Strategic Analysis of Organizational Challenges: Peppers Rotorua Hotel

This report provides a strategic analysis of Peppers on the Point Rotorua, a hospitality organization. It utilizes Tovstiga's seven-step insight-driven model to identify and assess key challenges, primarily focusing on competition from shared accommodation services like Airbnb and its impact on revenue. The report scopes the strategic dimensions, frames strategic issues, articulates strategic questions, identifies insights, and consolidates them to evaluate challenges. It also provides recommendations for three growth strategies to improve the business position of the organization, addressing the need to enhance revenues and maintain a competitive edge in the hospitality industry. The analysis considers the influence of local experiences offered by competitors and suggests strategies to mitigate these challenges, ultimately aiming to ensure the hotel's long-term success. The report concludes with a summary of findings and recommendations, emphasizing the importance of adapting to the evolving market dynamics and leveraging unique offerings to attract guests.

Running head: STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
Name of the Student
Name of the University
Author Note

1STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
Executive Summary
The report is based on the strategic analysis of a major hospitality organization named Peppers
on the Point Rotorua. The strategic analysis will be based on the insight driven model based on
the seven steps that have been suggested by Tovstiga. The strategic challenge that has been
identified after the analysis is mainly based on the competition and lack of revenues faced by the
hotel due to shared accommodation services and localized experiences that are offered by
Airbnb. The complex challenges have been discussed in the report along with the
recommendations that can help in mitigating the challenges. The three major growth strategies
that are suggested to the hotel are related to enhancement of revenues of the hotel in the future.

2STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
Table of Contents
Introduction to the selected business organization..........................................................................3
Performing an insight driven analysis using seven steps discussed by Tovstiga............................4
Step 1 – Starting with the relevant challenge..............................................................................4
Step 2 – Scoping the strategic dimension of the challenge.........................................................5
Step 3 – Framing the strategic issues...........................................................................................6
Step 4 – Articulating the strategic questions...............................................................................7
Step 5 – Identifying the insights prompted by the strategic questions........................................8
Step 6 – Extricating the insights – external and internal contexts...............................................9
Step 7 – Consolidating and aggregating the insights.................................................................12
Evaluation of the four challenges faced by the organization based on Tovstiga analysis.............12
Recommendations of three growth strategies to improve the business position of the organization
.......................................................................................................................................................13
Conclusion and findings................................................................................................................14
References......................................................................................................................................16

3STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
Introduction to the selected business organization
Peppers on the Point is an example of Peppers approach that is related to the creation of
unique properties that have a timeless appeal. The distinct charm has been retained by the
organization and it is able to attract the guests from different parts of the world. The organization
currently operates as the exclusive Peppers lakeside retreat and the property is able to offer the
finest levels of lodges in Rotorua that serve excellent food and a rare experience to the guests as
well. The ambience that has been maintained in the organization is considered to be tranquil and
relaxed in nature along with the lavish features and the amazing views that the organization is
able to offer to the guests from different parts of the world (Peppers.co.nz. 2020).
The distance of the hotel of Peppers on the Point is also quite less from the main city
which is able to provide major growth opportunities to the organization. The various features that
are offered by the organization to the guests visiting the place from different parts of the world
mainly include spectacular views to the sacred Mokoia Island, fine dining, beauty and massage
treatment, tennis, mini gymnasium, secluded beach and tennis. The organization is able to attract
the guests with the uniqueness of its experiences and the different other facilities and features
that are offered to the guests as well (Peppers.co.nz. 2020).
The report will be mainly based on the analysis of strategies that are implemented by
Peppers on the Point Rotorua in its operations and the challenges that are being faced by the
organization as well. The recommendations will be based on the proper mitigation of the
challenges that are faced by the organization in the last few years. Three different growth based
strategies will also be suggested to the organization that can support the hotel to maintain its
position in the industry.

4STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
Performing an insight driven analysis using seven steps discussed by Tovstiga
Step 1 – Starting with the relevant challenge
The growth in different organizations that have started implementing the concept of
shared economy has been able to provide major levels of challenges to a hotel like Peppers on
the Point Rotorua. The organization has started losing its business to the online operators in
different parts of the world. Airbnb is a major organization that has been able to provide growth
based challenges to the hotels in various countries. Airbnb mainly operates in collaboration with
owners who wish to rent out their homes to the tourists who visit from various countries. The
local experiences that are provided by the accommodations offered by Airbnb are able to play a
key part in enhancing the challenges that are faced by Peppers on the Point Rotorua (Ali et al.,
2019).
The challenge is however able to provide a major growth opportunity to a major
organization like Peppers on the Point Rotorua which also aims at providing unique experiences
to the guests. The organization can aim at offering a local feel to the guests with the help of
services that are offered to them. The hoteliers can thereby enhance the levels of local
experiences that are provided to the guests who visit New Zealand. The local culture will also be
able to influence the revenues that are gained by Peppers on the Point Rotorua (Alrawadieh &
Alrawadieh, 2018). The major stakeholders who will be influenced by the challenges faced by
the organization include the management of the hotel, the employees and the guests as well. The
proper resolution of the challenge by using it as an opportunity can offer major levels of support
to the growth of the organization (Bavik, 2016).
The competitive position that has been gained by Peppers on the Point Rotorua is
considered to be quite high as it is a major part of the Accor Hotels group. Accor Hotel group is

5STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
also considered to be a leader in the hospitality based sector of New Zealand and will be able to
maintain its position in the industry with the help of changes that can be implemented in its
strategies (Boella, 2017). Peppers on the Point needs to address the challenge so that it is able to
attract the guests from various parts of the world with the help of unique services that are offered
to them. The lack of proper steps implemented by Peppers on the Point Rotorua can lead to a
major reduction in the revenues earned by the organization in the hospitality industry (Bowie et
al., 2016).
Step 2 – Scoping the strategic dimension of the challenge
The concept of sharing economy has been implemented by Airbnb in order to provide the
accommodation based services to the consumers. The sharing economy is considered to be a
process based on the consumption and production in which the shared access of the resource is
gained by an organization that also allows the recirculation or reutilization process. The
consumers in different parts of the world have embraced the concept and this has also further led
to the proper development of different innovative businesses which are able to compete with the
traditional businesses (Campbell et al., 2019).
The competitive position of the firm will be influenced in a huge way by the services that
are provided by the organizations that apply the concept of sharing economy. Peppers on the
Point Rotorua will be able to maintain its position in the industry as a part of the Accor Hotels
Group with the changes that can be implemented in different strategies (Clark et al., 2018). The
strategic impact on the organization will be based on lack of an effective customer base and
revenues that are earned in the hospitality sector as well. Peppers on the Point Rotorua will
thereby need to improve the services that are provided to the guests for the purpose of
maintaining its profitability in the industry (Casais, Fernandes & Sarmento, 2020).

6STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
The sharing economy based business model is able to play a key role in the methods by
which the guests can gain a local experience in different countries and can also reduce the
excessive usage of resources. The strategies that are implemented by Peppers on the Point
Rotorua can be influenced in a huge way by the implementation of sharing economy based
business model. The challenge can play a major role in influencing the levels of services that are
provided by the hotel to guests from various countries. The strategic dimensions of the challenge
can affect the operations of an organization like Peppers on the Point Rotorua that operates in the
service based sector (Deery et al., 2018).
Step 3 – Framing the strategic issues
Airbnb has proved to be a major challenge for the hotels and different hospitality firms
that are a part of the industry as well. The personalized and local experiences that are provided to
the guests by Airbnb have been able to bring changes in the demands of consumers. Airbnb had
not been considered as a threat by different hotels as they had aimed to serve different markets or
target audiences. However, the huge growth of Airbnb in the last few years has been able to play
a key part in influencing the revenues that are gained by the hotels in different parts of the world.
The lack in revenues of the hotels has also been able to influence the economy of various
countries (Gössling & Michael Hall, 2019).
The levels of competition in the hotel industry have also been enhanced due to
enhancement of services that are provided to the guests. Peppers on the Point Rotorua has also
faced major levels of competition in the hotel industry due to variations that have taken place in
the demands of guests. Airbnb has been able to bring huge levels of disruption in the hotel
industry that has been able to influence the services that are provided to the guests. The increase
in use of internet has also enhanced the usage of services that are provided by Airbnb. The hotels

7STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
have also started aiming at proper enhancement of services based on the local environment
(Harkison, 2017).
The strategy that has been implemented by hotels based on broad differentiation of its
services irrespective of the prices is also influenced in a negative manner by the services offered
by Airbnb. The services that Airbnb provides is based on low costs and is also able to fulfil the
needs of customers in an effective manner (Jenkins, 2018). The prices of the services of Airbnb
are considered to be lower in comparison to the service prices of a hotel like Peppers on the Point
Rotorua. The local experiences are also provided effectively by an organization like Airbnb at
lower prices in comparison to the prices that are offered by Peppers on the Point Rotorua. The
hotels have thereby started implementing alternative strategies in order to maintain the
profitability levels in the hospitality industry (Hussein, Hapsari & Yulianti, 2018).
Step 4 – Articulating the strategic questions
The strategic challenge that is faced by Peppers on the Point Rotorua is mainly based on
the prices that are charged by the hotel for the experiences and services offered to the guests. The
differentiation of services is considered to be a major factor that is able to play a key part in
deciding the prices that are set by the organization. The organization is able to provide the
services to guests that are mainly based on the experiences that are unique in nature (Köseoglu et
al., 2019). The questions that are considered to be a major part of the strategic challenge faced by
Peppers on the point Rotorua include the following,
What is the reason behind changes that have taken place in needs and demands of
the consumers?
What is the major factor that has led to the success gained by services provided by
Airbnb to the guests?

8STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
How will the local experiences provided by Airbnb have an impact on the
services provided by a major hotel like Peppers on the Point Rotorua?
How will the hotels aim at facing the challenges that are provided by an
organization like Airbnb?
The proper resolution of the questions can have an influence on the revenues and levels
of profitability that are gained by Peppers on the Point Rotorua. The questions need to be
addressed in order to enhance the position that has been gained by Peppers on the Point Rotorua
in the hospitality industry. The organizations in hospitality industry need to improve the services
in an effective way in order to match the services and local experiences that are offered by a firm
like Airbnb (Law, 2019).
Step 5 – Identifying the insights prompted by the strategic questions
The insights that have been mainly provided after the analysis of the strategic questions
are mainly based on the impact that the operations and services of Airbnb have on the revenues
gained by a hotel like Peppers on the Point Rotorua. The variations that have taken place in the
demands and needs of the consumers have been able to provide an insight based on effectiveness
of the services of hotels (Lee, 2020). The guests have been provided with high levels of
satisfaction by the experiences and the levels of services that are offered by Airbnb. This can
provide an impact on the service levels of the hotels (Lugosi, 2019).
The success gained by Airbnb is also able to provide an insight based on the effect that
new type of accommodation had on the hotel industry. The local experiences are considered to
be an important factor that is related to the improvement of operations of Airbnb in the last few
years. The hotels and different organizations in the hospitality industry have been considered to
be important for attracting the guests from various countries. The hotels have started making

9STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
various changes in the operations and levels of services that are offered to the guest (Manoharan
& Singal, 2017). The changes are mainly based on the improvement of local experiences that are
offered to the guests.
Demands and needs of the consumers or guests have also been taken into consideration
by the hotels in order to maintain their operations in the industry for a long period of time. The
food and beverage based revenues of the hotels have been influenced in a huge way by the lack
of consumers in the hospitality industry (Martin-Rios, Pougnet & Nogareda, 2017). The hotels
are thereby aiming at implementation of proper changes in the ways by which food and
beverages are provided to the guests who visit the restaurants in different countries. The bars and
hotels are also trying to implement the changes that can enhance the localized nature of their
operations (Millar & Grant, 2019).
Step 6 – Extricating the insights – external and internal contexts
External factors related to the strategic challenge – Porter’s five forces analysis of
hospitality industry
Threats of new entrants – The threats related to entry of new organizations are mainly
determined by the barriers that are based on the economies of scale. Product differentiation, cost
structure, customer loyalty and switching costs are major factors that can have an impact on the
operations of new firms in the hospitality industry. High capital costs are considered to be a
major aspect of the global hotel industry and this is able to reduce the entry of new organizations
(Millar & Grant, 2019).
Threats of the substitute products – The substitute products of the services provided by
organizations in the hospitality industry are able to perform the similar levels of functions. The

10STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
organizations in hotel industry like Peppers on the Point Rotorua are threatened in a huge manner
by the substitute services offered by different other organizations. The services provided by
Airbnb can also considered as a low cost substitute of the services that are offered by hotels and
hospitality firms.
Bargaining power of the suppliers – The suppliers are able to play the most vital part in
proper development of the services that are provided by the hotels and hospitality firms in
different countries. Labor is considered to be a major supplier of the hospitality industry that is
able to influence the levels of services that are provided by the hotels. The labor based costs in
hotels are considered to be higher in comparison to the organizations that are a part of the
sharing economy (Okumus et al., 2019).
Bargaining power of the buyers – The consumers or buyers in a particular industry are
considered to be more powerful if they are more concentrated in comparison to the players.
However, the in case of the hospitality the power of buyers is considered to be quite moderate as
the prices are not provided with high importance in comparison to the services. However, an
organization like Peppers on the Point Rotorua will face major challenge based on the demands
of the buyers related to the localized experiences that are offered by Airbnb (Petruzzi, Sheppard
& Marques, 2019).
Internal factors related to the strategic challenge – SWOT analysis of Peppers on the
Point Rotorua
Strengths – The network that has been developed by Accor Hotels is able to support the
operations of Peppers on the Point Rotorua. The business philosophy of the hotel is mainly based
on the interaction that is developed with the guests and this is considered to be a major strength

11STRATEGIC ANALYSIS OF ORGANIZATIONAL CHALLENGES
related to its operations. The loyalty programs of Peppers on the Point Rotorua is able to
influence the services that are offered by the hotel. Social media platforms have also been used
by the hotel for the purpose of communicating with the guests (Poulston & Jenkins, 2016).
Weaknesses – The loss of revenues of Peppers on the Point Rotorua to the online
businesses like Airbnb that provide local experiences and services at lower prices. The high
prices of services have also been able to act as a major weakness of Peppers on the Point
Rotorua.
Opportunities – Peppers on the Point Rotorua has been provided with an opportunity to
grow its online operations in order to enhance the customer base in different parts of the world
(Stringer, 2018).
Threats – The high levels of competition that is provided by the organizations like Hilton
Hotel, Inter Continental Wellington, Hilton Queenstown Resort Spa and M Social Auckland is
considered to be a major threat for Peppers on the Point Rotorua.
The frameworks that have been used for internal and external factors affecting the
operations of Peppers on the Point Rotorua include Porter’s five forces model and SWOT model.
The strategic challenge related to the services provided by Peppers on the Point Rotorua can be
mitigated in an effective way with the support that is provided by strengths of the organization
(Tibay et al., 2018). The opportunities that have been provided to Peppers on the Point Rotorua
can also be used by the organization in an effective manner for the purpose of facing the
competition that is provided Airbnb. The competitive threats in the industry can be easily faced
by Peppers on the Point Rotorua by proper development of the services at lower costs (Taylor &
Orchard, 2020).