Business Strategy Reflection and Evaluation
Butlin is a chain of hotel resorts that were opened in the early 1930’s to provide hospitality and an environment where Britons would relax away from their stressful daily activities. By and large, the business has been successful in achieving its objectives, which are described by its mission statement as the provision of an enjoyable and secure holiday resort, development of new and attractive services, provision of opportunities for career development and maintaining the company’s integrity in its operations (Butlin, 2012). As a result of its continued excellent performance, the business has continuously earned profits, which it distributes to its shareholders in the form of dividends. In recognition of its excellent services, Butlin earned two awards in 2011; the Leisure and Tourism award and the Customer Service Training award.
Notwithstanding its excellent performance, Butlin has developed two new and robust strategies that will spearhead its progress in the coming years. The first strategy aims at increasing the sources of income for the business by diversifying the accommodation and services that the business offers to “generation extra”, which are bigger and more dispersed families. The second strategy aims at satisfying the needs of “Super grandparents”, who are grandparents who are viewed as heroes and included in almost all family functions.
The strategy that the business developed aims at accommodating the changes that are occurring in the United Kingdom. Currently, there has been a paradigm shift in the nature and character of individuals who are visiting hotels and restaurants. Therefore, in order for a business to remain competitive and relevant, it must adopt appropriate changes that suit the tastes and preferences of these new categories of customers.
Currently, the social economic environment in the UK is changing quickly, mainly due to increased life expectancy of Britons. As a result, there has been a change in the role of grandparents and the development of complex family structures. In a typical family setup, for example, it is becoming common to find two great grandparents, two step-grandparents, two parents (living as cohabiting or married couple), one step-mother, two children, and a step child. As a result of this huge family set up, there has been an increase in the popularity of Relation Vacation, which is normally composed of about fourteen family members from a single family. To emphasize the extent of the increase in Britain’s aging population, there is an expected increase of about 1.2 million children, 6 million grandparents, and 1.5 million great-grandparents in the next 25 years. Evidently, the rate of growth of the elderly population is higher than that of young individuals.
Butlin’s first strategy of increasing the sources of income for the business by diversifying the accommodation and services that the business offers to “generation extra” is appropriate since it considers the diversity in every group of visitors. In general, there is a great and apparent difference in the tastes, preferences, and personalities of these individuals due to their wide age gaps (Knox, 2010). In order for the company to generate maximum income from these visitors, it must be able to provide a wide variety of services that cater to the needs of each group of individual in the relation vacation.
The second strategy acknowledges the need to satisfy the new breed of “Super grandparents.” According to Butlin (2012), the new breed of grandparents is viewed as superheroes by other family members. Therefore, they play a significant role in determining where the family will go on holiday and how much they will spend. In light of this, the strategy of satisfying the needs of “Super grandparents,” directly influences if the entire family will visit Butlin resorts.
Areas of Improvement on Strategy
In as much as the above strategies are great, the company should modify part of its strategy to focus on ordinary visitors as well as the needs of individuals who visit as a couple. Although the resort is mostly booked seasonally, especially during holidays, there are also ordinary visitors and couple who visit without coming along with their families. In order to satisfy the needs of these customers, the company should segment part of its business to cater for the needs of these customers. Butlin should improve the quality of its guest rooms that are designed to host couples and those that are designed to cater for single individuals. In addition, the resort should also provide private facilities where these individuals can interact on their own without interference from other visitors. In addition to the above, the resort should provide tour guides who may assist couples in identifying beautiful scenes that they can visit. This feature would complement the Bulin resort feature of providing quality meals and accommodation.
Butlin should also diversify the activities that it offers to its customers. The resort should introduce conference halls, which may be used to hold meetings by potential customers. Conference halls are currently an important feature that are used by businesses and organizations when they want to have meetings out of office. This strategy will ensure that the Butlin has customers even in low seasons since businesses and organizations would book these facilities to use for their meeting and team building activities (Dunning & Kundu, 1995). Interestingly, these individuals would still use the resort’s meals and at times accommodation facility, which would ensure that the business has a broadened source of income throughout the year.
Identify and Operational Strategies
Strategic implementation refers to the process of setting into action the plans and objectives that had been developed by the business. This process is essential since for the success of business since it determines how, where, and when the goals and objectives will be implemented. It also identifies the specific individuals who will be used in the implementation of the plans. To fulfill this objective, the strategic implementation is done as the last stage after evaluating all the factors that affect the business (Lv & Wu, 2009). In particular, a SWOT analysis, PESTEL analysis, and environmental scans of the entire organization are conducted. The processes of strategic implementation are discussed below.
Strategy 1: Diversifying the services that the business offers to “generation extra”
In order for the strategic implementation process for this objective to be successful, the business will have to involve all its departments. In particular, the company will involve the marketing, sales, finance, accommodation, recreational, and meals and catering department. In particular, the business will aim at ensuring that its services meet the desires and needs of these customers.
In order to successfully implement this strategy, the business will have to invest a significant amount of resources for the fulfillment of these new objectives. Firstly, the business will require skillful personnel who will be used in the development and implementation of procedures that will ensure that the needs of “generation extra” are properly served. In general, the needs of “generation extra” can be categorized as needs required by children, such as playgrounds and monitored sports facilities. Teenagers and young adults would require areas where they can explore and develop their talents and skills, while at the same time having fun. The parents would love private space where they may have fun, while still having enough access to see their playful kids. Finally, grandparents and great grandparents would require areas that have a relaxed environment and where the general infrastructure is properly developed to cater for their needs such as ramps and lifts to ensure that they can easily access any place in the resort. In order to ensure that the hotel can comfortably accommodate all these individuals, it will have to change its existing infrastructure, which would require the participation of the finance department, the resort’s civil engineers, and the catering and accommodation department (Sobh, Belk, & Wilson, 2013).
Butlin will adopt relationship marketing as the best way to reach out to its customer’s. Rather than trying to close in customers in the marketing campaigns, the resort will aim at creating a lasting relationship with them by addressing their specific needs. Therefore, the company will describe its spacious facilities that can cater for the needs of the entire family. It will also mention about is a uniquely designed facility that ensures easy movement of travelers, even the elderly. Similarly, it will mention of its huge collection of playing facilities, as well as its private lounge and spaces where couples can have their private time. Interestingly, it has been found out that customers buy more goods and services in stores where they have created a lasting relationship with their suppliers (Okumus, Altinay, & Chathoth, 2010). Therefore, the use of relationship marketing will also encourage visitors to spend more of the resources in the resort.
Butlin hotels and resorts would brand themselves as high-class hospitality facilities catering for the upper middle-class and high-class customers. To achieve this goal, the facility will use expensive and luxurious materials in all its facilities. In addition, the resort will also use target marketing, so that it can showcase its activities to high-end consumers. Similarly, the resort will also price its products highly. These prices will ensure that only high end and upper-middle-class customers can afford to visit the resort. Since the profit margins earned from this customers are high, this method will ensure that the resort will increase its net income.
This strategy will result in the business making more profits and revenues from its activities. Generally, the increased marketing activities by the resort and the provision of specialized services to cater for the needs of each category of customers will ensure that the business attracts more customers. However, the business will have to increase its costs so that it can comfortably meet the needs of these customers. To begin with, the company will have to improve its infrastructure so that it can meet the needs of its “generation extra” customers.
Strategy 2: Need to satisfy the new breed of “Super grandparents”
Super grandparents play an important role in the planning and determination of the vacation and holiday place that the family will visit. Due to their significant role in the planning of holiday events, the resort will use target and relationship marketing to ensure that these group of customers are aware of what to expect in the company. In general, the resort will create a relationship with these individuals by calling them after they have visited the facility in order to know if they enjoyed their stay in the resort. It will also ask for their feedbacks in order to know if there are any changes that can be made to improve the services offered to them. In terms of In addition to the above, the resort will give customers the option of requesting for a lift or a private accommodation assistant. These will include items such as wheelchairs and guides to offer support and specialized care for these elderly individuals. It is expected that the presence of these facilities will encourage them to include Bulin resort as a preferred holiday destination when making their vacation plans.
As aforementioned, the resort will have to dedicate a considerable amount of resources to cater for the needs of these elderly individuals. In particular, the resort will have to ensure that there are enough lifts in all its premises in order to make the movements of these individuals easy and fast. It will also have to add ramps to ensure easy navigation of wheelchairs, which are mostly used by these individuals (Ottenbacher, Harrington, & Parsa, 2009). As a result, the company will have to invest a significant amount of resources in renovating its current infrastructure to cater for the needs of these customers.
International Market Development Strategy
The entry into international markets will present various opportunities for Butlin hotel and resort. In order to determine the most appropriate market for the resort, a PESTEL analysis will be done of some of the fastest growing international markets. Notably, this analysis will focus on the economic potential, as well as the political, social, technological, environment, and legal situations in these areas, all of which interact to determine the viability of setting up a business in this area (Iveta & Jana, 2014). The international market development strategy will aim at diversifying the business so that it can attract various customers. The country’s that are of interest are China, United Arab Emirates (UAE), and the United Kingdom.
Strategic Choice Country
|United Arab Emirates (UAE)|
|Politics||Although the country has a significant restriction of freedoms, it ensures that all its citizens have all their basic requirements. This method has ensured that the country has political stability.|
|Economic||The UAE has been enjoying a robust economy, which has ensured that its citizens have a lot of disposable income to spend in hotels and resorts. The country attracts millions of foreign tourists and investors annually, who require hotel and resort services.|
|Social||Although the UAE is mainly conservative, it allows significant levels of liberalism in areas that tourists visit. In light of this, the conservative culture in the country does not restrain the performance of its hospitality business.|
|Technology||The UAE has an elaborate interconnected network system, which enables businesses to incorporate technology in their activities. In particular, hotels and resorts use technology in online payment, booking, and provision of customer care services.|
|Environment||The UAE has a secure environment that attracts tourists and investors. It also sunny beaches and a friendly weather, which enables all year tourism. As a result, this environment creates a lot of business activities in the hospitality industry.|
|Legal||The UAE government has established simple but necessary policies that ease the process of starting a business in the country. In addition, the country has ensured that its courts are open and transparent to increase fairness and encourage investment in the country.|
Britain has been enjoying a fast growing tourism sector, which has provided a lot of business opportunities for companies in the hospitality industry. According to the countries forecast, it is expected that there will be tourism worth 257 billion pounds in the year 2025. According to Deloitte, the tourism sector is expected to grow by 3.8% per annum, which makes it the fastest growing sector in the UK economy. At this point, the tourism sector will contribute almost 10% of the country’s GDP and provide employment for 11% of all UK workers (Britain’s visitor economy facts, 2016). In addition, the tourism GVA is 2.8, which implies that for every dollar spent directly on tourism, there is an additional spending of 1.8 dollars to support the economy through the supply chain processes (Warhurst, Lloyd, & Dutton, 2008). Inbound tourism will be the highest contributor to the UK’s hospitality market in future. The PESTEL analysis for the UK will focus on political, economic, social, technological, environmental, and legal factors that may affect this market.
The UK has a democratic form of government, which allows for a capitalistic market. In practice, the government does not influence the performance of any business, rather, it acts as a facilitator of business by providing necessary legal guidelines and working environment. In addition, the UK government has friendly policies required for establishment of business and on its management, such as tax laws. Currently, the UK exited from the European Union, a position that has jeopardized its position as an attractive business center. While been a member of the EU, most European tourists would easily travel into the UK without restrictions (Jany-Catrice & Ribault, 2010). However, they will now be subjected to border restrictions and additional taxation, an issue that may discourage most of them from visiting the UK.
The UK has a diversified economy, which is composed of manufacturing, logistics, retail, healthcare, finance, hospitality, sports, among others. Therefore, its economy is strong enough to absorb shocks that may be occasioned by policy changes in the country. However, given that the European economy has not been strong in the recent few years, the amount of disposable income for most locals has been eroded. Therefore, the hospitality industry in the UK mostly relies on inbound tourism. Research studies indicate that this industry will continue growing steadily mainly due to foreign tourists.
The UK government is a multicultural and inclusive society, which provides a good environment for business. The country’s laws are also inclusive and stress on the importance of equality, adherence to the law, and protection of fundamental human rights. Due to the inclusive nature of UK, it has individuals from all places in the world, which makes it have a diversified diet and rich culture. In light of this, when setting up a hotel and resort in the UK, it should have cuisines from different parts of the world due to the different type of visitors. In terms of demographics, the UK, just like many European countries has an aging population. This demographic structure is mainly due to a decrease in birth rate and an increase in the life expectancy. In this regards, a hotel in the UK should have services that cater to the very old members of the society children, and working class adults (Lloyd, Warhurst, & Dutton, 2013).
The UK is one of the most technologically advanced places in the world. Most of the individuals and businesses have adopted cutting edge technology for their daily activities. In particular, the wide research base in the country and knowledge-based economy have spearheaded this quick embracement of technology by the general public. In the hospitality industry, most five-star hotels in the country have incorporated technology as a core feature of their services. Generally, these businesses enable their customers to conduct most of their operations that relate to the business online. For example, most of them have tools that facilitate for online booking of hotel rooms, description of the specific meals that they want to be served, and the places that they will require to visit once in the hotel. In addition, most of these hotels provide wi-fi facilities in their premises to all visitors.
The UK has a friendly and safe environment for conducting business. Despite the terrorist fears globally, the UK has established appropriate mechanisms to deal and eliminate these threats by gathering various information on terrorist activities. In additional, the country has a properly developed infrastructure, which is composed of a wide network of roads, electricity, internet cables, and telecommunication masts. The country is also linked to other countries through its seaports and its airports. In general, these facilities enable the UK to be an attractive tourist destination due to its accessibility.
The UK has properly established laws and fair and open court systems. In fact, the common law, which has been adopted by most countries is based on the UK laws. In particular, the open and fair court systems in the UK, which are free from any political interferences is one of the reasons why most businesses station their headquarters in the UK. Since the UK uses a bicameral parliamentary system, its laws are stable and do not change haphazardly. In addition, due to the freedoms and rights provided in the UK, there are active civil rights organizations in the UK, which prevent the establishments of laws that can disenfranchise businesses or individuals. In this regards, the UK laws fully protect businesses from unfair interferences by the government or any private individual.
China has thriving hospitality industry mainly due to the increase in the average real income of Chinese. In the last decade, the Chinese economy has been growing steadily, at an average rate of about 10% per annum. As a result, the country has increased the wealth of most of its citizens, which has resulted in them having more income for tourism and other leisure activities. Currently, the main driver in the hospitality industry is domestic tourism. Due to increased modernization and liberalization of its market, tourism in China is expected to have a boom in the coming few years. Currently, China ranked third tourist destination after France and the US, which was after the exclusion of Hong Kong and Macau states. However, if these regions were included, the country would rank as the highest tourist destination. The tourism sector has been expanding by 10% annually, which has resulted in a lot of investment opportunities for those in the hospitality industry. The PESTEL analysis of China is as below:
The Chinese use a communist political administration. Therefore, there is the control in the ownership and of private property. However, the country is slowly liberalizing its market, which is enabling foreign investors to invest in the country. In fact, major companies such as Apple Inc., and General Motors Company have offices in China. In addition, there are also major international hotels in the country. In regards to this, businesses entering China should avoid participating in local politics so that they do not put their investments at risk. In addition, they should be aware that they may lack political freedom.
China has been enjoying a robust economy, which has pulled most of its citizens out of poverty. As a result, there has been a significant increase in the number of local tourists. Interestingly, since China has a huge population, of more than 2 billion individuals, naturally, it has a huge potential in terms of domestic tourists. However, the country’s one-child policy has resulted in the country having an aging population. In light of this, the country’s economy and the domestic market may not be so positive. In an effort to reverse the negative effects caused by an aging population such as high dependency levels, which reduce the provider’s disposable income, the country has now suspended the one child policy. Since China plays a significant role in the world economy, acting as a major industrial center, there has been an increase in international business tourism in the country, which is expected to increase in future. The country’s industrial activities have come at a huge cost of pollution, which is discouraging tourism activities in some of the cities in the country (Erini, Kalliopi, Maria, Mitropoulou, Mpakalou, Eumorfia, 2017). As a result, there has been a slow growth rate in the hospitality business in some cities.
China has a conservative society, which prefers to conserve and maintain most of its culture. The Chinese culture is entrenched in most of the activities of the locals. Therefore, it is prudent for any individual who wants to establish his/her business in China to learn the country’s culture. This knowledge will enable him to learn on the locals’ religion, which is mostly Buddhism, and social set up, the country’s cuisine, as well as the country’s politics. In terms of demographics, the country has an aging population. However, the recent suspension of this policy may result in the country having a youthful population in the coming few decades. Since its abolishment in October 2015, 1.69 million couples of the 11 million couples who were eligible to have an extra child had applied for a second child (Gu, Wnag, & Cai, 2016). These figures indicate the high rate of interest in having a child among Chinese couples.
As a leading center for the manufacture of machines, electronics, and consumer goods, China has adopted technology in almost all spheres of its economy. To elaborate, the country has developed the largest electric railway network in the world in less than a decade. China also boasts of having the most modern airports and ports in the world. In addition, the country is also diversifying its economy and making it a knowledge-based economy. Due to the continued importance of technology in the hospitality industry, businesses in China have also embraced it as a core feature of their business activities. In most high-end hotels and resorts, online booking, payment, and request of specialized services is the norm.
The Chinese business environment is restricted and dependent on the government policies. Therefore, before establishing a business in China, it is prudent for an investor to conduct a background study and find out if such an activity is accepted. Nonetheless, due to the country’s increased income levels, locals have a lot of disposable income that makes the country a viable investment destination. Due to the attractive nature of doing business in China, the country is extremely competitive and investors must constantly develop innovative business ideas. Noteworthy, Chinese companies are known to violate copyright and patency laws, an issue that makes it difficult to do business in the country. Therefore, when setting up a hotel and resort in China, an individual must formulate strategies and tactics that he/she will use to protect his intellectual property and remain competitive.
Chinese law courts are often accused of being corrupt and favoring the policies implemented by the government. In addition, the country’s communist policy ensures that the courts are not open and fair. However, the country is trying to liberalize its systems and make its court and legal process open and fair. In light of this, foreign investors setting up businesses in China should implement their business by following the strict guidelines provided by the government. In addition, they should seek clarification on any issue that they are not familiar with in order to avoid violating the country’s laws.
United Arab Emirates (UAE)
The UAE has been continuously enjoying fast economic growth, which has positioned it as an attractive destination for business and leisure visitors. Due to the rise in traveling activities in the country, there has been an increase in the number of businesses in the hospitality industry that are offering various services to these travelers and tourists. Generally, the country is strategically positioned between the East and the West side of countries in the world. Therefore, it is able to attract tourists from Europe, USA, and also those from Asian countries. More to this, the country enjoys perpetual sun almost all year round, and it has a long coastline that has sandy beaches, which are ideal for leisure activities (Eleonor, Adriana, Madalina, 2014). Taking advantage of its strategic position and a recent boom in global fuel prices, the country has significantly improved its infrastructure. In particular, the country has built a large international standard airport in Abu Dhabi. In addition, the country has also developed its road transport. As a result, there has been an increase in the number of international hotels and resorts in the country that are offering high-class services to a large number of holiday makers that visit the country.
UAE has a monarchical system of government. Therefore, there are significant restrictions on human rights in the country. In particular, there is a lack of representation of the general public in making the country’s laws. Nonetheless, the country ensures there is political stability by ensuring that individuals can readily and easily access their basic needs such as healthcare, shelter, education, and food. In addition, the country provides a friendly business environment by easing the process of registering and starting a business in the country.
UAE has been enjoying a high economic growth rate in the last ten years, mostly due to the high international fuel prices and increased direct investments into the country. As a result, local Emiratis have a high disposable income to spend in hotels and resorts. In addition, the country also attracts a huge number of foreign tourists and investors (Gillespie & Morrison, 2000). In effect, the country has attracted a large number of investors in its booming hospitality industry.
The UAE has a highly conservative society, of individuals who are mostly Muslims. However, there is a significant degree of freedom and liberal culture that is permitted in resorts and hotels and also in areas that attract tourists. Although the country is largely conservative, there is a significant liberal environment that is adequate for attracting tourists and other holiday goers to various destinations in the UAE.
The UAE has incorporated technology in most of its activities. In fact, it is among the countries that have highly adopted technology in businesses in the Middle East. The country has an elaborate and interconnected internet system, which enables businesses and individuals to access the internet from any place in the country. In addition, most hospitality businesses in the UAE use the internet for online booking of services, payment, and issuance of support services.
The UAE provides a secure and ideal location for businesses. The country has effectively secured its borders from terrorists that have been ravaging various countries in the Middle East. Therefore, it provides an ideal location for holiday and domestic tourism. In addition, the country has sunny beaches and a conducive environment for holiday all year round. As a result, most international hotels have established resorts in the UAE (O’Gorman, Baxter, & Scott, 2007).
In order to encourage investments, the UAE has deliberately established laws that provide essential guidelines to businesses on how they should conduct their activities in the country. In order to encourage investments, the UAE has ensured that its court system is open and transparent. In light of this, the country has functional laws that protect businesses and all their stakeholders.
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