Strategic Management Dalata Group of Hotels - Free Samples

Question: Strategic Management for Dalata Group of Hotels Answer: Introduction Dalata Hotel Group is a well-established hotel that is operating a number of hotels in Ireland and United Kingdom. This hotel group was established in July 2007 by Pat McCann, former chief executive of the Jurys Doyle Hotel Group. This is the largest hotel chain in Ireland and it has more than 40 hotels throughout the nation. Two well-known hotels of this group are Clayton and Maldron hotels. Through quick acquisition, this hotel group introduced 15 new hotels in the year 2015 and expanded its business in United Kingdom. Currently, it is offering three and four star hotel services and attracting families, business clients and short break visitors (Dalata Group of Hotels, 2018). Looking at the increased competition, Dalata Hotel Group is planning to expand its business in new and emerging market of South and South East Asia region i.e. Thailand. This report includes the analysis of external and internal environment of Dalata Hotels in Thailand. There are various external factors, which will affect the business of this hotel in the country. It analyzes the competitive environment of the organization by conducting Porters five forces analysis. Internal analysis of Dalata Hotel Group is conducted by considering its strategic capabilities, competencies and resources. Furthermore, Bowmans strategy clock is used to analyze the strategic directions and position of this hotel group. For further expansion of business, Dalata Group of Hotels can choose Thailand country. Thailand will be the best destination for hospitality organization to improve its operations in international hospitality industry. In this country, most of the tourists arrive from Korea, China, Malaysia and Japan. By looking at the Thailand hotel industry, it can be stated that Thailand has a bright future for new and emerging hotels (Charoenphon, 2014). There are various external factors which support the hotel sector such as government support etc. To analyze the external environment, PESTLE analysis is used here. It includes various factors which are given below; There are various political factors in Thailand like terrorism, corruption that are related to the stability of organization. In Thailand, political stability is positive for hotel and resort sector. The government of Thailand has developed various policies and laws which indicate that for establishing hotel in the country, the organization needs to have enough financial support and experience. The founder should have clear knowledge about the policies hospitality business. The improvement in bilateral relations with other countries has declined the conflict risk in the country. Political system of this country is good for hotel business in Thailand. However, it will offer a positive political environment to Dalata Hotels but long procedure of hotel establishment can affect the growth of hotel. The organization will need to take certificate of construction, license for entertainment and sales of food (Meissner, 2012). Economic forces of a country play an important role in the expansion of any business. Hospitality and tourism are major and leading sectors of the Thailands economy. In this country, some adverse factors such as increased unemployment, investment risks, bankruptcy and loss of customer interest may influence the business operations of Dalata Hotels. However, the economic conditions in Thailand have been improved than earlier. This growth in economy is because of improvement in Foreign Direct Investment in the country. The economic growth is about 8% annually and it is developing every year (Costa, Montenegro and Gomes, 2016). The people from other nations like USA, China are arriving to the tourist destinations of Thailand. Thus, this country will provide more business opportunities to Dalata Group of Hotels. Social factors are the aspects that are related to the society such as family relationships, health and changes in the lifestyle of population. In the current year, the demands and preferences of people are changing for hospitality and tourism facilities. With the passage of time, healthier lifestyles are becoming popular in Thailand. By the result of this change, hotels need to have updated information to improve their business like gym and spa, food products and sports activities (Teece, 2010). Through this business expansion, Dalata Hotels can increase the employment rate in the country and provide job opportunities to the Thai population. Moreover, it will be beneficial for this hotel to expand the business in Thailand as there are various tourist attractions like Sea and beach resorts, parks and mountains, culture, Golf, spa and food. In modern business environment, technology plays an important role in the growth of hotel business. About Thailand, it can be stated that it is a technology advanced nation. So, Dalata hotels can adopt modern and innovative technologies in its facilities and hospitality services. The population of Thailand has shown interest in executing updated technologies to improve the hotel business. The hotels can provide various facilities such as online booking facility, internet banking, free Wi-Fi etc. In this country, Dalata Hotels can adopt new technologies to attract travellers towards its hotels (Schuckert, Liu Law, 2015). The government of Thailand is committed to the objective of sustainable development and environment protection. The country has powerful environmental policies so Dalata Hotels need to comply with them. This hotel will need to develop effective management system for managing solid and hazardous wastes, water wastage and level of pollution. It will need to make more focus on environmental aspects (Lam, Ho and Law, 2015). The Government of Thailand has a liberal attitude towards international trade and business. Due to this, it will be easy to establish hotel in this country. Other legal factors are such as overtime work without extra wages, illegal migration and hazardous waste from factory outlets. These aspects in Thailand are affecting the business operations in the country. Thus, it can be stated that Thailand provides a moderate business environment to Dalata Group of Hotels. The organization needs to overcome the challenges related to these external factors so that it can stay competitive in Thailand Hospitality Industry. Competitive Environment Analysis (Porters Five Forces Analysis) In Thailand, the competition among players in hotel industry is continuing to become very fierce because of the fact that switching costs and product deviation are lower than other industries. In Thailand hospitality industry, Dalata Hotel will face direct competition from Centara Plaza Hotel. Cantara Hotels and Resorts is the leading hotel operator of Thailand that owns 43 deluxe and first class rooms across the major destinations in Thailand (Centara Hotels, 2018). In addition to this, other competitors are such as Anantara Golden Triangle Elephant Camp Resort, Four Seasons Hotels, Hilton Group of Hotels etc. Apart from this, it can have competition from non-profit organizations which competes for non-refundable funds of customers. Dalata Hotels is one of the best hotels of Ireland so organization will be able to expand its business in Thailand and stay competitive in the industry. In this country, the demands and needs of people are changing with the passage of time. The customers are becoming very demanding for their stay and accommodation. They want to avail best hospitality services available by paying minimum prices. It will put pressure on Dalata hotels to run long term profitability in Thailand. To reduce the bargaining power of customers, Dalata needs to become more innovative and influential towards customers. In Thailand, the bargaining power of suppliers for Dalata Hotels is moderate, as there are various suppliers who are supplying materials for hospitality and tourism sector businesses. The dominant suppliers in the industry can decline the profit margins that Dalata hotels can earn in Thai Market. Due to higher availability of suppliers, the hotels can negotiate for the prices of supplies. Moderate bargaining power of suppliers can affect profitability of Dalata Hotel in Thailand (Dobbs, 2014). Threat of new entrants is moderate in Thai hospitality industry as new hotels enter with new and innovative things. It can put pressure on Dalata Hotels via their lower pricing strategy and innovation value proposition to the potential customers. It is very easy to establish a business with a small hotel. However, the regulations for running a hotel can be very restrictive. Dalata Hotel needs to fight with these challenges and create effective barriers for new entrants (Lacap, 2014). The global hospitality industry is not challenged by substitutes. In this way, threat of substitutes to this industry is very low. Direct substitutes for Dalata Hotels include the people who are living at their friends and relatives homes in Thailand. This arrangement can be very time consuming so people have to find the hotels for their accommodation. Different communication tools can avoid the needs of travelling for business travellers and staying at hotels. In this way, it can be said that competitive business environment in Thailand is moderate for Dalata Hotels. The hotel needs to make strategies and develop its strategies capabilities to deal with higher competition (Clancy, 2016). Internal Analysis: Strategic Capabilities When an organization expands its business to any new or emerging market, it needs to analyze its strategic capabilities before expansion. By conducting internal analysis, the organization can analyze its resources, capabilities and core competencies of Dalata Group of Hotels (Rothaermel, 2015). Internal analysis for the hotel is stated below; Resource audit is a process of going through the overall internal environment of the organization and analyzing all the available resources. These resources of organization may be in different forms and are not limited to the inventory and cash. Dalata Hotel owns various resources which are assisting the organization in developing and enhancing its business operations in emerging market. Human resources play an important role in the growth and success of hospitality business in any country. The employees at Dalata Hotels are committed to offering an environment where their associates can attain their potential (Steenkamp, 2017). Employees are managed in an effective so that they feel more engaged and they are empowered to offer exceptional guest services. It conducts a training program for its hotel staff and provides them competitive compensation, benefit packages and career progression. It has well-trained and well-educated employees to retain its guests. Financial management is one of the significant parts of customer service at Dalata Group of hotels. The company has managed all the financial resources in an effective so that it does not face any issue related to funds. It conducts weekly revenue forecasting process and its financial managers to ensure the payroll, variable costs to match the revenues. by delivering effective hospitality services, the hotel is generating significant revenues and profits. In addition to above, Dalata Hotel is focused on managing its physical resources such as hotel premises, equipment and other related resources. The hotel buildings are very attractive and rooms include various facilities. It has various technology resources as a crucial component of its business strategy (Piekkari, Welch and Welch, 2014). It is offering effective services to guests from electronic billing services and check-in. With the passage of time, Dalata Group of Hotels has added new properties to its fast growing list. It has assisted the organization in gaining effective brand image in Ireland and all over the world. It is offering three and five start hotels with exclusive facilities. Brand image and goodwill of this organization is one of the major intangible resources which are supporting the hotel in expanding its business in new markets. For any hospitality organization, it is very essential to become innovative and creative so that they can stay on the top position in the industry (Mok, Sparks Kadampully, 2013). Dalata is making innovation in its hospitality services according to the changes in the needs and demands of guests. They are offering Gym or Spa, conference rooms, technology innovation etc. In addition to resources, the strategic capability of a business is dependent on its core competencies. Core competencies are the capabilities and skills which differentiate the organization from other in marketplace. Core competencies of Dalata Hotels are given below; Dalata Group of Hotels has managed all the resources so that it can offer a significant care to the guests. The organization is committed to offer world class hospitality services to fulfill the needs of guests. The guests expect high-end services so all their demands and needs are fulfilled by offering excellent room quality at each and every guest of hotel. In this way, this hotel is offering attentive care to every guest arriving at Dalata Group of Hotels (Zhechev, 2016). Dalata Hotel is able to develop the highest brand recognition by delivering quality customer services to their guests. The staff at hotels is well-trained so that they can communicate with their guests effectively (Kandampully, Zhang Bilgihan, 2015). In addition to this, the organization is capable to offer exceptional amenities to the customers. Basis of Competitive Strategy (Bowmans Strategy Clock) Bowmans strategy clock is a framework which explores the alternatives for strategic positioning. It indicates how a product or service should be positioned to get most competitive position in industry (Radut, 2015). These products can be positioned based on two dimensions i.e. price and perceived value. Bowmans Strategic clock for Dalata Hotels is stated below; In Thailand, Dalata Group of Hotels should not use this type of strategy as it is used by the organizations whose services lack the differentiated value. This strategic position is considered as bargaining basement strategy. The only manner Dalata can make it is by enticing new customers by developing cost effective services (Thompson Martin, 2010). In this category of strategic position, low cost players compete in the industry. For establishing its business operations in Thailand, Dalata Group of Hotels can offer its hospitality services on lower prices so that it can make its initial customer base. In this stage, the organization will earn minimum profits from its operations. This hotel should use this strategy to set-up its hotel in the Thai industry. Companies prefer to practice hybrid strategy when it provides the products and services at comparatively lower prices. Dalata Hotels should implement this strategy by providing seasonal and special discounted packages to regular visitors. In Thailand, it can provide attractive offers to the travellers to enhance their repeat intention. It should offer the services by considering the needs and demands of guests (Crowley, 2016). With the help of this strategic position, Dalata hotels will offer its services to customers so that it can create highest level of perceived value. This hotel is well-established brand in Ireland and it is offering quality services. In Thailand, the organization can use more innovative practices to attract customers towards its services. Under differentiation, it should add some more services in its service package. Dalata Hotels can use this strategy after successful establishment of its business operations in Thailand. In the beginning, it should focus on lower pricing strategy so that it can develop its customer base. Dalata Group of Hotels can take a risk to offer its hotel services at higher prices as it has a better brand recognition in Ireland and all over the world. It will be risky for the company and it may face the situation where guests can switch from one hotel to other (Shakhshir, 2014). In Thailand, Dalata should not practice monopoly pricing because there are various players in Thai hospitality industry which are already well-established. There are various organizations that are practicing this strategic position. Under this, they have to set low value of their products and services which they provide to potential customers. There is no product or service at Dalata Hotels which fits in this strategic position (Legrand, Sloan Chen, 2016). From the above strategic clock, the organization should use some positions such as lower pricing, hybrid, differentiation etc. It will be beneficial for Dalata Hotels to stay competitive in the Thailand hospitality industry. Conclusions From the above analysis, it can be concluded that Dalata Groups of Hotels can expand its business in Thailand. It will be profitable for the business as it has various factors which are beneficial for the growth and success of this hotel. The above analysis of external and internal environment of company indicates that there are various factors which are in the support of this business expansion. Government of country is supporting to new businesses and international expansion. It is an attractive and beautiful country with natural sceneries and rich culture. It can be recommended that it should develop effective strategies to deal with the increased competition in Thai hotel industry. It should consider the market trends and changing needs of guests towards hospitality business. After conducting a market research, they should provide their services to potential customers. It will assist the organization in staying competitive in international hospitality industry. References Centara Hotels, 2018, Centara Hotels Resorts | Book an Exciting Escape Now available from https://www.centarahotelsresorts.com/ (Accesses on 27 March 2018). Charoenphon, V. 2014, The Future of Thailand Tourism Industry, Available from https://www.scbeic.com/en/detail/product/458 (Accessed on 27 March 2018). Clancy, M., 2016.Brand New Ireland?: Tourism, development and national identity in the Irish Republic. UK: Routledge Costa, J., Montenegro, M. and Gomes, J., 2016. Global trends challenging tourism organisations and destinations today: What are the likely solutions?.Worldwide Hospitality and Tourism Themes,8(6), pp.716-719. 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