Aggressive Marketing Strategy only in Winter
In the existing business plan of Vocational Hotel, it can be identified that the management has focused on aggressive marketing strategies to attract more customers and improve the performance standard of the business. The company has planned to provide each service that the customers want. However, the management has ignored one of the key factors that are costs, which will be very high if the aggressive marketing strategy is adopted throughout the year. At the same time, continuous aggressive strategy may cause unhealthy competition within the industry.
In this context, it will be better if the company focuses on the aggressive marketing strategy only in the winter because the number of visitor increases in this season. It is because in Australia, winter starts from June and continues until August; in this time, summer vacation goes on in the other parts of the globe (De Queiroz Falcão et al., 2018). Hence, aggressive marketing during this time will be suitable and this will help the organization saving its funds. On the other hand, the company needs to focus mainly on the changing needs of the customers and it requires identifying the common needs of the customers. It will not be possible for the company to satisfy all the customers by providing different specific services; hence, it should focus on some key services like, availability and quality of food, accommodation at a standard price that most of the customers can afford and better transportation services.
If the overall existing business plan for Vocational Hotel is considered, it can be identified that the business plan is lacking behind in some areas. The management failed to develop perfect mission, vision, values and objectives for the business. These might be the reason behind ineffectiveness of the business plan. Though the management has identified important personnel for the business, it has ignored developing strategies for improving the quality of the existing human resource team. The existing business plan states about the strengths and weaknesses of the company; however, it does not provide any remedies for improving the weaknesses. At the same time, the existing business plan does not have any concrete operational plan that can help in improving organizational operations.
However, here, some suggestions have been provided that can help Vocational Hotel improving their existing business plan as well as business performance.
If the operational flow chart in the existing business plan is considered, it can be identified that the entire service or product delivery time consumed by the company will be bit longer if the customer is not a prior customer. There should be prior customer segment, but that must not be widely different from the normal segment. This will create dissatisfaction among the normal customers (Assaf et al., 2017). As the number of prior customer is less than the number of normal customer, the company needs to focus on the time consumption in providing and delivering services and products to the normal customers.
The major drawbacks that have been identified in the existing SWOT analysis are higher level of absenteeism and the lack of experience among the managers. However, the business plan did not focus on improving these two areas. The management at Vocational Hotel can improve the internal operations of the business by recruiting experienced personnel in the managerial positions. At the same time, the management of the company needs to focus on the rewarding system. Providing reward is very important for motivating the employees for better operations (Ampountolas et al., 2018). At the same time proper reward can help the company reducing the level of absenteeism in the organization. The rewarding strategies can be as under:
- Family holiday trip for 5 days
- Gift voucher
- Extra payment
Identifying Common Customer Needs
On the other hand, in order to improve the current operations system, the management will follow the lean management technique. Under lean management, the Total Quality Management or TQM will be most suitable for Vocational Hotel. This will help the company reducing the time for delivery the services and products and at the same time, this will also improve service quality by eliminating wastage (Willie et al., 2017).
In this existing business plan, specific operational plan cannot be identified. However, there should be proper operational strategies. The operational strategies will include the followings:
- Developing core-competency through skilled staffs and improved quality services
- Implementation of computer-based supply chain system is also important. The supply chain must not include any time consuming procedure and can delay the service delivery.
- Prioritizing the activities on daily basis is also important because it will make the business procedure systematic and will help to minimize the waste level.
- Implementation of TQM technique is very important because it will help to improve the service and product quality.
The existing mission of the business states that the company wants to be the number one hotel to the visitors in Melbourne. However, if the existing mission is critically analyze, it will be identified that the mission does not state how the company will be the most preferred hotel to the customers. The mission statement of the hotel must be as follows:
Mission – To be the most preferred hotel in Melbourne by providing specialized and customized services at affordable price range
Vision – To make the people feel and enjoy the natural beauty and culture in Melbourne and other areas in Australia
Values – The hotel will follow five core values of business – leadership, ownership, teamwork, integrity and hospitality.
Objectives – The objectives of the business needs to be measurable and attainable. The objectives will include the followings:
- To enhance the revenue level at least by 10% in each accounting year
- To maintain the cost of sales maximum at 70% of total revenue
- To enhance the number of customers by 20% in every year
- To enhance profitability at least by 10% in every accounting year by offering luxury Ski accommodation
- To maintain the employee base including 80% employees with good experience in the same field
The existing business plan of the hotel does not include any information about the stakeholders of the business. However, stakeholders’ identification is very important for developing an efficient business plan. For improving the business, Vocational Hotel needs to focus on the following stakeholders:
- Owners
- Management
- Staffs
- Creditors
- Government
- Customers
- Investors
In the existing business plan, it has been identified that Vocational Hotel will deal with different types of products or services like, 120 AC rooms with underground parking, pool gymnasium, luxury shopping, roof-top helipad, tennis court, business centre long with food store, Ski rental and front desk service. However, the product line in the existing business plan did not consider the exact transportation facility that the customers will receive by availing the services of Vocational. The existing service or product line will include 24X7 car transportation services in between hotel and nearest airport or railway station.
The existing business plan of the company does not include any specific pricing strategy; however, in order to improve the financial performance of the company, the management must follow a specific pricing strategy. The pricing strategy of Vocational Hotel must be based on the cost-led pricing strategy. It means the price should be determined by identifying the total cost and adding up a certain percentage of profit on the cost (Mohammed and Rashid, 2018).
As per the existing business plan, the target market of Vocational Hotel includes two types of customers – Skiers and Summer Visitors. The segments are okay for the business. However, in order to identify the most suitable target market, the company needs to follow the STP model. Proper segmentation, targeting and positioning is important for business growth (Kantola et al., 2017).
Improving Existing HR Team and Rewarding System
KPIs – The KPIs of the business must be the followings:
- Number of orders processed per day
- Number of training session arrange by the company in each year
- Changes in the customers’ satisfaction level
- Number of orders due
Benchmark:
- Minimum 100 orders per day must be processed
- The company must arrange training session quarterly basis
- Number of repeat purchase at least 2 times in every year
- There must not be any due orders
If the existing business plan for Vocational Hotel is considered, it can be identified that from 2016 to 2018 the gross profit, net profit and revenue are in increasing trend. However, in this context, it is important to be mentioned that the percentage increase in the net profit of the company was not much high. In 2017, the net profit percentage was 12.48%, which increased to 13.60% in the next year. However, as per the new business objectives, the net profit percentage of the company must be increased at least by 10% in each accounting year. In order to achieve this standard, the company needs to focus on cost control strategies. It needs to reduce the direct and indirect costs of the business. On the other hand, the company also needs to enhance the current assets level to improve the liquidity and working capital management of the business. Cash flow also needs to be enhanced by 30% more for achieving better financial position.
As the company is facing huge problem related to its human resource, it needs to improve the quality of its human resource. The company needs to recruit more experienced candidates for the managerial positions (Mohammed and Rashid, 2018). At the same time, it needs to provide better training to the employees, so that they can learn many things that can enhance their employment opportunities. Moreover, proper rewarding system must be implemented for enhancing employee retention rate within the company.
In order to perform a business successfully in Australia, Vocational Hotel must follow the following laws and legislations:
- Corporation Act 2001
- Fair Labour Standards Act 1938
- EnvironmentProtection and Biodiversity Conservation Act 1999
- Standards provided by Australian Accounting Standard Board
If the current performance is compared with the targeted performance, it can be identified that average processing time taken by each employee at Vocational Hotel is 8 minutes higher than the targeted time. This is indicating inefficiency of the employees. At the same time, the average cost to process an order is also high than the targeted cost. It means while processing, the total cost of the company is increasing more than it should be. It is indicating the waste level of the company is high. This is causing declination in the income level. Quality error rate is extremely high, which means the customers’ dissatisfaction level is high at this organization. This is a major barrier for the future growth of the company. Production average number of orders processed per day is lower than the target. It means the production at the company is lower than the standard level. This is creating barriers to the revenue growth of the company.
Therefore, from the overall analysis of the employees’ performance, it can be stated that the employees or human resource team of the hotel is inefficient. The human resource department needs to develop better strategies for improving the performance standards of the employees. However, this situation can also be improved by considering the following suggestions:
- Implementation of TQM technique
- Better training for the employees
- More efficient supervision
- Better production strategies
Reference list
Ampountolas, A., Shaw, G. and James, S., 2018. Active Learning to Improve Self-Confidence and Decision-Making Skills Through the Use of Hotel Simulation. Journal of Hospitality & Tourism Education, pp.1-14.
Assaf, A.G., Josiassen, A., Woo, L., Agbola, F.W. and Tsionas, M., 2017. Destination characteristics that drive hotel performance: A state-of-the-art global analysis. Tourism Management, 60, pp.270-279.
De Queiroz Falcão, R.P., de Castro, A.R.C., do Nascimento, E.S., da Silva Barboza, T. and Ferreira, J.B., 2018. Improving business performance of budget hotels through social media. REVISTA ACADÊMICA OBSERVATÓRIO DE INOVAÇÃO DO TURISMO, 12(1), pp.45-65.
Kantola, J.I., Barath, T. and Nazir, S. eds., 2017. Advances in Human Factors, Business Management and Leadership: Proceedings of the AHFE 2017 International Conferences on Human Factors in Management and Leadership, and Business Management and Society, July 17− 21, 2017, The Westin Bonaventure Hotel, Los Angeles, California, USA (Vol. 594). Springer.
Mohammed, A. and Rashid, B., 2018. A conceptual model of corporate social responsibility dimensions, brand image, and customer satisfaction in Malaysian hotel industry. Kasetsart Journal of Social Sciences, 39(2), pp.358-364.
Willie, P.A., Connor, D., Sole, J., Forgacs, G., Grieve, R. and Mueller, J., 2017. Human capital challenges in the hotel industry of Canada: finding innovative solutions. Worldwide Hospitality and Tourism Themes, 9(4), pp.402-410.
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