New York: Springer. Hitt, M., Ireland, D., and Hoskisson, E. R., 2010. Strategic management. Stamford: Cengage Learning. Peng, M., 2013. Global strategy. Stamford: Cengage Learning. Ritchie, B., and Crouch, G., 2003. The competitive destination. London: CABI. Robinson, P., 2009. Operations management in travel industry. London: CABI. Vanhove, N., 2012. Economics of tourism destinations. London: Routledge. Visit Britain., 2013. Background. [Online]. Available at: http://www.visitbritain.org/marketing/marketingprogramme.aspx. [Accessed on August 11, 2014]. Appendix Table 1: SWOT Analysis Strengths Government support and renowned brand name. Skilled Employees and successful global expansion strategy. Effective marketing strategy and strong external stakeholders’ support. Weaknesses Low employee motivation and employee morale. Service issues in new global market places. Opportunities Advanced technological development and growth in market demand. Effective and advanced promotional practices to enhance brand awareness. Threats Intense market competition and high market saturation. Inadequate global economic environment. Figure 1: Porter’s Five Force Analysis Figure 2: Perceptual Positioning Map Read More