Introduction
This report focuses on strategic analysis to analyze the positive and negative factors of the chosen country. In this report, proper evaluation is made to analyze the results of a particular country which can be considered by Dalata Hotel Company to enhance its business. In the first phase of the report, external environment has taken into consideration. In the next phase, competitive environment of a specific country will be considered. Dalata has a good international chain in which they offer various tour and travel packages to its clients. In the last phase of the report recommendations will be given so that activities of the organization can be conducted smoothly (Bellur et al., 2015).
Pestle Analysis of Mexico
Mexico is one of the largest economies in Latin America. The economic policy is liberal and there is a serious issue of drugs and cartel. The economy of Mexico plays a dominant role in the service sector (Kim and Kim, 2015). To evaluate the viability of Mexico for tours and travel activities, it is important to evaluate the macro factors by the management of Dalata.
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Political Factors
· Political pressure in Mexico is quite low.
· It is seen that Mexico has low risk in the continent.
· Political factor is stable in Mexico.
· With the developed countries proper relations are made (Kraus et al., 2015).
· There are many laws that are given by the government related to labors.
· Government of Mexico imposes high tariffs plans on the business to start new business in the economy (De Villa et al., 2015).
· Dalata can easily enter in Mexico by taking into consideration joint venture and strategic alliance with the existing organizations of Mexico.
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Economic Factors
· Mexico is one of the largest countries in economy.
· There is high quality and cheap labor.
· Reduction in the overall employment rate.
· To enhance the transparency government has considered many decisions (Xie and Li, 2017).
· Mexico is vibrant free market economy.
· The turnover can be enhanced as dalata has a high potential in the market of Mexico (Surdu et al., 2018).
· People of Mexico focus more on quality and tour packages.
· It is important that Dalata should focus on offering good quality and tour packages so that customers can be attracted in Mexico (Mak, 2015).
· There are various issues faced by Dalata hotel like rise in the labor cost and also due to this decline is the overall productivity is analyzed (Vogl, 2014).
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Social Factors
· Technological change is the major factor on which emphasis is given more by the organizations.
· People are living more in cities.
· Increase in the overall household income.
· Life standards and economic values are good.
· Mexico is open and focuses on considering new changes.
· If Dalata wants to acquire a large market share then it is important to focus on customizing the tours and travel packages so that customers can be attracted towards the market.
· The company should set their prices high as people of Mexico are not concerned more about the prices (Moshiri and Santillan, 2018).
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Technological Factors
· Lifestyle of the people is superior due to the advance technologies.
· By focusing on 4G network type communication has enhanced effectively.
· It is analyzed that should first emphasize on using online cyber computing system so that travel packages can be promoted.
· Many people in Mexico take active part on through social media applications to book packages.
· The government of Mexico is encouraging companies to use advanced technologies so that activities can be conducted smoothly.
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Legal Factors
· The government of Mexico has analyzed that legal requirement plays a great role in enhancing the growth of tour and travel industry.
· The legal procedure of the Mexico is stable and it encourages other companies to consider liberal policies and program.
· There are many laws that are compiled at the time of conducting the activities of the organization like property law, patent act.
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Environmental Factors
· The environment of Mexico is good and pollution free which offer positive environment to establish the business.
· It can be easy for the company to set up the business as the environment is good (Molina-Azorín et al., 2015).
· Dalata should invest more in managing the employees of the organization.
· Price skimming strategy is also effective so that quality can be maintained in a proper manner.
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Competitive Environment
This research focuses on the evaluation of tours and travel industry in Mexico by considering Michael Porter's five force model.
Bargaining power of the buyers
Bargaining power of analysis is high in Mexico. It is analyzed that in tours and travel industry the consumers focus more on the high quality of the tour packages. So, it is important to customize the packages as per the requirement and demand of the customers. It is evaluated that of Dalata hotel does not offer proper quality services in Mexico then it can be difficult to survive for a long time in the market (Laufs and Schwens, 2014).
Tours and travel industry in Mexico have many competitors like Marriott and carnival. It is important to consider proper functioning of these industries so that large market share can be grabbed. If a large market share is grabbed then it can be easy to enhance overall profits in an effective manner (Berman, 2015).
Bargaining power of Suppliers
It is analyzed that in the industry of tour and travel, suppliers are those who offer services to Dalata hotel like breakaway tours and also travel service providers. Human resources in Mexico are less and therefore there are many services that are given to existing business. It also requires a high cost of capital to create a strategic alliance with the competitors. The power of suppliers is high in Mexico (Marchington et al., 2016).
The threat of substitution
It is analyzed that the profits of Mexico are high. The threat of substitution will be affected by the other product substitution. In Mexico, there are many attractive places that are attracting the customers and help them to choose the best visitor place. This can be a high threat for dalata hotel to survive in Mexico. But on the other hand, it can also enhance the demand for the services given to the customers if the quality is good (Tang et al., 2015).
Rivalry competitors
There are many rivalries in the market of Mexico like Marriott. These groups are giving quality services to its customers to attract the customers towards the industry. If Dalata wants to give proper competition then it is important to offer good services so that satisfaction level can be enhanced. It will also help to sustain in the market for a long time. If services are good then more preferences are given by the customers to avail the services in a proper manner (Ruetzler et al., 2014).
The threat of new entrants
In Mexico threat of entrants is low as a high investment is required to establish the business. It is important for the new entrants to consider proper strategies so that proper competition. It is important to invest a large amount so that activities can be conducted smoothly. Threats of new entrants for tour and travel industry will be less. It is analyzed that to enter the market it is important to have the capability to invest in the business. If proper resources or capital are not there then it cannot be possible to conduct the activities smoothly.
Internal analysis
The internal analysis is considered to analyze the resources of Dalata Hotel group. The resources audit is the method of analyzing the available resources so that activities can be conducted smoothly. There are many resources that are analyzed in Dalata Hotel to conduct the activities smoothly.
Physical Resources
It is analyzed that Dalata Hotel has more than 30 hotels globally. There is proper communication channel established by the company so that connection can be maintained all over the world. It is important as it helps to communicate with a large audience in an easy way and it also helps to enhance the market share. Also, the employees are giving quality services to the customers so that satisfaction level can be enhanced. Some workers should be promoted to the Mexico branch so that quality services can be maintained in the Mexico market (Chan et al., 2017).
Financial Resources
Financial resources play a great role in the organization to expand its business. If there are no proper financial resources then it can create difficulty to enhance the market in an effective manner. The total turnover of the company is more than 225.7 million and it has enhanced by 158 % in the last two years. It has analyzed that the organization has a good financial position that helps to set up the business in the Mexico market (Williams and Best, 2014).
Human Resources
In dalata there are highly professional employees who are conducting the routine activities with efficiency. It is seen that the company offer high-quality services to the customers and the employees are trained properly so that they can accomplish their goals and objectives effectively. The management of the company focuses on developing and encouraging the employees according to the business process system. It is also seen that the training and feedback provided to the employees help to enhance the confidence level in a proper manner.
Specific resources
The company is offering product differentiation strategy so that core competencies can be enhanced. It helps to provide quality services to the employees at very less cost. It is difficult for other companies to consider this strategy. The cyber computing system will help to enhance the channel of communication of the organization and it will enhance the growth in the market (Kim et al., 2016).
Specific resources which are possessed by the company are : Good image, intellectual property, and good services. It is evaluated that by focusing on past information it is seen that company is performing well and tries to acquire resources in the market. These resources help the organization to acquire large market share so that brand image and quality services can be offered to the customers (McKercher et al., 2014).
The basis of a competitive strategy
To evaluate the competitive strategy of Dalata in Mexico, Bowman's strategy clock model is taken into consideration. This model helps to search the options for a strategic position that how the packages related to tour and travel will create a competitive advantage to enhance the market share of the company.
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(Source: human resource, 2018).
(Position 1) Low price and low value added
Dalata should focus on minimizing the overall cost of the services so that demand for the service can be enhanced in the Mexico market. It will help to attract more customers.
(Position 2) Low price
Low pricing strategy should be considered and it is related to develop cost leadership strategy in Mexico market so that customers can be attracted in a proper manner.
(Position 3) Hybrid
The company should consider cost leadership strategy so that large market share in the Mexico market can be grabbed easily. By keeping the prices low the company can easily attract the attention of the customers. It will help to acquire large Mexico tours and travel market (Wang et al., 2016).
(Position 4) Differentiation
This strategy should be followed by the company so that good quality products can be offered and satisfaction level of the customers can be enhanced effectively. It also enhances the value of the customers through its different tour and travel packages.
(Position 5)Focused differentiation
It is concerned with the pricing strategy which is price skimming strategy in which the prices are kept high and customer's satisfaction is enhanced so that demand enhances in the market.
(Position 6) Risky high margins
This strategy will not be taken into consideration by Dalata at the time of entering the market. If a high margin is considered by the company then it can give impact on the overall return on capital employed in the company.
(Position 7) Monopoly Pricing
This pricing strategy impacts the activities of the business. If Dalata takes into consideration the strategy related to monopoly then it will give negative impact on the organization. The negative impact is also seen in the overall brand image of the company.
(Position 8) Loss of market share
This position of the company is in a drastic situation. In this strategy, the hotel will give a product by enhancing the satisfaction level of the customers. After evaluating the clock strategy it is seen that Dalata requires considering position from1 to 5 to acquire Mexico market. Remaining position will be highly on the competitive position.
Conclusion
After evaluating all the factors of Mexico, it is seen that Mexico is the best place for the company to enhance the business. Also, the human resource will be high just because of the customers who require high-quality tour and travel packages. Dalata also tries to acquire large market share. The stable legal requirement will also encourage the company to expand the organization in this region.
Dalata should try to expand its activities in Mexico by taking into consideration the two strategies like cost leadership and product differentiation strategy. It will help the organization to enhance the overall satisfaction level of the customers and also the market share in a proper way. It is seen that if a company focuses on the strategies then it can be easy to enhance the market share and also success can be achieved by the company in a proper manner. By the above the information it is analyzed that human resource of the organization is efficient towards the activities of the organization (Riley, 2014).
Recommendations
By the above information, it is analyzed that in Mexico the people are more active on social media and other application that help to promote the overall activities of the organization. If dalata want to promote its product then it is important to focus on effective promotional strategies so that overall goals and objectives can be achieved. So, it is important for the company to consider proper marketing strategies so that business can be promoted effectively. By this, it can be simple to conduct the activities in a managed way (Nieves and Segarra-Ciprés, 2015).
Mexico market is wide and large and it has a high potential for the Dalata hotel to expand its market effectively. To expand in the market it is important to introduce various tour and travel packages so that growth can be achieved effectively. It is also important to establish a strategic alliance with the other travel and tours companies in the market so that business can be set up easily. The organization should also have a strong image and proper resources so that competitive advantage can be attained in the market. It also helps to compete with the competitors prevailing in the market. Tough competition can also be given to the competitors by focusing on proper utilization of the resources in an effective manner. It is also important that tour and travel package offered by the company should be attractive so that customers can be attracted towards the company and profits can be enhanced easily.
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