Consultants Strategic Report and Recommendations for Oak Tree Inn (BM633)

This report provides a strategic analysis of Oak Tree Inn, including Porter's five force analysis, SWOT analysis, PESTEL analysis, and potential strategic options. The report suggests two potential strategic options for Oak Tree Inn, including increasing revenue per available room and improving digital presence. The SAF strategy model is also utilized to evaluate the suitability, acceptability, and feasibility of the strategies. The report concludes with recommendations for the organisation.

Strategic Agility

Table of Contents
INTRODUCTION...........................................................................................................................1
Brief overview of the firm and its activities....................................................................................1
Porter's five force analysis of Oak Tree Inn...........................................................................1
Internal and External Environment Analysis...................................................................................3
SWOT analysis of Oaks Tree Inn...........................................................................................3
PESTEL analysis of Oaks Tree Inn........................................................................................3
TWO potential strategic options......................................................................................................4
SAFe analysis...................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management refers to different strategies that help to full utilisation of resource to
achieve organisation’s goal. The strategic management involves evaluate the process of company
and external factor that affect the company's operational function. The strategic management is
performed by top level management. The strategic management help to the organisation to
achieve the organisation's objectives. With the strategic management, the company determine the
planning strategies according to external environment of the company. Oaks Tree Inn was
founded by Sandy Fraser in 1991 and it’s headquarter is located in Sunshine Coast, Queensland,
Australia. Oaks Tree Inn is providing accommodation service with approx. 60 properties located
in Lebanon, Qatar, the UAE and Australia etc. The report will cover the discussion about
explanation of the Oak Tree Inn along with poster's five forces analysis of Oak Tree Inn. In
addition to this, SWOT analysis as well as PESTEL analysis of Oaks Tree Inn will be covered in
the report.
Brief overview of the firm and its activities
Oak Tree Inn is developing Tourism Company in small rural area and providing amazing
experience across the global. The respective company generated approx. £ 3 million and given
organisation has ambition to reach 10 euro million by 2025. The respective company has worst
hit during pandemic as guests tried to stay at home to maintain the social distance and many
countries has restricted for movements. The given company faced challenges by their
competitors such Catnip inn, Inn on the River LLC, Delux Inn and Suites and Phoenix Inn Suites
etc.
Porter's five force analysis of Oak Tree Inn
Porter's five forces is an analysis tool that help to the company evaluate trend that will affect
by industrial competition and measure the power of negotiation with buyer and supplier. This
tool is most important for organisation to achieve the organisation's goal because it mainly
focuses on external environment.
 Competition in the industry: The competition threat is very high for Oak Tree Inn because
the given company has been facing challenges from competitive company such as Phoenix
Inn Suites, Delux Inn, Catnip Inn and The River LLC etc. The competitive companies use
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low pricing strategy that affect the Oak Tree Inn's business as guest as wide variety of
accommodation services at nominal price.
 Threat of new entrants: The new entrants’ threat is low for Oak Tree Inn because the new
firm requires huge amount of capital and wide area of market that most difficulty tasks for
new company. The respective company has advantages as good brand image and guest
loyalty so that it is hard for new entrants.
 Power of supplier: The power of supplier is low for Oak Tree Inn because the given
company has power to buy a product in high volume and they have huge of supplier so they
can switch from one supplier to other suppliers if they have issues with specify supplier.
 Power of customer: The power of customer is high for Oak Tree Inn reason being The
consumer has wide numbers of hotels so that it may a higher chance in which consumers
transfer from one brand to another brand for better service at nominal price.
 Threat of substitute: The threat of substitute is high for Oak tree Inn as if company has not
full filled the required of consumer so they shift from one company to another company.
Financial information
The Oak Tree Inn is thriving day by day as it provides memorable experience to its clients or
guest. The respective company has net assets approx. £21,576.00, company’s working capital
approx. £8,403.00 and company's total-liabilities is approx. £11,202.00.
Values of the organisation
The Oak Tree Inn has been following good ethics value as it maintains the good relationship
between guest and company. It maintains harmony among employer and employees.
Issues faced by the organisation
The financial position of Oak Tree Inn was unstable during pandemic as company's sales
reduced. The company has failed to maintain the advance technology that helps given company
to provide service effectively.
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Internal and External Environment Analysis
SWOT analysis of Oaks Tree Inn
The SWOT is an analytic tool that helps for company to evaluate the external factor and
internal factor that affect the company's business.
Strengths Weaknesses
The Oak Tree Inn is famous for providing the
luxurious amenities and it has good brand
value in approx. 16 cities across the world. The
company has maintained the good relationship
with guest as it has increased the goodwill in
the market.
The Oak Tree Inn is facing challenges to
maintain the different country's taste as it
declined the sales of given company. The
respective company has failed in modernizing
in technology advancement as it has reduced
the efficiency.
Opportunities Threats
The Company can grab the international guest
through digital advancement as it increase the
market value of the given company. After
covid, the small hotels have not enough money
to perform its business and Oak Tree Inn has
opportunity to takeover and associate with
them to increase the market value and sales.
In growing market, the competition is
increasing day by day as Oak Tree Inn has
been facing competition. After the pandemic,
the tourism sector has been affected badly so
that the given company's sales have been
decreased.
PESTEL analysis of Oaks Tree Inn
 Political factor: The government has strong control in hotel Industry as it determines the
different policies. In context to Oak tree Inn, Australia government has promoted hotel
industry that helps given company to expand the business in different countries.
 Economic Factor: The economic factor refers to travel spent, unemployment rate, and job
growth. In relation to Oak tree Inn, The given company has advantage in which Australian
people spent more on holidays and tourism..
 Sociocultural factor: The Sociocultural factor includes working culture, consumer beliefs,
lifestyle trend and demographic consideration. With referenced to Oak tree Inn, The mostly
people use app for booking the hotel's room as it can be helpful in peak season.
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 Technological factor: The technology factor affect business's operational. In context to Oak
tree Inn, the respective company has user-friendly website and apps so that consumers reach
to the company in any time and any place.
 Environment factor: The Oak tree Inn's room has been fluctuating according to the weather
as guest want to stay at pleasant weather and good surrounding that this factor affect the
hotel's price.
 Legal factor The Oak tree Inn has followed legal and welfare laws as it has increased the
brand value and the respective company has spotted hotel locations that help to guest to stay
at safe area and less crime rate area.
TWO potential strategic options
One of the most important parts of developing suitable strategies for the organisation
includes analysing the strategic options from SWOT analysis for mitigating the threats, and
exploiting future opportunities and strengths so that the organisation's competitiveness can be
improved. There are certain key matrices that can help to identify the students and weaknesses of
Oak Tree Inn and brainstorm tactics that can convert the weaknesses into strengths and take
advantage of the opportunities. The following KPIs can provide strategic choices to Oak Tree Inn
for exploiting opportunities and turning weaknesses into strengths (Sánchez-Cuesta, and et.al.,
2021).
 Increasing Revenue per Available Room (RevPAR), Average Daily Rate (ADR) and
Occupancy: The reports by STR provide data of about 63,000 hotels present across more
than 180 countries to compare benchmarks of the organisation as per industry standards.
With the help of this data the organisation can evaluate the statistics of the organisation
and compare it with the competitors. By doing so Oak Tree Inn can identify various
solutions like using metasearch management software for maximizing the reach of
organisations on various websites that can help it to increase Occupancy levels. Oak Tree
Inn can improve bookings and increase website traffic, better searches on TripAdvisor
and Trivago, etc. for increasing their revenue. With the help of metasearch management
software Oak Tree Inn can manage its presence across various applications like Google
Hotel Ads, TripAdvisor, Trivago, etc. in exclusive manners. This is helpful for the
organisation to increase or raise the bookings done by guests. The EBITDA margin of the
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Oak Tree Inn directly combines back depreciation and amortization expenses to the
operating profit and creates assumptions for the percentage of revenue that can be
obtained. EBITDA means earnings before interest, taxes, depreciation and amortization
(Makadok, Burton and Barney, 2018). It is helpful to compare the margins of the
organisation with its competitors and identify the trends within the industry with the help
of brokers like JLL and CBRE. The company can identify its margins and if its margins
are exceeding the market average then the organisation is doing well but if it is lower
than the market average then Oak Tree Inn has to identify the major causes and create
solutions to convert this weakness into opportunity. If the organisation's margins are
lower and its RevPAR and ADR are higher than the organisation can understand the
reason behind declining profits. By this the organisation can look at its staff composition,
work distribution, work process, etc. and can improve its performance. The Oak Tree Inn
can improve its direct bookings instead of using the third party site because it can provide
greater profitability to the organisation. With the help of proper marketing activities the
organisation can increase the percentage of direct bookings so that maximum profit can
be obtained. The organisation can use its statistics with the help of digital platforms and
can avoid third party booking so that the organisation can get direct benefit and
customers do not need to pay extra charges. If the business improves its room
availability, marketing channels, digital booking and user experience the company can
easily increase the number of customers and gain higher profit in the future.
 Improving the digital presence: The Company needs to enhance its digital presence
with a positive reputation. Oak Tree Inn can have better ranking in comparison to its
competitors if it constantly upgrades its digital performance that will help it to improve
its ranking on websites such as TripAdvisor and Trivago. Oak Tree Inn master looks
forward to having five star ratings and reviews with the help of reputation management
software that can aggregate the reviews from various social sites, OTAs and metasearch
for evaluating the feedback of the customers or clients (Lynch, 2018). The company can
use dashboards for correctly reviewing the suggestions, customer ratings and this could
help to improve the facilities for customers. With the help of digital data and customer
review system Oak Tree Inn can easily provide better customer experience at their hotel
and will be able to analyse the reviews of the customers for making improvements. By
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increasing the website traffic with the use of various softwares Oak Tree Inn can also
improve the presence of customers on their website. With the help of various softwares
like SEMRush Alexa and Similar Web the website traffic can be diagnosed easily and the
organisation can develop attractive solutions that compel the customers to take actions in
their favour. This would enhance the overall bookings and will likely increase the profits
of the organisation and retention capacity of their customers (Valeri, 2021). SEO is also
an important aspect for improving the website traffic of the organisation that can help to
market the services and products of the hotel more easily.
SAF analysis
While considering the formulation of strategy for a business the suitability, acceptability and
feasibility of the strategies must be evaluated (Chofreh and et. al., 2021). SAF strategy model is a
better option for identifying suitability, acceptability and feasibility of the strategy formed:
 Suitability: The organisation can definitely use its strength for improving its performance
because the increasing revenue per available rooms and average daily rate are very important
to enhance the profitability of the organisation. Oak Tree Inn can overcome its difficulties of
room allotment, customer generation and outer challenges by utilising the suitable strategies
that are stated above.
 Acceptability: The acceptability of SAF strategic model is about measuring the return, risk
and reaction of the stakeholders on the given strategy. The digital strategy of the
organisation to enhance customer experience is highly acceptable and reduces the chances of
risks for the organisation. With the help of effective digital strategies the organisation can
succeed easily and if it does not succeed there would not be any negative publicity of the
organisation in any manner. Therefore the strategy should be acceptable to the organisation
for improving its performance.
 Feasibility: The strategies mentioned above do not require huge amounts of investment,
manpower, machinery, and materials etc. (Siegel and Leih, 2018) for improving the
performance of Oak Tree Inn. It is because they are highly feasible and require the
development of a company's strategy with the same amount of resources for improving its
performance and provide better customer services for enhancing their chances of growth.
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CONCLUSION
It has been discussed in the above report that strategic agility is important for developing
strategies for the organisation and utilisation of resources for achieving the organisational goals
effectively and efficiently. Moreover, a brief overview of the organisation is provided with the
help of porter's five forces analysis. Furthermore internal and external environment analysis of
the organisation is provided with the help of SWOT analysis and PESTLE analysis. Along with
its strategies for improving the organisational performance in terms of its financial profits and
organisational growth are explained. Finally, it has utilised the SAF strategic model for
identifying the suitability, acceptability and feasibility for evaluating the strategic options for the
organisation.
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REFERENCES
Books and Journals
Chaudhuri, S.,and et.al., 2021. Prioritizing research in strategic management: Insights from
practitioners and academics. Strategic Management Review, 2(1), pp.1-28.
Chofreh, A.G. and et. al., 2021. Covid-19 shock: Development of strategic management
framework for global energy. Renewable and Sustainable Energy Reviews, 139.
p.110643.
D’Cruz, J.R., 2018. Strategic Management of Subsidiaries 1. In Managing the multinational
subsidiary (pp. 75-89). Routledge.
Doherty, T. and Lew, L., 2020. Competitive Analysis in Hotel Revenue
Management. Hospitality Revenue Management: Concepts and Practices, p.115.
Lynch, R., 2018. Strategic management. Pearson UK.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal, 39(6). pp.1530-1545.
Ostovare, M. and Shahraki, M.R., 2019. Evaluation of hotel websites using the multicriteria
analysis of PROMETHEE and GAIA: Evidence from the five-star hotels of
Mashhad. Tourism Management Perspectives, 30, pp.107-116.
Sánchez-Cuesta, R., and et.al., 2021. The environmental drivers influencing spatio-temporal
dynamics of oak defoliation and mortality in dehesas of Southern Spain. Forest Ecology
and Management, 485, p.118946.
Siegel, D. S. and Leih, S., 2018. Strategic management theory and universities: An overview of
the Special Issue. Strategic Organization, 16(1). pp.6-11.
Valeri, M., 2021. Organizational Studies: Implications for the Strategic Management. Springer
Nature.
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