Business Health Check: Analysis of Travelodge Hotels' Performance

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This report presents a comprehensive business health check for Travelodge Hotels, a private hospitality company and the second-largest budget hotel chain in the UK. The report begins with an analysis of Travelodge's objectives, mission, vision, and scope, followed by an examination of internal and external factors impacting the business. External factors are assessed using PESTLE analysis, while the competitive landscape is evaluated using Porter's Five Forces model. Internal factors are examined through SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. The report then explores potential improvements to the business organization and operation, including the application of Ansoff's Growth Matrix. Finally, the report assesses the current skills of management and staff, and proposes plans for their development. The analysis aims to determine the company's sustainability and competitive advantage, offering insights for strategic decision-making within the hospitality industry.
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Business Health Check
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Table of Contents
.........................................................................................................................................................3
INTRODUCTION...........................................................................................................................4
1.1 Analyse the objectives of the business..................................................................................4
1.2 Explain factors that impact on the business..........................................................................5
1.3 Determine potential improvements to the business organisation and/or operation..............8
M1 How the objectives of organisation meet the ‘SMART’ criteria of organisational
objectives...................................................................................................................................10
D1 Analyse how the elements of Ansoff’s Growth Matrix have contributed to improvements
in organisation...........................................................................................................................10
TASK 2 .........................................................................................................................................10
2.1 Review the effectiveness of the business............................................................................10
2.2Develop plans to improve the business, justifying their value.............................................11
M2 Evaluate how the effectiveness of areas of the business stipulated can contribute to
organisational growth................................................................................................................12
D2 Critically analyse how the plans developed and can lead to an improvement in the
business.....................................................................................................................................12
3.1 Evaluate the current skills of management and staff.........................................................12
3.2 Devise and justify plans for the development of skills for management and staff.............14
M3 To analyse the effect current experience, skills and abilities of management and staff may
have on business. ......................................................................................................................16
D3 To critically evaluate the various methods that can be used to develop the skills of
management and staff. .............................................................................................................16
CONCLUSION..............................................................................................................................16
REFFERENCES ...........................................................................................................................17
INTRODUCTION
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Business health check is concerned with quantitative and measurable assessment of the
business in terms of their weakness and strengths. This assist in full diagnostic of the business by
applying various models and theories so as to analyse their internal and external elements and
determines their chances of sustainability and growth of the business (Porter and Tanner, 2012).
Therefore, health check up of the business helps in determining how healthy the business is and
provides a way for bringing change or improvement to the business. In addition to this business
health check helps the manager to take proper decisions regarding maintaining sustainability of
the business and also to gain competitive advantage over their rival companies. Hospitality
industry chosen for this assignment is Travelodge hotels which is a private company operating as
a hospitality industry throughout UK. It is the second largest budgeted hotels in UK which
provides services according to the requirements of the customer. The following report will throw
highlights on objectives and the different factors that has an impact on the business as well as
determines potential improvements to the business organisation and the operation. It also
develops plans to improve business activities and evaluate the current skills of management and
staff.
1.1 Analyse the objectives of the business
The chosen business under the report is Travelodge which is a private hospitality
company and is the second largest budgeted hotels in the United Kingdom. It was founded in
1985, and caters to the need of different types of customers. Travelodge hotels has origin has
Travelodge chain of United Sates and is now under a a separate ownership and headquarter in
England, UK. Stakeholders within the organisation include employees, government, community,
customers and suppliers. They have a positive as well as negative effect towards the functioning
of the business. It is the duty of the management within the respective organisation to function its
business activities in such a manner that positively contributes to its stakeholders (Laws, 2015).
Mission- Mission of the Travelodge hotel is to make continuous improvement in its
services and provides maximum quality level services to the customer so as to gain competitive
advantage.
Vision- Vision of the Travelodge hotels is to work in a sustainable manner towards
bringing improvements in their services. This ensures them to deliver quality services and
products to the clients to reduce possible impact to the environment and the society.
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Scope- In general scope of the hospitality industry comprises of various business such as
accommodation, food and beverage, travel and transportation and other business which allows
the management within the organisation to provide specialized services in different categories of
business and maintains their sustainability in competitive business environment. In addition,
scope of Travelodge is to provides other entertainment services including food and beverage and
accommodation services. This will assist the company to enhance their brand image as well as
providing diversified portfolio of services leads to attract larger number of customer thereby
maximising profitability of the business (Porter and Lee, 2013).
Objective-
Objective for the Travelodge hotel is to become favourite hotel for the customers by
providing them value for the money as well as enhances market share by 20%. This long term
objective can be fulfilled by the company by providing facilities and services according to the
requirements of the varied customers. This will attract larger number of customers towards the
hotel and helps in maximising profitability for the business. Short term objective for the business
is to maximise its profit margins by attracting larger number of customers. Apart from this in
order to attain the business objectives in most effective manner, it is necessary for Travelodge to
work in a sustainable manner and provides eco friendly services to the customer( Cadle, Paul and
Turner, 2014).
1.2 Explain factors that impact on the business
Business health check assist the managers within the respective organisation regarding if
their company is working in a healthy manner or facing issues which maintains their
sustainability in the competitive environment. There are various external and internal factors that
has an impact on the business which is determined by the manager at Travelodge. These factors
are described as follows-
In order to analyse the impact of the external factors, PESTLE analysis should be conducted
so as analyse the impact and take proper decisions.
Political- The main focus of the respective hospitality industry is to attract international
tourism. This affects their working because of the different governmental rules and
regulation in different countries, faces problem for Travelodge to work differently in
varied nations. In order to overcome this affect Travelodge should set a standard
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procedure of policies and plans to work similar in various countries and therefore pay the
taxes as per the polices of the government (Wheelen and et.al., 2017).
Social-As with the increase in the social trends it creates impact on the respective
company's products and services. Therefore, this forces Travelodge to provide various
options for the customers and provide differentiated services to gain competitive
advantage over its rival companies.
Economic- As large number of tourist comes for business meetings, conferences and
other sole purpose. Therefore, with the inflation in the UK's economy, it reduces the
purchasing power of the customers and therefore impacts profitability of the hospitality
industry. In order to overcome such impact, budgeted and varied services should be
provided to the customers according to their demand so as to provide maximum customer
satisfaction and enhance profit margins for Travelodge (Simoneaux and Stroud, 2011).
Technological- With the advancements in the technology, it is necessary for the
respective hospitality industry to use modern technology in their hotels as it would attract
larger number of customers as they feel safe and secure while using services of such hotel
such as services should be Wi-Fi facilities, finger print check-in and many others so as to
attract large number of customers. Other wise has a impact on the company as way of
reduced profit margins as customers would not get attracted towards the services of the
hotel.
Legal- Changes in the legal laws and regulation affects the working of the hospitality
industry. Legal factors such as safety and health laws of the employees and customers
should be provided by respective hospitality industry and maintains its sustainability in
the competitive business environment. Otherwise will lead to issues and conflicts at
workplace as well as employees will also not get motivated to enhance productivity and
profitability within organisation.
Environmental- Environmental factors has a direct impact on the hospitality industries. Such as
with severe weather conditions it decreases demand on Travelodge services and impacts their
profit margins.
In order to determine the level of competition and attractive of the industry, it is necessary for the
hospitality to conduct Porters five Forces Model which is described as follows-
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Porters five forces model is a strategic management tool which consist of five factors and allow
manager to take proper decision in order to gain competitive advantage over rival companies.
Threat of new entrants- Hospitality industry such as Travelodge provides various
categories of services such as lodging and accommodation, food and beverage .
Therefore for new entrant it is a costly process as they have to invest huge on innovation
of services so as to gain attention of larger customers. Therefore is low risk of new
entrants (Lencioni, 2012).
Bargaining power of Suppliers- Hotel industry comprises of the labour, staff and skilled
personnel which has huge demand in the market. Moreover employees are easily
available and can be recruited effectively by the hospitality industry. Therefore there is
reduced bargaining power of suppliers and has a low and a indirect pressure on their
competitiveness.
Bargaining Power of Customers- In the hospitality industry customers exercise a huge
bargaining power as there are various other options towards which customer can switch
their services. As there are various competitors of Travelodge which is providing
budgeted services to the customers, so there is high bargaining and switching cost of the
buyers.
Threat of substitute products- There is relatively more threat of substitute products
within the hospitality industry as there better substitutes available in the market place as
tourist can reside is motels or at their relatives which are better substitutes and for food
services they can go to quality restaurants. This act as a substitute for Hotel Travelodge
(Saaty and Vargas, 2013).
Intensity of Competition- There is high degree of competition within the hospitality
industry. In context to Travelodge it faces stiff competition from companies such as hotel
Hilton, Premier Inn and many others. This makes the industry to provide differentiated
budgeted offerings to the customers so as to gain competitive advantage over rival
companies.
In order to analyse the internal influence on the chosen organisation it is necessary for
manager at Travelodge to conduct SWOT analysis, which is described as follows-
Strengths- Travelodge provides affordable room services to the customers as a way to
attract larger number of tourist. Moreover, in order to attract customers and boost revue
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Travelodge also provides Travelodge Business account card to its premium customers
and lowers the price of the hotel service. This will assist in attracting larger number of
customer share and helps to gain competitive advantage.
Weaknesses- The major weakness lies with Travelodge is that hotel doesn't provide full
range of services such as porters service, drop down facilities, this makes the guest
unsatisfactory and therefore faces the risk of attracting large number of customers and
impacts profit margins and brand image of the company in comparison to its competitors
(Iwai, 2011).
Threats- Travelodge hotel faces huge risk of competition from its rival companies such
as Hotel Hilton, Premier Inn as the respective hotel has a very limited international
presence, this creates lack of awareness among the customers and Travelodge faces the
risk of profitability of the company and has a impact over its sustainability.
Opportunities- As the vision of the hotel is to provide eco friendly services to the
customers, this is a greatest opportunity for the respective hospitality industry to attract
large number of customers and reinforce its brand image in the global market and to gain
more profits. This has a [positive impact towards reinforcing its image globally and
competing effectively in the business environment.
This provides analysis of the complete health check up of the respective hospitality organisation
and allows manager to take proper decisions so as to gain the competitive advantages (Walker,
2014).
1.3 Determine potential improvements to the business organisation and/or operation
After analysing the internal and external business environmental factors it assists the
manager within the Travelodge to make potential improvements to their business organisation so
as to maintain its sustainability and gain competitive advantage over the rival companies. In
order to consider possible improvements in the business organisation it is vital to use Ansoff
Growth matrix so as to select the most viable option for the improvements in the business
organisation and the operation.
Ansoff Growth Matrix
It is a strategic planning tool which provides framework to help senior managers to
devise appropriate strategies which results in proper growth of the business organisation (Ansoff
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Matrix. 2018). It consists of four different growth strategies which the manger can adopt
according to their business situation. These strategies are described as follows-
Market Penetration Strategies- This is a growth strategy in the which the organisations
focus on selling existing products in the existing markets. This strategy helps the manager
within the respective organisation to increase their market share by adopting competitive
pricing strategies as well as undertakes various advertising and sales promotion methods
so as to attract the customers towards hotel services and therefore achieves maximum
profitability for the company (Inoue and et.al., 2012).
Market Development- It is a strategy in which the respective organisation seeks to sell
its existing products and services into the new markets. This is the way in which
Travelodge can increase their market presence by opening their hotels in new
geographical markets internationally as well as adopts to new distribution channels so as
to make it easy for the company to provide product to customers in different geographical
areas.
Product Development- It is a growth strategy where respective organisation aims to
introduce new products and services into the existing market. This strategy requires the
competencies of Travelodge to provide new innovative services such as providing
customised package holidays to the customer and target the existing markets. This
strategy if adopted requires Travelodge to conduct proper research and development and
thereby innovate its products as well as determines needs of the customer so as to provide
innovative services (Aithal, 2016).
Diversification- It is a different growth strategy in which the respective organisation
provides totally different products in the new markets. This is the riskiest strategy
concerned with whether the new product or service will meet customer needs and wants.
From the various strategic options available manager at Travelodge can adopt to market
development strategy so as to provide so as to sell its existing products in the new market
internationally place and attracts larger number of customer so as to maximise its profitability.
M1 How the objectives of organisation meet the ‘SMART’ criteria of organisational objectives.
As the objective of the Travelodge is to provide quality services to the customers and
provides them value for money. Therefore this objective meets the smart criteria that is objective
is specific I.e. to enhance its market share by 20% and measurable in terms of number of
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customers attracted while comparing it on yearly basis as well as it is achievable and realistic so
as to maintain its sustainability for the long time period as well as it could be achieved within
time period of 1 year (Fotiadis, Vassiliadis and Piper, 2014).
D1 Analyse how the elements of Ansoff’s Growth Matrix have contributed to improvements in
organisation.
As Ansoff Matrix provides manager at Travelodge with four strategic options towards
which manager chooses the market development strategy so as to provide existing products and
services into the new markets and gains the attraction and confidence of various customers and
this strategy helps them to enhance their brand image in the global market. Moreover matrix also
provides with other strategic direction which helps Travelodge to frame and implement various
strategies for the growth of business.
TASK 2
2.1 Review the effectiveness of the business.
Effectiveness in business is concerned to how the product or service is produced and
provided to the customers within the specific time frame. Effectiveness refers to the level of
quality in which a task or process is carried out which leads to the achievement of business
objectives. Business effectiveness with Travelodge hotel can be measured by conducting reviews
of different areas of business such as-
Products and Services- Products and services within the Travelodge includes lodging
and accommodation and food and beverage services and other hospitality related
services according to the demands and requirements of the customers (Inoue and et.al.,
2012). After reviewing their products and services it has been analysed that additional
services such as drop down facilities and porters facilities should be provided to the
customers so as to meet their satisfaction level.
Marketing- It is considered with adopting promotional strategies so as to market
products and services to the customers and make them aware about the existence of the
hotel. Therefore Travelodge should adopts to effective promotional strategies so as to
enhance its brand image as well as makes the customers aware and fulfil customers
demand.
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Finance- It act as a backbone for functioning the business activities in a proper manner
and acts a vital component within Travelodge. Company requires effective and sufficient
amount of funds so as to provide quality services to the customer and provides value for
money to tourists. Therefore Travelodge is effective in finance area and provide
innovative services to the customers (Anerousis and et.al., 2014).
Business Image- In order to sustain effectively in competitive business environment it is
necessary for the organisation to have a proper sustained image in the market so as to
attract larger number of customers. Therefore Travelodge has a renowned brand image in
the UK market and is effective towards attracting larger number of customers.
2.2Develop plans to improve the business, justifying their value.
Business plan is basically concerned with deciding the future course of action for
achieving goals in the best possible manner. It is very much necessary for the organisation to
make plans and strategies for achieving the goals and objectives in the best possible manner. As
with the help of proper formulation of plans management of Travelogue will be able to increase
overall performance of the organisation. Plans can be made related to the better functioning of
internal and external environment of the hotel. Plans in Travelogue are generally made after
analysing the current and past situation of the organisation. As after evaluating this management
of the hotel will be able to compare actual performance with standard performance. Plans and
strategies in Travelogue can be related with increasing the sale and productivity, plans related
with marketing, performance monitoring plans, etc. The major steps for improving the businees
are discussed below-
Financial management system- By making plans and strategies for managing the fund
of the hotel its manager will be able to save time and cost in the efficient manner. In this plans
will be made for using the fund in the proper manner, so that unnecessary wastage can be
reduced. By making plans for utilizing the funds Travelogue will be able to give tough
competition to this competitors (Mathooko and Ogutu, 2015).
Roles and responsibilities of management- If each and every employee's in the hotel is
able to perform the assigned task in the proper manner than chances of overall growth of
Travelogue will be increased. The roles and responsibilities in Travelogue can be assigned
according to the skills and capabilities of the individual. This is because if task is allotted
according to the skills of employee's than chances of error in the work can be reduced.
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Market analysis- It is related with analysing and evaluating the trends which is going on
in the market. By analysing the market Travelogue will be able to make necessary changes in its
working structure to achieve the desired goals and target.
Performance monitoring- It is also essential for the manager of Travelogue to monitor
performance of each and every employee in the hotel. As by doing this plans can be made for
improving the weak points of the individual. With the help of performance monitoring plan
individuals in Travelogue will be able to give their best output.
M2 Evaluate how the effectiveness of areas of the business stipulated can contribute to
organisational growth.
Effectiveness in the business functions is necessary for providing quality services to the
customers. Therefore business effectiveness within Travelodge is determined in various areas of
business such as their products and services, marketing activities, finance held by them as well as
the business image in the outside environment. Effectiveness is determined as adequate amount
of finance is with Travelodge to provide services as well has enhanced brand image in the market
.Therefore effectiveness should be maintained in other areas of business such as marketing and
products and services so as to contribute towards organisational growth and sustainability for a
longer term period (Gallie and et.al, 2012).
D2 Critically analyse how the plans developed and can lead to an improvement in the business.
These plans and strategies will directly lead to growth and development of the hotel in
the effective and efficient manner. As it will guide the manager in taking logical and appropriate
decisions for sustaining in the market for longer period of time. With the help of these plans
better competition can also be given to the competitor.
3.1 Evaluate the current skills of management and staff.
Human resource management is related with the process of selecting, hiring and provide
training and maintain workforce within an organisation. Travel Lodge aims to becomes a hotel
who is famous for providing value which can be achieved through proper functioning of human
resource management. There are following types of skills required by the employees described as
follows-
Managerial Skills- There are following managerial function performed by Travel lodge are-
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Planning- The travel lodge estimate the type of employees needed to achieve the goals of
Hotel. The planning includes collecting, identifying and analysing the requirement of
human needs.
Organising- The Travel lodge provide work to their people according to their skills and
capabilities to achieve common goal. They organise the activities in a manner which
results in proper allocation of duties and responsibilities (Boulanger and et.al., 2015).
Directing- The travel Lodge direct their employee effort in favour of the hotel and uses
maximum potential of their employees. They guide their employees by providing proper
direction that is how to perform the job.
Controlling- The travel lodge verify and compare the performance of the employees with
the pre determined goals. The deviations are analysed and the steps to correct them are
taken.
Operational skills- There are following operational skills perform by Travel lodge are-
Recruitment/Hiring- The Travel lodge collects pools of prospective candidates for the
process of selection and select right people from the candidates who will put their effort
in achievement of Organisational goals.
Job Analysis & Design- The travel lodge elaborates the nature of job like qualification,
skills and experience which are required to perform the job. Job design includes duties
and responsibilities which are required to perform (Philbin and Kennedy, 2014).
Performance appraisal – The travel lodge analyse the performance of employees which is
essential for development of employees.
Training and Development- The Travel and lodge provide training to their employees to
acquire new skills and knowledge which increases their ability to perform and able to
take higher level responsibilities.
Salary Administration- The Travel lodge pays different to different jobs performed by
their employees and various benefits which includes compensation, incentives , bonus,
benefits related to job.
Technical Skills- There are following technical skills of staff and management are-
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Human Resource information software- The Travel lodge uses this software to focus on
planning and strategizing which takes more effort and time manually. A certification in
this software could help in increasing the technical skill of human resource manager.
Applicant tracking system- The travel lodge do not take more time in short-listing the
candidates because of the use of this application. It passes the data from resume and
matches with the standard data. This process saves time and provide accurate results as
only ideal candidates are selected (Philbin and Kennedy, 2014).
Knowledge of SQL and Reporting- The Travel lodge uses this system to find required
data in less time as the source is known. The HR team require to have this tool to
generate effective matrices and solves complex calculations.
3.2 Devise and justify plans for the development of skills for management and staff.
For developing the skills of management and staff development plan is discussed below-
Skills Technique of
improvement
Time required Main target.
Strategy development
(management)
The formulation
process of strategies
can be improved by
the management by
communicating with
the subordinates in the
best possible manner.
Views and ideas of the
experts can also be
taken into
consideration by the
management of
Travelogue(Philbin
and Kennedy, 2014).
As experts and
professionals will
Continuous
development
The major motive
behind this is to make
better plans for
achieving the desired
goals in the best
possible manner.
Focus will be
emphasised on
completing the work
within limited period
of time.
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provide better
guidance for
formulating and
implementing the
strategies.
Flexibility (staff) This skills of the
employee's in
Travelogue can be
improved by
consulting with the
superiors. It can also
be improved by
knowing the need and
importance of
flexibility in the
organisation. Training
and development
programmes can also
arranged for the
employee's. As with
the help of this they
will be able to adapt
themselves in
uncertain conditions
(Philbin and Kennedy,
2014).
Continuous
development
It is very much
essential that
employees are flexible
in working with
uncertain market
conditions. Travelogue
aims at providing
services to its
customers on regular
basis, so the
employee's must be
able to work according
to the need and
demand of customers.
With the above development plan management and employee's of Travelogue will be able to
achieve the goals and objectives in the best possible manner. Since the major motive of the
organisation is to provide better services to the customers, so by making necessary adjustments
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according to the development plan the sale and profitability of the hotel can be directly
increased.
M3 To analyse the effect current experience, skills and abilities of management and staff may
have on business.
The current experience, skills and abilities if the management can have positive and negative
impact on the working of business. As if the employee's as proper set of skills and knowledge
they will be able to contribute better in the growth and success of organisation. Whereas if they
have improper skills than dissatisfaction among the customers of Travelogue will be increased
(Hameed and Waheed, 2011).
D3 To critically evaluate the various methods that can be used to develop the skills of
management and staff.
The various methods which can be used for developing and enhancing the skill of management
and employee's of Travelogue includes- Trainings can be provided to them, proper guidance can
be given by the experts and professionals, etc. With the help of these methods goals and target of
the hotel will be achieved in the best possible manner and chances of error and duplication of
work will be reduced. This is because employee's and management will know how they are
supposed to perform for attaining the desired target within limited period of time.
CONCLUSION
From the above report it has been concluded that in order to gain sustainability and gain
competitive advantage it is necessary for the managers within the respective organisation to
undertake complete business health check. Therefore business health check can be conducted by
analysing the internal as well as the external factors and take proper decisions regarding proper
planning and implementing of strategies. Apart from this with the help of Ansoff Matrix it helps
in determining the manager to choose the most viable strategies and maintains growth of the
business. It also evaluated various operational and management skills which is needed by the
employees and managers to perform their task in effective manner.
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