Dalata Hotel: Strategic Analysis and Expansion in the Mexican Market

This report provides a strategic analysis for Dalata Hotel's potential expansion into the Mexican market. It begins with an executive summary and table of contents, followed by an introduction outlining the report's focus on external and competitive environments, and internal analysis. The report includes a PESTLE analysis of Mexico, evaluating political, economic, social, technological, legal, and environmental factors. It then applies Porter's Five Forces model to assess the competitive landscape of the tour and travel industry in Mexico, considering bargaining power of buyers and suppliers, the threat of substitution, rivalry among competitors, and the threat of new entrants. An internal analysis examines Dalata's physical, financial, human, and specific resources, followed by an evaluation of its competitive strategy using Bowman's strategy clock. The report concludes with recommendations for Dalata to successfully enter and compete in the Mexican market, supported by references.

Running Head: strategic management
Strategic Management

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Executive Summary
Dalata is one of the largest hotel operators with many hotels in Ireland and UK. The company
was founded in July 2007 by the chief executive Pat McCann. In this report the focus is given to
enhance the business in Mexico. It is seen that it is important the organization to conduct the
activities by expanding in the international market. It will help to enhance the overall profit and
demand of the services. This report consists of pestle analysis, competitive environment, and
internal analysis and also recommendations are made for the company so that activities can be
conducted smoothly in a proper manner.

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Table of Contents
Introduction.................................................................................................................................................1
Pestle Analysis of Mexico............................................................................................................................2
Competitive Environment............................................................................................................................4
Bargaining power of the buyers..............................................................................................................4
Bargaining power of Suppliers.................................................................................................................5
The threat of substitution........................................................................................................................5
Rivalry competitors..................................................................................................................................5
The threat of new entrants......................................................................................................................5
Internal analysis...........................................................................................................................................5
Physical Resources...................................................................................................................................6
Financial Resources.................................................................................................................................6
Human Resources....................................................................................................................................6
Specific resources....................................................................................................................................6
The basis of a competitive strategy.............................................................................................................7
Conclusion...................................................................................................................................................9
Recommendations.......................................................................................................................................9
References.................................................................................................................................................11

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Introduction
This report focuses on strategic analysis to analyze the positive and negative factors of
the chosen country. In this report, proper evaluation is made to analyze the results of a particular
country which can be considered by Dalata Hotel Company to enhance its business. In the first
phase of the report, external environment has taken into consideration. In the next phase,
competitive environment of a specific country will be considered. Dalata has a good
international chain in which they offer various tour and travel packages to its clients. In the last
phase of the report recommendations will be given so that activities of the organization can be
conducted smoothly (Bellur et al., 2015).
Pestle Analysis of Mexico
Mexico is one of the largest economies in Latin America. The economic policy is liberal
and there is a serious issue of drugs and cartel. The economy of Mexico plays a dominant role in
the service sector (Kim and Kim, 2015). To evaluate the viability of Mexico for tours and travel
activities, it is important to evaluate the macro factors by the management of Dalata.
Political Factors
 Political pressure in Mexico is quite
low.
 It is seen that Mexico has low risk in
the continent.
 Political factor is stable in Mexico.
 With the developed countries proper
relations are made (Kraus et al., 2015).
 There are many laws that are given by
the government related to labors.
 Government of Mexico imposes high
Economic Factors
 Mexico is one of the largest countries
in economy.
 There is high quality and cheap labor.
 Reduction in the overall employment
rate.
 To enhance the transparency
government has considered many
decisions (Xie and Li, 2017).
 Mexico is vibrant free market economy.
 The turnover can be enhanced as dalata

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tariffs plans on the business to start new
business in the economy (De Villa et
al., 2015).
 Dalata can easily enter in Mexico by
taking into consideration joint venture
and strategic alliance with the existing
organizations of Mexico.
has a high potential in the market of
Mexico (Surdu et al., 2018).
 People of Mexico focus more on
quality and tour packages.
 It is important that Dalata should focus
on offering good quality and tour
packages so that customers can be
attracted in Mexico (Mak, 2015).
 There are various issues faced by
Dalata hotel like rise in the labor cost
and also due to this decline is the
overall productivity is analyzed (Vogl,
2014).
Social Factors
 Technological change is the major
factor on which emphasis is given more
by the organizations.
 People are living more in cities.
 Increase in the overall household
income.
 Life standards and economic values are
good.
 Mexico is open and focuses on
considering new changes.
 If Dalata wants to acquire a large
market share then it is important to
focus on customizing the tours and
travel packages so that customers can
be attracted towards the market.
 The company should set their prices
high as people of Mexico are not
Technological Factors
 Lifestyle of the people is superior due
to the advance technologies.
 By focusing on 4G network type
communication has enhanced
effectively.
 It is analyzed that should first
emphasize on using online cyber
computing system so that travel
packages can be promoted.
 Many people in Mexico take active part
on through social media applications to
book packages.
 The government of Mexico is
encouraging companies to use
advanced technologies so that activities
can be conducted smoothly.

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concerned more about the prices
(Moshiri and Santillan, 2018).
Legal Factors
 The government of Mexico has
analyzed that legal requirement plays a
great role in enhancing the growth of
tour and travel industry.
 The legal procedure of the Mexico is
stable and it encourages other
companies to consider liberal policies
and program.
 There are many laws that are compiled
at the time of conducting the activities
of the organization like property law,
patent act.
Environmental Factors
 The environment of Mexico is good
and pollution free which offer positive
environment to establish the business.
 It can be easy for the company to set up
the business as the environment is good
(Molina-Azorín et al., 2015).
 Dalata should invest more in managing
the employees of the organization.
 Price skimming strategy is also
effective so that quality can be
maintained in a proper manner.
Competitive Environment
This research focuses on the evaluation of tours and travel industry in Mexico by
considering Michael Porter's five force model.
Bargaining power of the buyers
Bargaining power of analysis is high in Mexico. It is analyzed that in tours and travel
industry the consumers focus more on the high quality of the tour packages. So, it is important to
customize the packages as per the requirement and demand of the customers. It is evaluated that
of Dalata hotel does not offer proper quality services in Mexico then it can be difficult to survive
for a long time in the market (Laufs and Schwens, 2014).
Tours and travel industry in Mexico have many competitors like Marriott and carnival. It
is important to consider proper functioning of these industries so that large market share can be

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grabbed. If a large market share is grabbed then it can be easy to enhance overall profits in an
effective manner (Berman, 2015).
Bargaining power of Suppliers
It is analyzed that in the industry of tour and travel, suppliers are those who offer services
to Dalata hotel like breakaway tours and also travel service providers. Human resources in
Mexico are less and therefore there are many services that are given to existing business. It also
requires a high cost of capital to create a strategic alliance with the competitors. The power of
suppliers is high in Mexico (Marchington et al., 2016).
The threat of substitution
It is analyzed that the profits of Mexico are high. The threat of substitution will be
affected by the other product substitution. In Mexico, there are many attractive places that are
attracting the customers and help them to choose the best visitor place. This can be a high threat
for dalata hotel to survive in Mexico. But on the other hand, it can also enhance the demand for
the services given to the customers if the quality is good (Tang et al., 2015).
Rivalry competitors
There are many rivalries in the market of Mexico like Marriott. These groups are giving
quality services to its customers to attract the customers towards the industry. If Dalata wants to
give proper competition then it is important to offer good services so that satisfaction level can
be enhanced. It will also help to sustain in the market for a long time. If services are good then
more preferences are given by the customers to avail the services in a proper manner (Ruetzler et
al., 2014).
The threat of new entrants
In Mexico threat of entrants is low as a high investment is required to establish the
business. It is important for the new entrants to consider proper strategies so that proper
competition. It is important to invest a large amount so that activities can be conducted smoothly.
Threats of new entrants for tour and travel industry will be less. It is analyzed that to enter the
market it is important to have the capability to invest in the business. If proper resources or
capital are not there then it cannot be possible to conduct the activities smoothly.

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Internal analysis
The internal analysis is considered to analyze the resources of Dalata Hotel group. The
resources audit is the method of analyzing the available resources so that activities can be
conducted smoothly. There are many resources that are analyzed in Dalata Hotel to conduct the
activities smoothly.
Physical Resources
It is analyzed that Dalata Hotel has more than 30 hotels globally. There is proper
communication channel established by the company so that connection can be maintained all
over the world. It is important as it helps to communicate with a large audience in an easy way
and it also helps to enhance the market share. Also, the employees are giving quality services to
the customers so that satisfaction level can be enhanced. Some workers should be promoted to
the Mexico branch so that quality services can be maintained in the Mexico market (Chan et al.,
2017).
Financial Resources
Financial resources play a great role in the organization to expand its business. If there
are no proper financial resources then it can create difficulty to enhance the market in an
effective manner. The total turnover of the company is more than 225.7 million and it has
enhanced by 158 % in the last two years. It has analyzed that the organization has a good
financial position that helps to set up the business in the Mexico market (Williams and Best,
2014).
Human Resources
In dalata there are highly professional employees who are conducting the routine
activities with efficiency. It is seen that the company offer high-quality services to the customers
and the employees are trained properly so that they can accomplish their goals and objectives
effectively. The management of the company focuses on developing and encouraging the
employees according to the business process system. It is also seen that the training and
feedback provided to the employees help to enhance the confidence level in a proper manner.
Specific resources
The company is offering product differentiation strategy so that core competencies can be
enhanced. It helps to provide quality services to the employees at very less cost. It is difficult

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for other companies to consider this strategy. The cyber computing system will help to enhance
the channel of communication of the organization and it will enhance the growth in the market
(Kim et al., 2016).
Specific resources which are possessed by the company are : Good image, intellectual
property, and good services. It is evaluated that by focusing on past information it is seen that
company is performing well and tries to acquire resources in the market. These resources help
the organization to acquire large market share so that brand image and quality services can be
offered to the customers (McKercher et al., 2014).
The basis of a competitive strategy
To evaluate the competitive strategy of Dalata in Mexico, Bowman's strategy clock
model is taken into consideration. This model helps to search the options for a strategic position
that how the packages related to tour and travel will create a competitive advantage to enhance
the market share of the company.

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(Source: human resource, 2018).
(Position 1) Low price and low value added
Dalata should focus on minimizing the overall cost of the services so that demand for the
service can be enhanced in the Mexico market. It will help to attract more customers.
(Position 2) Low price
Low pricing strategy should be considered and it is related to develop cost leadership
strategy in Mexico market so that customers can be attracted in a proper manner.
(Position 3) Hybrid
The company should consider cost leadership strategy so that large market share in the
Mexico market can be grabbed easily. By keeping the prices low the company can easily attract

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the attention of the customers. It will help to acquire large Mexico tours and travel market (Wang
et al., 2016).
(Position 4) Differentiation
This strategy should be followed by the company so that good quality products can be
offered and satisfaction level of the customers can be enhanced effectively. It also enhances the
value of the customers through its different tour and travel packages.
(Position 5)Focused differentiation
It is concerned with the pricing strategy which is price skimming strategy in which the
prices are kept high and customer's satisfaction is enhanced so that demand enhances in the
market.
(Position 6) Risky high margins
This strategy will not be taken into consideration by Dalata at the time of entering the
market. If a high margin is considered by the company then it can give impact on the overall
return on capital employed in the company.
(Position 7) Monopoly Pricing
This pricing strategy impacts the activities of the business. If Dalata takes into
consideration the strategy related to monopoly then it will give negative impact on the
organization. The negative impact is also seen in the overall brand image of the company.
(Position 8) Loss of market share
This position of the company is in a drastic situation. In this strategy, the hotel will give
a product by enhancing the satisfaction level of the customers. After evaluating the clock
strategy it is seen that Dalata requires considering position from1 to 5 to acquire Mexico market.
Remaining position will be highly on the competitive position.

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Conclusion
After evaluating all the factors of Mexico, it is seen that Mexico is the best place for the
company to enhance the business. Also, the human resource will be high just because of the
customers who require high-quality tour and travel packages. Dalata also tries to acquire large
market share. The stable legal requirement will also encourage the company to expand the
organization in this region.
Dalata should try to expand its activities in Mexico by taking into consideration the two
strategies like cost leadership and product differentiation strategy. It will help the organization to
enhance the overall satisfaction level of the customers and also the market share in a proper way.
It is seen that if a company focuses on the strategies then it can be easy to enhance the market
share and also success can be achieved by the company in a proper manner. By the above the
information it is analyzed that human resource of the organization is efficient towards the
activities of the organization (Riley, 2014).
Recommendations
By the above information, it is analyzed that in Mexico the people are more active on
social media and other application that help to promote the overall activities of the organization.
If dalata want to promote its product then it is important to focus on effective promotional
strategies so that overall goals and objectives can be achieved. So, it is important for the
company to consider proper marketing strategies so that business can be promoted effectively.
By this, it can be simple to conduct the activities in a managed way (Nieves and Segarra-Ciprés,
2015).
Mexico market is wide and large and it has a high potential for the Dalata hotel to expand
its market effectively. To expand in the market it is important to introduce various tour and
travel packages so that growth can be achieved effectively. It is also important to establish a
strategic alliance with the other travel and tours companies in the market so that business can be
set up easily. The organization should also have a strong image and proper resources so that
competitive advantage can be attained in the market. It also helps to compete with the
competitors prevailing in the market. Tough competition can also be given to the competitors by
focusing on proper utilization of the resources in an effective manner. It is also important that