The Participation of Australia in the US Market - Case Study Example

Title: Name: Institution: Course: Tutor: Date: Recommendations on the business environment Peng (2008) says that, in order for the hospitality industry to continue doing well then the business environment should be favourable. This will not only contribute to the growth of the organization but will also promote investment in this industry. The US should ensure political stability to sustain Australia’s participation in its market. Political stability in a state will promote forign participation in the market which will in turn boost the perfomance of the economy. It is also important that the goverment ensures that they only adopt changes that are favourable for the business to operate. The participation of Australia in the Us market is highly dependent on the policies that the govrnment adopts in relation to foreing investors in the industry. The industry is dependent on the government to promote a strong political business environment for it to prform well. The industry needs to reduce its cost of operation by making maximum use of technology to reduce the labour applied. An updated technological environment in Us will facilitate effective use of resources. It will also ensure quality services that will be competitive in the Us Market. This will promote efficiency in the industry. The industry can consider intergrating its processes to the modern technology so that Australia gains competitive advantage over the other participants in the US hospitality market. These will also ensure that the organization has systems that promote proper record keeping and thus analysing the performance of the industry will be effective. Through the technological advancements implemented the industry can consider renewal of its production and marketing techniques (Cantwell 2009). Through her entry in the US market Australia should ensure that the service and products it offers cater for the needs of the individual families in the market. Thus when analysing the market Australia should be keen on ensuring that it has consideration for the different consumers. Rose-Ackerman & Tobin (2005) asserts that when providing the hospitality services Australia should ensure that it can cater for the different religions, institutions and familystructures.These can be effected through a variety og goods and services and ensuring that the staff have the right skills to deal with these range of customers.The industry also neeed to have a good understanding of the international culture that is in operation in the industry. This will help in increasing the profitability of the organization since it will be global sensitive in the provision of its goods and services. Dahlsrud (2008) asserts that, the US government can put in place strategies to ensure that Australia the hospitality industry does not face economic challenges that will hinder its performance. The government should ensure stablity of interest rates so that there is no inflation in the economy. The targeted market in US majorly the connsumers in the country, the government should therefore ensure equal distribution of income through the tax system so that the market too can be evenly distributed. Australia should also be keen to understand the trends in the US hospitality market so that they can have in place strategies to adopt well in each cycle in the economy. Australian investors should also understand the prevailing inflation rate so that the can well plan for the lvel of supply as well as predict the level of demand.The geovernment should also set taxes that promote the Australian investors to participate in the US market. According to Rose-Ackerman & Tobin (2005) the Australian investors should also aquint themselves with the existing legal frameworks to control production and foreing investment in US. The government should make it clear to Australian investors on the required production standard so that consumer satisfaction is achieved. The legal environment under which Australia is going to operate should be well defined so that there is no ambiguity or conflict of interest among the two countries. Australia should understand all production activities that are not allowed in the country as well as the requirements in place for consumer satisfaction. The performance of Australia in US hospitality industry is dependent on how well they manage these external environment in which they operate. Challenges affecting the global market As Gretzel et al (2006) points out that, there are challenges in the global market that will affect this industry.One of the challenges is the constantly changing consumer tastes and preferences. This will affect the US ohospitality industry and will have to constantly improve their production to meet the customers needs. Technological advancement is happening so rapididly such that industries have to keep advancing their technology to be up to date. This is a challenge to the industry since they have to keep updating their production techniques. There is increasing foreign participation in the US hospitality market which is a challenge to Australia which has to deal with increasing competition. Emerging threats and opportunities There are some emerging opportunities and threats that are affecting the hospitality industry. The opportunities provide channels for increasing business levels while the treats threaten the operations of businesses in hospitality industry. Opportunities Internet Kaplan & Haenlein (2010) explain that the wealth of content which is user – generated in social media, CRM notes, emails and surveys are being created on a daily basis about companies, services and competition. Interestingly, this information is underutilized by firms in hospitality industry and nearly untapped, it is a valuable asset that these firms to take advantage of. The presence of solutions provided by advanced text analytics, Australia firms can conduct deep analytics and consequently use the insights to make business decisions, formulate competitive strategies and deliver proactive services to customers. To unlock these assets of information, as (Xiang & Gretzel, 2010) points out, Australian firms need to understand language (the ability to pull out sentiments accurately, key issues and relationships) and have the ability to express the insights in easy to use business applications. The social media should not be used only to make sales but also for adding value of brand and engaging potential and current customers. It offers an opportunity to serve by offering distinguished services to the customers directly and in return the customers have the opportunity to tell the world of the great experiences they had. Another emerging opportunity is mobile access in hospitality industry. Brand is another important issue that Australian firms should focus on cementing in US hospitality market. Sustainability is becoming a defining issue in the industry. Increasing scarce resources and rising populations provide an environment for sustainability and therefore should be entrenched within the facets of firms in this industry. Threats There is a big shortage of professionals in this industry. (Chan & Wong, 2006) outline that serious questions are being raised on the skills and experience of personnel to meet with the increasing demand in labour intensive sector, there is lack of training on man power. Moreover, there is emergence of substitute service providers rivaling the hotels such as guest houses; this is a growing trend in US. The economic conditions in US are harsh; they have direct impact on the revenues earned by hotels in hospitality industry, this has been deteriorated by the recent global financial crisis. This has pushed the costs of labour very high thereby adding more complications. The Australian firms should be aware of these threats and prepare adequately before venturing in the markets. Security threat is another major concern in the US market; this is as a result of terrorist attacks of September 11th 2001. Customers therefore have security and safety issues, (Goodrich, 2002) Managerial recommendations Based on the analysis in part one, the Australian investments in the US should ensure that they have a financial back up from Australia when venturing in the US hospitality market. As one of the objectives is to examine the trend of profitability in the hospitality industry, the Australian firms should understand that they are venturing in an already developed market and therefore should not expect to make profits instantly, it is for this reason that they should ensure that they have financial back up for sustaining them before they establish themselves fully in the US market, (Rimmington et al., 2012). The efficiency and effectiveness of strategies deployed, complexity of organizational inputs and resources and the employees will determine the success of the ventures. In this regard, the Australian investments should focus to deploy experienced employees and frequently train them. They are a core part of business; their effectiveness should be improved by refining their skills and expertise. Managers should focus on building brand awareness for their organisations. Before providing customers with impeccable services, they need to know and get information about the organization. Applying different ways to reach them is very important as well. Building brand awareness will in turn build trust among customers in the brand and consequently an urge to come and stay in future. The manager should be purposeful and realistic in the market as success is not guaranteed even in the strongest of markets. They need to have systematic approaches and put in place smart strategies in order to flourish; the conversion techniques of sales must be refined as well. Management of talent is crucial in provision of world class services. To avoid turnover of personnel, nurturing them will increase their expertise on customer service. This would also curb turn over that is currently plaguing the industry in US. There needs to be robust strategic plans for employee retention and development. Crisis management is a managerial function that should be planned adequately. Managers should put in place mitigating measures and responses, contingency plans, protocols and risk management programs for unpredictable shocks in the industry. This would minimize impacts of unpredictable risks in the industry. References Cantwell, J. Dunning, J. H. & Lundan, S. M. 2009, An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment. Journal of International Business Studies, 41(4), 567-586. Chan, E, & Wong, S, 2006, Motivations for ISO 14001 in the hotel industry, Tourism Management. Dahlsrud, A. 2008, How corporate social responsibility is defined: an analysis of 37 definitions. Corporate social responsibility and environmental management, 15(1), 1-13. Goodrich, J., 2002, September 11, 2001 attack on America: a record of the immediate impacts and reactions in the USA travel and tourism industry, Tourism Management. Gretzel, U, Fesenmaier, D. R., Formica, S., & O’Leary, J. T. 2006. Searching for the future: Challenges faced by destination marketing organizations. Journal of Travel Research, 45(2), 116-126. Kaplan, A, & Haenlein, M, 2010, Users of the world, the challenges and opportunities of Social Media, Business horizons. Peng, M. W., Wang, D. Y., & Jiang, Y. 2008. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies, 39(5), 920-936. Rimmington, M, Williams, C, & Morrison, A, 2012, Entrepreneurship in the hospitality, tourism and leisure industries, Routledge. Rose-Ackerman, S., & Tobin, J. 2005. Foreign direct investment and the business environment in developing countries: The impact of bilateral investment treaties. Yale Law & Economics Research Paper, (293). Xiang, Z, & Gretzel, U, 2010, Role of social media in online travel information search, Tourism management Read More