Strategic Report and Recommendations for Oak Tree Inn (Case Study)
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This report aims to produce two important strategic options which assist in managing the organisation in an effective way. The report undertook important analysis models such as PESTEL, SWOT, Porter's Five Forces model, VRIO, etc.
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CW1: Consultants strategic report and recommendations for Oak Tree Inn (Case Study) 1
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Table of Contents INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Section A................................................................................................................................3 Section B................................................................................................................................3 Section C................................................................................................................................5 Section D................................................................................................................................6 CONCLUSION................................................................................................................................8 REFERENCES:...............................................................................................................................9 Appendices:....................................................................................................................................10 PESTEL analysis..................................................................................................................10 Porters Five Forces model....................................................................................................10 VRIO model.........................................................................................................................11 2
INTRODUCTION Strategy is defined as the planned procedures which used by organisations in order to achieve their strategic goals and objectives(Ackermann and Eden, 2020). This is the reason that company needs to focus on creating the strategic options in order to achieve their goals and objectives. For that purpose, it is necessary that to analyse the market situations and match with the organisational resources. In this context, Oak Tree Inn is undertaken which is the three star hotels. It is located in the east side of Loch Lomond i.e. Glasgow, United Kingdom. This report aims to produce two important strategic options which assist in managing the organisation in an effective way. MAIN BODY Section A It is found in the shade of 500 year old oak tree, there is family which run a 3 star hotel that named is Oak Tree Inn. It is located in Glasgow, UK. They built this Inn in the village of Balmaha which is situated on the shores of Loch Lomond. It is found that they have also a walking trail which named is West Highland Way (The Oak Tree Inn). This hotel is providing many amenities and services such as on site restaurant, Wi-Fi internet, cafe, bicycle parking, fire sprinkler system, non smoking property, golf course, hiking trails, ATM, etc. They also have pubs and cottages in which people can stay and enjoys all the additional services. There are many competitors found in the case of Oak Tree Inn such as Catnip Inn, Inn on the River, Azalea Inn Bed and Breakfast, Deluxe Inn and Suites, etc. They earn revenue more than $5 million. They have total 7 employees who helps in managing all the functions and operations of their Inn. It is found that due to COVID-19, Oak Tree Inn is facing many issues such as less number of customers in the market, declining in the profits margins, decreasing in sales, etc. They are also faced issues after pandemic as they are unable to survive and thrive in the new normal. Section B SWOT is an important tool which is used for the purpose of analysing internal analysis. It is necessary for an organisation to conducts a SWOT analysis which assists an organisation to 3
formulate strategies(Dima, Burlacu and Buzoianu, 2020). It includes strengths, weaknesses, opportunities and threats. StrengthsWeaknesses Oak Tree Inn is found to be located in 500 year old oak tress which shows that they are highly aware in the market. They are running their business from many years and that's why they have strong financial resources. It is identified that employee’s retention isnecessaryanditisfoundthat motivationalfactorsarelessinOak Tree Inn. Their global presence is not as higher in themarketascomparedtoother nations. OpportunitiesThreats Politicalstabilityisoneofthe opportunity for Oak Tree Inn as they areabletoinvestinadoptionof strategies. It is found that Oak Tree Inn is highly sustainableresponsiblewhich opportunityforgainingcompetitive advantage becomes. Competitionrivalryislowwhich opportunityforcompetitiveedge becomes. Technologicaladvancementis increasing and that's why it becomes a threat for them. Economicslowdownsprovideda severe negative impact on the tourism and hospitality industry due to COVID- 19. Continuouschangesintastesand preferences of customers found to be highanditimpactsonthe organisational success. It is analysed from the above SWOT tool that helps in identifying the areas in which they are strong and also identify weak areas. There are many opportunities found in Oak Tree Inn such as competition rivalry is low, sustainable responsible organisation, and political stability (Moeslein, and Fritzsche, 2017). Oak Tree Inn is facing many issues such as technological advancement, economic slowdown, and continuous changes in tastes and preferences. 4
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Section C After conduct a SWOT analysis, it is identified that Oak Tree Inn needs to develop some strategic options in order to grow and success in the market. Two significant strategic options are undertaking in order to solve the problems which are mentioned below: Innovation In the analysis of SWOT, it is found that there is a continuous change in tastes and preferences of customers and due to this they are unable to attract customers towards their Inn. In addition to this, technological advancement is becoming the need of an organisation(NEGESCU OANCEA and et.al., 2019). This is the reason that this option is choosing as a strategic options. Innovation is the key of success and this is the reason that Oak Tree Inn needs to innovate their services and amenities time to time which helps them to stay competitive as well as innovative in the market. This will help in satisfying the needs and wants of customers which assist in gaining success and growth in the market. In Oak Tree Inn, they should make changes in their services as well as their employees' behaviour which should be very calm and happy that helps to satisfy customer’s desires. Innovation is require in services as well as employees' skills and knowledge so that they are able to take decision when there is no manager and any leader present in the difficult situations(Langemeier and Boehlje,2017). It is found that innovation requires high expenditure and in the case of Oak Tree Inn, they are able to afford that cost as their financial resources are strong. Market development Market development is also adopted as the strategic options as it very helpful for the organisation to stay competitive and survive in the market(Ali and Anwar, 2021). Due to the economic slowdown, it is identified that the market of hospitality industry is declining and this gives a negative impact on Oak Tree Inn. This is the reason that Oak Tree Inn crosses market development in their option which is one of the important strategies of Ansoff matrix. This strategy is very helpful in order to expand the market with existing products. Oak Tree Inn needs to focus on increasing sales with the addition of new promotional strategies and cost strategies. With the assistance of market development strategic options, it is found that company can achieve their strategic objectives as well as overcome with the upcoming challenges(Karapin and Feldman, 2018). In order to implement this strategy, Oak Tree Inn needs to do a market 5
research which covers all the areas which have a potential to do a business. This option needs to be effectively evaluated with the help of analysis of market trends as well as resources and capabilities of organisation. Oak Tree Inn is found to be already recognized in the market and that's why they need less resource for promotional activities. Section D SAFe model is basically is a strategy framework which are used by the organisation in order to identify whether the strategies made by them help in achieving a successful position in themarketornot(Payares-Asprino,2021).OnthebasisofSAFeframeworkstrategy organisation measure and weight the competition in the market. The strategy was proposed by Gerry Johnson and Kevan Scholes. The two strategy choices which are used by the Oak Tree Inn with the help of SAFe analysis have been discussed below:- SFA MatrixInnovationMarket development SuitabilityThis factor is being considered as the most important factor of the SAFe model. This helps the company in identifying whether the strategy made by them is suitable or not. The strategy of adopting the new innovation and technology by the Oak Tree Inn isverysuitableforcompany. This is not only helps them in overcomingforthedifferent weakness but also help them in offeringnewproducttothe consumer. Marketdevelopmentisalsobeing considered as the most suitable and important strategy for the Oak Tree Inn. This not helps the company in developing the market base but also help them in operating their business all over the globe. FeasibilityYestheinnovatingstrategy which are adopting by the Oak Tree Inn is very feasible for the Yesthemarketdevelopment strategiesisalsoveryfeasiblefor them.AstheOakTreeInnis 6
company.Theywantto innovatetheirmethodof providing the training to their employee.Thisinnovating technique not only improves the skillandknowledgeofthe employee but also improves the productivity. With the help of this employees of the company providebetterservicestothe customer which directly reflects ontheperformanceofthe company(Liu and Kong, 2021). financially sound company and deals in the different types of services. The feasibility matrix not only helps the company to grow in the market but also help the company in improving the brand awareness of the different products of the company. AcceptabilityGenerally the employees of the companyresistadoptingthe change. Innovation in the field ofservicesisgenerallynot accepted by the employee of the company.Butifthe management of the Oak Tree In apply the innovating strategy in a very effective manner then the innovationisacceptbythe employees of the company. This enhancestheskillsand productivity of the employees if they accept the innovation. TheOakTreeInnisawell establishedhotel.Theexisting product and service which are offered by the company have already a good image in the heart and mind of the consumer. If the company wants to develop their market or expand their businesswiththeexistingproduct then this strategy is easily accept by the market. This not only helps them indevelopingtheprofitbutalso improvesthesustainabilityinthe market for a long period of time. 7
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CONCLUSION It can be concluded that it is very important for an organisation that they should formulate strategic options in order to run their business. This is necessary for the purpose of long term survival in the market. It is also analysed that company needs to analyse the whole market in an effective way so that they can make strategies accordingly. In this context, this report undertook important analysis models such as PESTEL, SWOT, Porter's Five Forces model, VRIO, etc. These models are assists an organisation to formulate an effective strategy. 8
REFERENCES: Books and Journals Ackermann, F. and Eden, C., 2020. Strategic options development and analysis. InSystems approaches to making change: A practical guide(pp. 139-199). Springer, London. Dima, C., Burlacu, S. and Buzoianu, O.A.C., 2020. Strategic Options for the Development of Ecotourism in the Danube Delta in the Context of Globalization. InSHS Web of Conferences(Vol. 74, p. 04005). EDP Sciences. Karapin, R. and Feldman, L., 2018. Strategic Options. Langemeier, M. and Boehlje, M., 2017. Evaluating Strategic Options.farmdoc daily,7. Moeslein, K.M. and Fritzsche, A., 2017. The evolution of strategic options, actors, tools and tensions in open innovation. InStrategy and Communication for Innovation(pp. 61-76). Springer, Cham. Ali, B.J. and Anwar, G., 2021. Business strategy: The influence of Strategic Competitiveness on competitive advantage. International Journal of Electrical, Electronics and Computers, 6(2). Payares-Asprino, C., 2021. Prediction of Mechanical Properties as a Function of Welding Variables in Robotic Gas Metal Arc Welding of Duplex Stainless Steels SAF 2205 WeldsThroughArtificialNeuralNetworks.Advancesin MaterialsScience.21(3). pp.75-90. Liu, C. and Kong, D., 2021. Business strategy and sustainable development: Evidence from China. Business Strategy and the Environment, 30(1), pp.657-670. Online The Oak Tree Inn. [Online] Available through: <https://www.theoaktreeinn.co.uk/> 9
Appendices: PESTEL analysis Political Factors:Political stability of UK is found to be strong so that's why Oak Tree Inn has less threat in political factors. Economical Factors:Economic conditions of every country are very bad due to the impact of COVID-19. So it becomes threat for Oak Tree Inn. Social Factors:Continuous changes in tastes and preferences are increasing every day which becomes an issue of Oak Tree Inn. Technological Factors:Continuous technological advancements are increasing which becomes issue for the organisation as they it needs experts’ solutions and update of technology. Legal Factors:The legal factor needs to consider by an organisation as it gives an impact on the legal issues. There are many laws which needs to be comply by an organisation such as Environmental Factors:It is necessary for every organisation to consider environmental issues as it is the responsibility as well as duty. Oak Tree Inn has a good nature environment. Porters Five Forces model Five ForcesHighLow Bargaining power of suppliers✓ Bargaining power of buyers✓ Competitive rivalry✓ Threats of New entrants✓ Threats of substitutes✓ VRIO model ResourcesValueRareImitateOrganisation 10
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