Lexham Hotel: A Business Analysis of Performance and Expansion

This report provides a comprehensive business analysis of the Lexham Hotel, a small business enterprise located in Blackpool, UK. It begins with an introduction to small business enterprises and the hotel itself, followed by an examination of the hotel's strengths and weaknesses, including its customer service, cleanliness, and limited technological integration. The report then uses comparative measures to evaluate the hotel's performance, including financial data and customer perception. Task 2 focuses on identifying appropriate actions to overcome weaknesses, such as opening new branches, hiring more staff, diversifying the menu, and improving technological capabilities. It also explores ways to maintain and strengthen existing performance through cleanliness, staff training, and customer-focused features, as well as the application of Porter's Five Forces and PEST analyses. Finally, the report suggests areas for business expansion and recommendations for future growth, including strategic planning and resource allocation.

Small Business Enterprise

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Profile of Lexham hotel and its strength and weakness...................................................3
1.2 Analysis of business using comparative measures of performance.................................5
Task 2...............................................................................................................................................7
2.1 Appropriate actions to overcome the identified weakness in the business......................7
2.2 Different ways of maintaining and strengthening the existing performance. .................9
2.3 Areas where the business could be expanded.................................................................10
Task 3.............................................................................................................................................10
3.1 Assessment of existing business objectives and plans...................................................10
3.2 Revise plans to incorporate appropriate changes...........................................................11
3.3 Action plan to implement the changes...........................................................................12
Task 4 ............................................................................................................................................15
4.1 Impact of the proposed changes on the business and its personnel................................15
4.2 Plan how the changes will be made................................................................................15
4.3 Monitor the improvements in the performance of the business over the given period of
time. .....................................................................................................................................16
Conclusion:....................................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Small Business Enterprise is a small business and does not have volume of sale (Spence,
2016). These have proprietary in the hands of private individual. The legal definition of small
business enterprise differs from country to country (Small business enterprises, 2018). These
business are service-focused because they can adopt to changing market conditions very
efficiently. They offer growth and stability to the economy and community where business is
established. Hotel which is taken for consideration is Lexham hotel. This hotel is situated in
Blackpool Lancashire, UK. In this report, analysis of business using comparative measures is
done. The changes requited in the are also discussed to improve management and business
performance. To do that different plans and impact of these change management on operation of
business is also discussed.
TASK 1
1.1 Profile of Lexham hotel and its strength and weakness
Lexham hotel is ideally constructed to attract the customers to the famous Blackpool.
This is hotel licensed with stocked bar. The choice of food of this hotel is good and it provides
meals in its dining room. There is an option for every food which can be booked by the customer
with its choice.
Illustration 1: Overview of Lexham hotel

(Source: Overview of Lexham hotel, 2019)
Type:
This is a small type of business organization.
Objective:
The lexham hotel has a main objective of providing better services to its customers.
Goal:
The hotel has its main aim of providing cleanliness to its customers.
Structure:
The structure of this hotel is flat type in which employees are involved in decision-
making.
Mission:
The mission statement of this hotel is to provide cleanliness to its customers so that they
can feel a positive environment while having their food. Apart from that they provide assurance
of comfortless to their customers also. (Schaper, Volery and Weber, 2014).
Strength and Weakness of Lexham
Strength:
 They produce an environment in which they provide a best experience to the customers.
 They solve the problems efficiently and positively thus increases the customer
satisfaction.
 The time management skills are good.
 Staff is highly trained and professional because of the motivation level provided by the
leaders and managers.
 Customers are treated good as employees communicate properly with customers.
Weakness
 The hotel does not have its branches that is why it does not increase its profit share.
 This hotel has less staff which shows limited type of food to its kitchen.
 There is less variety of food to the customers.
 Limited use of technology in pre-booking of table and ordering.

1.2 Analysis of business using comparative measures of performance.
There are many factors on which the performance of hotel can be measured such as
profitability, brand, sales, perception of customers etc. The comparison of this is done with
Tavistock house , UK.
Balance sheet ( in￡)
Assets 2015-16 2016-17 2017-18
Fixed Assets:
Machinery 89000 95000 102000
Furniture 75000 81000 92000
Computer 50000 53000 55000
Total Fixed Assets 214000 229000 249000
Current Assets:
Cash at bank 95600 97800 99700
Cash in hands 56200 57600 58300
Accounts Receivable 55600 62000 63200
Inventories 45200 46300 47500
Total Current Assets 252600 263700 268700
Total Assets 466600 492700 517700
Less: Liabilities:
Accounts Payable 46200 48300 49800
Short term borrowings 55600 60500 62400
Net Assets 364800 383900 405500
Capital Balance 364800 383900 405500

Comparison of Profitability during 2016-18
The Lexham hotel Tavistock house
Year PBT PAT PBT PAT
2018 95250 89400 132120 115542
2017 82547 70484 114745 89425
2016 65012 56215 72000 65012
From the above data it can be concluded that the profitability of hotel is increasing in a
better way from 2011-2015.
Sales of company between 2016-2018
The Lexham hotel Tavistock house
Year
2018 890560 729584
2017 755020 626548
2016 671230 525485
From the above data it can be concluded that, the company is growing its sales from
2011-15 regularly.
Apart from the above financial data, company's brand awareness is also discussed that
indicates company's popularity among its customers.
Year ending 2018 The Lexham hotel Tavistock House
Loyalty 5 4
Brand awareness 6 8
Perceived Quantity 9 9
Patents and trademarks 6 8

From this report, it can be analysed that The Lexham hotel scores higher to Tavistock
house in terms of loyalty. Although it has compete the Tavistock in Perceived quantity.
Another aspect on which a comparison constraints and restrictions: weakness of the
business is done is customer perception of food and service quality. The data driven for that
comparison is detailed below:
Year ending 2018 The Lexham hotel Tavistock house
Has it good value? photo, to be used like
examples. Please modify all
work properly. 6
7
The performance delivered 5 6
Comparison with the
competitors
5 7
Future innovations 6 6
From the above data scored it can be concluded that The Lexham hotel has its good value among
its customers.
Task 2
2.1 Appropriate actions to overcome the identified weakness in the business.
 The hotel does not have its branches in UK that is why they are not capable of increasing
there profit share. That is why they have to open the new branches so that they can
increase there customers and hence profit share.
 This hotel has less staff to work. By this, customer assume to have less options to eat or
serve. Therefore to overcome such situation, it has to hire employees to stand among its
competitors.
 The food serves in lexham is specific which means that it has less variety of food to its
customers. To handle this weakness, hotel has to provide different variety of foods such
as Scottish, Irish etc.

 The technology used in hotel is below to its standards (Sahut and Peris-Ortiz, 2014). The
hotel does not allow pre-booking and ordering. Therefore to overcome such situation it
has to provide the facility of it.
Employee related problems:
Following are the problems related with employees:
 Lack of motivation: The employees of hotel are less motivated therefore they are not
working properly to gain access from this competitive advantage. The employees can be
motivated by rewarding them through incentives or extra wages.
 No team work: There is a lack of team work among the employees of hotel. Therefore to
increase that team work they should understand their work and responsibility so that they
can serve better for their customers. Quality of service: The quality of service in hotel is so poor. The service is delayed by
many times so that customers are not willing to come again at the premise of it. The
quality of service should be improved in a manner that the food should be delivered
within the ordered time.
Porter's five forces
This model is used to analyse the threats of competition which an organization can face. The
threats of competition are as follows:
 Threat of new entrants:
This is known as the new entry of a business in same profile. If new entrant is entered the hotel
than it is the time to increase competition. Since in hotel industry the capital cost is very high
therefore the chances of competition has more.
 Threat of substitutes:
This is known as the threat in which the rival can introduce a new technology which is necessary
for the customers. This technology will play an important role in substituting the previous
technology used by Lexham hotel.
 Bargaining power of customers
The customers can have the power of bargaining, this is only possible if the number of customers
are greater than the service providers. Since hotel Lexham is new and does not have any
branches therefore it has to maintain itself under the influence of its customers.
 Bargaining power of suppliers:

If the power of suppliers increases by increase in the their number. This will adversely affect the
working of Lexham because the pricing strategy is chosen by suppliers therefore it is also a
threat Lexham.
 Industry rivalry:
This is the change in technology and trends by the rivals. The hotel can be influenced by its
rivals if they change to their technology and trends. This will help them in adopting advanced
technology.
2.2 Different ways of maintaining and strengthening the existing performance.
 The biggest strength of hotel is to provide cleanliness in food delivered to its customers.
They have used the natural ingredients in their food which enhances its quality. Therefore
to maintain this strength, company should focus on providing its finest quality in the plate
of its customers.
 The environment in which hotel is providing services to its customers is warm and
acoustic. This attracts the customers to their door which will enhance their overall
productivity (Storey, 2016). One important thing to which company should stand, it
should not deliver its food online because if it happens they cannot provide the
environment for which they are known.
 The staff of hotel is highly trained and professional hence it is beneficial for it. It can
train their staff from time to time so that they can follow the new trends to attain the
customers.
 A special and new feature of this hotel is that the customers can see their food to be
cooked in the kitchen. This feature increases the faith in food quality which increases the
overall productivity. Therefore company should maintain this trend to stand in market.
PEST analysis:
 Political: This is the external environment in which political effect of government also
affect the hotel. If Lexham hotel follows the regulation set by the government of UK than
it would be easier for it to pursue business. For example- the policies made by
government of UK are feasible for operating the business or not for hotel Lexham.
 Economical: This is the factor where economy of the country in which business is
operating should be stable enough so that the purchasing power of people can be

improved. For example- the Lexham hotel can be in good condition if economical
condition of UK will be better.
 Social: Social factors include the gender, income group etc. so that the hotel Lexham can
improve its selling and thus it can survive in its competitive market. For example- if the
taste of people living in UK is different with the taste of lexham than it will not worth for
the hotel to place itself here.
 Technological: It is the factor in which hotel Lexham is looking to adopt the recent and
advanced technology. By effectively adopting the technology it can meet the
requirements of it's customers. For example- hotel can allow its customers to book a table
through internet so that its customers can book there seat.
2.3 Areas where the business could be expanded
Following are the recommendations through which hotel can expand its business.
 The hotel should plan properly to expand its business so that objectives, resources and
growth plans can be managed effectively. This will help them in deciding priorities on
which the business could be expanded.
 To expand their business, hotel has to increase the number of employee so that the human
resources required to increase the business will not remain short (Ratten, 2014).
 To expand the business of hotel, it has to increase the menu options in their plate. In
addition to that they also have to increase the mode of payment option such as e-wallets
or card payments, which is the basic requirement to expands its business.
 The hotel should expand themselves through social networking in advertising their
products and services offered. This will help them in creating a good image among
customers, therefore can expand its business.
 The gift vouchers and promo codes should be deliver to the customers which follows
them regularly. It can also be provided to the customers who are willing to come into
hotel. This will enhance the expansion of business to a great extent.
Task 3
3.1 Assessment of existing business objectives and plans
Goals and objectives:

The lexham hotel is situated in Banks street, Blackpool, Lancashire. They need to enlarge
their business by 7% in the next two years. Apart from that, they have to cover their 4% loss
consequently increase their profit margin so that they can start their business chain in other
places also. Hotel can use different types of techniques to increase their sales and brand equity
through distribution of pamphlets, advertisement, social media etc (Hilmersson, 2014). Cost
which will be incur in this can be cover up in the profit they have earned.
Goals and objectives after analysing:
 The Lexham should increase their sale by giving discounts and coupons to their
customers so that they can acquire more customer and market share in competitive world.
 Hotel should improve their brand awareness by investing more on marketing activities so
that brand awareness would increase in the mind of customers.
Strategies to attain pre set goals and objectives are described below,
 Hotel should use different type of techniques like sales promotions, advertising,
promotions techniques, vouchers coupons etc. It will help The Lexham to increases their
customer base and sales.
 Hotel should renovate their interiors as it plays an important factor in attracting the
customers as different groups have distinct demands and needs which should be satisfy
by hotel to improve customer experience engagement.
 More focus should be given to social media strategies as it would be easier for them to
cover more market. Most of the potential customers uses different types of sites before
booking an hotel.
The Lexham hotel objectives are described below,
Specific: Their will be no compromise in quality and quantity of food served by them which will
leads to better customer experience while staying in their hotel and through that they have to
increase their sales by 7% in next 2 years.
Measurable: Through counting the number of visitors and their grievance submitted to hotel.
Attainable: This would be achieve by setting the quality and quantity of food so that customer
will get attracted by their unique taste and renovation of interiors so that they can feel amazing
experience which other hotels can not provide.
Realistic: Objectives they have made are realistic as they have the brand image of providing the
best quality of food with unforgettable experience in the UK.

Timely: It would be achieved within 2 years and can be measure through making the timely
report like half early or quarterly so that actual figures after changing their interiors would be
get. It will help them to find ROI.
3.2 Revise plans to incorporate appropriate changes
Business plan is the blue print of the company as how they will achieve their pre set goals
and target. It should be made with proper techniques so that it could be attain within the decided
time (Veblen, 2017). Due to poor strategies implemented by hotel, they have not performed with
their maximum capabilities. The lexham hotel should made a proper business plan after
analysing their assets and liabilities as it would assist them to create an effective strategies as
their past strategies are not up to the expectations because their are many flaws in previous
planning which hotel should not do. Any single mistake committed by hotel affects their
goodwill and brand equity in a negative way. Any successful business strategies should be those
which can survive the business in any environment. Revise plans to incorporate changes are
given below,
 Hotel can only acquire more customers if they have various branches in London and
nearby places. The Lexham hotel should open branches in area which have potential
customers.
 Customers needs and demands are mainly for food and beverages hotel is offering.
(Goffee and Scase, 2015). Hotel should introduce different types of food according to
their culture and preferences.
 Hotel ambience assist customer to increase their experiences at every touchpoints. Hotel
should renovate their interiors and make it fashionable so that they can acquire high and
medium budget customers also.
 Food Lexham is offering should be in budget of customers as then only they would
prefer to eat in hotel instead of going out. They have to change their prices according to
the ability of customers.
 Owner of hotel should change their managers and hire consultant so that proper
planning while implementing changed would be achieved.
 The Lexham hotel management should give training to their employees who are
interacting with their customers so that professionally would attain.