Management Strategy Report

This management strategy report discusses the analysis of threats and opportunities, strategic options, and SAF analysis for Oak Tree Inn. It provides insights on achieving success and growth in the tourism sector. The report recommends strategies for expanding the business.

Management strategy report

TABLE OF CONTENTS
INTRODUCTION AND OVERVIEW...........................................................................................3
MAIN BODY..................................................................................................................................3
Analysis of threats and opportunities..........................................................................................3
Strategic options..........................................................................................................................6
SAF analysis on the strategic choices..........................................................................................6
CONCLUSION AND RECOMENDATION..................................................................................7
REFERENCES................................................................................................................................9
Books and Journals......................................................................................................................9

INTRODUCTION AND OVERVIEW
Oak tree Inn is a small company working in Balmaha, Loch Lomond, Scotland is based
on tourism sector. This business is owned and run by a family. This company is known for its
successful bar, restaurant and their accommodation for the holidays. The director and owner of
Oak tree Inn is looking to grow their turnover rates and thus is considering different options for
expanding the business. This Inn even features a B&B accommodation, have a village shop
along with a nice coffee shop and ice cream parlour (Gürel, and Tat, 2017). Oak tree Inn is a
beautiful loch side village in the Loch Lomond and Trossachs National park. This report deals
with the strategy management for the business to make them achieve success and keep growing
in the process. There will an analysis on the quality aspects of the business along with the threat
towards the company’s growth. The new opportunities rising for the Oak tree Inn in the tourism
sector is also discussed in detail. The uses of strategic options for successful achieving of the
goals and objectives of the organisation is very important and are done considering the needs,
availability of resources and company’s vision. It can be a bit difficult to select business
strategies appropriate for that particular business and then implementing them effectively. SAF
strategy is used to handle with all the problems and issues related to the choosing the correct
strategy approach.
MAIN BODY
Analysis of threats and opportunities
PESTEL analysis for the Oak tree Inn is given below
Political factors: They play an important role in the economy of the country and global
economy. The main target of companies like Oak tree Inn is to attract the international customers
into their Inn. Hotel industry form the back bone of government and therefore the government
supports the companies working in this sector to helping them survive in the market and sustain
in this competitive world. The company has been directly affected by the political changes.
Government takes some important decisions to support the development of hotels like Oak tree
Inn. Some negative effects such as violence or bad culture can influence the business as well.
Economic factors: They include the changes in the tax rates, inflation rates, interest and
exchange rates along with the growth of the economy (Vlados, 2019). Changes in the economy
of the country do produce some major effects on the working condition of the Oak tree’s

business. More guest are attracted towards the Inn when there is some workshop, some technical
conference in the city or for some business dealings. The more the tourist stays at the Inn, they
will demand more services and will therefore pay more for those services.
Social factors: Changing in nay social factors will have an impact on the rise and fall f
the demands for the business. Being a holiday Inn, oak tree Inn should have many wide ranges of
options for their customers (Abdel-Basset, Mohamed and Smarandache, 2018). Usually people
tend to come to relax with their family at such Inn so the company must let them feel welcomed
and relaxed.
Technological factors: Technology is offered to live beyond the basic standards of
living. There are various numbers of software available to manage the staff members and the
customers staying at the Inn. The use of technology is considered to be safer and secure way and
also helps in reducing the work effort. The availability of wifi within the boundaries of the Inn
can attract many customers and is very helpful especially for the foreign people. And hence
technology is a great factor which will affect the working of Oak tree Inn in the hotel industry.
Environmental factors: Changes in environmental and weather changes have affect the
business of Inn. Many taxes are applied to avail the use of more environmental friendly products.
The Inn might work with complete accommodation in some specific seasons. Natural disasters
can destroy the business of the company. The management are supposed to take necessary issues
in the emergency situations.
Legal factors: Following the rules, regulations and legislations while settling the Inn is
very important. The company has to deal with many legal issues from the customer’s side or the
acquiring of the land for expanding the Inn and many more like this. All these legal matter
decreases the profitability of the business.
The porter’s fiver forces analysis of the Oak tree Inn business is done below:
Threat of new entrants: High capital is required to start a project in hotel industry and
making it commercially operable status (Yusop, 2018). The already existing chains such as Oak
tree Inn have settled in the industry and have an advantage of their brand image and commitment
of the customers. They will have to invest more into bringing innovation in their services. New
entrants are different to survive in the market.

Power of suppliers: It is relatively low for Oak tree Inn Company. They have to put up
with the power of labour, trained staff and related arrangements. Power of suppliers has a low or
indirect pressure on them because of their competitiveness. The Inn has to maintain the expense
advantages over their rivals.
Power of buyers: When the number of buyers is higher in the market then their power
becomes higher. Many groups of buyers have a power over the hotel industry into purchasing
them in bulk. It becomes hard for the organisations such as Oak tree Inn to maintain their brand
name as being unique.
Threat of substitute products: This threat is relatively low for Oak tree Inn. But during
the recession times it becomes hard for them to even survive. People are always trying to book a
cheap accommodation which can be a bit challenging for Oak tree.
SWOT analysis table for Oak tree:
Strengths
- The location of the Oak tree In has won hearts of many
people. Maximum number of reviews has praised the
location of this property.
- There are more reviews on this Inn as compared to the
hotel and Inn in the nearby areas.
- High level of customer satisfaction.
- Good food quality.
Weakness
- No proper form of advertising.
- More number competitors leading to less market share.
- Less use of technology.
- Less available staff during the peak times of the Inn.
Opportunities
- Inn specific seasonal offers
- Opening of new tourist spot in the nearby area (Islam,
2017).
- Provide more variety of activities within the Inn.
- Tourist and travellers are looking for some new
destinations.
Threat
- A well establishes brand is opening the same business
in the nearby locality.
- Increasing costs for operations affecting the profit
rates.
- Intense competition.
- Less tourism due to natural disaster or any violence.
Strategic options
Oak Tree Inn is a small enterprise run by a family. This business needs to expand their
business. A proper business strategy can help the company achieve their goals and then
eventually attain success. Strategic options are goal oriented options which the company make

use of towards some external uncertain factors (Bruijl, 2018). The two types of potential strategy
options for Oak tree Inn are, Restructuring strategy and divestiture strategy.
Restructuring strategy: This strategy is used for restructure some if the unprofitable
services and options in the business. This process helps in discontinuing them and offering an
entirely new chain of systems to substitute the old ones. This strategy is beneficial for the
companies which have products that are not profitable for the business and the ones which are
starting to become unviable to make them persist. These also include the products which are in
the ending phase of their life cycle or are not available anymore. This option basically
reorganises the company which leads to discard some not so popular services and resources. It
makes them more focused towards the business growth by improving the overall status of the
company.
Divestiture strategy: This strategy is used when the business is getting unprofitable day
by day or from a long time. It is useful when the company is finding fewer opportunities for
growing their business. The company can then chose from the options to either sell some portion
to someone from the outside world or to go for management buyout where the management of
the company buy that particular area. Companies follow this option when they are trying to focus
on the core business, accommodation in this case. When the company is not able to manage the
diverse portfolio on which the business is working then this approach is very beneficial.
SAF analysis on the strategic choices
When choosing a strategy for the business it can be difficult to choose the best suitable
strategy. SAF strategy model gives the best approach for doing the same. It analysis on the basis
of three factors:
Suitability: It is the most important factor of this strategy model (Baaij, and Reinmoeller,
2018). This will show if the chosen option is providing what the company is looking for. It
includes many different criteria which are important for the business such as environmental
suitability, expectations and capability suitability. Each of these factors defines the business and
makes them reflect the needs and service by the company.
Acceptability: This aspect is all about measuring the return value, risk and the owner’s
reaction to that particular strategy for the business. Returns are measured based on the benefits
that the business is expecting including both financial and non financial. There are various

number of methods performed for calculating the costs benefits, profits and some other real
options for the analysis. When there are changes of risk, the profitability from the failure of the
strategy or due to any financial losses increases the impacts on the company.
Feasibility: This part of the SAF model form the make or break of the strategy. It finds
the ways if the business has the required set of resources and abilities to finally implement the
strategy and lead the path of success. Thus this part needs to be assessed by analysing cash flows
and performing break and even analysis. It can also be done by doing some financial tests. Next
part of the feasibility includes the manpower, equipments and other forms of management
powers when the strategy requires these needs to be fulfilled in order to work.
Firstly, the company must look into the SAF model and understand what it stands for.
Depending on this the best strategy is chosen. In the Oak tree Inn case the best strategy is the
restructuring strategy. The company is doing great but needs some restructuring in their style of
working. They can start by using the technology in the business (Moeslein, and Fritzsche, 2017).
Every customer is looking to find a hotel or an Inn which works in a technological advanced
way. Apart from this they can restructure the Inn into giving more comfortable experience to
their customers. So according to the SAF model restructuring strategy is best for an SME like
Oak tree Inn to help them become popular. With this right strategy Oak tree Inn can face their
threat fearlessly and gain the maximum from the opportunities being wide open to them.
CONCLUSION AND RECOMENDATION
Oak tree Inn is working just fine to attract some average customers. It can be seen that the
company is doing really well in the services they are providing and excelling in other factors
such as food quality. The only thing the company is missing is the power to attract more people
towards their Inn. They have so many opportunities open for them to increase their business
revenue. Firstly, they can hire a good marketing team to make the Inn reach out to as maximum
people as possible. Marketing is the core option for the companies to grow and using billboards
in this modern world will make the process of achieving success slow. Oak Inn is working is a
very competitive industry. But they can achieve competitive advantage by offering their
customers better prices and using their prime location near a national park into the main aspect to
gain more profits. They can even try to offer more activities within their Inn to give their
audience the best experience and making them stays loyal to the Inn.

Lastly, it can be concluded that the Inn can thrive when they can differentiate themselves
from the other options. The main quality of the company depends on their trained staff so the
company should focus on having more staff during the peak seasonal time of the Inn. Many
factors like politics, social, economical and many more can affect the business of the Oak tree
Inn but with a proper strategy it can survive whatever comes its way.

REFERENCES
Books and Journals
Abdel-Basset, M., Mohamed, M. and Smarandache, F., 2018. An extension of neutrosophic
AHP–SWOT analysis for strategic planning and decision-making. Symmetry, 10(4),
p.116.
Baaij, M. and Reinmoeller, P., 2018. Developing Superior Strategic Options and Making
Winning Choices. In Mapping a Winning Strategy: Developing and Executing a
Successful Strategy in Turbulent Markets. Emerald Publishing Limited.
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International Social
Research, 10(51).
Islam, M.A., 2017. SWOT Mix and PESTEL Analysis: Effective Tools of Risk Management of
Leasing Companies. The Millennium University Journal, 2(1), pp.1-18.
Moeslein, K.M. and Fritzsche, A., 2017. The evolution of strategic options, actors, tools and
tensions in open innovation. In Strategy and Communication for Innovation (pp. 61-
76). Springer, Cham.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Yusop, Z.B.M., 2018. PESTEL analysis. COMRAP 2018, p.34.