Strategic Agility: Expanding Oak Tree Inn Business

This article discusses the concept of strategic agility and its application in expanding the Oak Tree Inn business. It provides an overview of the firm and its key activities, analyzes the external and internal environment using SWOT and PESTLE analysis, assesses two potential strategic options, and recommends the best option. The recommended option is to use online advertisement and selling of branded artisan products to attract more customers and improve the brand image.

Strategic agility

Table of Contents
INTRODUCTION...........................................................................................................................3
Overview of firm.........................................................................................................................3
Determining the external and internal environment....................................................................3
Critically assess two potential strategic option............................................................................6
SAFe analysis of two options and recommending the best one..................................................6
CONCLUSION................................................................................................................................8
REFERNECES..............................................................................................................................10

INTRODUCTION
Strategic agility is capability to quickly and appropriately respond to change while
maintaining flexibility within a company. The current study is also based upon Oak Tree Inn
case study and for that study provides an overview of a firm and its key activities. Then by
applying models, it will determine the external and internal environment. Then critically assess
two potential strategic options and then recommend the best one as well.
Overview of firm
Oak Tree Inn business is located in Balmaha, Scotland which is a family run SME and
operates under tourism sector. It has a bar, restaurant and accommodation facilities for their
guest and in 2018 the annual turnover £3m. Now, the owner wants to expand its business in other
locations in Loch Lomond National Park by using centralised kitchen, along with water boat and
floating restaurant. The company also offer range of food and drink product and gift vouchers to
their customer. It also has a coffee shop and Cream parlour in which it serve special coffee along
with home baking and homemade ice cream (Oak Tree Inn, 2020). Further, Oak Tree also offer
the trips to nearby Inchcailloch Island in which it offer regular trip to their customers between
March and October. These activities reflected that quoted firm tries to meet the demand of
customers and offer the range of option to their guest in order to sustain the brand image.
Determining the external and internal environment
To determine the internal analysis, SWOT model is used that will assist to examine the
strength, weaknesses, opportunities and threats of a business. Such that:
Strength Weaknesses
 The company offer range of facilities
to their customers at reasonable rate.
 The quotes firm also has a string
turnover in 2018 (Kurniawan and
et.al., 2020).
 It also win an award for best holiday
accommodation because of its high
 The business is located in east side of
loch which has a dead-end road and
there is no traffic.

quality facilities.
Opportunities Threats
 Oak Tree Inn may expand its business
around National Park with further
centralized kitchen option.
 It books the premises through online
mode.
 Franchising and opening new outlet is
another opportunity for the company.
 Faces tough competition in the
market.
 Did not use effective marketing
strategy to promote it brand at
international level (Kohtamäki and
et.al., 2020).
To determine the external environment of a company, Pestle analysis is used that will
assist to examine the factor which affect the business. These are as mention below:
Political: Sudden fluctuation in the political stability of the country affect the Oak Tree
Inn business in opposite manner. Such that if there is terrorist attack in the country then it will
affect the performance of the company because tourism is affected in negative manner.
Economic: changes in the economic condition of the country will cause opposite effect
upon the business (Debellis and et.al., 2020). Like, due to COVID-19, the economy of country is
down and people do not spend extra money to spend upon facilities. This in turn affect the
overall performance of Oak Tree Inn in negative manner.
Social: the perception of people keep changes and this in turn encourage tourism sector
to innovate the ideas in order to attract the same. For the same, quoted business is also providing
range of facilities to meet the demand such that cruise, playground for children etc.
Technological: There is a need to implement the advance technology in order to run a
business smoothly. But quoted firm do not use the same to promoting the brand at international
level and this in turn affect the business performance.
Legal: To operate the business operations in better manner, it is essential for the
company to adhere the laws and regulation in better manner (Clauss and et.al., 2019). Such that

employment laws and equality law which in turn improve the results and sustain brand image at
global level.
Environment: The company comply with sustainability act in which it make sure that no
product cause harm to environment. Also, customer also ensure to take a leverage of those
facilities which do not cause negative impact upon environment.
To examine the competition in the industry, it is suggested to use Porter five force model
that help to determine the competition within tourism industry:
Bargaining power of supplier (high): The employees of the industry are consider the
major supplier who promote the products and goods at further level of success (Arbussa, Bikfalvi
and Marquès, 2017). Also, there is a high quality of staff members who provide range to services
to their customers in order to meet the demand.
Bargaining power of buyers (high): As there are range of business operated in tourism
sector and that is why, the buyer of industry is also increases. Hence, customers are ready to pay
the amount as per the need and facilities required. That is why, in hotel industry the bargaining
power of buyer is high which in turn increase the performance of a customers as well.
Threat of new entrant (low): The threat of new entrant is low because it requires lot of
money to invest and there is no chances whether the amount is return or not in specified time.
Moreover, in order to enter in this industry, company takes enough time to sustain the brand
image and that is why, there is low threat of entry.
Threat of substitute (high): there are range of alternatives are available in the market and
that is why, people shift towards another brand, if they find more reasonable facilities (Kale,
Aknar and Başar, 2019). Therefore the threat of substitute is high because most of the hotel uses
advance tool in order to attract the customers while others do not and as a result, customer
shifted.
Rivalry competition (high): There is a high competition in the market and that is why,
most of the business provide innovative product in order to attract the range of customers
towards it. Such that the tourism and leisure industry has a range of options and all the business
faces tough competition which in turn increase this rivalry competition.

Opportunity is denoted as 1, while Threat is denoted as 2
Political stability 2
Environment factor 1
Technology 2
Economy 2
Critically assess two potential strategic option
From the SWOT analysis, it is analyzed that there are two potential strategic option
available for the Oak Tree Inn business that helps to mitigate the threat. Through table it is
analyzed that company did not comply with advance technology and did not promote the product
and services to the customers. However it is evaluated that there is a need to convert the threat
into a strength because it will assist to convert this threat into strength so that most of the
customers are attracted. While on the other side, company offered variety of services and that is
why there is a need to start online booking which in turn improve the results in positive manner
(Xing and et.al., 2020). Through online selling of a branded artisan product which are linked to
current offerings with Loch Lomond brand also draw attention of many tourist and as a result,
the company increase the performance level too. Currently the company offer range of facilities
to their customer, but the location is at east side and that is why, most of the visitors did not
know about the brand because of lack of online promotional strategy. That is why, this option is
suggested that will help to increase the involvement of visitors towards a firm.
Another option available for the company is to expand the market by buying the under-
performing restaurants around the National Park and then turning them to Oak Tree Inns’. Along
with this, company also offered centralized kitchen for preparing and assuring the food quality
across the outlets (e Cunha and et.al., 2020). This is an opportunity for the company which also
assist to stay ahead in the competition and also sustain the brand image at international level too.
However it is also critically analyzed that Oak Tree Inn is a SME and that is why, it is not easy to
develop finance option for the company in order to expand the business. Through this strategic
option, most of the visitor knows about the business and it will grab attention of many customers
towards it.

SAFe analysis of two options and recommending the best one
In order to determine the suitability, SAFe model is used for both the strategic option
which is as mention below:
Organization performance: The performance of Oak Tree Inn is good but it is operated
in SME and that is why, it is analyzed that expansion and innovating the new product is consider
a best method to increase the performance of a company.
Suitability: For option 1st, quoted business there are three criteria are selected that will
assist to determine whether the option is good or not. Such that to use online mode of
advertisement, company have enough capability that helps to promote the product online
(Ahammad, Glaister and Gomes, 2020). On the other side for second option, company requires
enough time in order to expand the business in different area. But currently the company is
located in dead end area, so expanding a business at further location will help to increase the
overall financial performance of a company.
Acceptability: As per the second option, financial and non-financial strategy are
implemented that will assist to determine whether the option is good for the company or not. For
that Payback period is used for the first five years that will help to analyze the rate of return for
the chosen two strategic option.
For project A
Initial investment 50000
year
Cash
flows
Cumulative Cash
Flows
1 50000 50000
2 51500 101500
3 50500 152000
4 53000 205000
5 52000 257000
Payback period is = 1 year and 1 month
For project B
Initial
investment 50000

year
Cash
flow
Cumulative Cash
flow
1 50000 50000
2 53000 103000
3 52500 155500
4 55500 211000
5 56000 267000
The Payback period is 1 year and 2 month
Among both the project, the company uses those project in which the invested amount is
get back within a short time period and this is possible in the 1 option.
Feasibility: By using the financial ratio method it is analyzed that 1 option is more
suitable because it will help to get back the amount in shorter period as compares to another one.
Also, there are many advantage of using 1st strategic option such that it will assist to improve the
results and also let the customer know about the Oak Tree Inn as well.
Recommendation
Between both the strategic option, it is analyzed that company should use 1st option i.e.
online advertisement in which it also uses MIS system that helps to store the information in
better manner. Along with this it is also suggested to the firm that the invested amount will be
get back in the shorter period as compared to second option. Also, by online selling of branded
artisan product will also assist to improve the overall brand image in positive manner and let
other customer know about the new offered product to the users. Apart from this, it is also
suggested to the firm that option 1st is more suitable as compared to next as it leads to generate
best outcome as compared to other one. That is why, company should invest on online
advertisement so that it will grab attention of many customers.

CONCLUSION
By summing up above report it has been concluded that Oak Tree Inn is operated under
small business and the study concluded to determine the internal environment SWOT analysis is
performed. While for external analysis, PESTLE is used that will assist to examine the factor that
affect the business and its operations. On the other hand to analyze the competition within
industry, Porter five force model is applied through which it is concluded that there is a tough
competition in market. Apart from this study concluded online branding through advertisement is
the best strategic option which in turn improve the results of the company and take a business at
further level of success.

REFERNECES
Books and Journals
Ahammad, M.F., Glaister, K.W. and Gomes, E., 2020. Strategic agility and human resource
management. Human Resource Management Review. 30(1). p.100700.
Arbussa, A., Bikfalvi, A. and Marquès, P., 2017. Strategic agility-driven business model
renewal: the case of an SME. Management Decision.
Clauss, T. and et.al., 2019. Strategic agility, business model innovation, and firm performance:
an empirical investigation. IEEE Transactions on Engineering Management.
Debellis, F. and et.al., 2020. Strategic agility and international joint ventures: The willingness-
ability paradox of family firms. Journal of International Management, p.100739.
e Cunha, M.P. and et.al., 2020. Strategic agility through improvisational capabilities:
Implications for a paradox-sensitive HRM. Human Resource Management Review. 30(1).
p.100695.
Kale, E., Aknar, A. and Başar, Ö., 2019. Absorptive capacity and firm performance: The
mediating role of strategic agility. International Journal of Hospitality Management. 78.
pp.276-283.
Kohtamäki, M. and et.al., 2020. Strategic agility in innovation: Unpacking the interaction
between entrepreneurial orientation and absorptive capacity by using practice
theory. Journal of Business Research. 118, pp.12-25.
Kurniawan, R. and et.al., 2020. The impact of balanced agile project management on firm
performance: the mediating role of market orientation and strategic agility. Review of
International Business and Strategy.
Xing, Y. and et.al., 2020. Entrepreneurial team and strategic agility: A conceptual framework
and research agenda. Human Resource Management Review. 30(1). p.100696.
Online
Oak Tree Inn. 2020. [Online]. Available through: < www.theoaktreeinn.co.uk >.