Detailed Analysis of the Expansion Strategy for Dalata Hotels in India

This report provides a comprehensive analysis of the Dalata Hotel Group's expansion plans, specifically focusing on the Indian market. It begins with an executive summary and table of contents, followed by a detailed PESTLE analysis of India, evaluating political, economic, social, technological, legal, and environmental factors to assess market suitability. The report then applies Porter's Five Forces framework to analyze the competitive environment, examining threats of new entrants, supplier power, buyer power, substitute threats, and industry rivalry. Furthermore, it includes an internal analysis of Dalata Group, including a resource audit, identification of core competencies, and application of Bowman's Strategy Clock to determine competitive strategy. The report concludes with recommendations and a final conclusion supporting the feasibility of the expansion, along with a list of references.

Running head: ANALYSIS OF THE EXPANSION OF DALATA HOTELS
ANALYSIS OF THE EXPANSION OF DALATA HOTELS
Name of the Student
Name of the University
Author Note

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
Executive Summary
The report is based on the analysis of the expansion plans of the Dalata Group of Hotels
which is a hotel chain operating in UK and Ireland. The country that has been chosen for the
expansion related plans of the company is India. The potential market for the group is
analysed based on the PESTLE framework so that the company decide its operations based
on the conditions in the Indian market. The internal analysis is conducted based on the
Porter’s framework and the Bowman’s Strategy Clock. The report has been concluded by
stating that India is a suitable market for the expansion related plans made by the Dalata
Group of Hotels.

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
Table of Contents
Introduction....................................................................................................................3
PESTLE of India............................................................................................................3
Analysis of the PESTLE issues in India based on Dalata Group...............................5
Analysis of the competitive environment of Dalata Group using Porter’s Five Forces 6
Internal Analysis of Dalata Group.................................................................................8
Resource Audit...........................................................................................................8
Core competencies of the company...........................................................................8
Analysis of Competitive strategy based on Bowman’s Strategy Clock.........................9
Recommendations........................................................................................................10
Conclusion....................................................................................................................10
References....................................................................................................................12

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
Introduction
Dalata Hotel Group is an organization which operates in the hotel industry and has
many hotels in the United Kingdom and Ireland. Dalata Hotel Group was founded in the year
2007 by Pat McCann. The hotels that are operated by the Dalata Group include the ones
which are a part of the Clayton Hotels and Maldron Hotels brands. Dalata is considered to be
one of the greatest hotel operators with a portfolio of around 38 hotels and they successfully
operate their own hotel brands and those of their partners (Dalata Hotel Group PLC. 2018).
This report will be based on the expansion plans for the Dalata Group of hotels in
another country so that the group can increase its revenue and profitability. The analysis will
be further based on the internal and the external environment of the company and the
strategies that are applicable in the operations in another country where it will have its
operations.
PESTLE of India
Political
 India is considered to be one of the
biggest democracies of the world.
 The political environment of the
country is affected by the interests of
the politicians and the policies
formulated by the government.
 The business environment of the
country is affected by various
political factors.
 The system of taxation in India is
well-developed which include taxes
like, service tax, sales tax and
income tax.
 Privatization in the country is also
influenced by the government
policies and the Indian government
encourages business operations
(Boella 2017).
Economic
 India has a stable economic
condition after the introduction of
various reforms in the policies in the
year 1991.
 The policies have helped in the
liberalization of the foreign capital,
industrial licensing and
improvement of the economic
environment of the country.
 India had registered a GDP of
around
5.07 trillion dollars in the year
2013.
 The GDP growth of the country has
been increasing gradually in the
following years and the made the
country a hot spot for business
activities (Cuervo-Cazurra 2016).
Social
 Social factors mainly refer to the
changes in the trends that can impact
Technological
 India has been able to make
significant development in the

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
the business environment.
 The rise in the aged population in
India have led to a rise in the
pension related costs and the
increase of the employment of old
workers.
 The population of the country is
greater than 1.2 billion and 70% of
the people belong to the ages
between 15 and 65.
 The structures of the population vary
with the education. Income
distribution and the work attitudes of
the citizens (Dixit and Sotiriadis
2015).
technological areas.
 The country has focussed on the
development of new products and
they have also introduced many cost
cutting related processes.
 The users were provided with 3G
and 4G related technologies.
 The new technologies have helped in
reducing the costs and improving the
quality of the products.
 The various new operators are also
launching their services which
includes, development in IT, funding
of government technologies, new
materials and the related processes
(Durand, Grant and Madsen 2017).
Legal
 India has made significant changes
in the legal system and introduced
laws related to discrimination of the
disability.
 Minimum wages have also been
increased.
 The legal changes in the country
have affected the costs related to
firms and the demands as well.
 This has provided a boost to the
production of the companies.
 Different legislations have been
implemented by the Indian
government which include, Health
and Safety related regulations,
employment laws, product and trade
related restrictions (E. Dobbs 2014).
Environmental
 India has been facing many
environmental problems related
weather and climate and this affects
farming, insurance and tourism.
 Global warming has become a major
environmental factor in the country
in the recent years.
 The major necessity in the current
scenario is to develop an industry
which is pollution free in nature.
 The factors related to urbanization
and industrialization have caused
major damage to the environment in
the country,
 Air pollution has adverse effects on
the health and the living conditions
of the Indian citizens.
 The government of India is aware of
the problems occurring in the
environment due to pollution and
increasing traffic on the roads of the
country.
 The serious issues related to the
environment require immediate
action from the government
(Ferreira et al. 2014).

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
Analysis of the PESTLE issues in India based on Dalata Group
As discussed in the above table of the PESTLE analysis of India, the improvement of
economic activity in India will be able to create a welcoming environment for the expansion
of Dalata Group of Hotels. The service sector of the country has also shown huge growth
after the reforms had been made in the economic system. Employment options in India have
also increased in the recent times in India due to the huge increase in number of industries.
The fast rise in the population of the country has further increased the consuming power of
the Indian citizens. The rapid rise of the service sector in India will be a key factor related to
the expansion of Dalata Group of Hotels in the country. The welcoming political environment
of India will also help Dalata Group to set up their business in the country (García-Almeida
and Yu 2015).
The changes that have occurred in the social environment and trends in India will be a
major reason related to the success of this business in the country The legal system of the
country is also quite well-developed which will help in the expansion of the group without
complex legal procedures. The government of India is also quite welcoming for the new
business organizations. The Indian government system is open to foreign investments and the
good foreign relations of the country will help in the easy expansion of the Dalata Group. The
highly developed technological environment of the country will help the Dalata Group in the
formation of an advanced business setup (Gibbs, MacDonald and MacKay 2015).
The development that has occurred in the preferences of the society in India due to the
improved level of technologies will help in the expansion of the Dalata Group. However, the
country is facing problems related to the environment and global warming. Dalata Group will
therefore need to develop a business model which should be sustainable in nature. The
operations of the company should not affect the environment in a negative manner which can
further increase the environmental problems. The development of a sustainable business

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
environment will help in the long-term growth and will also increase the revenues and the
profitability of the company (Hutzschenreuter, Kleindienst and Lange 2014). It can therefore
be said that the Dalata Group can successfully set up their business in India due to the various
positive factors, however the environmental issues need to be taken care by the organization.
Analysis of the competitive environment of Dalata Group using Porter’s Five Forces
The five forces that have proposed by Michael Porter for the internal analysis of an
organization are,
 Threats related to the new entrants.
 Bargaining power of the suppliers.
 Bargaining power of the buyers.
 Threats related to the substitute products.
 Rivalry in the market.
Dalata Group will be analysed based in these forces as proposed by Porter so that the
company can be able to manage the changes in the competitive business environment (Jani
and Han 2014).
Threats related to the new entrants (Medium) – The industry where the company
belongs to is an innovative area and the entry of new players adds to the innovation. This can
further put pressure and they need to lower the pricing related strategies, reduce the costs and
provide new value propositions. The Dalata Group can improve the services and products that
they offer to the consumers and increase their revenues in the process.
Bargaining power related to the suppliers (Medium) – The organizations operating
in the travel and leisure industry source their materials from many different suppliers. The
suppliers who hold a dominant position in the market can create issue for the company and

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
decrease their margins. The negotiating power that is used by the powerful suppliers in the
service industry can increase the bargaining power of these suppliers. The company needs to
build an effective supply chain which contains multiple suppliers so that the power of the
suppliers can be reduced (Jiang, Holburn and Beamish 2016).
Bargaining power related to the buyers (High) – The consumers of the service
industry are quite demanding in nature and they desire the best offers for the lowest process.
The huge number of options for the consumers in this industry will put pressure on the Dalata
Group. The small base of customers of the organization can lead to increase in the bargaining
power of the buyers or consumers. This can be reduced by creating a large customer base for
the company. The Dalata Group can also create innovative product designs so that they can
attract more customers towards the company.
Threats related to substitutes of the services or products (Medium) – The threat
that is posed towards the company related to the substitutes that are present in the market are
faced much more by the organizations in this sector. The company needs to be much oriented
towards the service that they provide to the consumers rather than the products offered. The
Dalata Group needs to understand the needs of the consumers so that they can provide the
best of services and create a competitive edge (Lynch and Jin 2016).
Rivalry with the competitors (Medium) – The high degree of rivalry in the services
industry puts pressure on the company to reduce the prices of the various services offered and
the profitability of the organization as a whole. Dalata Group can reduce the competition
given by the rivals by creative a sustainable edge for the company. The group can also plan
for collaborations with the competitors in the market so that the levels of rivalry can be
reduced.

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
The complete picture of the ways by which the competitive forces in the market affect
the profitability of Dalata Group is depicted with the help of the Porter’s Five Forces
Analysis of the company (Monaghan, Tippmann and Reuber 2017).
Internal Analysis of Dalata Group
Resource Audit
Physical resources - The management team of the Dalata Group is exceptionally
strong and the skilled and experienced executives of the team are able to manage the current
business team in an effective manner.
Intellectual resources - The Dalata Group has been able to gain the position of the
topmost operator in the hotel industry of Ireland.
Reputational resources - The company has its properties in the prime locations of
the country and this has helped them in earning prime customers. The Dalata Group has huge
potential for expansion in the other countries which has helped them in increasing their
revenues and profitability (Ostapenko and Ginevičius 2017).
Financial resources - The huge capital base of the Dalata Group helps in the
expansion of the hotels of the Group to various other locations of the world.
Core competencies of the company
The major strategy of the hotel has been to grow its business with a mixture of
different types assets including leased and owned. The Group has been working on this
strategy and has been able to acquire around 21 hotels. The hotel group has become the
largest in UK and Ireland and they have plans to acquire 13 more hotels of the Clayton
Group. The Dalata Group has a different team of management for the purpose of the
managing of hotel assets. This team is named as the Dalata Management Services (Yu, Byun

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
and Lee 2014). They mainly manage the various divisions of the company including, finance,
operations, sales and marketing, revenue management, purchasing, human resources, IT. This
helps the company in managing the various departments in an easy manner and thereby this
acts as the major core competency of the Group (Papadopoulos, Gulanowski and Plante
2018).
Analysis of Competitive strategy based on Bowman’s Strategy Clock
Bowman’s strategy clock is a tool or model that can be used to explore the options
related to the strategic positioning of the services or products of the company in the market.
The major purpose of the strategic clock is to depict that the business has a variety of options
of positioning its service or product based on two dimensions including, perceived value and
price.
Position 1 – low price and low value – The Dalata Group cannot take this position in
the Indian market as they need to live up to the reputation that they have built in the market.
Position 2 – Low price – The Dalata Group does not need to take this position in the
market as the Indian economy will accept the prices that they offer in the other countries
(Porter and Heppelmann 2014).
Position 3 – Hybrid – The Dalata Group cannot take this position as they cannot
compromise on the quality of the services that they offer to the consumers. The lack of
quality in their services can affect the reputation of the company in a negative manner.
Position 4 – Differentiation – The Dalata Group may take this position in the Indian
market and differentiate their services by providing introductory offers and discounts to the
customers.

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
Position 5 – Focussed Differentiation – This position is the best for the Dalata
Group in the Indian market as they need to serve the niche market by providing high values
to the customers. The perception of the customers regarding the high value of the services
will help them in succeeding in this position (Reardon, Coe and Miller 2015).
Position 6 – Increased Price and Standard Product – This position cannot be taken
by the Dalata Group as the increase price of the standard products can lead to a loss of
customers and loss of reputation of the company.
Position 7 – High Price – Low Value – This position is not applicable for the Dalata
Group or any other company as providing low value to the consumers for high price will lead
to issues in the profitability.
Position 8 – Low Value – Standard Price – Providing low value to the consumers is
not an option for the Dalata Group. Hence, this position is also not applicable for increasing
the revenues and the profitability of the company in the industry (Yoder, Visich and
Rustambekov 2016).
Recommendations
 The Indian market is suitable for the expansion of the Dalata Group as the
developing economy of the country will be a great market area for the
company.
 The foreign relations developed by India and suitability for foreign investment
will lead to the success of the expansion plans of Dalata Group.
 The Group needs to improve its services and improvise them according to the
needs of the Indian consumers.

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
Conclusion
The report can be concluded by stating that the Dalata Group of Hotels can expand
their operations in India as the political and economic conditions of the country is suitable for
the operations of the organization. However, keeping in mind the environmental problems
faced by the country in the recent times, the Dalata Group has to create a sustainable business
model which will not affect the environment in an adverse manner. The Dalata Group can
however use its brand name to promote its business activities in India. The reputation of the
Group in the service sector will help them in creating a competitive position in the market
easily. The highly welcoming Indian market will act as an advantage for the Dalata Group
and the expansion plans of the company. The internal analysis of the Dalata Group has also
depicted that the company is able to build a competitive edge in all the areas where it
operates and the huge capital investment of the Group helps them in receiving this position.

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ANALYSIS OF THE EXPANSION OF DALATA HOTELS
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