Business Options, Advantages, and Disadvantages: Elm Tree Hotel

This report delves into various business strategies applicable to the Elm Tree Hotel, a small-scale UK hotel. It begins with an overview of business studies and the importance of strategic planning, particularly for small businesses aiming for growth. The report examines several expansion options, including enhancing products in the current market, introducing new goods, going international, and establishing a chain. It then analyzes specific strategies such as market penetration, market development, utilizing alternative channels (like online platforms), and diversification (concentric and conglomerate), outlining the advantages and disadvantages of each. The report also touches upon the role of small businesses in developing countries, emphasizing their contribution to employment, export earnings, and domestic revenue generation, offering a financial approach to business development.

Business Studies

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1) Different options that can be used, advantages and disadvantages these options..................1
2) ................................................................................................................................................5
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business studies is the wide concept of social sciences, which allowing the in-depth study
of a range of specialities like finance, accountancy, organisations, human resource management
and marketing. It is related to utilization of resources for the profitable as well as better outcome.
Application of struggle and strategy among the business organisation demonstrates requirements
for competency and ability to standing between occupational environment (Arquero and
Romero-Frías, 2013). In this modern scenario people are very much focused on gaining business
knowledge as it helps in enhancing the knowledge and skills of individual for expensing business
or its activities. This create value in achieving high growth and success at market place. Business
can be consist as an individual's regular occupation, profession and trade, which also create
value in persons growth and success. Elm Tree Hotel is a hotel of United Kingdom and it is mid-
range hotel which falls among bed-and-boutique and breakfast. The room which is provides by
this hotel is safe and secure. Under this mention assignment discuss about the review of different
options which are used and advantages or limitations of different options.
TASK 1
1) Different options that can be used, advantages and disadvantages these options
Small business firm are those companies whose profit level is low and there are small
number of staff members are working for making business profitable at large scale. In these
kinds of businesses, risk is less involved. But these business firm want to increase their business
ta the large scale to gain some competitive advantages. Elm Tree hotel is a small hotel in which
14 rooms are available and it provides the luxurious, relax and comfortable living to people in an
effective or better manner. Under this hotel there are 14 rooms with the big window and lovely
sea. But these small business firms do not make any kind of plan and strategic approach for
conducting the business in a better and effective manner. Plan is helpful in doing the business
activities as well as operations in a systematic manner (Cantwell, Dunning and Lundan, 2010).
Strategic approach refers to measuring the outcomes of an organisation to assesses an extent to
work initiatives which facilitated ability of an organisation to do some of the approaches on the
business strategies. Strategies are helpful in doing the work of business in an effective or better
manner. It is a method which is selected through company to bring regarding desired objectives
like for an instance achievement of aims and solution regarding the problem in better manner.
Small business organisations use the combination of option and methods for doing their business
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in proper way. At the time of dealing business at international level, there are many issues which
are developed. So in addition to this, it is necessary for company to make a better plan and
conduct business ta international level in an effective or better manner.
Strategic approach is a planning or process of business firm to explaining its strategy,
making better decision or direction for allotting its necessary resources to engage this kind of
strategy. It is more valuable procedure to pursue and also direct the cost of business firms until
timing and speed of modification enhances (Chhokar, Brodbeck and House, 2013). It is a helpful
approach in doing they business at international level. If firm will development business globally
then from this profit level along with the productivity will be enhanced in a better or an effective
manner. In addition to this, small business firm should develop the proper plan and doing all the
operations in a better manner. Generally, the small businesses have limited market place and
locale. But these kinds of entrepreneurs developing the new services as well as products to
enhancing growth as well as increasing the living standard of local people. Small firms provide
employment opportunities to people so that they can earn more and make improvement in their
living standards in a better manner.
Instead of developing the plans as well as using strategic approach, small firms use the
evolution strategy and it is a kind of optimization technique which depends of evolution ideas. It
is related to the artificial methodologies of evolution. The small business firm do its business on
assumption basis. Strategic processes are having beginning point. For the businesses, this kind of
beginning point derives from needs of firms to compete, evolve and adapt with the competitive
market. In addition to small business firm it has two main aims and these are enhancing profit at
small level and develop in to the large business firm. For achieving the organisational goals in
better manner (Doz, 2011). It is necessary to formulate the better strategic plan and execute in a
better manner. As Elm Tree is a small scale hotel and its industry is service but it for increasing
they business, this firm need to prepare the better and clear strategies as well as plans. In addition
to this, there are different methods by which Elm Tree Hotel can enhance the business from local
to the international for the purpose of increasing productivity:
Enhance products and sales in current market- It is a risk free and easy method to
expand business in better manner. This kind of tactic need to big location, various pricing related
strategies, new techniques of marketing and need to maintain the strong relationship with people.
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Introduce new goods- Before introducing new goods, it is necessary for Elm Tree hotel
to conduct research and gather data about consumers tastes and preferences. It is not an
evaluation tactic but it is normal business evaluation.
Go international- Firm can conduct its business at international level from different
ways like for an instance increase spending power of consumers, developing markets, improves
the climate of business. Doing the business at international level, it can take the form of
licensing, manufacturing, exporting, joint venture (Franke and Richey, 2010). If company will
conduct business at international level, then it will be helpful in enhancing productivity and
growth level of company.
Start chain- As Elm Tree hotel comes under the service sector and it can launch the
chain in an easy manner. Regarding this company need to provide training to staff members so
from this they can work in a better manner.
Small business firms have many different options which are based on the different
factors. In addition to this, there are some options and their benefits or limitations which Elm
Tree hotel used to maximised the success:
Market penetration- It is a better option for the small business firm to develop as well as
enhance its business related operations. Under this, the main focus of small companies is on the
existing services or goods in existing market place. In order to enhance the market share, there
are different strategies related to market penetration are used through small companies which are
mention below:
Minimizing selling cost of goods- Through reducing cost of goods, firm can attract more
consumers. From this there will be little differentiate in market (Griseri and Seppala, 2010). In
United Kingdom, there are various hotels which provides better quality services but Elm Tree
provides attractive services to consumers at minimum cost.
Maximising promotions for goods to raise its pull strategy- Promotion is a better way to
aware or inform people about the services or goods of firm. In addition to small firm, it searches
different method of attracting people like providing special offers, offering the trade, some of the
special events, sales discounts etc. These all are the better ways to catch attention of consumers
at market place.
Advantages:
 Helpful in enhance market share.
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 Attracting large number of consumers.
Disadvantages:
 Cost will be increase for promotion.
 Need to provide training to staff members.
 Conduct research about the new market.
 Level of competition is more.
Market development- Under this, without make changes in market size, firm can have achieved
the growth and it is demonstrating through market penetration. It is a kind of market expansion
and in this the growth strategy is applicable to the small business. Under this, there is new
market but no new goods and under new market business will able to gain the large market share,
more profit and also high sales (Henisz, Mansfield and Von Glinow, 2010). In addition to this,
existing market is being expanded by determining new consumers for goods. Under this firm
expand its business in to the geographical markets like for an instance other regions, countries
and states. At the time of using growth strategy, small business firm should be careful. Before
entering in to new markets, firm should conduct research in a proper manner and understand
about consumer’s base.
Advantages
 Through developing the strong contact will consumers, sales will be enhanced Helpful in increasing large market share.
Disadvantages
 Time and cost will be increased.
 Chances of product failure.
Use the alternative channels- An internet has opened with the other channels for the businesses
to reach to consumers for sell its goods and services. It is more beneficial and effective for small
organisation and also entrepreneurs (Kolk and Van Tulder, 2010). There are many different
options mention below for company to find consumers and then sell products:
Selling online- Under this business firms can start their websites to selling goods directly
to the consumers with their websites so that customers will not face any issues.
Selling through use apps on mobile- The mobile internet is acceptable through the
people. There are large number of people which are using mobiles phones as well as the online
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transaction. In addition to this, large number of business firm are looking for different methods
to integrate growth and marketing strategies.
Advantages:
 Attracting more consumers.
 Selling goods in easy manner. Increasing sales.
Disadvantages:
 Consumers fear to purchase online products regarding wrong delivery of products.
 Chances of failure in transaction.
Diversification- As Elm Tree hotel is a small business firm and it uses diversification where it
can sell its goods in to the new markets (Sharma, Chrisman and Chua, 2012). This growth
strategy has more risk involved and high return. Under this, there is a need to allocate all the
necessary resources and these are manpower, time, cost and some of the other resources. The
diversification is of two different types:
Conglomerate diversification- In this, when small companies suffer from any kind of
limited opportunities in existing product line then it should select to diversify in to the other
areas which are not related with its existing operations.
Concentric diversification- Under this, there is a need to small firms to make
diversification through adding sine goods which are related with its existing products to its
existing markets. As comparison to conglomerate, it is more effective.
Advantages:
 An investment is helpful in making products diversification. IT is helpful in increase potential resources.
Disadvantages
 Time and cost will be increased
 Limited growth related opportunities
 Complication of tax.
2)
According to OECD, in developing countries, small business firms plays necessary role.
Under this, there are more than the 90% of companies outside agriculture sector, main
employment sources and also develop the export and domestic earnings. In addition to OECD, it
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suggests that small firms have some tendency to move to the markets which are psychologically
or geographically close.
a) Benefit of approach
There is a financial approach applied under this and under from starting or developing the
small business firm can provide employment to the local people also that from this, they can
increase its living standard in an effective or better manner. As revenue which is generated from
the small business is less but these kinds of business firms are necessary source of export the
revenues. Small firms give their contribution in order to generate revenue and also income level
for people. It is helpful in reducing the poverty and contribute towards making the economy
better (Shaver, 2013). At the home base, small firms are more productive as well as competitive.
Regarding developing the business at international market, there will be need of more funds to
small companies. There is a need to small business firm to give the rapid response to signals of
international market for take the better trade related benefits and investment opportunities. This
is necessary that firm should be productive productive as well as competitive. Better support
system of business is required to increase productivity and also competitiveness of small
business firm. There are some of the advantages of this approach:
 From the living standard of local people can be enhanced.
 Firm will able to increase its reputation by providing better quality of products as well as
services to consumers.
 Increasing the ability of women to give their participation in development of small
business at each level. As small business firm conduct many programmes and events to
take better initiatives.
 Under this, company give the training to staff members in order to increase their skills as
well as capabilities so that they can give their contribution in making the business
successful and take in to the large scale (Stahl and Tung, 2015).
In addition to OECD Brasilia Action Sstatement that Entrepreneurship and small business
Financing underlines finance related hurdle to creation of growth and survival in order to
overcome from structural constraints in the small business financing. OECD Scoreboard on the
entrepreneurship and small organisation finance based on the debt related indicators which has
been giving the comprehensive structure for monitor the financing trends as well as policies of
small companies at national and global level.
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There are some of the alternative finance instruments given below:
 Traditional debt of finance generates the average returns and it retains the ordinary
activities and also short term requirements of mall scale company which are generally
characterised through stabilized cash flow.
 Trade credit is another necessary finance source for start- ups as well as small scale
business firms, which can be supplement the short term lending of bank (Welch and et,
al., 2011). It includes traditional credit extension and also credit- mitigation techniques
like from an instance guarantees, loans in order to retain the export and import activities
in better manner.
It is necessary for the small business firm to prepare the better and effective opportunities
to expanding business and deal with any kind of risk in an efficient and also proper manner.
b) Challenges that are presented through moving to markets that are psychologically or
geographically
When Elm Tree Hotel moving to the markets which are geographically or psychological
distant, there two issues or complexities faced through small company given below as above:
INTERNAL COMPLEXITIES- These kinds of issue are internally related to business which
are related with organisational capabilities. Some of the internal issues are given below:
Information complexities- Issues in determining, contacting and selecting the
international markets because of inefficiency of information (Zander, McDougall-Covin and
Rose, 2015). Sometimes, firms do not have the more information about the other countries and
their markets, so it is one of the main issue.
Human resource issues- There is ineffectiveness of the HRM with context to
internationalism. There is minimum time to deal with the internationalisation. Managers should
have ability to deal with the foreign clients and making better strategies. There is more difficulty
arise for managers to manage the international staff members in better manner.
EXTERNAL COMPLEXITIES- According to OCED, these kinds of barriers are stemming
from host and home environment in which Elm Tree operates its business. There are some of the
external issues are given below:
Procedural barriers- It is related with operating the transaction with international
consumers (Chhokar, Brodbeck and House, 2013). If Elm Tree Hotel will go to conducts its
business in to another country, then it has to familiar with the paperwork or process of them
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country and understand in better manner. Firm face the difficulty in interacting with the foreign
consumers in comfortable way.
Government barriers- These are related with inaction or action through foreign and home
investment in context to indigenous exporters and business firms. The rules and policies of every
country are different from each other which are developed through government. International
organisations are treated as minimum favourable for taxes.
CONCLUSION
It has been concluded from the above given report that each business organisation is
widely concern on expanding their business activities through implementing proper skills and
knowledge of people at work place. Business studies plays vast role in managing all business
activities in systematic and well planned manner as it also effective in attaining higher
competitive edge at market place. Under this given report studied about the advantages and
disadvantages of the different approaches. The principles are effective in attaining high
competitive edge at market place through providing competition to their competitors. There is
discussion about the different options through which Elm Tree hotel can maximise its profit level
and also productivity in an effective manner.
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REFERENCES
Books & Journals
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international business activity: The co-evolution of MNEs and the institutional
environment. Journal of International Business Studies. 41(4). pp.567-586.
Chhokar, J.S., Brodbeck, F.C. and House, R.J. eds., 2013. Culture and leadership across the
world: The GLOBE book of in-depth studies of 25 societies. Routledge.
Doz, Y., 2011. Qualitative research for international business. Journal of International Business
Studies. 42(5). pp.582-590.
Franke, G.R. and Richey, R.G., 2010. Improving generalizations from multi-country
comparisons in international business research. Journal of International Business Studies. 41(8).
pp.1275-1293.
Griseri, P. and Seppala, N., 2010. Business ethics and corporate social responsibility. Cengage
Learning.
Henisz, W.J., Mansfield, E.D. and Von Glinow, M.A., 2010. Conflict, security, and political risk:
International business in challenging times.
Kolk, A. and Van Tulder, R., 2010. International business, corporate social responsibility and
sustainable development. International business review. 19(2). pp.119-125.
Sharma, P., Chrisman, J.J. and Chua, J.H. eds., 2012. A review and annotated bibliography of
family business studies. Springer Science & Business Media.
Shaver, J.M., 2013. Do we really need more entry mode studies?. Journal of International
Business Studies. 44(1). pp.23-27.
Stahl, G.K. and Tung, R.L., 2015. Towards a more balanced treatment of culture in international
business studies: The need for positive cross-cultural scholarship. Journal of International
Business Studies. 46(4). pp.391-414.
Welch, C. and et, al., 2011. Theorising from case studies: Towards a pluralist future for
international business research. Journal of International Business Studies. 42(5), pp.740-762.
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Zander, I., McDougall-Covin, P. and Rose, E.L., 2015. Born globals and international business:
Evolution of a field of research. Journal of International Business Studies. 46(1). pp.27-35.
Online
Strategic approach, 2017. [Online]. Available through:
https://www.rockefellerfoundation.org/strategic-approach/.,
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