Independent Critical Analysis Report on Shangri-La Hotel Sydney

RUNNINGHEAD: INDEPENDENT CRITICAL ANALYSIS REPORT
INDEPENDENT CRITICAL ANALYSIS REPORT
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INDEPENDENT CRITICAL ANALYSIS REPORT 2
INDEPENDENT CRITICAL ANALYSIS REPORT
1) Introduction
Shangri-La hotel Sidney is a sub-branch of Shangri-La hotels and resorts, is a multinational
hospitality company with its headquarters in Hong Kong. Shangri-La hotels and resorts was
established in 1971 by Robert Kuok from Malaysia and according to the latest statistics, the company
has over 38000 rooms around the world
2) Porters’ 5 forces analysis for Shangri- la hotel Sydney
The use of the porters’ forces in the analysis of Shangri-La hotel will help in the assessment of the
market environment more especially the competitive analysis (Dobbs, 2014, p.45). The porters 5
forces analysis engages the following; the competitive rivalry of the hotel, threat of the new entrants
into the market, the bargaining power of the suppliers, customers bargaining power, and threats of
substitute product.
a) The competitive rivalry of Shangri-La hotel; the hotel is already established in the industry and
though there are infinitely many hospitality companies, Shangri-La hotel is still among the good
ones (Yunna, & Yisheng, 2014, p.804) The location of Shangri-La hotel of Sydney provides an
extra-ordinary experience to the customers. In addition, the fact that it is an international
company, the hotel has a series of branches with high public awareness and good image/
reputation. This gives it a better and high advantage over its competitors.
b) Threat of new entrants into the industry; there are no entry restrictions into the hospitality
industry. However, the cost of establishment and competition is considerably high. This makes it
considerably expensive to buy all the requirements and the advertisements costs to mae the
company reputation as well as attracting new customers (Indiatsy et al., 2014, p.75). Thence, the
hotel still enjoys the advantage of high standard with minimal threats from new entrants

RUNNINGHEAD: INDEPENDENT CRITICAL ANALYSIS REPORT
c) The bargaining power of suppliers; critically evaluating the hospitality industry, the suppliers
almost have a negligible impact. This is because there are infinitely many suppliers, whom of
which the hotel can alter. It therefore implies that the suppliers have low bargaining power. This
also an advantage for the hotel (Mathooko, & Ogutu, 2015, p.354)
d) Bargaining power of customers; based on the fact that there are infinitely many high class
hospitality firms, the customers have a high bargaining power. This offers a threat in determining
the prices of the services offered by the hotel. It is therefore important for the hotel to compare its
prices with that of its main competitor although it prides in providing high end/ premium services
e) Threats of substitute product; in the hospitality industry, customer loyalty is an important
factor that is viewed with considerable effort. According to Shangri-La’s website, the hotel has
over 2500 reviews of which 87% showed very good (thumbs up). With this level of customer
satisfaction, the company is able to maintain a high level of customer loyalty and thus minimal
threat (Zhao, Zuo, Wu, Yan, & Zillante, 2016, p.144).
3) Statement of the issue: staff turnover including definitions
Staff turnover may basically be referred to as the rate at which the employees of a given company are
replaced with new ones. Staff turnover is a crucial issue to focus on for any company to succeed in its
field of operation. An organization is said to have a high staff turnover rate as compared to its
competitor when the average number of employees who leave the company in a particular time is
higher than that of its competitors. As a company operates, there are some workers who leave the
company and have to be replaced by new employees. According to research, it has substantially and
imperatively noted that staff turnover in companies have a significant effect on the performance of
that company. The effect of the performance may be operational, financial or even reputation (Sölvell,
2015, p.480). In other words, there are consequences that come with high employee turnover, which
may either be negative or positive. Adversely employee turnover may cause high operational costs as
a result of hiring costs over a short period of time, loss of experienced staff and loss of reputation by
the company in the labor market. On the other hand, staff turnover provides access to new and more
skilled members to be employed in the company (Han, Bonn, & Cho, 2016, p.106).