Hospitality Industry

Main Body

1.1 Internal and external factors

PESTLE analyses (External factors)

PESTLE analyses is the model that can help in understanding the external factors that affect the business performance of the organization to great extent. It is a strategic analytical tool that supports in knowing the potential effects of external environment in the company's performance (Dwyer and et.al, 2014). Several external factors are discussed as below:

Political factors: Political stability is the major factor that influence the success of industry. It is the components that can influence the visitors, tourists direct or indirect way. For instance if in the nation there are stable government then maximum people will found it safe and they will plan the tour in particular countries (Strumickas and Valanciene, 2015). On other hand if in any area there are high terrorism attacks then people do not take interest to travel in particular location. Coach House Hotel business performance gets influence by this component to great extent. Coach House Hotel is located in the large town in the east of country. In case of political instability in the nation traveler will not take interest in coming in this location thus revenues of the organization can get reduced to great extent. People feel that they are unsafe because government has no concern for the travelers (Galliers and Leidner, 2014).

Economic factor : It is another external factor that impacts on entire hospitality industry to great extent. Business of Coach House Hotel is getting down because of fluctuation in currency and economic condition of the nation (Ryan, 2015). In the year of 2008 in United Sated big down fall have taken place due to this recession have taken place. It has affected the overall business of hospitality industry to great extent. Debt crises etc has created situation of recession in the nation. In such condition exchange rates, interest rates, etc. get costly. That decreases mind of traveler and they do not spend amount in traveling. Related problem faced by the Coach House Hotel if exchange rates get increased. It discourages Americans and foreign tourists and they do not take interest in visiting destinations of US countries (Heizer and Barry, 2013). By this way number of booking will get reduced in the cited hotel that impacts on the revenues of the organization. Long term economic threats enhances the situation of income inequality for the middle class and lower class people majorly and by this way they loss their ability to travel and stay in the hotel (Dwyer and et.al, 2016).

Social and cultural factors: It is one of the major factor that impact on the business of Coach House Hotel. Cited firm does not focus on the cultural aspects, needs and preferences of the customers. Company provides services to the guests as per their own norms it does not pay attention on the belief of travelers. Age, income and other demographic factors influence the mind of visitors (Goyal, Rahman and Kazmi, 2013). Young population like to travel and they stay in sch hotels which offers them attractive facilities whereas older persons do not like to travel much. That impacts on the business performance of the Coach House Hotel.

Technological factors: Today is the globalized era in which travelers first search about the place and facility of hotels before going in any place. Coach House Hotel has not given much detail about its services on its website and it does not use social networking sites effectively (Ali, Amin and Cobanoglu, 2016). By this way travelers do not get much detail about the hotel that decreases its total sales volume. That is why company has not reached to its satisfactory level. If cited firm uses advanced technology's then it can enhance its revenues and can improve business of the organization.

Legal factors: It is major factor that affect or impact on the business performance of hospitality industry (Moyle and et.al, 2014). As if in any nation there are tough legislation, strict visa policy, security issues etc. Then it may demotivates the travelers and they will not come in the location that would affect the business performance of hotel indirectly because number of customers will get reduced thus business of firm will be decreased.

Environment factor : Climate, weather, geographical condition, global changes impact on the overall business of the hospitality industry (Kitsios and et.al, 2015). In the situation of poor weather people do not come in the location that affect the business of the Coach House Hotel indirectly.
Porter's five forces

Michael Porter has given the model of Porter's fiver that explains the internal and external factors that influence the business performance of the hotels.

Competitors: There are many leading brands in the hospitality industry such as Marriott, Hilton etc. that creates big problem the Coach House Hotel because due to brand name of these brand s travelers do not pay attention on average hotels (Molina-Azorín and et.al, 2015). They have high power and they can influence the mind of travelers.

Bargaining power of suppliers: In the hospitality bargaining power of suppliers are very low. Coach House Hotel has many suppliers, power of suppliers of the company are very low.

Threats of substitute products: If consumers find better option to stay then they prefer to stay in other hotels. Thus, this factor can influence the business unit to great extent (Saleh and et.al, 2015).
Threat of new entry: Power is depended upon the firm's ability, as hotel industry is very expensive and to influence mind of travelers company will have to offer them attractive facilities which is not possible thus they have low power.

Buyer power: travelers or visitors have high power and they can influence the overall business of the hotel. If they like to stay in other hotel then it will affect the revenues of Coach House Hotel (Rashid, Rahman and Khalid, 2014).

SWOT analyses (Internal factors)

It is the model that describes the internal factor that influence the revenues of the Coach House Hotel.

Strength:

• It offers facility like wedding, conferences at affordable rates to visitors.
• It is the member of marketing and trade associations that makes it powerful in the hospitality industry.
• It organizes trade fairs, workshops and networking events which make it successful.
• It offers 4 star facilities to its guests (Köseoglu, Sehitoglu and Craft, 2015).

Weakness:

• Poor marketing strategies.
• Premium prices of product and services.
• Unhappy employees.
• It can arrange the small functions like wedding etc., it can not conduct big events.
• Domestic weekend is the drawback because people like to stay near to town so that they can get drink facilities (Parnell, 2015).

Opportunities:

• Public interest is increasing that can help in increasing sales of Coach House Hotel.
• Staff members are experienced that can support in satisfying needs of guests.

Threats:

• Economic down turn
• High competition.
• Government regulations

1.2 Leadership style

Leadership is the major factor that helps in improving the performance of the employees, their strategies can support in enhancing the business performance of the organization. There are several types of leadership that can affect the organization to great extent (The Benefits of Diversification. 2016).

Democratic leadership:

It is the type of leadership in which leaders involve employees in the decision making process. They encourage innovative ideas and engage the persons so that they feel satisfy. By this way will contribute well in the organization that can help in increasing the business of firms. Final responsibility is of democratic leaders but they delegate authorities to others so that people can perform their work significantly (Kitsios and et.al, 2015).

Autocratic leadership:

Such type of leadership style is currently used by the Coach House Hotel. Leaders of the firm takes all decisions by own and they give orders to tits staff members. Employees do not get power to talk they just have to follow the instruction of higher authorities. According to the give case study chef of cited firm is not happy because company make policies and change suddenly. Decision of offering fusion menu to the guests was the sudden decision and leaders did not take any suggestion with the kitchen staffs before implementing this. By this way employees feel demotivated and they think to leave the jobs (Moyle and et.al, 2014). Management level people are unable to manage the staff members, they do not concern about their opinion and force them to follow the regulations.

Strategic leadership:

It is the type of leadership which follows by large corporations. In this, leaders focus more on competition and try to enhance performance of the company so that it can gain competitive advantage. Sometimes they ignore the feelings of staff members but they give training to employees so that they can improve their level of performance and can serve effective services to the guests. By this way hotel will be able to attract more consumers and it will enhance the brand name of the organization (Strumickas and Valanciene, 2015).

In the hospitality industry democratic leadership is applicable. As in this sector there are huge competition and to survive in the competitive environment firms need to encourage innovative ideas. By engaging the employees in the decision making process hotels can get to know about their needs and management can provide them rewards and recognition to satisfy them. By this way they will share their innovative ideas that can help in attracting customers towards the hotel (Volgger and Pechlaner, 2014). Employees deal with the consumers so they know about preferences and demand of users. By engaging the workers in the decision making process company can get to know about preferences of travelers and they can develop their products accordingly. That would satisfy the needs of guests and it will give success to the organization to great extent.

In the modern globalized era to sustain in the competitive environment it is necessary that company satisfy its staff members because satisfied workers can stay in the company for longer duration. By this way they will serve the consumers well and make them happy. It will create unique brand image of the organization in the hospitality industry. Thus, democratic leadership is best suited to the hotel sector but Coach House Hotel is applying autocratic leadership in the workplace (Ryan, 2015). It does not involve its workers in the decision making process. Managers introduce any policy anytime without giving any prior information to the staff members. That is why staff members are not happy. It is necessary for the cited firm to involve its workers in the decision making process, by this way they will loyal and they can share their feelings with the management level persons (Okazaki and et.al, 2015). That wold help in reaching to satisfaction level that will attract more consumers towards the brand and it will help in increasing revenues of the hotel.

1.3 Strategy for expansion of Coach House Hotel

Coach House Hotel is needed to expand its business so that it can communicate with mass audience and can enhance its number of consumers. Expansion is the great strategy that assist in achieving the goal of the company (Strumickas and Valanciene, 2015). It can give global presence to the entity and can improve its business performance to great extent. Several growth strategies are described as below:

Mergers:

It is the great concept that can be used by the Coach House Hotel that can help in increasing business of the firm and it can improve its performance too. Cited firm can merge with the other big corporation which is working tremendous in the hospitality industry (Ryan, 2015). In this both firms have to make a legal contract and it is necessary that both give their positive concern to accept terms and condition of agreement. In the merger risk is shared between both parties and both are entitled to get profit. For instance if Coach House Hotel wants to enter in the Indian market then by merging with Indian hotel cited firm will be able to establish its business in the new market (Ryan, 2015). Local support will help in knowing the requirements of the costumers thus company will be in position to deliver them satisfactory services. That will enhance its brand name and that can attract consumers towards the hotel. Merger strategy can support the Coach House Hotel in filling the gaps of services and cited firm will offer addition services to clients of the hotels (Dwyer and et.al, 2016).

Acquisition:

Coach House Hotel is facing the problem of lack of experience staff members, that causes problems in service delivery. With the help of acquisition with other hotel Coach House Hotel will be able to acquire talented staff members that can serve better to consumers and those who are having great experiences in the field. They will serve better to consumers by this way company will be able to grow well (Heizer and Barry, 2013). This strategy will bring great opportunity for the Coach House Hotel because that will reduce marketplace confusions and it will give strength to the brand image in the global market to the cited firm. Acquisition is the term in which entities acquire small firms, they acquire staff and operations of small hotels. That enhance value of market share of the company and attract more visitors towards the hotel (Dwyer and et.al, 2014).

Divestment:

It is the retrenchment strategy which is used by the entities when they wish to downsize the scope of business. In this, firms chooses to eliminate the unprofitable , unmanageable operations from the workplace. There are so many reasons of divestment such as small market share, availability of better options, need of increasing investments etc (Dwyer and et.al, 2016). As Coach House Hotel is not performing well, cited firm has invested huge amount for improving its operations but still it has not reached to its satisfactory level. This strategy would be better for the cited firm by this way it will be able to manage its cash outflow. By this way capital will be managed and unprofitable products may get eliminated from the operations. That would give huge success to the hotel and will help in accomplishing its objective soon. By this way profit of the organization can get enhanced and it will be able to provide consumers effective services (Molina-Azorín and et.al, 2015).

Diversification:

It is another strategy that can help the Coach House Hotel is expanding its business to great extent. It can be applied when organization wants to develop its products or want to expand its business in the new market (The Benefits of Diversification. 2016). It can be used as growth strategy , it involves market penetration, product development, market development and diversification. Ansoff matrix is the model that helps in the growth of the entities. In this Coach House Hotel can analyses the needs of its consumers and can develop its products accordingly. That would help in attracting more visitors because they will be able to satisfy the needs of users (Parnell, 2015). That would increase sales volume of the company and it will help in the growth of the hotel.

Franchising:

Small or big corporation use this strategy to expand their business. It is the strategy in which firms need not to invest huge amount for the expansion. It helps in increasing profit of the organization to great extent (Köseoglu, Sehitoglu and Craft, 2015). It enhances visibility of brand and gives global presence to the organization. Coach House Hotel can use this option as well that can help in accomplishing business objective of the hotel significantly.

Coach House Hotel should go with diversification strategy, it can help in giving success to the entity. Cited firm can expand in new market and can make connection with the other consumers (Parnell, 2015). By this way sales of the company can get increased that would increase its brand image and it will support in the growth of the hotel.

1.4 Effectiveness of diversification

Diversification is the great strategy that can help in increasing business of the Coach House Hotel to great extent. This concept can support the hotel in accomplishing its objective soon. Cited firm can enter into new market that can be termed as geographical diversification (Molina-Azorín and et.al, 2015). By this way number of customers of the company can get enhanced that would increase revenues of the hotel to great extent. Hotel can implement this strategy by following way:

Market research: Coach House Hotel has to first research the market, it has to analyses the needs and desires of population so that it can modify its operations accordingly (Ali, Amin and Cobanoglu, 2016). By this way it will be able to identify the growth opportunities in this new market. That will support in identifying the drawback of the system and cited firm will be able to modify its products as per the needs of guests.

Resource allocation: Once potential of market and needs of visitors is analyzed then Coach House Hotel will have to allocate the resources accordingly (Heizer and Barry, 2013). It will have to hire the staff members those who are capable to do well. By this way talented staff members will be able to perform well in the new geographical area. Management has to decide the budget and they have to arrange all activities accordingly.

Engaging staff: Once resource is being allotted then cited firm need to enhance participation of employees, so that they can share their innovative ideas with the managers. That can support in increasing business of the hotel in new location (Ryan, 2015).

Monitor growth: Higher authorities have to monitor the growth time to time, if they find any mistakes then they can modify the functions. By this way Coach House Hotel will be able to expand its business and it will give growth to the hotel (Goyal, Rahman and Kazmi, 2013).

Final implementation: In the final phase cited firm will have to finally implement the strategy in the new market.

Effectiveness of diversification strategy

Limiting risk:

It is the great strategy that can help Coach House l in accomplishing its objective soon. With the help of this cited firm will be able to limit its risks. By this way investors will be confident and they will invest their money in the business unit (Moyle and et.al, 2014). That can support in expanding business operations and that can give huge success to the hotel. It will minimize the risk of failure to great extent.
Maximize returns:

As Coach House Hotel has not achieved satisfactory level till date. By expanding its business in new geographical location hotel will be able to make connection with new customers. By this way sales volume of the cited firm will get enhanced (Parnell, 2015). That will give success to the organization and it will increase revenues of the entity.

Enhance brand name:

By diversification Coach House Hotel will be able to expand and it will give global presence to the hotel. That can create positive image in the mind of consumers and they will get attracted towards the brand (The Benefits of Diversification. 2016). This brand name will attract more travelers and cited firm will be able to offer them attractive services.

Capital preservation:

Diversification is the great strategy that can help in preserving the capital of the firm. That would give success to the hotel and it will definitely help in achieving goal of the organization (Heizer and Barry, 2013).

Conclusion

From the discussion it can be concluded that strategic planning is the great concept that supports entities in gaining success. Effective strategies and systematic process supports the firm in expanding its business ell. From the discussion it is found that Coach House Hotel is offering poor services to its guests. Cited firm needs to improve its services and products so that people can feel satisfy and they get attracted towards the brand. Report has also indicated that staff members of Coach House Hotel are not satisfied so company needs to motivate them and have to encourage them so that they share their views and perform well in the workplace. It will support to reach in the satisfaction level and in gaining competitive advantage to the entity.

References

• Ali, F., Amin, M. and Cobanoglu, C., 2016. An integrated model of service experience, emotions, satisfaction, and price acceptance: an empirical analysis in the Chinese hospitality industry. Journal of Hospitality Marketing & Management.
• Dwyer, L. and et.al., 2016. Achieving destination competitiveness: an importance–performance analysis of Serbia. Current Issues in Tourism.
• Dwyer, L. M. and et.al., 2014. Tourism firms' strategic flexibility: the case of Slovenia. International Journal of Tourism Research.
• Galliers, R. D. and Leidner, D. E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
• Goyal, P., Rahman, Z. and Kazmi, A. A., 2013. Corporate sustainability performance and firm performance research: Literature review and future research agenda. Management Decision.

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