Strategic Analysis of Four Seasons Hotel in Dubai (Report)

This report provides a comprehensive strategic analysis of the Four Seasons Hotel Dubai International Financial Centre (DIFC). It begins with an introduction to the hotel industry and the Four Seasons brand, followed by an analysis of the hotel's past performance, including firm and industry performance, and an external analysis using the PESTLE framework. The report then delves into an internal analysis using the TWOS framework, assesses the company's competitive advantage through Porter's generic strategies, and identifies key lessons learned. The analysis continues with an examination of the current performance using VRIO analysis, defines current issues, and applies Porter's Five Forces model. The core of the report focuses on the implementation and evaluation of strategies, including investment in a shopping complex, budget-friendly rooms, service innovation, employee retention, and redesigning. The report aligns these strategies with the Balanced Scorecard dimensions before concluding with managerial implications and recommendations for the future.

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STRATEGIC MANAGEMENT
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7/30/2019
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Contents
1. Summary/ Introduction............................................................................................................3
2. Analysing firm’s past performance and issues........................................................................4
Firm and industry performance...................................................................................................4
External analysis (PESTLE analysis ).........................................................................................4
Political factors........................................................................................................................4
Economic factors.....................................................................................................................5
Social factors...........................................................................................................................5
Technological factors...............................................................................................................6
Legal factors............................................................................................................................6
Environmental factors..............................................................................................................6
Internal analysis...........................................................................................................................6
TWOS framework...................................................................................................................6
A critical assessment of strategy..................................................................................................7
Key lessons learned from the past...............................................................................................9
3. Analysing firm’s current performance and issues...................................................................9
Analysing information(VRIO analysis )......................................................................................9
Defining the current issue(s) and problem statement................................................................10
Problem statement.................................................................................................................10
Porters five force model.........................................................................................................10
4. Implementation and Evaluation of Strategies........................................................................15
Investment in shopping complex within the hotel.................................................................15
Budget friendly rooms...........................................................................................................16
Service innovation.................................................................................................................16

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Redesigning...........................................................................................................................16
Employee retention strategies................................................................................................16
Alignment of Recommended Strategies with Balanced-Scorecard (BSC) Dimensions...........17
Stage 1...................................................................................................................................17
Stage 2...................................................................................................................................20
Stage 3...................................................................................................................................20
5. Conclusion & Managerial Implication......................................................................................22
References......................................................................................................................................24

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1. Summary/ Introduction
The hotel industry is one of the dynamic and challenging industries, which has faced various
transformations for years. Thus, it can be said that along with the efficient opportunity for the
hotel brands, there are various problems faced by the companies as well. The purpose of the
report is to critical assess the internal and external environment of a hotel organizational case so
as to understand the recent problem faced and recommended a strategy for the same to sustain
through that problem. The organizational case considered in the report is Four Seasons, which is
one of the popular hotel brand providing accommodation and dining services across the globe.
The report will focus on analysing the strategic management elements for “Four Seasons Hotel
Dubai International Financial Centre (Ahlin, 2014).”
Four seasons is one of the popular international luxury hotel company, operating in more than a
hundred hotels across the globe. The company has been following the glocalization strategy that
is adapting the base global strategy with innovation and alterations as per the local area in which
the company is operating. This reflects the study of the brand in particular Dubai region would
be somehow different from other nations in which the company is operating (fourseasons, 2019).
The company is one of the successful companies located in Dubai heart with a boutique style
sanctuary. Four season DIFC are providing accommodation that will provide the feel of home to
the guest visiting that is designed in the way for productivity and relaxing time with
extraordinary services provided by the company. DIFC is generally dedicated to professional and
financial services in the free zone of Dubai. The key benefit that the company enjoys through the
free zone that is Dubai International Financial Centre is 100 percent foreign ownership, zero
percent tax rate on profits and income, free capital convertibility (riaabarkergillette, 2019). The
major problem is increasing competition in the luxury hotel brands near DIFC, which will be
considered as the preliminary motive for the company to assess the internal competences and
resources of the company and factors of the external business environment that leads to such
challenging situation for four seasons DIFC (riaabarkergillette, 2019).

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2. Analysing firm’s past performance and issues
Firm and industry performance
The hospitality industry performance, especially in case of luxury segment, can be reflected
through the facts that by DTCM that is a department of tourism and commerce marketing that
stated that at the end of 2017, the inventory of total hospitality industry was 107,431
(khaleejtimes, 2019). Moreover, the statistics from the send quarter of 2018 presented an
increase in 10 percent, which reflect the growth stage of the industry in Dubai. Moreover, Dubai
is considered to be one of the largest tourism industry across the globe, which also reflect the
increasing need for accommodation services in the nation (cavendishmaxwell, 2019).
To assess the performance of four seasons in DIFC, it can be assessed through the rating by the
customers through various official review sites like trip advisors, and in hotel.com. the brand as
per current rating got 9.0 rating out of ten, which reflect the customer satisfaction, and
company’s performance. Moreover, the company when entered into the Dubai hospitality
business, the company introduced the market with another hotel started constructing within two
years. The reason being, as the company was expected to have the highest revenue per room,
which is one of the reliable key performance indicators in the hotel industry (arabianindustry,
2019). The higher performance of the company reflects through the customer ratings, which
would eventually reflect the occupancy rate and sales of the company. Moreover, as per the news
on November 2016, the company eyes second considering the property in DIFC
(press.fourseasons, 2019).
External analysis (PESTLE analysis )
In order to assess the external factors of Dubai those will eventually affect and could turn out to
be either threat or opportunity for the company, which would be critically analysed through a
PESTLE analysis framework. The factors of the framework include
Political factors
The political environment of the UAE included the inclusion of 7 free emirates. Each emirate is
selected by Sheik of the nations, which has the highest position in the political system of the
company. However, it can be said that due to rigid rules and regulation framed and implemented
by sheiks depicts high control of corruption, which is better for the company dealing in the

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nation. However, democracy is not true to the level, as in case of western countries, which could
be a threat for the company that will result into long legal requirements and frameworks to be
followed (Andersson, 2016).
Economic factors
Figure 1: GDP UAE (Source: (tradingeconomics, 2019)
The GDP of the country seems to be increasing, and as discuss that the tourism industry is one of
the major sources of income. This reflects that the economic environment of Dubai can be an
opportunity for Four seasons hotel in the nation. As already discussed, the free zone that is DIFC
also comes with economic benefits like zero percent tax, which also makes four seasons to
increase the revenue earning (tradingeconomics, 2019).
Social factors
Social factors are a major element as the country is very involved and consider culture to be very
important and restrictive. The religion that is majorly found in the nation is Islam, that reflects
that the maximum population is of Muslim, which needs to be considered while offering product
and service sin the nation. Thus influencing the business and marketing activities of the company
in this nation (Tarhini, Rouibah, & Yammahi, 2018).

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Technological factors
Technology includes the infrastructure level in the nation, which is considered to be one of the
favorable element in the UAE that supports the business, and technological adaptability in the
nation. For example, the system operated in Dubai includes the feeder transport system, making
management and ease for the residents. Other than transport the financial transactions are
managed using technology, that included the availability of cards like MasterCard and visa. This
turned out to be an opportunity for Four seasons to conduct business online (thenational, 2019).
Legal factors
The legal frameworks are the major aspect in the country that has to be followed by every
citizen, people visiting the place, and most importantly corporates conducting business. The
change of laws related to hotel industry included licensing regulations of the hotel in 2013. The
new rule makes the official body for the tourism and hotel industry to be the Dubai Department
of Tourism and Commerce Marketing. Moreover, four seasons also have to abide by the legal
framework for DIFC specifically (gulfbusiness, dubais-ruler-issues-new-hotel-law, 2019).
Environmental factors
The environment of UAE priory included the dry climate, which makes the products and services
to keep the temperature low and effective electric appliances in order to keep the hot climate in
control and do not increase the business productivity affecting the global warming. For this, the
company needs to consider a climate action plan. However, this could be an opportunity for the
hotel companies, the reason being the luxury consisting air conditioners would be preferred
(Bruns, 2013).
Internal analysis
TWOS framework
Strengths
Customer satisfaction
Central location
Extraordinary room
amenities
Cleanliness (tripadvisor,
Weaknesses
Targeting high income
group only
High employee turnover

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2019)
Opportunities
Product development
Service innovation
SO strategy
 Customer engagement
 Technology use in-
room amenities
 Differentiation strategy
WO strategy
 Training and
development program
 New product
development
Threats
Increase in competition
Increased bargaining power
of the buyer
ST strategy
 Customer loyalty
program
 Customer retentions
strategies
WT strategy
 Employee engagement
 Compete for the
budget friendly hotel
as well
From SWOT analysis it can be said that the key past challenges faced by the company included
higher employee turnover, difficulty in finding highly skilled employees that are challenging
recruitment process. This may affect the firm’s performance as the human resource are the key
asset in the hotel industry responsible to serve the customers and enhance customer satisfaction
(Chiang, Chen, & Ho, 2016).
A critical assessment of strategy
For analysing the competitive advantage strategy of four seasons hotel DIFC, Porters generic
competitive advantage matrix will be used. The four optional strategies that the company could
have adopted in order to gain a competitive advantage in the industry includes cost focus
strategy, cost differentiation strategy, differentiation focus strategy and lastly differentiation
leadership strategy. These two strategies are based on two major aspects that are the market size
that the company is targeting and Source of the competitive advantage. After analysing the
external and internal environment of four seasons, the strategy that seems to be adopted by the
company is differentiation leadership strategy (Oral, 2014). The reason being the company is
adopting premium pricing strategy as the company is focused over luxury premium hospitality to
be offered to the customer, along with this the company has been focus over the service
innovation and extraordinary good experience to be offered to the customer when they are

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visiting four seasons resort and hotel DIFC. Moreover the locational advantage is another part of
this strategy that has found to be affected for the brand which has also been accepted by
customers through the ratings are different review sites like TripAdvisor and hotels.in. However,
a disadvantage that the company has faced due to the strategy is that they are only able to target
premium customer that is high income group and not the middle income group. Moreover, the
company has always focused more on business travelers which seems to be a good strategy as
most of the travellers across the globe are travelling due to the business purpose (Muller &
Nagle, 2017).
Figure 2: Porters generic competitive advantage matrix (Source: (refreshbreeze, 2019)

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Figure 3: Trip advisor ratings (Source: (tripadvisor, 2019)
Key lessons learned from the past
Key sources of competitive advantage in the hotel industry in Dubai included one of the supports
from external factors that are the enhanced tourism industry in Dubai. Another key advantage is
the global presence of four season’s brand, which will eventually help the company to increase
brand recognition and increase customer loyalty. The unique services provided by the company,
along with the high quality products and services that is the accommodation rooms designing and
service from human resources of the company have to get them being able to be sourced as a
competitive advantage for four seasons D I FC. Some of the key factors that will influence the
firm’s performance and will affect the industry are the technology, technology is identified to be
obsolete very quickly in repeatedly changing the digitalised world. This eventually affects the
industry concerning marketing activities, amenities provided by the company, services offered to
the customer (Oral, 2014).
3. Analysing firm’s current performance and issues
Analysing information(VRIO analysis )
Resource and
capability
Valuable Rare Imitable Organized
Location yes Yes Yes Yes

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Customer
experience
Yes Yes Yes Yes
Customer
feedback
Yes No No Yes
Human resource Yes No No No
Technology Yes Yes No Yes
Online presence Yes No No Yes
Through VRIO analysis it can be said that the company resources that stand out to be sustained
competitive advantage is location and customer experience, as these resources are valued to four
seasons DIFC, it is rare for the company, it cannot be easily imitable as legal requirement in
DIFC is very long and not easily available, which reflect competitive advantage (Puck &
Mudambi, 2016).
Defining the current issue(s) and problem statement
Problem statement
The major problem is increasing competition in the luxury hotel brands near DIFC, which has
increased the switching level of the customer. Therefore, it can be said that retaining the
customer due to the increase in completion is the major problem faced by Four seasons hotel
DIFC (Menon & Edison, 2015).
Porters five force model
The current issue identified through increasing competition, which would be analysed and
justified thorough understanding of the forces of the industry impacting the performance of Four
Seasons DIFC (Liedtka, 2018).
Forces Discussion
The threat of new entrants The new company entering into the market are
not the major problem to the company but may
influence the competition level in the industry

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after some time span. In other words, it can be
said that the investment in luxury hotels are
very youth, which makes the new entrant a
major barrier to entry into the luxury hotel
market in the IFC, this reflects listen to
influence on four Seasons DIFC. However,
The existing brand may enter into the market in
Dubai like Marriott brand, Radisson brand near
the DIFC, which will become a close
competition to four seasons, this reflects a
major threat to the company as the competition
will be increased and the options for customers
to switch will also be increased. Moreover, the
company entering into the industry may come
with new technology and innovative idea. In
addition to this, customers are looking for new
designs that are more innovative and latest that
a new company in Entering may include while
offering accommodation services to the
company near DIFC (Baker & Bowen, 2015).
Bargaining power of buyers Bargaining power of buyers is one of the major
threat to the company and major cause for an
issue related to customer retention. The
increasing competition has influenced one of
the external stakeholders that is the customers
by increasing the bargaining power to
negotiate, the reason being the customers can
easily switch from one branch to another
because of lots of an ability of services near the
IFC. This has reduced customer loyalty and it
has decreased customer retention by four