Strategic Management Report: Dalata Hotel's Canadian Expansion Plan

This report provides a comprehensive strategic analysis of Dalata Hotel's potential expansion into the Canadian market. It begins with an executive summary and introduction, followed by an overview of Dalata Hotels. The report then delves into the general external environment using a PESTLE analysis of Canada, examining political, economic, social, technological, legal, and environmental factors. A competitive environment analysis utilizing Porter's Five Forces is also included, assessing threats of new entrants, bargaining power of suppliers and customers, threats of substitutes, and rivalry among competitors. The internal analysis section evaluates Dalata's strategic capabilities through a resource audit, exploring basic and unique resources, and core competencies. The report also covers the basis of competitive strategy, applying Bowman's strategy clock to identify suitable competitive strategies for the Canadian market. Finally, the report concludes with recommendations and a conclusion, offering insights into Dalata's strategic choices for success in Canada. The report is available on Desklib, a platform providing AI-based study tools for students.

Strategic Management
3/27/2018
Dalata Hotel

Strategic Management 1
Executive summary
Strategic management is the formulation and the implementation of the primary goals and
initiatives that are taken by the higher authority of the company on behalf of owners, based on
consideration of resources and an assessment of the external and internal environment analysis of
Dalata Hotel is conducted in which the organization competes. The report includes the
competitive environment analysis from the perspective of Canada market. Strategic capabilities
and resources of the company are evaluated in the report which shows the strength and weakness
of the company. Moreover, the report includes the bowman strategy clock which is used to
identify the competitive strategy that the Dalata Hotel should follow in the market of Canada.
Content

Strategic Management 2
s
Introduction......................................................................................................................................4
About Dalata hotels.....................................................................................................................4
General external environment..........................................................................................................5
PESTLE Analysis of Canada.......................................................................................................5
Political factors........................................................................................................................5
Economic factors.....................................................................................................................6
Social factors...........................................................................................................................6
Technological factors...............................................................................................................7
Legal factors............................................................................................................................7
Environmental factors..............................................................................................................7
Competitive Environment................................................................................................................8
Porter’s five forces.......................................................................................................................8
Threats of new entrants- High.................................................................................................8
Bargaining power of suppliers- Low.......................................................................................9
Bargaining power of customers- High.....................................................................................9
Threats of substitute products or services- Low......................................................................9
Rivalry among the existing competitors- High......................................................................10
Internal Analysis: Strategic Capabilities.......................................................................................10
Resource audit...........................................................................................................................10

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Basic Resources.....................................................................................................................10
Unique resources...................................................................................................................11
Core competencies.....................................................................................................................12
The basis of the Competitive strategy...........................................................................................12
Bowman’s strategy clock...........................................................................................................12
Low price and low value added.............................................................................................13
Low price...............................................................................................................................13
Hybrid....................................................................................................................................13
Differentiation........................................................................................................................14
Focused differentiation..........................................................................................................14
Risky high margins................................................................................................................14
Monopoly pricing..................................................................................................................14
Loss of market share..............................................................................................................15
Recommendation...........................................................................................................................16
Conclusion.....................................................................................................................................17
References......................................................................................................................................18

Strategic Management 4
Introduction
The aim of the report is to analyze the internal and external factors that create an impact on the
expansion of the business. The company that has been selected for the report is Dalata Hotels
that is known as largest hotel chain in Ireland. This hotel believes in the rapid expansion of the
business in the market as the Dalata group has bought around 15 new hotels in the year 2015.
Being the senior consultant it has been asked to conduct the strategic analysis along with the
Strategic choices. The country has been selected for the expansion of the business in Canada; this
country belongs to the geographic regions of North and South America.
About Dalata hotels
Dalata is Ireland largest hotel operator with a current portfolio of around 38 hotels which include
owned, leased and managed hotel. The hotel successfully operates the Maldron Hotel brand and
Clayton Hotel brand throughout the UK and Ireland along with the managing a portfolio of
Partner Hotels. Dalata came into existence in the year 2007 June by the year McCann. Since the
year 2015, the group has re-branded ten of the hotels in its owned portfolio as Clayton Hotels.
By the end of the year 2016, there was a total of 17 Clayton Hotels (Dalata Hotel Group, 2018).

Strategic Management 5
General external environment
An external environment consists of external factors that influence and create the impact on the
operations of the business (Moutinho and Vargas-Sanchez, 2018). Dalata Hotel makes use of
PESTLE Framework to analyze the factors that can affect the business expansion in Canada.
PESTLE Analysis of Canada
Canada is a country that is located in the northern part of North America with the 3.63 crores in
the year 2016 (Frue, 2018). The country is known as world’s wealthiest countries and also
known as major tourist destinations. There are some external factors that can create an impact on
working of Dalata hotel.
(Source: Meffert, 2013)
Political factors
The political factors include the rules and regulations formed by the government that creates the
impact on the business (Baker, 2014). Canada is a democracy with a parliamentary government.
The minister of small business and tourism (Honourable Bardish Chagger) has clear plan to work
with the partners so that they can grow international tourism to Canada. This is a positive sign

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for the hotels present in the Canada and hotels like Dalata who are willing to expand their
business in Canada. Moreover, the hotel association of Canada promotes lodging industry
because this is the only way through which they can employ more than 304,000 people (Hotel
Association of Canada, 2018). Therefore, Dalata Hotel has an opportunity to expand the
business.
Economic factors
The economic factors include the GDP, inflations rates, the purchasing power of the customers
and many others. The GDP of Canada was $83.1 billion by the year 2016 and the economy of the
country is a mixed economy with the 10th largest GDP by the nominal and 17th largest GDP by
the purchasing power parity in the world. In addition, the growth in the GDP was 1.7% in Q3
2017. This shows that the purchasing power of the people in the country is high which means the
Dalata Hotel can easily earn the revenue if they expand business in Canada (Amadeo, 2018).
Social factors
The social factors include beliefs and preference of the people that can influence others. The one-
third population of Canada falls under the working class category with 40-50% being middle
class. Along with this, there are only 3% to 5% Canadians who are considered in the segment of
the upper class. This shows that most of the people belong to the working and middle class. In
the year 2016, the international visitors accounted for approx. $20 billion in tourism revenues
along with this the domestic tourism raised by $72 billion (Government of Canada, 2011). The
culture of Canada is attractive for the tourists due to which most of the tourists visit the country.
This shows that the Dalata hotel has an opportunity for the expansion of the business. Dalata
hotel can easily attract the domestic and the international tourist towards their hotel by linking
the hotel with the culture of the country.

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Technological factors
The technology advancement can create an impact on the working of the hotel. Canada is one of
the most developed in terms of the technology and science along with this the people of this
country must rely on the internet for their careers, educations and for other activities. Dalata
hotel can make use of technology to make strong customer base in the country. Internet booking
of the hotel will make the jobs of Hotel easier (Frue, 2018). Apart from booking hotel use of
advanced technology might create strong competition from other hotels that are already
established in Canada such as Marriott, Hilton, and many others.
Legal factors
Legal factors include the legislation and regulations introduced by the government for the
business. In Canada, the hotels have to follow the legal laws related to the wastage of the
product, for the expansion of the business, licensing and other laws (Meffert, 2013). Similarly,
Dalata hotel has to follow the legal laws that might lead to complications for the Hotel.
Environmental factors
Canada is the world's second-largest country after Russia that is covering approx. two-fifths of
Northern America. Along with this, the climate of the country is dominated by the extreme cold
and long winters. The country has the environmental department that works to protect and
enhance the quality of the natural environment (Kotler, 2015). Moreover, the person of the
country believes in conserving the renewable resources. The business has to follow the
environmental protection Act 1999 to conserve the environment of the country. This might create
the problem for Dalata hotel as they have to follow the action and have to assure about the use of
products.

Strategic Management 8
Competitive Environment
A competitive environment is the dynamic external system in the business. It is essential for the
Dalata hotel to analyze the external competitive analysis before expanding the business in
Canada.
Porter’s five forces
Porter's five forces framework is a tool that is used to analyze the competition of a business
(Foxall, 2014). The analysis of Canada is given below: -
(Source: Foxall, 2014)
Threats of new entrants- High
In Canada, the government promotes hotel expansion in their country as this is the only way
through which the GDP of the country will grow. So the opportunity for the new entrants is more
in Canada and these lodging companies bring innovative services with them which create the
impact on the existing companies (Prince, 2016). Therefore, Dalata hotel will find the high

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threats of new entrants which might make them adopt such strategies with the help of which they
can deal with competitors.
Bargaining power of suppliers- Low
Most of the companies in the hotel industry have tie-ups with different suppliers which provide
them convenience while negotiating with them (E. Dobbs, 2014). In Canada, the hotel
association represents more than 8,226 hotels, motels, and resorts which reflect that there will be
the huge availability of the suppliers. Therefore Dalata hotel can easily form the tie-ups with the
suppliers available in the market. If in the market the number of the suppliers is high then there
will be low bargaining power of suppliers.
Bargaining power of customers- High
The change in the customer preference mostly depends on the prices of the product and services.
There are many hotels who offer the same sort of products and services at low prices which
makes it difficult for the other hotels to survive in the market (Fread, 2014). Dalata hotel will
face the issues related to the bargaining power of customer as there is a large number of hotels
available which might be able to grab the attention of the customer and potential customers.
Threats of substitute products or services- Low
When in a market a new alike product or service meets the needs of the customer then they can
easily substitute from one product to another (Rajasekar and Al Raee, 2013). In Canada, the
availability of the accommodation options where the customer can get desire facilities is low.
Therefore, the tourists have to select the option of hotels where they can get all the facilities in a
single go. Moreover, there are tour packages which make the work simpler for the hotels because
most of the tourist like to opt for the travel packages which means they have to stay at the hotel.

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Therefore, Dalata Hotel will not find the threat of substitute products or services. Though, the
hotel has to form the tie-ups with the travel guides who can provide benefit to the hotel.
Rivalry among the existing competitors- High
In Canada, there are numerous international hotels who are offering their services in the market
(Kotler, 2015). These hotels will become the high intense rivals of the Dalata Hotel. Few of the
competitors of the Dalata hotel will be Fairmont Pacific Rim, rosewood hotel Georgia, Marriott
Canada, Hilton hotels in Canada. These hotels are well-known in the market of Canada,
therefore, these hotels can give strong competition to the Dalata hotel.
Internal Analysis: Strategic Capabilities
An internal analysis is conducted to identify and evaluate the organization competency in the
marketplace. This part of the report includes the analysis related to the resources and capabilities
of the Dalata hotel.
Resource audit
A resource audit is a set process in which audit has been conducted to analyze the strength and
weakness of resource base of the firm (Free Management, 2018). These resources can take on
many forms and due to this, these resources are not limited to cash and inventory. Dalata hotel
resource audit includes the basic and unique resources.
Basic Resources
Human resources
The hotel operates the decentralized human resource model with HR manager. The company
believes that development of staff is essential for the company due to which the hotel has offered

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the management development programs to their employees. Dalata has an exceptionally strong
management team who has experience along with the skills to grow the business (Worldwide
Hospitality Awards, 2017).
Financial resource
Financial resources are essential for the development of the Dalata hotel. The director of the
hotel believes that they have enough fund with the help of which they can continue their
operational existence in the near future (Davy, 2018). Moreover, it has been analyzed that the
investor finds it effective to invest in the company as Dalata hotel has many resources so if they
are a bear loss they can fulfill it.
Physical evidence
This resource includes the physical presence of the company. The company currently has the
portfolio of 39 which include 3 and 4 stars hotels with more than 7,351 rooms. Out of these
approximately 27 hotels are owned by Dalata, 9 hotels are operated by the company under the
lease agreement and rest are under management segments (Dalata Hotel Group, 2018). The
hotels of Dalata are mainly located in Ireland and UK.
Unique resources
Brand image
The image of the brand is one of the unique resources of the company. The hotel has a good
brand image in the market of Ireland as it is known as one of the leading hotel chains. In
addition, the company can easily form their image in the other markets with the help of strong
customer base. The brand image in the market is a competitive advantage for the company.