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Situation Audit

Discuss about the Strategic Management for Service Quality Management.

With the dynamic progress of business, the organizations have to change strategies and policies in order to meet the needs and demands of customers. Every business organization while meeting the expectation of customers has to focus on strategic management so that customers from different psychological backgrounds get equal treatment from the organization. Novotel Hotel is one of the most recognizable hotels occupying a prestigious place in the soil of Brisbane (novotel.com, 2017). With the help of 4.5 premium accommodation, this particular hotel is constituted with 295 guest rooms, 24-hour services from the reception, having the presence of lobby bar, outdoor swimming pool gymnasium and sauna and so on. However, in order to draw the attention of customers from different geographical boundaries Novotel Hotel has focused to implement different strategies and policies for expanding their business more effective and to gain organizational image and reputation in the international market (novotel.com, 2017). This particular study has provided deep insight on how Novotel Hotel with the help of most innovative strategic policies would be able to draw the attention of customers for using their services. 

Before forming business strategy and policy, an effective situation analysis is highly important. Situation analysis is conducted with the help of both external as well as internal analysis (Hoque, 2013). External analysis allows the business experts to get an in-depth overview about the political, economic, socio-cultural, technological, environmental and legal factors based on which the success of an organization is highly dependent. On the other hand, internal analysis includes evaluating the strength, weakness, opportunities and threats of an organization in order to run the entire business process in the market. However, the external environmental as well as internal factors of Novotel Hotel are as follows:

Strength

Ø  Flexible service process with large number of workforce strength is one of the most recognizable strengths of Novotel Hotel.

Ø  The reception of this specific hotel is open for 24 hours. Therefore, the service users do not have to face any kind of problems in using the products and services of Novotel Hotel.  

Weakness

Ø  The revenue generation of Novotel Hotel is highly dependent on the seasonal business. As a result, the business experts have to face innumerable difficulties to promote their products and services throughout the year.

Ø  In order to grab the mind of international customers the marketing executives needs to conduct corporate social responsibility more effectively.

Ø  As a result, the organization cannot get the scope to gain brand identity and image due to seasonal business process  

Opportunities

Ø  Novotel Hotel is possessed with a big opportunity of expanding the entire business process beyond going the regional market of Brisbane as well as Australia.

Ø  Novotel Hotel is having a scope to make a partnership as well in order to enhance internal resources.

Threats

Ø  Competitors’ market threat is one of the major concern for Novotel Hotel in order to establish their brand in the market of Australia

Ø   After implementing new strategies and policies, Novotel Hotel is having a major risk whether this particular organization would be able to collaborate their business process effectively with its partner or the business experts would get an opposite reaction from the customers.  

Table 1: SWOT analysis

(Source: Mok, Sparks & Kadampully, 2013)

Novotel Hotel is possessed with large number of workforce strength. Australia is the country endowed with numerous tourists’ spot. Therefore, a large number of hotels have flourished their entire process of business in the soil of Australia. Brisbane is one of the most recognizable places of Australia where people from different geographical countries can easily access (Wang, Chen & Chen, 2012). Therefore, the business experts of Novotel Hotel have appointed a large number of employees in order to provide effective service process to the customers. On the other hand, the entire service process of this hotel is open for twenty-four hours especially for the international customers (Mohammed & Rashid, 2012). In this kind of situation, people who belong to different country do not have to face any kind of difficulties in use the service process of Novotel Hotel.

SWOT analysis

This particular hotel is not possessed with some of the major drawbacks as well. Most of the hotels belonging to Australia are highly dependent on the seasonal business. As a result, people belonging to different geographical markets tend to visit the spots of Australia in winter. Therefore, the entire business process is highly dependent on some of the specific seasons. In this kind of situation, the business experts have to depend in earning the revenue at the time of peak season (Wu & Lu, 2012). In order to overcome this particular challenge the business experts of Novotel Hotel intend to collaborate their business process with Village Roadshow. As a result, the experts would not have to depend on tourists only. Novotel Hotel would get more opportunity to spread their entire business in different geographical areas (Vila, Enz & Costa, 2012).


In order to expand the entire business in other multinational countries, business partnership for Novotel Hotel is one of the most effective solutions. On the other hand, it has been observed that partner would enable the organization to enhance their financial capital as well. Therefore, Novotel Hotel would be able to maintain corporate social responsibility more effectively for gaining image and reputation of the business organization (Evans, Stonehouse & Campbell, 2012). At the same time, it is also undeniable that partnership or collaboration with different organization like Village Roadshow is possessed with several risk factors as well. The organization may not become successful in making an effective adjustment with the business partner. Employee may have to face innumerable difficulties in communicating with the new work culture (Boella & Goss-Turner, 2013). Therefore, this kind of strategy may become a major risk for the business organization.

SWOT analysis

Figure 1: SWOT analysis

(Source: Brotherton, 2012)

Political

Ø  Australia is beyond major political conflicts. The government of Australia is flexible enough to allow the business organizations for running their wings successfully. As a result, the customers do not have to face any kind of challenges in order to use the service process of Novotel Hotel.

Economic

Ø  Inhabitants of Australia are very much advanced in technology. Therefore, the regional inhabitants do not have to face any kind of difficulties in purchasing the products and service of Novotel Hotel. At the same time, it is undeniable that the products and service of Novotel Hotel are affordable for the low cost customers as well. Therefore, people belonging to Asian countries can easily use the facilities of Novotel Hotel.    

Socio-cultural

Ø  Australia is possessed with people of different cultures and religious backgrounds (Cabiddu, Lui & Piccoli, 2013). Therefore, the accommodations and services of Novotel Hotel are not biased at all. Various cultural people and religious inhabitants can use the products and services Novotel Hotel.

Technological

Ø  With the advancement of technology, customers do not have to visit directly for using the products and services of Novotel Hotel. International customers before visiting to the place can book the hotel with the help of internet.

Environmental

Ø  Australia is endowed with extreme weather. Therefore, people cannot visit the place in summer. Hotel industries have to spend through a challenging phase at the time of those lean seasons (Tajeddini & Trueman, 2012). 

Legal

Ø  Like every business organization, Novotel Hotel has to follow some of the major acts and regulations at the workplace. The regulations include health and safety act, right to information act, anti-discrimination act, gender equity act, data protection act and so many.   

Table 2: PESTEL analysis

(Source: Nieves & Segarra-Ciprés, 2015)

PESTEL analysis

Figure 2: PESTEL analysis

(Source: Sigala, Christou & Gretzel, 2012)

As per the case scenario, it has been observed that Novotel Hotel aims to expand their business in order to gain brand identity and image (Heizer & Barry, 2013). For that purpose, the business experts of this particular organization have focused to implement three major strategies within the entire business process. The three major strategies include:

  • Initiating partnership with a business organization of different industry like Village Roadshow
  • Implementation of non-organic growth strategy in order to gather sufficient number of capital for business expansion
  • Maintaining corporate social responsibility more effectively in order to place the brand of Novotel Hotel in the international market

Based on the three major issues, the organization has decided to implement some alternative strategies and policies with the business process. The alternative strategies include:

  • Implementing risk management in order to evaluate the risk analysis factors while following the business strategies
  • Enhancing the promotional activities in order to gain global image and reputation
  • Accumulating the financial resources by making partnership in order to expand the brand in global market

With the change of environment, technology and political status of a particular country every business organization needs to change their strategy and policy. SFA is the systematic framework that enables a particular business organization to develop their strategic policy as per the situation (Fraj, Matute & Melero, 2015). Novotel Hotel is not exceptional to that. The significance of SFA framework is as follows:

Analysis

Suitability:

With the help of suitability framework the business organization like Novotel Hotel tends to evaluate whether the strategies implemented for the development of business organization like Novotel Hotel is suitable with the current market or not. After conducting an effective external and internal analysis, it has been evaluated that this particular business organization is very much dependent on seasonal business process (Nieves, Quintana & Osorio, 2014). As a result, the business experts have to face challenges in meeting the needs and demands of employees at the lean months. In this kind of situation, the strategy of non-organic growth or partnership would be most suitable for enhancing the entire business process in the international market as well.

Feasibility:

Feasibility focuses on the facts whether the organization like Novotel Hotel has sufficient resources in order to flourish the entire business wings in the market of Australia as well as other international countries (Sainaghi, Phillips & Corti, 2013). Making a partnership with Village Roadshow would help the business experts of Novotel Hotel to accumulate large number of financial resources. As a result, Novotel Hotel would be able to promote their business process more effectively.

Acceptability:

Acceptability primarily focuses on two major aspects that include financial aspect and stakeholder aspects. Financial aspect implies that business organizations need to be strong financially in order enhance the entire wings. In order to run the entire process of business successfully in the market the company like Novotel Hotel should have a strong economic background (FitzPatrick et al., 2013).  In addition, people have to deal with the customers the aspect of stakeholder implies that business experts after implementing new business strategy and policy should wait for the reaction of stakeholder as well. If the stakeholder is not satisfied in implementing new strategy and policy, the business experts have to change the entire plan.

As per the case scenario, the three major issues that have been identified for expanding the entire business process of Novotel Hotel are as follows:

Analysis of the implementation of CSR activities:

Corporate social responsibility is the form of business approach with the help of which a specific business organization intends to maintain sustainable development by serving social, economic and environmental benefits to the concerned stakeholder. The primary objective of maintaining an effective corporate social responsibility is to gain organizational image and reputation. CSR activity is the part of business strategy and policy (Wu & Lu, 2012). This particular business strategy helps the organization to show their major concern for the society. In order to enhance the entire process of business the organization like Novotel Hotel should follow corporate social responsibility by contributing certain amount of money to the NGOs. In addition, the organization can help the employees by providing them additional benefits and facilities. As a result, employees would like to show their interest for providing good services in order to reach the business goal. Novotel Hotel can follow community relation for maintaining the entire process of business (Vila, Enz & Costa, 2012). Community relation enables the business organization to hire the employee from local community. As a result, the business experts get necessary benefits and facilities from the community as well.

PESTEL analysis

Non-organic growth is the systematic strategy of acquiring new business with the help of business merges, acquisition, collaboration, joint venture and so on. The entire business process of Novotel Hotel is entirely based on season. Therefore, in the lean month the business experts have to face innumerable difficulties in maintaining the glory of business. The employees on the other hand get deprived of receiving remuneration at the proper time (Mok, Sparks & Kadampully, 2013). As a result, they show their reluctance in providing effective service process for reaching the business target. However, in order to overcome this kind of crisis the business experts can implement one particular strategy.

Non-organic growth strategy is the most effective way with the help of which people Novotel Hotel has the scope to merge their business with other company. As a result, business experts can get the scope to enhance their resources, be it physical resource or financial resource. On the other hand, the number of workforce strength also becomes high due to the business merge. As a result, the customers get necessary facilities and benefits within proper time. The customers do not have to wait for a long time in order to receive the service process (Brotherton, 2012). Therefore, non-organic growth strategy is very much effective for enhancing the business growth of Novotel Hotel. 

Partnership is another way to expand the entire business process. Village Roadshow is the organization that has already spread a recognizable place in the market of mass media. By making an effective collaboration with Village Roadshow the business growth of Novotel Hotel would be enhanced. On one hand, the financial resource of two accumulated business organization would be high with the help of which the marketing managers get the scope to invest large amount of money in maintaining promotional activities (Boella & Goss-Turner, 2013). At the same time, sufficient financial resource would help the organization like Novotel Hotel for maintaining an effective corporate social responsibility as well. Corporate social responsibility is most effective way to earn the business image and reputation. Partnership is possessed with some of the major drawbacks as well. If the employees fail to communicate with each other at the workplace, the customers would not get services at the proper time. On the other hand, the managers as well do not get the scope to make proper managerial decision due to cultural barriers. Therefore, before implementing partnership the business experts of Novotel Hotel should follow risk management strategy as well.

After evaluating the entire strategic implementation, some of the major recommendations can be analyzed. The recommendations are as follows:

  • Implementation of risk management within the business process of Novotel Hotel in order to evaluate the expected risk factors in making partnership
  • Investing sufficient amount of money behind promotional activities in order to make the customers attractive towards the entire business process
  • Conducting corporate social responsibility for gaining organizational image and reputation more effectively
  • Along with implanting low cost strategy the significance of brand value strategy is equally important to draw the attention of premium customers as well

Reference List:

Benavides-Velasco, C. A., Quintana-García, C., & Marchante-Lara, M. (2014). Total quality management, corporate social responsibility and performance in the hotel industry. International Journal of Hospitality Management, 41, 77-87.

Boella, M., & Goss-Turner, S. (2013). Human resource management in the hospitality industry: A guide to best practice. Routledge.

Brotherton, B. (Ed.). (2012). International Hospitality Industry. Routledge.

Cabiddu, F., Lui, T. W., & Piccoli, G. (2013). Managing value co-creation in the tourism industry. Annals of Tourism Research, 42, 86-107.

Evans, N., Stonehouse, G., & Campbell, D. (2012). Strategic management for travel and tourism. Taylor & Francis.

FitzPatrick, M., Davey, J., Muller, L., & Davey, H. (2013). Value-creating assets in tourism management: Applying marketing's service-dominant logic in the hotel industry. Tourism Management, 36, 86-98.

Fraj, E., Matute, J., & Melero, I. (2015). Environmental strategies and organizational competitiveness in the hotel industry: The role of learning and innovation as determinants of environmental success. Tourism Management,46, 30-42.

Heizer, R., & Barry, R. (2013). Operation Management, Sustainability and Supply Chain management (Vol. 11). Pearson, UK.

Hoque, K. (2013). Human resource management in the hotel industry: Strategy, innovation and performance. Routledge.

Mohammed, A. A., & Rashid, B. (2012). Customer Relationship Management (CRM) in Hotel Industry: A framework proposal on the relationship among CRM dimensions, Marketing Capabilities, and Hotel performance.International Review of Management and Marketing, 2(4), 220.

Mok, C., Sparks, B., & Kadampully, J. (2013). Service quality management in hospitality, tourism, and leisure. Routledge.

Nieves, J., & Segarra-Ciprés, M. (2015). Management innovation in the hotel industry. Tourism Management, 46, 51-58.

Nieves, J., Quintana, A., & Osorio, J. (2014). Knowledge-based resources and innovation in the hotel industry. International Journal of Hospitality Management, 38, 65-73.

novotel.com., (2017). Novotel Hotels: book a hotel for family holidays or business trips. (2017). Novotel.com. Retrieved 17 April 2017, from https://www.novotel.com

Sainaghi, R., Phillips, P., & Corti, V. (2013). Measuring hotel performance: Using a balanced scorecard perspectives’ approach. International Journal of Hospitality Management, 34, 150-159.

Sigala, M., Christou, E., & Gretzel, U. (Eds.). (2012). Social media in travel, tourism and hospitality: Theory, practice and cases. Ashgate Publishing, Ltd..

Tajeddini, K., & Trueman, M. (2012). Managing Swiss Hospitality: How cultural antecedents of innovation and customer-oriented value systems can influence performance in the hotel industry. International Journal of Hospitality Management, 31(4), 1119-1129.

Vila, M., Enz, C., & Costa, G. (2012). Innovative practices in the Spanish hotel industry. Cornell Hospitality Quarterly, 53(1), 75-85.

Wang, C. H., Chen, K. Y., & Chen, S. C. (2012). Total quality management, market orientation and hotel performance: The moderating effects of external environmental factors. International Journal of Hospitality Management, 31(1), 119-129.

Wu, S. I., & Lu, C. L. (2012). The relationship between CRM, RM, and business performance: A study of the hotel industry in Taiwan. International Journal of Hospitality Management, 31(1), 276-285.

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