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Hotel Business Plan
Sociocultural– the hotel market is built on the background of diversity in terms of beliefs among the people. Being a popular tourist destination helps to ensure the industry a consistent supply of customers from both the local economy and foreigners. The diversity in terms of beliefs guarantees a greater sense of tolerance among the people thus providing a welcoming environment for visitors (Mandal, 2015). Moreover, Singapore is multi-racial hence further improving on its diversity.
Economic– the Singapore economy has over the years been performing well thus effectively raising the living standards of locals. This is an important aspect of the business since a strong local customer base will significantly support the business during periods when the tourist numbers are low (Wall, Minocha and Rees, 2015). The performance of the economy has also enabled the Singapore government in the provision of adequate infrastructures such as efficient transport systems and consistency in power supply.
Political– the region is politically stable owing to secure government systems that ensure efficiency in the provision of public services. Political stability is crucial for the business as it has a direct impact on the image created across other economies especially when people are deciding on which countries are most friendly to visitors (Mandal, 2015). Singapore has also been able to enjoy relative peace as compared to other countries in the region owing to its governance.
Legal– the government has devised ways of ensuring adequate legal support to foreign investors through policy formulations and the simplification of the process to starting a business (Geringer, Ball, Minor and McNett, 2016). This has been effective in reducing the time and resources it takes for a foreign investor to setup operations. In addition, the economy enjoys a robust judicial system which helps in the quick resolution of business-related disputes in a fair manner to all investors.
The Singaporean economy provides an immense opportunity for investment in the hotel industry. The economy offers a supporting environment backed by a strong local currency and excellent international relations. These factors play a role in the determination of places that businesses would wish to setup operations (Wall et al., 2015). Therefore, there exists a potential market for the various hotel industry services and products that the company wishes to offer in the market. However, there are many players in the industry thus it is crucial that the business seeks the development of core competencies which include the offering of quality services and guaranteeing value for money spent by the customers. In addition, the business will have to utilize further its branding success in other countries as an influence in the market to offer a competitive advantage.
Singapore has very few natural resources that would be of much benefit to the hotel and tourism industry as an influential factor. However, great motivation has led to the development of a model city leading to the consideration of the city being one of the most livable. This is a great aspect of development as it provides an insight as to why the city has been able to avoid problems associated with space and poor urban planning across the main cities in the world (Mandal, 2015). The efficiency of the public transport system has significantly helped in the movement of people within the city which has effectively made the city attractive for many people to live in and visit. This clearly postulates that the economy has been able to sustain itself in the absence of natural resources thus providing a more flexible approach to business.
Businesses have to pay taxes to the Singaporean government which are structured according to the nature of business one is conducting. However, the processes are simplified to ensure compliance by companies through support offered by government agencies. The rate of inflation in the local economy is low whereby the economy has experienced a low inflation rate over the years. This has ensured stability in the prices of products in the economy (Geringer et al., 2016). This is an important aspect of business as it makes the economy much more predictable thus easy to plan on the size of investments to make and when it should be done. In addition, the low inflation rates will effectively help in the structuring of costs to ensure that optimal costs are incurred to create the best services to customers. The strength of the local economy is significantly tied to how well the local currency continues to perform against foreign currencies.
The following strategies will enable the hotel to enjoy competitive advantage in the Singaporean hotel industry
Cost leadership– the hotel industry is price sensitive hence the prices of services offered will have to be kept low. In this case, the business will embark on a plan to encourage our employees towards ensuring quality services through training. The lower costs will be brought about through efficient employee allocation of duties (Wall et al., 2015).
Differentiation– the company has to differentiate itself for it to survive in the hotel industry given the high number of competitors (Mandal, 2015). Differentiation will be attained through application of technology that is better user-friendly to the customers as a way of increasing their comfort levels while at the various facilities in operation. In addition, the application of technology will ensure customer convenience where they can book or request for different services online.
Cost focus– the company will embark on a pricing mechanism that targets both the high and middle class in the economy. This will effectively broaden the market base as the customers will have the choice as to their ability to afford each package offered (Geringer et al., 2016). This cost focus method is essential towards helping the business to develop packages that generate optimal profits enough to sustain the business into the future.
Differentiation focus– the diverse nature of the cultural heritage of the people within the economy calls for the provisions of services that show the same level of diversity. Therefore, the hotel will provide both local and internationally recognized cuisines which will ensure that customers will have an option of consuming what they are used to or trying out new tastes. This will help in the development of an adventurous approach in dishes served thus attracting customers.
The mode of entry employed in the Singaporean hotel industry will involve licensing and strategic alliances. Licensing will be employed whereby other business would wish to use the branding of the hotel on their hotels and consequently offer similar services under the same model. Vetting will be conducted to ensure that the businesses seeking for the licenses meet the minimum standards to be able to perform at the level expected. The use of strategic alliances will be incorporated as a way of ensuring that the hotel offers services beyond premises owned. Therefore, this will require marketing and strategic alliances with companies dealing with events management. This will help to increase the market base while reducing the cost of logistics in setting up and managing events (Mandal, 2015).
Product/Service– The high number of foreign visitors in the economy provide opportunities for investment in the hotel industry. The services provided will include accommodation and food and beverages in the various locations. The dishes served will include both local and foreign cuisines to promote a global outlook for the hotel. In addition, the customer will be offered an opportunity to recommend their preferred combinations.
Place– the various services associated with the hotel business will be offered on the premises and in events where the hotel will be providing such services through partners. This will help to ensure control of the quality of services provided thus enabling guarantees on the services offered. This is a different approach as to what is employed by other players in the industry thus ensuring the hotel competitive advantage (Wall et al., 2015).
Price– the primary target for the hotel business is to ensure that the customers get value for money spent on the premises while maintaining operational sustainability. The customer base is price sensitive hence measures have to be employed to ensure that the prices offered are not prohibitory given the level of service offered. The price mechanisms will help the hotel to compete effectively in the market against other players.
Promotion– active advertising will be employed through media such as television ads and on the printing press. The internet also offers a significant potential, especially when reaching out to both local and international customers (Mandal, 2015). The seasonal nature of foreign visitors thus requires the hotel to seek the services of travel agencies through commissions for clients successfully recommended to use the facilities.
Geringer, J. M., Ball, D. A., Minor, M. S., & McNett, J. M. (2016). International business. New York, NY: McGraw-Hill Education.
Mandal, P. (2015). Development of tourism and the hospitality industry in Southeast Asia. Singapore: Springer.
Wall, S., Minocha, S., & Rees, B. (2015). International business. Harlow, England: Pearson Education.
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