Analyzing Business Strategies Of Four Seasons Hotel

Background of Four Seasons Hotel

A business strategy can be defined as a set of actions and functions that are conducted for the prime motive of fulfilling the organization’s objectives. The main business strategy of an organization can be explained as a long-term initiative that is undertaken for the present and future development of an organization. Generally, a business strategy is planned for a period of three to five years. But with the frequent changes in the current working environment, each organization is forced to make changes in their working styles and approaches. The hospitality industry has also witnessed humongous changes in the last decade and the organization of the hospitality industry has to include various different approached depending on the various trends. From the changes in the demands of the customers to the emergence of lifestyle hotel to the advancements in the field of technology, the market has intensified in the hospitality industry. These changes have increased the competition between organizations as each firm main motive is to offer the customers with a great experience. The organization Four Seasons Hotel has a solid customer base in the current market and it is due to the traditional approach of the organization that is “Treating the customers in the same manner as we would like to be treated”. The organization has followed this approach for ages and this is the key success factor of the organization. In this assignment, the business strategies of the Four Seasons Hotel will be analyzed, to identify the strengths and weaknesses of the organization, which will be utilized in the better formulation of new business strategies that will help the organization to increase their customer base in the current market. Also, these strategies will facilitate the organization to deal with future changes and issues in an appropriate way. The Four Seasons Hotel is in need of new business strategies to maintain their hold in the market.

The Four Seasons Hotels is an international chain of hotels, which was founded in 1961. Since then the organization has spread its branches in over 47 countries and owning more than 110 properties in the world. The founder of the organization Isadore Sharp was architecture and had no experience in the field of hospitality. But he had an insight that luxury hotels are the future of the hospitality industry. The organization formulated strategies that were formulated to provide the customers with personalized service and thus, built the culture of luxury hotels. For more than five decades, the organization has severed customers with a high standard of personalized service that has helped the organization is becoming the finest and the biggest brand of luxury hotels. The organization has set a benchmark in the group of luxury hotels. This business strategy of the organization is termed as differentiation approach and the various actions of the Four Seasons Hotels completely justify their approach. This approach of the founder of the organization exhibited the organization’s strategy of utilizing the new strategies for the development and expansion and also to use them to tackle the threats to the organization (Four Seasons Hotel, Singapore, 2018).

Emerging Issues in the Organization and Hospitality Industry

But in the last decade, this has been identified that the organization has become too comfortable with their strategies and have not modified their approaches in the last ten years. This was easily identified as the hospitality industry has witnessed massive changes, which the organization has completely ignored. This has affected the sales of the organization and also their customer base. With the emergence of lifestyle hotels, luxury hotel brands have suffered huge losses. This is due to the availability of equal and better services at lesser prices. The demographic changes also provided support to the trend of lifestyle hotels, with generation Y, becoming the biggest contributor to the hospitality and tourism industry. The Four Seasons Hotel did not utilize this opportunity for the development of the organization and thus, is struggling to maintain their position in the current market.

There are a number of factors that have affected the growth and development of the Four Seasons Hotel. These factors are known as macro environmental factors. Some of the factors that have affected the strategies of the organization are –

• Political

The political factors affected the functioning of an organization through the intervention of the national and local government. This intervention can be conducted by the addition of new government policies. The Four Seasons Hotel approaches have suffered due to the new taxation policy that has been proposed in the latest income tax amendment bill (Al-Oguiliy and Khasawneh 2015, p.74). This has affected the working of the organization and due to this, the organization has to reformulate its future strategies. Thus, the governance system of a country plays a crucial role in affecting the organization’s objectives and policies. Also, the other political aspect that is imposing pressure on the Four Seasons Hotel is the pressure due to the international regulations.

• Economic

Some of the economic factors that can affect the working of an organization are inflation rate, taxation rate, interest rate, exchange rate, the conditions of the labor market, and many other different economic aspects. The Four Seasons Hotel’s approaches have been affected due to the latest taxation bill. But according to the new budget proposed by the ruling government, the hospitality industry will experience a huge boost (Boz 2016, pp. 78-85). Also, the hospitality industry will attain more opportunities to excel with the new Tourism Development Fund of the country, which will ultimately help the Four Seasons Hotels for better success.

• Social

Every nation has its own set of social norms for conducting business. These social factors can help organizations in understanding the different ways to entice a customer by fulfilling customer preferences. The social factors include the culture, attitude towards specific services and products, traditions, the attitude associated with health and safety, the demographic changes and many more. But, in the organization Four Seasons Hotel, the organization is facing major issues due to the demographic changes in the tourism industry (Gorondutse and Hilman 2017, pp. 150-161). The new demands of the generation Y for lifestyle hotels have produced issues for luxury hotels. The Four Seasons Hotel has not included this social trend in its strategies and thus, the organization is facing a loss of customers.

• Technological

Macro-environmental Factors Affecting the Organization

The one external factor that has impacted the growth and development of organizations belonging to any field is technology. Though through technology, the organizations have been facilitated with the opportunity of quick expansion, there are several drawbacks too, which hamper the brand image massively. The technological aspect has brought transformation in the various management functions of an organization. The Four Seasons Hotels have been juggling to fulfill the sudden changes in the demand of customers due to technology. The organization is severely facing major issues as they have not incorporated changes in their approaches (Gucer et al. 2016, p.206). Also, due to the massive utilization of technology in the organization, there have been immense changes in the supply chain of the organization. Thus, the Four Seasons Hotel is in need of redesigning their supply change to increase the standard of flexibility in the organization and also, to formulate a balance in fulfilling the needs of customers and to have an effective cost structure.

• Legal

The laws of all the countries are different and these guidelines have to be followed by all the organizations. The Four Seasons Hotels is an international brand, thus, the organization has to follow the guidelines of both the international and local market (Hertawan 2015, pp.90-108). Some of the legal factors that have to be taken into consideration by an organization are business law, copyright law, discrimination law, laws for data protection, and many more. For the Four Seasons Hotel in Singapore, the organization has to adapt to the new licensing laws that have been imposed by the government. This regulation has been added by the Singapore Tourism Board under the Hotels Act.

• Environmental

In the last decade, the pressure on the organizations to fulfill their corporate social responsibilities have intensified. For an organization, to follow methods and functions that are sustainable and environmentally friendly is paramount. This is also very crucial in the development of the brand image (Kala and Bagri 2016, p.240). The Four Seasons Hotels has to abide by certain environmental factors like safe disposal of waste, insurance policies, pollution regulations, climatic change, increasing attention towards sustainability, saving water, and many other factors. In the hospitality industry, the resources are wasted in abundance. Thus, it is the duty of the organization to follow the various environmental regulations and guidelines that encourage an organization to fulfill its corporate social responsibilities.

Thus, all these various factors affect the functioning of an organization. For the Four Seasons Hotel, it is crucial that they focus on utilizing the advantages of different factors to the organization’s benefit and also, address the various emerging issues in a planned and organized manner (Kopaneli 2014, pp.472-487).

Strategy Recommendations for Four Seasons Hotel

For identifying the strengths and weaknesses of an organization, the best tool that should be utilized is the SWOT analysis. So, according to the analysis –

• The Four Seasons Hotels have a huge brand name in the local and international market. The organization have a good market share and have many loyal customers. They also are the main leaders in the hospitality industry of Singapore.
• The organization has created his reputation in the market due to the high standard services which it offers. Thus, the organization is immensely trustworthy, in the opinion of the customer.
• The organization has incorporated innovation in all its strategies, which is beneficial for addressing different issues in a better and creative way.
• The organization’s management team is very strong and all their approaches have the main focus on the customers(Lacap, RMP, AFBE 2014, 115).
• The organization’s approach of offering the customers with personalized services helps in quick transformation of a non-customers into a loyal one.

• The organization does not have skilled labor that incorporates each and every new social trend in the organization’s strategies.
• In comparison to the other organizations, the Four Seasons Hotel is touted to be more expensive. This has become more obvious after the emergence of lifestyle hotels that offers luxurious services at budget prices.
• The organization, though have a powerful brand name, but its public relation approaches are very less effective.
• The organization is secluded. It only targets elite people who have the wealth to spend on luxurious services. The organization’s approach thus is not diversified(Ofondu 2018, 196).
• The organization does not use the advantages of technology to the fullest.

• The Singapore economy is growing at a rapid speed. The new budget proposed by the government has exhibited huge potential for the development of the hospitality industry.
• The organization has various opportunities to expand their customer base. Their huge brand awareness in the market will help the organization expand in a better way.
• The Four Seasons Hotels have exhibited their interest in formulating a connection with a popular airline. This will help in increasing the customer base of the organization.
• The support by the Singapore Tourism Board will support the hospitality industry immensely in the coming years(Pecheritsa 2015, 29-39).

• The biggest threat that the organization is facing from the new competitors that are offering better services at a lesser price.
• The organization is struggling to deal with the various new trends in the market. These trends are now continuous in nature, as they keep changing from time to time(Popova 2017, 23-26).
• Due to the presence of lower cost competitors in the market. The organization facing a price war. The Four Seasons Hotel has an adamant approach.
• The organization also faces an immense threat due to the emergence of cheaper technology.

The organization has an experience of more than 50 years, successfully working in the market. So, it has numerous capabilities that can help the organization in attaining competitive advantages over its counterparts. Some of the sources to attain competitive advantages are –

• The organization has the abilities and knowledge to deliver excellent customer experience. The organization has established a strong position in the market with its excellence in personalized service. Thus, the organization has the abilities to serve better than its competitors(Shairullizan KamalulAriffin, Nabiha Abdul Khalid and Abdul Wahid 2013,106-117 ).
• The organization has followed the strategy of differentiation for years. The approach of offering the customer with a distinctive and unique value is the best source of gaining competitive advantage.
• The organization also have an approach to building all their strategies and activities around the position of the firm in the market. This provides the organization to easily adapt to any changes(Sulistyawati 2015, 15).
• The organization, like its differentiation approach, has always followed the strategy of continuous improvement. The organization is responsible for introducing the culture of luxury hotels, due to their approach of continuous widening their knowledge about luxury hotels and for the betterment of their services.
• The organization’s strategies are in sync with their human resource strategy. This facilitates the organization with the opportunity to shape and mold the organization in an easy way. This also offers the organization with the chance, to train and push the human resources for fulfilling the organization’s objectives.

According to the various micro and macro environmental factors, the Four Seasons Hotel requires the following strategies to address the numerous issues emerging in the organization and also to easily adapt to the changes occurring in the hospitality industry. They are –

• The organization has to adapt to diverse approaches for increasing their customer base.

The organization for maintaining their hold on the market have to broaden its focus by targeting different and diverse audiences. The organization has to invest in lifestyle hotels. It is crucial for the organization due to the demographic changes in the tourism industry (Trini and Salim 2018, p.100). The organization excels in offering luxurious services and thus, they have the potential to gain customers belonging to any group in an easy manner.

• The organization needs to utilize the various advantages that are highlighted by the economy of Singapore.

The economy of a country plays a crucial role in the development of an organization. An organization is affected due to the rise and fall of the economy. Thus, for the Four Seasons Hotels, it is crucial that they utilize the different advantages for the success of the organization.

• The organization needs to utilize their strengths to the fullest.

The Four Seasons Hotel has the knowledge and experience in offering the customers with great customer experience, due to their approach of delivering high-quality services. The organization should utilize this trait in attracting new customers from diverse groups (Walsh and Dodds 2017, pp.672-687).

• The organization has to focus on continuously improving its position in the market.

As to maintain their position in the market as the key leader and to exhibit a powerful brand image, it is crucial that the organization continuously works on approaches that help in improving their position in the market. Even the biggest organization has to continuously change their approaches, due to the increasingly intense competition in the market.

• The organization is in need of better-skilled labor.

For the organization to completely ignore the changing trends in the market, highlights the need for more skilled labor. The organization has to get inspired by the excellent insight of its founder Sharp, who predicted the culture of luxury hotels, way in advance. In the same manner, the organization requires a workforce that can predict various changes that are expected to happen in the future and formulate strategies that utilize them for the betterment of the organization (Baek Kim and Yean Chee, 2018).

• The organization has to win the current price war in the market.

Conclusion

The organization has to gain a competitive advantage by ending the current price war in the market. The organization has to offer certain discounts to the customers that are planned in accordance with the organization’s objectives. This will help the organization in improving its position in the market.

In order to successfully implement the different strategies proposed above, it is crucial for the organization to formulate an action plan. This action plan will provide the management of the organization with a solid direction, helping them to conquer the market by utilizing their competitive advantages. The action plan for the organization is –

• The organization has to invest in new properties that provide them with opportunities to make their approaches diverse. The Four Seasons Hotel can utilize their attribute of becoming a hotel operator rather than the hotel owner in Singapore too. The organization has developed a huge customer base due to this approach all over the world. This will strengthen the position of the organization in the market as the key leader in the hospitality industry. This will also offer the organization with several new opportunities to extend further(E. Petri, 2016).
• The organization has to build a solid regional management plan. This will include the different aspects that will direct the organization in utilizing the different positive traits offered by the fast boosting economy of Singapore. Also, the organization regional management plan should include the changes that the organization requires, depending on the changing preferences of the local customers.
• The organization has to make changes in their targeting and segmentation approaches. The organization cannot restrict itself only to elite customers, especially after the demographic changes brought by generation Y. The organization has to carefully explore and examine the needs and requirements of the diverse targeted audience and have to formulate strategies on that basis(Fah, 2018).
• The organization has to build effective public relation strategies. The organization has to hire an effective public relations team that conveys the different changes conducted by the organization and their approaches to targeting diverse groups. The Four Seasons Hotels enjoy the reputation of an organization that offers luxury services only to elite customers at exorbitant prices. The organization has to change its image and thus, the organization requires a team that helps in revamping the position of the Four Seasons Hotel in the market(Shah, 2016).
• The organization has to attain the help of a professional team that understands the current trends and also have the potential to foresee the future ones too(Ong, 2018). This is crucial for the organization to adjust to the upcoming changes way in advance. Skilled labor will push the organization to continuously improve. In the current working environment of the organization and the circumstances in the market, the only way to survive for an organization is to continuously improve.
• The organization has to fluctuate their prices as to attain an upper head on its competitors. This can be conducted by adapting to new pricing strategies. In the current circumstances, the penetration pricing strategy will be appropriate for the organization in ending the price war in the market(Nagabhushan and Ganeshan, 2014).

Conclusion

After all the analysis and recommendation, this can be formulated that the organization Four Seasons Hotel enjoys a powerful position in the market which it should utilize for further expansion. For effectively implementing it the organization requires a workforce that incorporates and utilize the different trends that are introduced in the market. According to the current changing conditions in the market, every organization has to redesign their working styles. Also, a newly improved workforce is crucial for the organization as it does not ignore any new trends introduced in the market. The organization also have to utilize the various advantages that are provided due to the advancement in the field of technology. The organization should follow their prime motive of offering the customers with great customer experience. The organization should follow the same approach while serving the new diverse audience that the Four Seasons Hotel is targeting, to increase their market share.

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