Hotels have become so much important that they are a part of the lives of people. Four seasons hotel is located in in various parts of this world. The hotel is a five star located in several major cities in the world and has a branch in Paris that we are going to analyze..Four seasons hotel has felt the economic impact after the attacks in the capital Paris last year (Barney and Hesterly, n.d.). This report analyses the strategic management perspective Four seasons Hotel in light of increased competition and terrorism challenges. We shall analyze the strategic vision of the company by reviewing the SWOT analysis of the company.as well as the porters five model of the hotel.
Porters Five Forces
On the other hand, it should be mentioned that there is a strong or growing demand for this type of services, which creates a "sellers' market" where the bargaining power is transferred to the sellers (Michaux, 2015). It is also important to mention that nowadays customers or guests are well informed of the products and services, prices, costs, etc. of the hotel range, which translates into high competition within the industry.
The buyer bargaining power
The power of buyers, especially in the case of tourism agencies, is relatively high, since it will depend on the sending of tourists to the different hosting centers, thus limiting the opportunities of the industry to find buyers that offer more advantageous conditions, generating dependence on the members (Blackstone, n.d.). Four seasons hotel has been offering competitive holiday packages to its patrons which gives the hotel more competitive edge over its competitors and suppliers in paris. The rates allow the hotel to have more customers. The hotel also buys good quality products at low prices which gives
The exact severity of the threat to income depends on the barriers to entry and the expected reaction of firms already in the market to such new income. Paris boast a lot of high end hotels because it is one of the most visited cities in the world. the competitors have forced Four Seasons hotel to up its game to survive in this market. This is by coming up with unique packages for the customersw to increase its clientele.
The suppliers bargaining power
The Four seasons hotel when providing hotel service realize its economies of scale by lowering their costs through their suppliers, that is, when buying in large quantities real estate, food, etc. It allows them to offer a service at low prices (Clifford and Thorpe, 2007). With this, the arrival of new competition is low. Hence the hotel is able to offer good rates therefore enabling it to sustain itself in the market.
A lot of times the brand's loyalty is given by the customers or guests for something of a trajectory of the hotel company, which is inherited by consumers to other generations (Kainthola, 2009). This creates a positioning and loyalty and identification with the brand, indicating that potential entrants must spend a large amount of money to create a brand image that will last in the mind of the tourist. This will be given by the quality of the service, and its facilities.
The threats of new entrants
The need to invest in financial resources is high to enter the market with a hotel company, both for the constitution of the company and its facilities. In addition we must add that they must cover the initial investments, of publicity, etc. in light of this, Four Seasons can be sure that there will be no many entrants into the market because of the huge capital oulay needed to venture into the hospitality industry in Paris. However, there are many multinational hotels eyeing the lucrative market in Paris and therefore Four Seasons should always be on top of the game.
The Threats of Substitutes
The hotel industry is facing threats of substitutes in recent years. Bed and breakfast commonly known as B&B and cottages are becoming more and more common among tourists. This is because the provide quality services at affordable rates and this is taking away many customers from the five star market. The threat of these substitutes is great because there are many cottages and B&B coming up because there is no need of huge capital to start.
The interrelationships between business units and others in the company in terms of image and commercial capacity, are the reason that the companies attach great strategic importance to being in a concrete activity. In this industry, it corresponds to direct work with travel agencies (Everett, 2016).
Four Seasons hotel reinforces its pioneering nature as an expansion strategy
What is foreseen, and is now under construction, is one more hotel in other cities like Dubai.The hotel will invest more than 300 million euros a year in new construction, three to five hotels a year depending on its size, as in a comprehensive reform plan.
Precisely with its strategy of differentiated brands, the chain intends tooffer each demand segment the product it seeks. Now it has taken a step forward with the concept of adults only, which has involved a very important change in the company of which we are very satisfied by the welcome of this product with which started in America and have been adopted in Europe.
Four Seasons Hotel Strategic Direction
Market Penetration Strategy
The strategy for market penetration was developed by Igor Ansoff and called it the Ansof Matrix. Implementation of certain policies and brand development is the key strategy to market penetration. Product diversification and quality service delivery is the key strategy to enhance market penetration. The analysis of these four elements must be done taking into account either the internal characteristics of the hotel of the analysis, as well as the external competitive environment, constituted by the characteristics of the location, the evolution of the tourist demand and the characteristics, Strategies and actions of the competition.
The internationalization of the hotel chains and its impact on the management of human resources of the company In the previous image we see the first 10 Spanish hotel chains with establishments abroad ordered by number of rooms. Next, we will analyze these chains, where we will clarify their main characteristics and make special reference to their internationalization process. To do this we will go by ranking order of each chain in the Hotel ranking.
Diversification strategy depends on the quality of service that is being delivered in the hotel. Most hotels have diversified their portfolios by engaging in other activities that bring in revenue. The first diversification strategy is the tours and travels and conferencing where other hotel brands have ventured into.
As a global brand, the growth strategy is crucial to four seasons. The digital marketing strategy is to broadcast the brand name while expanding physically. Digital marketing has become a big hit for organizations and four seasons should also have a big brand in the social media for visibility and growth. Feasibility studies should also be done to help in growth potentials
Four seasons hotels strategic vision
In the creation of an economic-financial feasibility study, once all information on the location of the hotel, potential tourist demand and the structure of the competition has been collected and analyzed, a SWOT analysis must be carried out to determine the strategic positioning You should take the new hotel, or repositioning options if the hotel is already in operation but fails to fully squeeze its revenue potential.
Looking at the results of the analysis of the elements considered above, through the SWOT analysis, we define in detail the strengths of the hotel under analysis, its weaknesses, opportunities and threats (Noe et al., 2015).
The strengths and weaknesses reflect the elements that represent respectively the advantages and disadvantages of the hotel project object of the analysis in the present, in the present state, and represent objective data, or certainties to take into consideration(AccorHotels SWOT Analysis, n.d.).
Opportunities and threats, however, represent future positive or negative elements, which can therefore be verified with reasonable certainty and which, in the case in which they occur, may create advantages or disadvantages for the development of the hotel project or condition the positioning in the market when dealing with a hotel already in operation(Alston and Bryson, 2013).
Once a deep SWOT analysis is done it is possible to concentrate on a definition of the hotel project.
Among the latest openings to continue its international expansion, we must mention that in the first quarter of this year 2014, the chain has signed the following contracts: The internationalization of Spanish hotel chains and their impact on the management of Human Resources.
In addition to this, it is worth noting that in 2013 the chain signed a strategic agreement to create a joint venture with the Chinese hotel group HNA in order to develop the hotel business in China while the Spanish chain diversified its operations. Thanks to this agreement, NH Hotels will manage several hotels in China in 2014. Riu Hotels • United States: Although the chain already has 3 establishments in the US, it wants to reinforce its presence in the North American country. For it has followed two phases of expansion. The first in 2014, Meliá has signed a new hotel under its new brand , thus, the hotel "Innside los angeles" . In this case, instead of the franchise or management modality, the chain associates with promoters through long-term lease agreements of the properties, in this way, the promoters assume part of the risk and chain all the operational risk(Casademunt, n.d.) . The second step will be to complement this expansion in the US with growth in destinations in the Anglo-Saxon Caribbean, such as the Bahamas and Jamaica, where it will enter with a hotel in each of these destinations under the management formula.
It is the Four Seasons hotel chain that leads the ranking seen above, with 302 establishments and 7,894 rooms in 2013 (Singh, 2006). Currently, the network has a presence in almost 30 countries on 4 continents, especially in Latin America, the Caribbean and the main European capitals, with an incipient development in Asian destinations such as the Pacific, the Middle East and other emerging markets. As for its forms of internationalization, although 30% of its establishments are operated under property ownership, its tendency in recent years has been characterized by less capital intensive formulas, such as management and variable rent. In fact, in the last strategic plan.
Currently, more than 80% of the chain's hotels operate under the management or franchise model. In this way, the destinations that comprise this international expansion project are located in the following business areas: Asia Pacific and Real Estate (Zaccour and Jorgensen, 1996). When in psychology we talk about introspection we refer to the moment when the individuals perform our own analysis. In this case we extrapolate to the organizational scope to obtain a finished knowledge of our organization and the influence of the environment.
Once the above analyzes have been made, we can build the SWOT of our business. Although it is not possible to consider the hotel industry as a single whole, it is by no means unwise to rescue what it has in common (Pinto, 2015). Thus, in order to go deeper into any topic, it will be necessary to take into account some elements such as categories, geographical location, dimensions, etc.
But it is important to analyze them in order to seize opportunities and avoid threats.
Starting with the external analysis, we find the following:
- Appearance of new competitors with more attractive prices and / or more modern infrastructures.
- Difficulty of access to credit given the high volume of investment in this business.
- Instability of energy prices with the consequent impact on transport.
- Seasonality of demand.
- Atomization of the offer.
- Postponement over time of certain political uncertainties, especially regarding the legal guarantees for investment.
- Security problems especially in large urban areas such as the city of Los Angeles.
- More bold and convincing tourism promotion and development policies by neighboring countries such as Chile, Uruguay and Brazil.
- Country with little tourist tradition.
- Appearance of new market niches.
- Existence of an official policy aimed at strengthening it as destination for international tourism.
- The fact that our country is located in a sub region with no conflicts.
- Lower intermediation costs due to the application of new technologies.
- Better access to information and greater customer knowledge
- Wide variety of tourist attractions for all seasons.
- Standardization of the quality parameters that facilitate the commercialization.
- Multiple tourist attractions to be explored.
In the case of internal analysis, which is typical of each company, in general terms we will find:
- Scale of very low staff remuneration which leads to high turn over. Not only is a bad policy of incentives but also motivation perceived.
- Tendency to overvalue services by producing a very strong imbalance between them and prices.
- Existence of personnel with some shortcomings in vocational training. Usually it is about employees and officials with many years in the activity who possess countless things that do not do to good service. In many hotels with long-standing staff, there is some very strong informal power.
- Delay implementation of technologies that are new.
- Poor planning and exploitation of resources.
- Low professionalization of staff and management.
- Effects of convertibility after changing the .
- market changes flexibility and adaptability.
- competitive experience with other chains of hotels
Opening of establishments such as Hilton, Inter-Continental, and many others, have moved local hoteliers to worry about this topic producing a flashy reinvestment, which not only encompasses facades, Bars or restaurants, but also in some cases translates to expansions of facilities.
- Existence of training programs for staff in contact with a view to obtaining a better direct relationship with clients. To a greater or lesser extent, nowadays all hotels carry out trainings (mostly internal). I think the reasons for this are the same strengths mentioned in the previous point, in addition to the influence that the hospitality schools radiate.
· Effects of convertibility
· Competitive experience
· Training programs
· New competitors
· Seasonality of demand
· access to credit
· Security problems
· Instability of energy prices
· Country with little tourist tradit
· Poor planning
· Low professionalization
· Delay implementation of technologies
· Existence of personnel with some shortcomings
· very strong imbalance between them and prices.
· low staff remuneration
· new market niches
· Better access to information
· Wide variety of tourist attractions
· Multiple tourist attractions to be explored
Problem Solving-The Dutch Model
Defination of Real Problem
Four seasons hotels has been doing very well in its growth and development model and its strategic focus. The real problem however, for four seasons hotel is to oversee the expansion and growth agenda program and to match it with quality delivery of services (Thompson, n.d.). It would not be prudent to expand and have many hotel opened while compromising the quality of service offered. In this respect four seasons should grow strategically when expanding its brand.
Inorder to overcome the problem discussed, four seasons should enhance a brand image that should match up with other big hotel brands like Hilton and the intercontinental among others.it is also among the objective to make sure that four seasons will hire quality staff to improve the quality of service being p[rovided. Also, the place where the hotels set up should be made in the best place possible for tourist attraction and providing the best ambience.
Identify bounderies and constraints
There are various bounderies and constraints that hinder the growth of four seasons hotels. The constraints are financial and/ or otherwise. Due to rapid expansion, there are financial constraints associated with that. The reasons with this is that the environment at the moment doesn’t really encourage expansion of hotels.
Identify, generate and prioritize options
Prioritization of options to enhance the strategic decision is crucial. Instead of rapid expansion, four seasons should only target on slow expansion while enhancing and improving the brand quality to better the brand image.
Develop, evaluate and chose options
The options of the hotel is to improve on quality service to redeem its image. Image control serves for the betterment of the hotel industry (West, Ford and Ibrahim, 2015). The evaluation of options amakes it good for the company to choose the best strategy.
Under the models, the choices given to develop a strategy will only make it good for the management to evaluate both its internal and external business strategies. For this reason, the objective in the years to come, in addition to continuing to grow in the aforementioned emerging destinations, is to strengthen and maintain its presence in already consolidated areas and increase its presence in US destinations, such as New York, Miami or Los Angeles among others . & Resorts.
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