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Situational Analysis

This assignment is based around a case study of a holiday resort, the LodgePole Park (LPP), Bowron Lake, Canada, whose owners are seeking to use information systems to improve its efficiency and competitiveness.  You have been appointed as an IS consultant to provide guidance to Mr & Mrs Martin.

You are required to produce a business report to guide the Mr & Mrs Martin on how Information Systems and Internet applications could improve their current business operations (See guidelines below).

This is a case study of a Holiday Resort company Lodge Pole Park (LPP) that is based in Bowron Lake, Canada. The company was started in 1922 by Anne Campbell and subsequently was taken over by Samuel Martin, who was the grandson of Anne, in 1993. LLP had a significant number of resorts operating in the Quesnel region. The properties of LLP were different from other existing regular hotel or model business models as their services were targeted to travellers.

The resorts were open year round and was all-inclusive of facilities including accommodation, three full meals, licensed dining room, licensed patio overlooking the water that had canoes, paddleboats, fishing rods, rowing boats, kayaks as well as both touring and mountain bicycles. The property also included some beaches, docks, boat ramps, tennis courts, shuffleboard and playground. In total the property of LLP had 29 rooms that included 6 main lodges, 18 lakeside cabins, 3 hillside cabins and 2 economy cabins.

LLP had clients were regular travellers, coming from different nations and most of their clients were very loyal. The bookings were made well in advance by its customers to enjoy their preferred rooms and travel seasons.

There were some business specific issues that were bothering Martin and these included:

  • The guests were charged only for the number of adult bookings and thus, in case of kids joining them, the resort would get paid only for adults while they had to serve kids for free. This presented a big financial challenge for the company especially when number of kids increased as they had to provide services as well as facilities
     
  • The hotel was not given any star rating by the magazines it was putting ads in. However, if the company had to install the facilities to get better rating, it would have added a cost of $20,000 for only getting one rating. But as the company was still getting sufficient customers, they would not spend the amount for improving rating.
     
  • The day-to-day operations were manually recorded in a reservation book with details taken on room numbers, cottage numbers, dates, guest names, and counts. Every morning the total bill for every guest staying would be calculated including room charge, deposits, bar bills, motorboat rent, etc. As everything was done manually, often mistakes would happen when the staff would forget to include an item such as a drink ordered in the ledger. For a small amount, Martin would take the cost on himself but there were more mistakes and the company saw huge losses during an year.(Manual, 2012)

The company had realized a need for using a reservation system that would minimize mistakes that happened with manual entries and this reservation system could then be used for allowing online reservation for its customers which was not available. Thus, Martin approached a company called Northwind that had good customers list and was offering a complete package called Maestro which included functions for the front office (check in/check out), sales and catering, accounts receivable, voice and text messaging, Club/Spa management, work order maintenance, golf/tee times, yield` management and real-time online Web reservations. Martin brought the software with a cost of $8,000 that included hardware upgrade costs, software, installation, training at the vendor's facility in Markham for three staff, and some other expenses were also added for onsite training ($2,900) and one year of technical support ($1,000). even after training, finding it too complex and went back to use their old methods. Thus, Martin decided to do away with the system and acquire new one. (Hawthorn, 2005)

Before a solution can be designed for the company, it would be worthwhile to explore the internal value chain of the company which would help consultant understand the working of the resort and its core value generating activities. It would also help consultant understand based. (Gupta, 2005)of the company that could be cost advantage, differentiation, or technology

Internal Analysis

Porter's generic value chain model may be used here to explore these activities and core competencies to understand how the company generated value for its customers (Internet Center for Management and Business Administration, Inc., 2010)

Porter's Generic Value Chain Model

(Mind Tools Ltd, 2015)

The resort was a preferred resort by its customers but while competing with other resorts, it lacked in certain things. The resort had five full time staff and 20 more hired for housekeeping and maintenance. The core staff did not stay in the resort and thus, were not available full time. (Newell, 2006)

The resort was build keeping in mind to provide a facility away from home and disturbance. Thus, amenities like television and in-room phones were not considered very important but when considering the ratings given to resorts by reviewers, these facilities were given most importance to get a star rating. As per this rating system, the resort would not get any star rating. (Vuthipongse, 2001)

Another thing in which the report lacked compared to its competition was that the company did not have a booking facility on their website but the customers had to send email requests for booking. An yearly newsletter would be sent to regular customers to update them about next year happenings in the resort.

Moreover

To understand how the company performed externally a management tool called porters five forces model may be used here which would help us understand how environmental factors customers, suppliers, competitors, new entrants and substitutes can affect the business considering the situation. (PORTER, 2007)

Who? Travellers, Tourists

Power? High as they have many options

Who? Food services, Travel agents

Power? Less as LLP has its own resorts and a loyal customer base

Bowron Lake Lodge (no bedding, basic camping)

Becker's Lodge Bowron Lake Adventures Resort (online booking)

Bowron Lake Provincial Park (Nature walk)

Low competition as there are few of them and very few have online booking systems

Bargaining Power of Suppliers: As the property have their owned resorts and a good set of regular customer base, the suppliers have to supply things like food, and adventure equipments like boats to the report owner. Moreover, there are few resorts of similar capabilities which limits the customer base of suppliers and thus, the bargaining power of suppliers is low.

Bargaining power of customers: Customers have ample options to both travel to different places and to take different resorts, hotels or even camping trips, their bargaining power is very high. Thus, they have to be attracted through marketing and have to be retained by supplying them with good services. Moreover, chances of getting repeat customers depends on the services and enjoyment of these customers which makes their bargaining power even higher.

Competitive Rivalry: There are very few resort chains that provide similar facilities and services that are competing with LLP in the area. Also, those present in the locality also do not have online booking facilities or other amenities. Some of the resorts do not even supply bed to its travellers. However, there are some companies that have full services as well as provide online booking. If LLP installs the software for online booking and reservations, it would easily beat even these companies considering the loyal base of their customers.

External Analysis

Threat from New Entrants: The resort is a capital intensive business and even deployment of amenities is a costly affair. Just as Martin says that to make television available in all rooms, the cost would spike up to $20,000. Thus it is not easy for new entrants to take charge which leaves them a very low bargaining power.

Threat from Substitutes: Substitutes to resorts include motels, hotels and camping or trekking organizers. Travellers who want luxury can go with star hotels while those looking for adventures can easily choose cost effective camping services and thus, the threat from substitutes can be considered significant.

Information systems in any organization deal with processes, products or services, quality, social structures and bring automation to the organization. As thus, to understand how and IS would help LLP, these characteristics of the system could be explored (Yu & Singh, 2004).

Processes: Information systems can store large amounts of data that may be useful both for the organization and for its customers that are travellers in this case. By using information system, company can store a lot of information that a customer may be seeking while taking a decision for travel such as geographic characteristics of areas, accommodation availability, public transport facilities, demographic, socio-economic characteristics of the place to travel, tourist activities available, and services offered by the resort. All this information can be stored and can be made available to the customer or a prospects through the website which would make it easier for the site visitor to take a decision. Moreover, display of this information would build an image of the field expert for the company which would have a positive impact on the travellers mind. This would simply the process as the customer would otherwise have to call the resort to get details but with IS, the information would be readily available (Duran, Zeker, & Shrestha, 2004).

Further, an online reservation system would allow customers to make bookings and the details given by customers would get saved in IS such that there is not scope of error. In the current process, this is done with interruption from the staff who have to respond to emails from consumers or answer calls and manually write down booking details. The errors that are made in the facilities used by customer when they come to resort would also be minimized as the users would be able to directly enter the details against the consumer booking (Bodmer, Seidel, & Aerts, 2000).

Services: The services of the resort chain include reservation, booking, dining, food, water sports, etc. These services would improve as customers would be able to get the information on availability online, make bookings online which would be a convenience for them. Also, as the systems would be used to record customer data, the time taken for booking process would reduce thereby reducing the guest waiting time. Moreover,  as the resort has repeat customers, the data can be stored on systems and special marketing can be done using this data for existing customer such as giving them loyalty discounts or special offers (Oracle Corporation , 2005).

Bargaining Power of Buyers

Quality: Quality in case of  a resort service can be defined by changes such as lowered costs, faster booking and fewer delays. As the time taken for booking would reduce, manual entry errors would also reduce, the service quality would be improved as the staff would get more time to attend customers as the manual work would be minimized (Australian Council on Healthcare Standards (ACHS), 2003).

Social Structures: Social structure involves the manner in which people in the business environment interact with each other at work. With adoption of IS, this interaction would change as new reporting structures would emerge for employees who would be reporting to the management over the system. Moreover, with systems storing details of customers, staff would know more about a customer while interacting and this would delight the customer who would feel that the company cares for him or her (Sawyer, 2011).

Automation: The calculation of invoice would become automatic as the details of customers and the services used would be stored at the time of ordering and when the customer would be checking out, an invoice can be generated totalling the amount. Email promotions can also be made automatic such that every month, promotional email can go to the existing customers of the resort (Yang, Flynn, & Anderson, 2001).

There can be several methodologies that can be used in developing an information system for an organization such as waterfall model, prototyping, incremental, spiral, RAD, and Agile. As the company has already used one software in the past for managing their systems that did not work for it, it would be an appropriate thing to ensure that the same mistake is avoided this time and thus, a prototype may be installed first which can used by the employees of the company such that only after these employees are comfortable and familiar with the model, the full development would be carried out. This method would leave the scope of improvement if the model does not work in the first stage as the users would be able to give feedback on the shortcomings that could be corrected in the full installation.

The development would be carried out using a generic sequence both for the prototype and for the full development of the software for the company. This would begin with preliminary investigation in which feasibility of the proposed system would be determined for alternative solutions that would be suggested by the consultant such that the best solution could be chosen for actual implementation. Based on the chosen solution, the requirements of the system would be collected including functionalities required, users and deliverables (ICA, 2014).

Major functionalities that the software solution would provide to LLP would include:

  • Storing of customer information such as past stays, services taken, etc. at the time of booking in the database.
     
  • Storage of data on the pricing of each room as well as each service that is provided by the chosen resort in the database.
     
  • Retrieval of availability information from the database that is updated in the real time and displaying it on website for visitors to check anytime.
     
  • Booking of rooms using the website which would contain details of rooms, availability as well as would have a payment gateway installed allowing customers to make payments online.
     
  • Automatic generation of confirmation mail and invoice online after booking.
     
  • Automatic notification to booking manager about the new booking that happens through the portal
     
  • Retrieval of customer details from the company database and ability to enter details of added services taken during stay in this database.
     
  • Automatic addition of figures into the guest's account based on the added service such that employees can generate invoice at the time of checkout of the resort guests.
     
  • Automatic generation of newsletter based on the offers and updates entered by employees in the system every month as well as automatic emailing of the same to a list of customers .

Once the functionalities are decided, the system would be developed accordingly and then the same would be tested by real users of the system that is being installed to check if there are any discrepancies, complexities and bugs in the system. After a successful testing, the actual IT system would be installed replacing the legacy system whose data would be taken into the new system (Salazar, 2005).

Bargaining Power of Suppliers

Conclusions & Recommendations

This case study discussed how information technology solutions like online booking and reservation systems can help a company manage its operations, its employees and customers using the case of LLP which was a holiday resort chain that was using manual processes for managing their business. It was found that installation of information system would be able to improve their services significantly by bringing convenience to both customers of the firm and its staff as well as would reduce the time required for the booking and reservation for the customer. It was also found that there were huge mistakes that were happening in manual entries carried out by the employees while making bookings or updating service requests in the company and these errors could be completely eliminated with this new system. Thus, it was proven to be more reliable.

Considering this case where the company already spent a significant on a software which it was unable to use later, the consultant would recommend to first do a prototype and test it with users before the actual implementation so that such blunders could be avoided as they could lead to loss for the company.

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