Discuss about the Management and Analyse Strategies Implementierung.
The aim of the report is to analyze the internal and external factors that create an impact on the expansion of the business. The company that has been selected for the report is Dalata Hotels that is known as largest hotel chain in Ireland. This hotel believes in the rapid expansion of the business in the market as the Dalata group has bought around 15 new hotels in the year 2015. Being the senior consultant it has been asked to conduct the strategic analysis along with the Strategic choices. The country has been selected for the expansion of the business in Canada; this country belongs to the geographic regions of North and South America.
Dalata is Ireland largest hotel operator with a current portfolio of around 38 hotels which include owned, leased and managed hotel. The hotel successfully operates the Maldron Hotel brand and Clayton Hotel brand throughout the UK and Ireland along with the managing a portfolio of Partner Hotels. Dalata came into existence in the year 2007 June by the year McCann. Since the year 2015, the group has re-branded ten of the hotels in its owned portfolio as Clayton Hotels. By the end of the year 2016, there was a total of 17 Clayton Hotels (Dalata Hotel Group, 2018).
An external environment consists of external factors that influence and create the impact on the operations of the business (Moutinho and Vargas-Sanchez, 2018). Dalata Hotel makes use of PESTLE Framework to analyze the factors that can affect the business expansion in Canada.
Canada is a country that is located in the northern part of North America with the 3.63 crores in the year 2016 (Frue, 2018). The country is known as world’s wealthiest countries and also known as major tourist destinations. There are some external factors that can create an impact on working of Dalata hotel.
The political factors include the rules and regulations formed by the government that creates the impact on the business (Baker, 2014). Canada is a democracy with a parliamentary government. The minister of small business and tourism (Honourable Bardish Chagger) has clear plan to work with the partners so that they can grow international tourism to Canada. This is a positive sign for the hotels present in the Canada and hotels like Dalata who are willing to expand their business in Canada. Moreover, the hotel association of Canada promotes lodging industry because this is the only way through which they can employ more than 304,000 people (Hotel Association of Canada, 2018). Therefore, Dalata Hotel has an opportunity to expand the business.
The economic factors include the GDP, inflations rates, the purchasing power of the customers and many others. The GDP of Canada was $83.1 billion by the year 2016 and the economy of the country is a mixed economy with the 10th largest GDP by the nominal and 17th largest GDP by the purchasing power parity in the world. In addition, the growth in the GDP was 1.7% in Q3 2017. This shows that the purchasing power of the people in the country is high which means the Dalata Hotel can easily earn the revenue if they expand business in Canada (Amadeo, 2018).
The social factors include beliefs and preference of the people that can influence others. The one-third population of Canada falls under the working class category with 40-50% being middle class. Along with this, there are only 3% to 5% Canadians who are considered in the segment of the upper class. This shows that most of the people belong to the working and middle class. In the year 2016, the international visitors accounted for approx. $20 billion in tourism revenues along with this the domestic tourism raised by $72 billion (Government of Canada, 2011). The culture of Canada is attractive for the tourists due to which most of the tourists visit the country. This shows that the Dalata hotel has an opportunity for the expansion of the business. Dalata hotel can easily attract the domestic and the international tourist towards their hotel by linking the hotel with the culture of the country.
The technology advancement can create an impact on the working of the hotel. Canada is one of the most developed in terms of the technology and science along with this the people of this country must rely on the internet for their careers, educations and for other activities. Dalata hotel can make use of technology to make strong customer base in the country. Internet booking of the hotel will make the jobs of Hotel easier (Frue, 2018). Apart from booking hotel use of advanced technology might create strong competition from other hotels that are already established in Canada such as Marriott, Hilton, and many others.
Legal factors include the legislation and regulations introduced by the government for the business. In Canada, the hotels have to follow the legal laws related to the wastage of the product, for the expansion of the business, licensing and other laws (Meffert, 2013). Similarly, Dalata hotel has to follow the legal laws that might lead to complications for the Hotel.
Canada is the world’s second-largest country after Russia that is covering approx. two-fifths of Northern America. Along with this, the climate of the country is dominated by the extreme cold and long winters. The country has the environmental department that works to protect and enhance the quality of the natural environment (Kotler, 2015). Moreover, the person of the country believes in conserving the renewable resources. The business has to follow the environmental protection Act 1999 to conserve the environment of the country. This might create the problem for Dalata hotel as they have to follow the action and have to assure about the use of products.
A competitive environment is the dynamic external system in the business. It is essential for the Dalata hotel to analyze the external competitive analysis before expanding the business in Canada.
Porter’s five forces framework is a tool that is used to analyze the competition of a business (Foxall, 2014). The analysis of Canada is given below:
In Canada, the government promotes hotel expansion in their country as this is the only way through which the GDP of the country will grow. So the opportunity for the new entrants is more in Canada and these lodging companies bring innovative services with them which create the impact on the existing companies (Prince, 2016). Therefore, Dalata hotel will find the high threats of new entrants which might make them adopt such strategies with the help of which they can deal with competitors.
Most of the companies in the hotel industry have tie-ups with different suppliers which provide them convenience while negotiating with them (E. Dobbs, 2014). In Canada, the hotel association represents more than 8,226 hotels, motels, and resorts which reflect that there will be the huge availability of the suppliers. Therefore Dalata hotel can easily form the tie-ups with the suppliers available in the market. If in the market the number of the suppliers is high then there will be low bargaining power of suppliers.
The change in the customer preference mostly depends on the prices of the product and services. There are many hotels who offer the same sort of products and services at low prices which makes it difficult for the other hotels to survive in the market (Fread, 2014). Dalata hotel will face the issues related to the bargaining power of customer as there is a large number of hotels available which might be able to grab the attention of the customer and potential customers.
When in a market a new alike product or service meets the needs of the customer then they can easily substitute from one product to another (Rajasekar and Al Raee, 2013). In Canada, the availability of the accommodation options where the customer can get desire facilities is low. Therefore, the tourists have to select the option of hotels where they can get all the facilities in a single go. Moreover, there are tour packages which make the work simpler for the hotels because most of the tourist like to opt for the travel packages which means they have to stay at the hotel. Therefore, Dalata Hotel will not find the threat of substitute products or services. Though, the hotel has to form the tie-ups with the travel guides who can provide benefit to the hotel.
In Canada, there are numerous international hotels who are offering their services in the market (Kotler, 2015). These hotels will become the high intense rivals of the Dalata Hotel. Few of the competitors of the Dalata hotel will be Fairmont Pacific Rim, rosewood hotel Georgia, Marriott Canada, Hilton hotels in Canada. These hotels are well-known in the market of Canada, therefore, these hotels can give strong competition to the Dalata hotel.
An internal analysis is conducted to identify and evaluate the organization competency in the marketplace. This part of the report includes the analysis related to the resources and capabilities of the Dalata hotel.
A resource audit is a set process in which audit has been conducted to analyze the strength and weakness of resource base of the firm (Free management , 2018). These resources can take on many forms and due to this, these resources are not limited to cash and inventory. Dalata hotel resource audit includes the basic and unique resources.
The hotel operates the decentralized human resource model with HR manager. The company believes that development of staff is essential for the company due to which the hotel has offered the management development programs to their employees. Dalata has an exceptionally strong management team who has experience along with the skills to grow the business (Worldwide Hospitality Awards, 2017).
Financial resources are essential for the development of the Dalata hotel. The director of the hotel believes that they have enough fund with the help of which they can continue their operational existence in the near future (Davy, 2018). Moreover, it has been analyzed that the investor finds it effective to invest in the company as Dalata hotel has many resources so if they are a bear loss they can fulfill it.
This resource includes the physical presence of the company. The company currently has the portfolio of 39 which include 3 and 4 stars hotels with more than 7,351 rooms. Out of these approximately 27 hotels are owned by Dalata, 9 hotels are operated by the company under the lease agreement and rest are under management segments (Dalata Hotel Group, 2018). The hotels of Dalata are mainly located in Ireland and UK.
Brand image
The image of the brand is one of the unique resources of the company. The hotel has a good brand image in the market of Ireland as it is known as one of the leading hotel chains. In addition, the company can easily form their image in the other markets with the help of strong customer base. The brand image in the market is a competitive advantage for the company.
The company tries to get engage with their customers by offering them personalized services which make the customer feel connected towards the product (Dalata Hotel Group, 2018). This customer engagement towards the hotel is one of the resources for the company which motivate them to expand the business in international markets.
The core competencies include the strength or capabilities of the business. Dalata hotel has the capabilities to bring the innovation in their products which help them in competing with the competitors in the market. Moreover, the company values their employees due to which they are able to run their operation successfully. The hotel has a strong dealer and distributions tie-ups which are effective for the company as these people promote the services offered by the Hotel (Fern Fort University, 2018).
Bowman’s Strategy Clock is a model that is used by the companies to analyze the competitive position of the Dalata Hotel in comparison to the offerings of competitors.
This strategy low price of products with less value added. Dalata Hotel offers the services at the affordable prices for the middle-class people (Shakhshir, 2014). In Canada, most of the people are the middle class that means they can afford the price of the hotel. It is recommended to the company not to make use of this strategy as a customer like value-added services.
A low price is a strategy in which the company reduces the prices of product offered by them to their customers. In the Canada market, the Dalata hotel can bring down its prices with high-quality services as this is one of an effective way to make space in Canada market.
In the hybrid strategy, the company tries to compete for both on the quality of products along with the prices which helps them in growing customer loyalty and to gain market share. Dalata hotel can also make use of this strategy in which they can compete for both on the high quality of products with low prices. This strategy can make the expansion in Canada successful for them.
Differentiation is when the company offer diverse products and services in the market. It is suggested to Dalata Hotel to make use of differentiation strategy in Canada market as this is the only way through which they can compete with their competitors. Moreover, this differentiation strategy will help them to establish a strong customer base.
In the focused differentiation strategy, the company offer the high level of perceived value to their customers but on high price irrespective of the value of the products (Shakhshir, 2014). It is suggested not to follow this strategy as Canada market is new for the company so with this strategy they won’t be able to survive.
In this strategy, the companies keep the high prices of their product which helps them in generating high profit. Though, it will make the customer switch from one hotel to another. If Dalata hotel will keep high prices of their services then they won’t be able to survive in the market.
In this strategy, the company doesn’t care about the accumulation value of the product and service. These companies believe that if the customer is willing to buy the product so they have to pay more amounts for the same. In Canada, there are many companies so Dalata Hotel can’t make use of this strategy.
There are numerous companies who pursue this kind of strategy in which they have low value for the products and services that they offer in the market (Porter, 2008). It is suggested to the Dalata Hotel not to follow this strategy in the Canada Market.
It is suggested to the company that the expansion of the business in the market of Canada is suitable because the number of tourists is increasing in the country. Dalata Hotel can offer its service most to the business class and travelers but it is recommended to maintain the packages for the NRI who visits the place for the job purpose. These packages need to be affordable for them so that they can afford it. Moreover, the company can get the labor easily because numerous people visit for job purpose.
Conclusion
The report is based on the Dalata Hotel expansion in the market of Canada. The strategic management has to critically analyze the internal and external environmental factors that might create an impact on the working of the company. Moreover, the report includes the internal analysis of the company which shows the resources and capabilities of the company. It also includes the analysis of the competitive strategy for Dalata hotel in Canada market.
References
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