BM633: Oak Tree Inn Strategic Analysis and Recommendations Report

This report presents a strategic analysis of the Oak Tree Inn, a 3-star restaurant and hospitality business located in Glasgow, UK. The analysis begins with an overview of the firm's services, including its restaurant, bar, B&B accommodation, and other amenities. It then proceeds to examine the external environment using PESTLE and Porter's Five Forces models, identifying political, economic, social, technological, legal, and environmental factors, as well as competitive threats and opportunities. A SWOT analysis highlights the restaurant's strengths, such as its unique concept and diverse offerings, and weaknesses, such as limited brand awareness and financial performance. The report explores two strategic options, based on the Ansoff Matrix and Porter's Generic Strategies, focusing on market development as a key strategy for growth. The report evaluates the chosen strategic options for suitability, acceptability, and feasibility (SAF), providing recommendations for the Oak Tree Inn's future development.

W1 Consultants strategic
report and recommendations
for Oak Tree Inn case study
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Table of contents
Overview of firm.............................................................................................................................3
External threats and opportunities...................................................................................................3
Two potential strategic options........................................................................................................5
Evaluate 2 strategic choices.............................................................................................................7
REFERENCES................................................................................................................................8
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Overview of firm
Oak Tree Inn is located in Glasgow, UK and is a 3 star restaurant. IT provide variety of
services and products. The unique feature of restaurant is that there is Bar, B&B accommodation
and other services as well offered at one place. There is also a village and Mocha coffee shop
along with the restaurant in that area. Besides that, there is ice cream parlour as well. Oak Tree
Inn is owned and run by Feaser family (Ackermann, and Eden, 2020). The restaurant is opened
from 3- 9 p.m. The dining services is offered in different ways and styles such as cosy, side bar,
or conservatory. The Balmaha village shop is there that sell groceries, magazines, toys,
newspaper, etc. Moreover, ice cream and coffee shop sell specialty coffee which is roasted on
site. There is home made ice cream also offered. Just next to restaurant is boat yard which offer
trips to near by location island that is Inchcailloach.
The restaurant is located near sea and is connected with highland way, forest, etc. the snacks
and dishes provided by Oak Tree Inn is of high quality. In addition, place is peaceful and quite.
The restaurant offers a voucher to customer that can be used in mocha bar, village shop, etc. to
buy products. Also, card is valid for lifetime. For taking feedback of guests Oak Tree Inn provide
a green envelope to them. In this way they take feedback.
External threats and opportunities
Pestle
This is a framework which is used to find out external factors which can affect the
business operations. The factors are not in control of business. So, for Oak Tree Inn the pestle
analysis is as below
Political – Here, there are various factors like change in government, tax, relation with
neighbouring countries, etc. These directly affect on operations of business (Arbussa, Bikfalvi,
and Marquès, 2017). Thus, brexit will negatively impact on Oak Tree Inn growth. It is because
brexit will change policies and laws of UK.
Economic- In this the factors are exchange rate, interest rate, inflation, GDP, per capita income,
etc. Thus, due to covid 19 there is decrease in income of people. Therefore, UK GDP has
declined and it has affected on operations Oak Tree Inn operations in negative way. The growth
and revenue of restaurant has declined.
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Social- They are socio-culture factors that consist of ethics, beliefs, values, etc. so, it affect on
needs of people within society. Due to pandemic there is change in people behavior as they are
health conscious. They prefer to eat natural and organic food. Thus, it will affect on Oak Tree
Inn growth in negative way.
Technological- in this it includes advancement in technology. UK is developed nation and firms
uses advance technology. Thus, AI, VR, etc. have positive impact in Oak tree Inn. With that they
can able to cover wide area and market.
Legal- they are related to health and safety, employment, etc. due to covid 19 there is change in
employment laws. Now, health and safety of staff is maintained (Baaij,. and Reinmoeller, 2018).
The restaurant is to focus on working with new normal way. Due to that there operations in
negative way.
Environmental – In this the factors are CSR, environmental laws, etc. The UK government has
taken initiative to reduce carbon emission. For that new guidelines and laws are implied that
focus on reducing use of plastic. Therefore, this impact on Oak Tree Inn operation in negative
way.
Porter 5 force model
The model enables in finding out industry competitive advantage. Besides, it identified
weakness and strength of industry.
Threat of substitute- It refers to substitute available of particular product or service. The threat is
low in this as only few substitutes are there in market.
Competitive rivalry- This means level of competition in market. In UK there is intense
competition level. There are large number of restaurants that provide similar services and
products to people.
Threat of new entrant- It refer to new business to enter in market. Here, exit and entry barriers
are simple for new venture to enter. Hence, threat is high in this.
Power of buyers- Here, if buyers are more than they are having low power to drive prices and if
customer base is low then power is high to drive prices. In this there are less buyers so power is
less (Morton, Stacey, and Mohn, 2018).
Power of suppliers - if the suppliers are more than they are having low power to drive prices and
if few suppliers then power is high to drive prices. In this there are no suppliers which provide
services to customers. So, power is less.
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SWOT analysis
Strengths
The major strength of Oak Tree Inn is its
concept. This makes restaurant unique and
attractive as compare to others.
It provides variety of food and dishes to guest
which is not offered by other restaurants.
It contains bar, ice cream parlour,
accommodation, etc. (NEGESCU OANCEA,,
and Diaconu, , 2019)
Weakness
There is lack of awareness of restaurant in
market. So, Oak Tree Inn is not having strong
brand image in market.
The financial performance is low as compared
to other restaurants. Besides, quality of
services is not so high as well.
Services ae limited.
Opportunity
They can expand in other cities to generate
more revenue.
Various other services can be provided as
well like as spa, swimming pool, etc.
Threats
Due to pandemic there may be negative
impact on restaurant growth.
Competition may rise as new restaurants can
open in future
Two potential strategic options
There is need to develop a strategy so that restaurant can expand and grow. Thus, for that
there are various strategic options available which can be used by Oak Tree Inn. The use of
options depends on needs of business and goals. Hence, strategic options are evaluated as
below :
Ansoff matrix
This model helps business to find out market growth opportunities. It was proposed by H
Igor ansoff in 1957. In this there are 4 strategies which can be used by Oak Tree Inn. so, they are
defined as below :
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Market penetration- It is a strategic option in which Oak Tree Inn focus on increasing sales in
existing market with current products and services. Thus, for this they can promote their
products, give discounts, offers, etc. to customers. It will enable in attracting people and creating
a large customer base (Rădulescu, , Bran, and Burlacu, 2021).
Market development- This is an option in which Oak Tree Inn can enter in new market with
existing products. Here, restaurant can open in new cities such as London, Liverpool, etc. to
increase sales. They can expand their geographical area in UK. By that it is easy to attract new
customers and generate more revenue and sales.
Product development – the option where business develop new products and services but in
existing market. Similarly, Oak Tree Inn can also develop new products in existing market. They
can provide various types of services to guests. In this way they can expand and increase sales.
Diversification- it is last option in Ansoff which is related to enter in new market with new
product. Here, Oak Tree Inn can enter in new market with new products. They can attract new
customers through it. however, this option is most risky one as it can led to failure of business in
new market.
Apart from it, another strategic option that can be applied by Oak Tree Inn is porter
generic model. The model provides 3 strategic options for business to expand and grow in
market. So, the strategies are as below :
Cost leadership strategy – this is a strategy in which business adopt low cost to become a leader
in industry. Here, they provide products and services at low cost as compared to other firms.
With that Oak Tree Inn is able to create a large customer base by offering services at low cost.
However, the profit margin is low but due to large customer base company gain competitive
advantage (Shams, and Czinkota, 2021).
Differentiation- in this it requires Oak Tree Inn to offer different and distinguish services to
people. This is done so that people can differentiate Oak Tree Inn from others. The
differentiation is on basis of additional features provided in services. So, for that Oak Tree Inn
can charge high price as well for offering services. This results in building a brand image in
market.
Cost focus - this is same as cos leadership but here the business is small. So, if restaurant open
different places, then it will consider cost strategy for one market, it is called cost focus strategy
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Differentiation focus- the strategy where Oak Tree Inn need to develop differentiation product
for a new market. It is same to above strategy but the market focus is on selected market. The
restaurant can adopt this strategy by focusing on differentiation and gaining competitive
advantage in selected market.
From SWOT analysis it can be evaluate that Oak Tree Inn strength is its unique concept
and providing variety of services to guest. With this strength Oak Tree Inn is able to gain
competitive advantage in market. So, on basis of this strength the strategy which can be implied
by Oak Tree Inn is market development (TAKÁCS, 2020).
Market development- This is an option in which Oak Tree Inn can enter in new market with
existing products. Here, restaurant can open in new cities such as London, Liverpool, etc. to
increase sales. They can expand their geographical area in UK. By that it is easy to attract new
customers and generate more revenue and sales. By opening into new cities in UK Oak Tree Inn
can gain competitive advantage. Besides that, restaurant can increase their presence in other
cities and markets. They can compete with other restaurants in UK and generate more revenue.
Evaluate 2 strategic choices
It is necessary to evaluate the strategy which has been taken. This is because it enables in
analysing suitability and feasibility of strategy adopted. From above analysis it is found that
market development is strategy that can be adopted by Oak Tree Inn. So, for that SAF analysis is
done which is explained as :
Suitability- the strategy is suitable for Oak Tree Inn as it allows them to expand in market. By
that restaurant can expand in market and attract more people. Furthermore, it will also help in
creating awareness in market about the new and unique concept. Besides strategy falls within
their goal as they want to expand (Trigeorgis, and Reuer, 2017).
Acceptability- It is acceptable to stakeholder as the strategy will generate revenue. Besides, there
are less chances of failure of strategy. But as there is tough competition in market thus strategy
may result in huge loss. So, stakeholder may not accept this as liquidity of firm is affected in
negative way.
Feasibility – In order to adopt strategy and expand in marker there is need of resources such as
capital, machinery, HR, etc. therefore, it is analysed that Oak Tree Inn is not having enough
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resources due to which they are not able to adopt the strategy. The restaurant is not having
enough cash and other asset for it.
REFERENCES
Books and journals
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