Business Expansion Strategies for YHA Medway: A Case Study

Desklib provides solved assignments and past papers to help students succeed.

SMALL BUSINESS ENTERPRISE
1

Executive Summary
This study based on the small business enterprise sheds light on the business expansion of the
business by a company named YHA Medway belonging to the hospitality business sector.
Several business plan and objectives of this company had been pending for a long time. In
this report, some of the effective measures of such cases have been mentioned. This study
also sheds light on the different ways of business expansion. The change management with
respect to business has also been discussed in this report. The effect of such change
management over a period of time has also been discussed in this report.
2

Table of Contents
Introduction................................................................................................................................4
LO1: Performance of the selected business enterprise...............................................................4
1.1 Profile of selected business enterprise focusing on strengths and weaknesses................4
1.2 Analysis of comparative performance measurement........................................................5
LO2 Proposals for improving management and business performance.....................................5
2.1 Weakness faced in the business and ways to overcome them..........................................5
2.2 Ways to maintain and strengthen existing performance...................................................6
2.3 Areas in which business can be expanded........................................................................8
LO3 Business objectives and plans............................................................................................9
3.1 Assessment of existing business plans.............................................................................9
3.2 Revision of existing plans to incorporate changes...........................................................9
LO4 Impact of management change on business operations...................................................10
4.1 Impact of proposed changes on the business..................................................................10
4.2 Management of changes in the business.........................................................................11
4.3 Performance improvement over a given time period.....................................................13
Conclusion................................................................................................................................13
Reference List..........................................................................................................................15
3

Introduction
Every established business starts its journey in the form of a small business enterprise. Such
small business enterprises thereby gradually evolve by the application of the effective
business strategies into an established business brand. This long process consists of many
risks which are either mitigated or controlled. In the present case study of hospitality
company YHA Medway, its business improvement has been evaluated to highlight the
reasons behind its success. This present report considers the general challenges faced by the
company and also recommends their solutions. This report also discusses in detail about the
business expansion and the impact of change in a business procedure.
LO1: Performance of the selected business enterprise
1.1 Profile of selected business enterprise focusing on strengths and weaknesses
The business enterprise selected for this study is YHA Medway. It is a small business
enterprise in the hospitality sector. YHA Medway is located at 351 Capstone Road,
Gillingham, UK. YHA Medway is a decent family hotel with affordable prices (YHA
Medway, 2019). It is a down-to-earth hotel situated across the road from Capstone Farm
Country Park. It is just 3 miles away from the famous Chatham Historic Dockyard Museum
and 4 miles away from Rochester Castle. The hotel provides an excellent view of the
environment. The hotel provides single-sex dorms as well as private rooms. Free beddings
are provided and the hotel has shared bathrooms. There are no air-conditioned rooms
available in this hotel. YHA Medway provides complimentary parking.
Among other facilities, the hotel provides a bar, a communal kitchen, a TV room, and a
games room for kids is worth mentioning. The hotel provides free parking and free Wi-Fi
facilities. It also has a small restaurant open round the clock (YHA Medway, 2019). Free
breakfast or dinner is not provided and the guests are required to pay for these services,
although a complimentary evening snack is provided to all the guests. Smoking is not
allowed within the hotel premises. The mission of this organisation is to provide their guest
with cozy and comfortable rooms along with professional staff and services. YHA Medway
desires to establish their enterprise on a global level. YHA Medway also desires to meet all
the complaints and negative feedbacks by their customers, and thereby increases their
4

average level of occupancy by three percent or above compared to the last year’s level
(Parkes, 2016:35).
Organisational profile
Type: Public limited
Structure: Corporate
Size: Medium
Mission and goals: Global expansion
Objectives: Considerable revenue growth (minimum 15%) in upcoming five years
Internal constraints and restriction: Fund allocation for technological supervision is not up
to the mark. Expertise in business auditing is also a close demand for this business profile.
1.2 Analysis of comparative performance measurement
YHA Medway is located in a rural area away from the city. It is situated in a calm and quiet
environment. This place may not be suitable for people who are on a business trip. This is
mainly due to poor transport facilities in that area and also due to poor communication
facilities. As the hotel situated far away from the city-center, mobile network is often poor,
and guests have to rely on the Wi-Fi connection provided by YHA Medway (YHA Medway,
2019). Despite being a small enterprise in the hospitality sector, YHA Medway has excelled
in providing all the basic amenities to its guests.
This hotel, on an exclusive basis, allows its guests to hire the entire place. This enables guests
to use the place according to their will. They may bring as many friends and family members
they wish to. The hotel was a former oats house, and its location provides an excellent place
to stay for those people who love to explore nature. However, this hotel should work on the
improvisation of their toilets. There are only shared toilets in this hotel that creates problems.
In addition, the bike shed of this hotel is not up to the standards with growing complaints of
cramped spaces. YHA Medway has a good reputation for providing delicious English and
European foods. But many of their guests have complained of the delayed service regarding
delivery of foods. The rooms of this hotel are usually clean and comfortable and
housekeeping services are quick enough in meeting the complaints of their guests. As per the
REVPAR recommendation key financial ratio for this company is required to be rectified
towards a more sophisticated business output. Lower occupancy percentage is considered to
be an evidence in favour of that.
5

LO2 Proposals for improving management and business performance
2.1 Weakness faced in the business and ways to overcome them
A business is smooth running when there is continuous flow of the necessary resources for
the business purpose (Albert & Van der Auwermeulen, 2017:10). In spite of this, some of the
small and prominent small businesses such as YHA Medway face some of the following
challenges in some point of their business or the other:
Integrity issues: The hospitality sector is expected to have the necessary planning ready to
address the integrity issues. The companies of such business sector such as YHA Medway
faces the integration issues in connection with availing a plethora of services under one
umbrella structure. This includes availability of booking in both online and offline mode.
Resource Management issues: Specific resources such as inventory as well as human
resource plays a vital role in the overall functionality of the hospitality sector and is required
to be efficiently managed in the companies such as YHA Medway. In spite of such effective
management as well as shortage of supply the inventory management is hampered to a large
extent.
Tough competition: With the increase in the digitalization process of businesses, more and
more business are getting an opportunity to showcase their innovative ideas. This implies that
customers are getting to choose the preferred brand over others.
Marketing: The advantage of having customer loyalty is a difficult task to achieve due to the
tough competition from the rival companies. All the companies have one common objective
of satisfying the customers in order to increase the profit margin of their business. Thus, in
hospitality sector, a tough competition is often to be taking place between the companies such
as YHA Medway. In this context, there is probability that companies face loss percentage in
terms of inappropriate selection of marketing strategy (Altamony et al. 2016:700).
Uncertainty about future prospects: Future prospects are selected based on the current
performance of the business in the market. Future prospects tend to increase a significant
amount of pressure in case the level of future prospects are not as per the current prospect.
Rules and Regulation: The hospitality sector along with its companies such as YHA
Medway is greatly affected by the sudden amendments of rules and regulations by the
concerned authority of UK Hospitality (ukhospitality.org.uk, 2019).
6

Risk Management: Risk is always involved in the hospitality business sector. The
companies such as YHA Medway are greatly affected by the risks. This risk includes
financial risk, customer demands and many others.
Staffing: In hospitality sector, staffing plays as significant role. This is because, most of the
hospitality related tasks such as taking care of the guests, and serving food to them and many
others are carried out manually by the human workforce. Thus, proper number as well as
quality staffing issue is faced by the companies such as YHA Medway (Andersson et al.
2018:110).
2.2 Ways to maintain and strengthen existing performance
The performance of a business in the market is determined by the capability of the business
company to attract the customers. This customer attraction tends to increase the profit margin
of business. The following business tactics helps in the strengthening of the existing business:
Integration of several facilities: Nowadays, individuals prefer to receive several facilities
under one umbrella name for time saving purpose. This is often found in the hospitality
companies such as YHA Medway. The hotels of such companies offer both lodging and
fooding facility in addition to arranging specific conference arrangement for the corporate.
Planned resource management: In hospitality sector, several resources such as human
resource are one of the key factors for the smooth running of business for the companies such
as YHA Medway. This is because; hospitality is all about providing facility to guests to the
extent possible. Thus, it is essential that human resource and inventory of such companies be
managed in the most efficient way possible.
Market competition: Launching of innovative product ideas facilitate the company to give
tough market challenges for the other brands. This is achieved by the increasing the volume
of the customer base. Customers are attracted by the consistent product quality and
reasonable pricing.
Marketing and Customer Loyalty: Companies such as YHA Medway has a principle
business objective of marketing to gain customer loyalty. Such loyalty is effective for profit
generation and is earned by offering quality products to the customers on a regular basis
(Anggadwita & Dhewanto, 2016:140).
Planning of future prospects: Small companies such as YHA Medway, always have more
than one objective in their mind. This objective is business expansion in future. Such an
objective covers the future prospects that need to be considered well in advance. These future
7

prospects include launching of experimental product ideas, offers for the customers and many
others.
Abiding by rules and regulations: Government and the regulatory bodies decide the
essential rules and regulations in case of a business. Such rules and regulations play a vital
role in the functionality of a business. Thus, YHA Medway prefers to abide by such rules and
regulations set by UK Hospitality as much as possible for the benefit of their hospitality
business (ukhospitality.org.uk, 2019).
Risk Management: YHA Medway prefers to manage the risks involved in their business
well in advance. This is thereby initiated by the calculation of the risk and its subsequent
analysis. The company hires the risk manage
Staffing: YHA Medway considers the human resource as one of the most important factor
for their business. This is because, when the business is run by the efficient employees, the
business growth is found to have a significant improvement (Bibarsov et al. 2017:98).
2.3 Areas in which business can be expanded
The expansion of a small business helps in the experimental process of the business growth.
This business expansion helps the business entrepreneurs to gain new business experience. In
some cases of slow economy, the business expansion proves to be difficult. Small companies
of the hospitality business sector such as YHA Medway expands their business in the
following ways:
Addition of new products: An effective way of business expansion for YHA Medway is the
addition of new products to the existing product lines of hospitality sector. These products in
case are innovative in nature tends to attract more customers towards the company. For the
marketing purpose of these new products, the companies get to experiment with new
marketing strategies.
Customer retention: YHA Medway considers their customers as their main pillar of strength
for the purpose of profit generation. Therefore, it is essential that the existing customers are
rewarded properly in the form of personalized discounts and offers. In addition to customer
satisfaction, such customer loyalty programmers help in the mouth publicity of the brand
attracting more potential customers (Zaki et al. 2016:28).
Territory expansion: Companies such as YHA Medway involves them in territorial
expansion in order to experiment with their products in new geographical territories. This
enables them to analyse the sustainability of their product in new business territories. This
8

territory expansion of the business is encouraged to a large extent by the digital platform.
There are chances that this expansion helps a company to materialize their idea of region
based product lines (Carvalho & Moreira, 2015:20).
New customer markets: The hospitality business expansion is successful only when new
customer markets are successfully captured by the companies such as YHA Medway. This
implies that new business establishments are made in the vicinity of customer markets that
are yet to be penetrated. The strategies employed in such places define the profit generation
from that market.
Sales monitoring: Hospitality business is such an area where product quality determines the
customer loyalty attributes. YHA Medway resolves into close tracking of its sales and
delivery of services to the products. This also ensures that inventory and customer
management is effectively done within the company (Vedenik & Leber, 2015:590).
New business launch: For the growth purpose of a company into a brand, the company tends
to experiment with new business ventures. This is evident in the hospitality business sector
among the companies such as YHA Medway. New business launch includes new risk
scenarios that need to be managed as per the requirement (De Carvalho et al. 2016:60).
LO3 Business objectives and plans
3.1 Assessment of existing business plans
YHA Medway had decided some typical business objectives and plans since its inauguration.
Some of these business objectives have been stated below:
Improved customer service: The service provided to the customers of YHA Medway was
supposed to be improving gradually.
Customer loyalty: Customer loyalty program for the customers who largely prefers the hotel
service of YHA Medway over any other hotels.
State-of-the-art hospitality architecture: YHA Medway had decided to include some world
class features in their hotel service such as large swimming pools, continental cuisine, suite
service, and mobile application for booking, banquet management and many others
(Dornberger & Hanne, 2017:2).
Quality product service: YHA Medway had decided to consistently offer quality product
services to its customers. This includes food and beverages, scope of recreational activities,
touring facilities for the purpose of sightseeing and many others.
9

In addition to these business objectives, YHA Medway had some business plans as following:
International expansion of the business: YHA Medway has decided on its international
expansion in other tourist friendly countries such as Malaysia.
Collaborating with other established business partners: YHA Medway had decided to
collaborate with branded hotels of foreign origin. This is for the purpose of their business
expansion that specific region (Fraccascia et al. 2016:90).
3.2 Revision of existing plans to incorporate changes
It is observed that the objectives decided by YHA Medway since its inauguration, the
company had not been able to fulfill all the business objectives as well as materialize the
business plans (Ghezzi et al. 2015:200). Thus, these objectives and the plans require some the
following revisions to incorporate the necessary changes:
 Customer feedback must be started to understand the customer trend and also understand
their reaction about the hospitality service. This will improve the customer service.
 State-of-the-art amenities have become a necessary for the companies such as YHA
Medway belonging to hospitality sector. Thus, it is necessary that the company arranges
funding for implementing such amenities of recreational hub, swimming pool and many
others.
 Personalized offers must be initiated for the customers who had been loyal to the
hospitality service of YHA Medway. This will fulfill the objective of customer loyalty.
3.3 Preparation of action plan for implementing the changes
Plan of doing Support Deadline
Customer feedback for
improving the customer
service
 Online feedback
 Offline spot feedback
 Feedback questionnaire
15 days
State-of-the-art amenities
as per the standard of
other companies
 Funding from sources
 Purchasing of the
accessories required for
the amenity service
60 days
Personalized offers for the
loyal customers
 Selection of the loyal
customers
 Special treatment of
these customers during
their return visit
 Customer specific offers
on special occasions
30 days
10

such as Birthday,
Anniversary or special
occasion
Table 1: Action plan for change implementation
(Source: Created by Learner)
LO4 Impact of management change on business operations
4.1 Impact of proposed changes on the business
In the business belonging to hospitality sector, it is essential that changes are implemented
based on the scenario. In fact, the executives working for the companies such as YHA
Medway makes adopts changes taking place due to several reasons such as any modification
of business sector related rules and regulation, change in the existing business hierarchy
structures, and many others. The impact of such changes on the overall structure of business
is significant. Some of these impacts have been stated below:
Current industry trends: The changes brought in companies such as YHA Medway is
positive for the company as such changes helps the company to get upgraded as per the latest
standards of the hospitality sector. This also implies that the company now has the enough
capability of participating in competition with the rival brands.
New business ventures: The changes incorporated in companies such as YHA Medway
implies that new ventures are on the way for the company in relation to hospitality sector.
This is evident when a company serving as accommodation provider resolves to start a new
venture in the tourism sector. In such cases, significant changes take place in the company
environment as well as in its structure (Halkias, 2017:2).
Business innovation: The hospitality business sector gets upgraded gradually with the
advent of new and innovative technologies and their subsequent implementation in
companies such as YHA Medway. In such situation, an upgraded company is identified by
their implementation of the latest technologies for the purpose of business innovation.
Business efficiency: The business efficiency of a company helps a company in the process of
its expansion. Apart from this, this business efficiency results in the incorporation of changes
in the company. The business efficiency in terms of hospitality sector is identified to be new
hospitality services such as tourism hospitality offered by the companies such as YHA
Medway.
11

Employee attitude and morale: With the advent of new changes in the hospitality sector,
the employees of the company such as YHA Medway tend to get affected by such changes in
their workplace. It is possible that the employees are happy about the changes taken place in
their workplace in the event that the changes include innovative technology integration. Such
technological integrations ease the working of the employees and thereby positively affect
their performance (Imgharene et al. 2017:2).
4.2 Management of changes in the business
In majority of the cases, it is observed that the changes incorporated in companies such as
YHA Medway prove to be beneficial for the entire hospitality business sector. These may end
up becoming an inspiration for other companies of the same industry to follow. The company
executives are primarily given the responsibility to incorporate the changes. Such changes
required to be managed efficiently. Otherwise the objective behind the implementation of
such changes will never be fulfilled. The main objective of such change management is to
make awareness about the changes among all the stakeholders who will be affected by this
change. The change management is implemented by the following 8 stages:
Creation of urgency: In this stage of change implementation in YHA Medway, the
stakeholders are explained in detail to necessity of the change. The change is necessary for
the organization for reasons such as urgent technology integration. For such change scenarios
taking place in an urgent basis, it is mandatory that the reason for urgency is explained for
creating a general awareness.
Team building: Every change implementation in companies such as YHA Medway requires
the participation of an effective team. This stage ensures that an effective team is formed for
the purpose (Umar et al. 2016:10).
Vision creation: It is necessary that a proper vision be created by the change team executives
of YHA Medway behind the implementation of a change. This vision is decided by the team
executives to fulfill the objectives behind the change.
Vision communication: The vision that has been selected by the executives of YHA
Medway to be behind the change is communicated to the stakeholders for their knowledge
and understanding of the change (Lemańska-Majdzik & Okręglicka, 2015:308).
Obstacles removal: The entire session of change implementation may not be a clear path for
YHA Medway. Thus a span of time is given for the removal of the entities posing as an
obstacle in the path of change.
12