Analysis of Oak Tree Inn: A Business Development Case Study

The case study examines the Oak Tree Inn, a tourism business in Balmaha, Loch Lomond, founded in 1997. The analysis includes PESTEL, Porter's Five Forces, and SWOT analyses to evaluate the inn's challenges and strategic choices. The report explores political, economic, social, technological, legal, and environmental factors affecting the business, as well as competitive forces and internal strengths, weaknesses, opportunities, and threats. The study evaluates strategic options using SAFE and schematic analyses, concluding with an assessment of the inn's growth and market position. The case study references various books and journals related to innovation and tourism management.

Case Study
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTEL Analysis........................................................................................................................3
5 Forces models...........................................................................................................................3
Strategic capabilities on the bases of SWOT analysis................................................................3
Evaluation of two strategic choices through the application of theories....................................3
CONCLUSION ...............................................................................................................................3
REFERENCES................................................................................................................................4
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INTRODUCTION
Oak Tree Inn was founded by Fraser family (Sandy and Lucy) in year 1997. The place is
located in the beautiful village of Balmaha, Loch Lomond. Balmaha is one of the most popular
tourist destination and Oak tree Inn is dealing in tourism business. Balmaha is a small village
with less population but it is beautifully covered by nature which attract the tourist to visit. Oak
Tree Inn have successfully established their business which provide holiday
accommodation ,restaurant ,artisan coffee,ice creams shops etc. In 2018 the oak tree inn had a
turnover of £3m and the owner director of the business have the aspiration to grow its business to
£10m by 2015. Tourist comes to visit another place so that they can feel relaxed and experience
the new environment. Oak tree inn provides new experience and great hospitality to the tourist
who are coming to visit their place so that the demand of the organisation can be increased in
market because If tourist will be happy with the services provided by the company then they will
recommend it to their friends and relatives which will help the business to grow and earn profit.
In this report we will analyses the challenges which oak tree inn faces and how they plan their
strategies in order achieve their goals.
MAIN BODY
PESTEL Analysis
Pestle analysis is a part of marketing strategies which shows how a business should
execute in various environmental changes. Pestle stands for Political, economical, social,
technological, legal, environmental These are the various factors which effect the working of the
organisation.
POLITICAL ENVIROMENT
These are factors which include government policy, high tax rate, unemployment rate,
economic condition of a country where a business is operating. High tax rate will effect the
profitability of the business. Stability of government is very important in order to achieve the
growth in the tourism industry. Because government has the liability to impose tax which can
affect the organisation also it will lead to decrease in the no tourist who are coming for a visit.
ECONOMIC FACTORS
Inflation rate is one of most important factor which effect the revenue generating power
of the organisation. If there will be high inflation rate in the economy then automatically there
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will be a rise in the price of the product and services which Oak Tree Inn is providing. Which
will be a drawback for the organisation because if the prices will be high then demand for the
company will go down and its profit will also decrease in the market. Tourist already spend high
amount in travelling and other expenses if the prices will be go high for other services which
they have to avail then it will affect tourist financially also the no of tourist will decrease in the
country.
SOCIAL FACTORS
Social factors are basically the trends which society wants to follow and accordingly they
require the services from the organisation. if organisation will not provide the services according
to the demand of the tourist then it will affect the productivity of the organisation. oak tree inn
should create a portfolio of the services which are providing to the customers and upload it on
the social media platform which will attract more tourist and it will also help in generating profit.
TECHNOLOGICAL FACTOR
Technology plays an important role for the organisation to increase its demand and profit
in the market. Oak Tree Inn can develop new feature in the services which they are providing
with the help of new technology. They can provide better transport system to the tourist by
providing free wifi, charging points around they place which will help them to enjoy their
travelling and will also increase the demand for the organisation in the market.
LEGAL FACTOR
These are the legal laws which the organisation has to follow in order to sustain in the
economy. There are different types of laws given by government for example consumer
law,labour law etc according to that the organisation has to perform. Oak Tree Inn has to provide
the full safety to the tourist who are coming for a visit so that they cannot face any issue also
they should provide job security to the workers who are working in the organisation. So that the
company can achieve its organisational goal.
ENVIRONMENTAL FACTOR
Pollution is the biggest environmental factor which can affect the tourism industry.
Pollution caused by buses, aeroplanes are highly affecting the environment due to which
diseases can take place in the environment so to stop this government has to take action for
decrease in the rate of the tourism taking place in the country. Which will affect the productivity
for the tourism industry.
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5 Forces models
Porters five forces model is the management tools to determine the competitive intensity
in the market it helps the the organisation to analyse the competition the market. Threats of new
entrants: New entrants in the market creates tough competition for the existing firms. New
entrants comes with new variety of products and services which attracts the consumer. There are
many challenges through which the existing firms has to go through like price variation, product
and quality differentiation etc. Oak Tree Inn has to plan their strategies accordingly so that they
cannot face any loss. They should maintain a reasonable price for the services which they are
providing to the tourist so that their demand cannot go down in the market.
Threats of new substitute: In today's world every customer want good variety of product at a
reasonable price. To attract more customer and increase sale of the product substitute are made
by the firms in the market to give competition to the opposite firm and gain profit out of it. Oak
tree Inn has to focus on it if the tourist will get attracted by the services provided by the opposite
firm it will affect the profitability of the organisation.
Bargaining power of suppliers: For every industry raw material is very important. If suppliers
starts bargaining it can affect the profitability of the firm. Oak tree inn is the leading tourism
industry in the market. It needs raw material for the manufacturing of products and services if the
prices will be high for the raw material then it can create loss for the industry. Oak Tree inn
needs to build a supply chain with multiple suppliers suppose if prices of raw material is high by
one supplier it can switch the another.Bargaining power of Buyers: Every tourism industry has to
go through this factor tourist tries to do bargain as much as possible because they need the
services at low prices as compared to other this can affect the profitability of the firm and will
also effect the reputation of the firm in the market. if company accepts the price which the
customer wants to pay for the product then it will increase the sale of the product but with the
loss. So to avoid this loss business should invent new variety of product and services in the
market this will reduce the bargaining power of the buyers and the company can earn profit out
of it. More variety of products will attracts more customer also and it can also give the
competition to the other firm in the market.
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Competitive rivalry: Firms takes place in the market with the aim of achieving profit by
increasing the sale of the product if the firms will sale the same variety of products then it
cannot earn profit from that. So firm should build a variety in a product so that it can
attract the customer and increase the sale in the market. Oak tree inn should build the
variety in the product and services in the market instead of competing for the same
product. if product will be different from the other firms then there will be more choices
with the customer and it will also increase the demand for the product in the market.
Strategic capabilities on the bases of SWOT analysis
SWOT analysis stands for strength, weakness, opportunity, threats of the organisation with the
help of this analysis company can get over from the challenges coming in the market. It is an
important tool for any organisation to check their stability in the market. With the help of swot
analysis Oak Tree Inn can analyse these four aspects of the organisation and plan their strategies
accordingly.
STRENGTH: It basically means what are the areas where organisation is doing well. Every
organisation has it strength as they are doing well in some or the other parts of the
organisation. Strength is the advantages through which company can earn its profitability.
Oak tree is making suitable is making changes for the growth of the business and
developing its products and services so that there demand in the market can be increased as
it is one of the most re putative tourism industry in the market so its goals are set
accordingly.
Weaknesses:Weakness is the part of the company which shows where the company is lacking
behind and has the need of improvement. By the motive of earning profit companies sometime
creates weakness in the organisation which further creates a problem for the company. Oak tree
inn needs a proper staffing for the services to the tourist because if the staff are not trained proper
then it will affect the growth of the company in the market. Business poor decision-making due
to which sometimes they have to face loss in terms of the services which they are providing. So
proper decision making is very important to achieve the goals of the organisation.
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OPPORTUNITIES:Opportunities are the chances comes from outside the organisation through
which company can earn profit. There are various opportunities which can take place in the
Oak Tree Inn like development in technologies, development in the areas so that more
tourist can get attracted are visit the place and experience the new environment.
THREAT:Threats are the obstetrical company has to go through in the market. To compete with
Oak tree on many new firms are planning to operate in the areas where it is operating which will
affect its growth in the market also tourism industry demand is also going down in the market
which will affect the tourism industry and its profitability.
Evaluation of two strategic choices through the application of theories
SAFe analysis: acceptability ,feasibility and suitability are the major aspect aspect of SAFE
analysis it helps the organisation to plan their strategies accordingly. So that the firm can operate
in the market and earn its profit .tourism industry has to work according to this analysis.
Schematic analysis:it is basically a collection of data about the working of the organisation and
how it can perform well in the it provides the data in a proper format which helps in the growth
of the organisation.
CONCLUSION
In this report it has been observed that Oak Tree Inn is developing its products and
services so that its growth can be developed in the market and also it has overcome from the
challenges which have occurred in the past and increased its growth in the coming years due to
which it has been at the top in the tourism industry.
REFERENCES
Books & Journals
Aldebert, B., Dang, R.J. and Longhi, C., 2011. Innovation in the tourism industry: The case of
Tourism@. Tourism management. 32(5). pp.1204-1213.
Camilleri, M.A., 2018. The tourism industry: An overview. InTravel marketing, tourism
economics and the airline product(pp. 3-27). Springer, Cham.
Csapo, J., 2012. The role and importance of cultural tourism in modern tourism industry.
Strategies for tourism industry-micro and macro perspectives, pp.201-232.
Holloway, J.C. and Humphreys, C., 2019. The business of tourism. SAGE Publications Limited.
Goodall, B. and Ashworth, G. eds., 2013. Marketing in the Tourism Industry (RLE Tourism): The
promotion of destination regions. Routledge.
Jaafar, M., and et.al., 2011. Entrepreneurship in the tourism industry: Issues in developing
countries. International Journal of Hospitality Management. 30(4). pp.827-835.
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Fang, B., Ye, Q. and Law, R., 2016. Effect of sharing economy on tourism industry employment.
Annals of Tourism Research, 57, pp.264-267.
Baker, D., 2014. The effects of terrorism on the travel and tourism industry. The international
journal of religious tourism and pilgrimage. 2(1). pp.58-67.
Sigala, M., 2017. Collaborative commerce in tourism: implications for research and industry.
Current Issues in Tourism. 20(4). pp.346-355.
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REFERENCES
Books & Journals
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