Banyan Tree In India: A Case Study (Essay)

Analysis of development of dynamic capabilities at Banyan Tree

Discuss about the Case study of Banyan Tree in India.

The four dynamic capabilities that are taken into consideration are- cultural ethics, risk management, advertisement campaign and their one of a kind product and services.

The service of providing spa facility along with individual villas that comprises of private pools. The concerned organization also provides intimate moments for couples. Surprises like incense oil lamp burning and lit candles along with petal spread everywhere in the room to make their moment special. The same process can be initiated in Asian county like India, where people intends to go to foreign country for holidays and honeymoon. Expansion of this business in India not only will save customer’s money but also allow them to experience a brand in their own country.

Another aspect is their maintenance of local heritage and culture. “Chiang’, the craft initiated the promotion of the brand ‘Banyan Tree Gallery’ that sells cottage crafts like- traditionally woven handmade fabrics, jewellery, tribal art made by local artisans (Johnson and Cavicchi 2017). The approaches to include the indigenous people especially those who belong from villages make the business successful in India. The government of India is taking initiative to make every people self- dependent. The support from nations; government and community will provide effective competitive advantage to the Banyan. It is also mentioned that there is 12% hotels registered growth in India and thus, Banyan can associate with all the existing and developing hospitality industry so that they can enhance their target market and attain more profitability (Lodging In India, 2016).

In addition to that, effectual promotional strategies and campaigns also provide competitive advantages and make aware of people about their unique services. Banyan already utilizes the approach of promoting their brand through international advertising agency. These agency or third-parties are also liable for formulating new tag-lines for each of their departments. However, apart from promoting the brand through social networking sites, targeting the leading business magazines in India will help other business parties to associate with them. Ferguson (2016) stated that this approach not only enhances the business network but also help the concerned organization to expand their business within short time. Developing county like India, have many people who belong to poor category and suffer from unemployment adversity. Expansion of business like Banyan can provide those poor people an opportunity to make indigenous spa products. This contribution in Indian economy allows the concerned organization conduct their business ethically. Moreover, the online registered dynamic growth of 21% in current value terms in 2015, so Banyan Tree services can also sell their spa products through online and target more customers, who cannot avail the villa and spa treatment (Lodging In India, 2016).

Service and product

The risk management is associated with every business. In this case, high price of the products and services is one of the risks. Another risk that can be stated is the inexperience staff members. Thus, Banyan tree can take initiative for hiring only experience people or provide training to the employees. Currently, the Banyan utilizes the strategy of DEEO process- discover the problem, establish a solution to overcome the adversity, equip clear guideline and long term perspective or mitigating and controlling the raised problem and lastly to oversee the developed plan. This can be developed by preparing a risk plan or matrix by listing some of the risks that can be occurred in hospitality sector like- inventory management, logistic management, customer abuse, lack of authentic products, monetary fluctuation and mispricing of the products or unnecessary demands for donation against the customer’s will. The government for both Thailand and India collaboratively prepare some strict guidelines for ‘Banyan Tree’ services so that these problems can be addressed and effective solutions can be taken based on the adverse situation. Wirtz (2016) stated that transparency with external and internal stakeholder is also plays an important role in attaining effective competitive advantage. Thus, regular survey from customers and employee will also allow the organization to know about the problem that is present in the organization.

According to Aaker and Biel (2013), strong and rich brand image acts as an opportunity for Banyan Tree Hotel in terms of expanding their business up to the extent of foreign market penetration. The following are the opportunities, strategic vision to which would help the personnel to spread their fame and glory across the corners of the world:

Hospitality industries are renowned for providing lip smacking delicacies within the ambience of recreation and luxury. In this, Banyan Tree Hotel is a deviation as it provides quality spa and wellness services. Like the other services, the spa generates calmness within the tourists. Within this, various therapies and facials are applied on the tourists for invoking their inner beauty and peace (Banyantreespa.com 2017). Utilization of the natural products would attract large number of customers. Along with this, if the customers are surveyed about their preference over the products, the personnel would be aware of the effectiveness of their products and services in terms of the wellness of the customers. Rationalistic application in this direction would enhance the popularity of the products and services of Banyan Tree Hotel.

Local heritage and culture

The methods of open forums and discussions are adopted by the personnel of the Banyan Tree Hotel for mitigating the intensity of the potential risks. Within this, the shareholders and stakeholders are involved. Coordination and unity is established between the management and the employees, which is crucial for overcoming the risks. After the selection of the appropriate solution for risk management, evaluation is done to check the appropriateness in terms of the identified and the specified risk (Banyantreestrategies.com 2017). Here, the utilization of checklists, templates would enhance the clarity of the personnel in terms of the undertaken methods for risk management. Keeping a track of these exercises would help in the publication of annual report and final evaluation.

Banyan Tree Hotel, through the means of delivering quality products and services, promotes cultural diversity. The number of tourists visiting the hotel and enjoying the services is the evidence for this fact. The hotel authorities have indulged in joint ventures with the nearby villagers, which has resulted in fairs and exhibitions. Opening these fairs and exhibitions for the tourists escalates the sales revenue of the hotel authorities. Herein lays the projection of cultural diversity. On the other hand, looking after the needs, demands and requirements is the ethical consideration of the hotel authorities in terms of enhancing their corporate social responsibility (Wirtz 2016). Creating a museum and preserving the talents of the local traders and businessmen would act as a token of appreciation towards their efforts by the hotel authorities. Along with this, if the visits to these museums are included within the holiday packages, the tourists would gain awareness regarding the cultural heritage.

Advertising is one of an effective means for transmitting the news of the latest activities, undertaken by the companies and organizations, to the customers. Within this, adopting the means of social media would help Banyan Tree Hotel staffs to increase the trafficking of the audience towards the brand image. Putting the image and news of the latest activities on the social networking sites and official websites would increase the urge of the audience to visit the place at least once (Robles and Hassan 2015). Along with this, if special discounts, schemes and offers are announced on the holiday packages in the form of leaflets, then also the network chain of the hotel would expand to a greater extent. Campaigns can also be conducted for advertising the steps taken by the hotel authorities to make the audience aware of their latest trends.

Promotional strategies

After the data collection and the analysis of the Indian hotel industry, where Banyan Tree Hotel is trying to enter, this report is trying to make an attempt of recommending a strategy for the hotel. For this purpose, Porter’s generic Strategy would be adopted. There are three different strategies of Porter, Cost leadership, Differentiation and Focus which is of two kinds, Cost focus and Differentiation focus (Tansey, Spillan and Meng 2014). While looking at the hotel industry in India, it can be seen that it has witnessed a sustained development trend in the past few years. The government has permitted the Foreign Direct Investment which contributed to the further growth of the industry. The strategy that is recommended for Banyan Tree Hotel is that the hotel should activate the ancillary departments which will get them more revenues. This strategy comes under the ‘differentiation’ strategy of Porter’s generic strategy which includes being unique in the industry adding some new dimensions which can be valued by the consumers.

This strategy suggests opening up the supplementary departments of the hotel, such as gym, gift shop, laundry, spa, pool, cabs, travel and making these services available for all general customers in the hotel. The Banyan Tree Spa has been awarded in the international market before, so if the hotel makes these services accessible for the general public initially, it can gain more revenues in the new market in India. According to Shen (2015) Most of the five star hotels do not allow the general public to utilize these services such as spa, gym, laundry or cabs. However, when the organization is entering a new hospitality market, it should not just rely on the guests of the hotel to gain sufficient revenues. Rather, if the hotel opens up these services to general customers on a monthly or annually membership basis, it can turn into a huge revenue generator.

There are always potential advantages and disadvantages of any strategy. The strategy that has been recommended in this report also has some possible advantages and disadvantages. Those are discussed below:

Advantage

The hotel can earn extra revenues if the management is capable of aligning the value chain system of the hotel. The extra revenue can come from the fixed bookings of the hotel services such as the spa, gym, cabs, travel and several others. Earning the extra revenues requires a well-organized revenue management technique and its application within the organization, so that the consumers view the ultimate results to be fair to them. The hotel can also have tie-ups with different partners for the activation of such departments. For instance, if the hotel is allowing general people for availing the gym service provided by the organization, they can tie up with few experienced personalities within the gym industry. This will not only increase the brand value of the hotel gym, but also bring in a new kind of expertise while making a serious distance from other players within the industry. In this way, the Banyan Tree Hotel can tie up with several experienced partners within the Indian hotel industry which will make their establishment a lot easier. In addition to that, considering the laundry services, if the hotel can start taking the other laundry loads from the outside establishments from the surrounding areas, they can also plan their strategies focusing on the cost leadership. If the hotel takes up the job, it can have double advantage, the first one being the earning of extra revenues utilizing the already installed facilities within the hotel premises, and the other one is that they can also offer their services to the people who are not staying with them currently. This will help them to build a sustainable and healthy relationship with their guests.

Risk management

Disadvantage

There can be a major disadvantage of this strategy is that; this strategy entirely depends on the value chain system of the hotel. Therefore, it requires some serious changes in the value chain system for making this strategy smooth and successful. This may be a little difficult for a new company within a new market. In addition to this, the organization should also remember that for any such outsourced jobs, the management requires a different logistic mechanism that can ensure that all the operations are being handled. There should also be more resources in the hotel which can take the pressure of all the jobs.

Reference list

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