Strategic Direction Of St. Regis Bangkok: SWOT And Porter’s Five Forces Analysis

Porter’s Five Forces Framework

The St Regis Hotel is the debut hotel of Starwood Hotels & Resorts Worldwide Inc in Bangkok, Thailand. The timeless sophistication, high standard services, and unmatched hospitality of the hotel have made the five-star hotel famous among the target demographics in Bangkok. The 47-storied hotel tower is situated at Rajadamri Road contributing as one of the significant silhouettes of the city skyline. The hotel is designed by Brennan Beer Architects. The St Regis Bangkok has featured 227 guestrooms that include 53private condominiums and 51 luxurious suits with all the leading amenities, hospitality services and dining space (Blair, 2016). The lavish interior and colour palette has felicitated the luxury brand of St Regis Bangkok.

Understandably, the accommodation, services quality, hospitality of the staffs and location of the St Regis Bangkok are unmatched. In the recent time, the growth in hotel and hospitality business all around the world has created substantial challenges for St Regis as well (Narangajavana and Hu, 2008). The study has discussed the leading strategic direction of St Regis Bangkok providing a number of tools i.e. SWOT analysis and Porter’s Five Forces analysis. However, the study also points out the product diversification strategy as the most significant strategies to make further inroads in Bangkok. Ultimately, the Dutch Model has been taken into consideration in the problem solving to identify the leading challenges, particular causes of the problems, the constraints and boundaries in the business environment, limitations, and futuristic recommendations.

A Porter’s Five Force Analysis has been presented below to explain the external factors that influence the business of St Regis Bangkok in the Thai market:

There are several five stars hotel in Bangkok that can provide a high level of competition to St Regis. Hence, the customers have a number of choices for high level of service in the region. It is the primary factor for the high bargaining power of the consumers. St Regis needs to focus on product and service diversification in order to meet the changing needs of the customers.

The company can choose different types of media channel such as online marketing, newspapers and magazines to promote its products and services in the region. On the other hand, the number of suppliers related to hospitality and hotel industry is quite high in the region. Hence, the bargaining power of the suppliers is low for St Regis Bangkok (Chen, 2011).

There are several substitute products and services that are offered by different hotels in the region. Hence, the threat from substitution is high for the St Regis Hotel Bangkok. For example, there are several boutique hotels, motels, small guesthouses, hostels and residential properties on rent that can be considered as threat for the business (Kathuria, 2008).

There are several five stars hotels near the Rajadamri region of Bangkok that provides a high level of competition to St Regis. For example, Four Seasons Hotel, Grand Hyatt, Intercontinental, Siam Kempenski, and Grand Centara are the primary competitors of St Regis. Hence, the threat of rivalry is high for the hotel (Narangajavana and Hu, 2008).

SWOT Analysis of St Regis Hotel

There is a need of a huge investment to construct a five stars hotel like St Regis. Hence, the cost for entering the hotel business is quite high that makes the threat from new entrants low for the St Regis’s business (Nithi Sthapitanada, 2012).

SWOT analysis is conducted to present the influence of the internal and external environmental factors on the operations of the business. The strengths and weaknesses present the impact of the internal factors. On the other hand, the opportunities and threats focus on the impact of the external factors. Hence, the SWOT analysis of St Regis Bangkok has been presented herein below:

The strengths of St Regis Hotel Bangkok have been presented herein below:

• Strong Brand Image:St Regis has a strong brand image due to its global presence and ownership of Starwood Hotels and Resorts. The brand has several hotels in different locations across the globe. On the other hand, the brand has been serving its customers for more than 50 years has become a heritage hotel in Bangkok.
• Strong Financial:St Regis has been acquired by Starwood Hotels and Resorts in the year 1990 that has a good financial position (Nithi Sthapitanada, 2012). The financial position of the company acts as a strength of the hotel.
• High Standard of Service:St Regis Bangkok is known for its 5 stars standard of services that attracts business class people to visit and stay in the hotel. It is one of the high standard hotels in the region with multi-facility services (Shen, 2016).
• Professional Staff:St Regis employs thousands of staffs across the globe and is known for its professional behaviour of its employees. The employees are well trained and knowledgeable about the needs of the customers (Sophonsiri, 2008).
• Good Location:The St Regis Hotel is situated in the Rajadamri area of Bangkok, which is a good location for tourist visiting the city. On the other hand, the location is connected with the Sky Train that increases the value of the hotel.

The strengths of St Regis Hotel Bangkok have been presented herein below:

• Less Promotional Activities for local People:The primary weakness of St Regis is that the company does not focus on promotional activities for local people. The company has only two staffs employed in the marketing activities for the local people (Rodtook and Altinay, 2013).
• Vertical Management:The vertical management system of the firm makes it difficult for the St Regis to take quick decisions. The company needs to communicate all issues to headquarter and wait for their response to make major decisions (Panvisavas and Stephen Taylor, 2016).
• Outdated Technology:The technology used in the service of the St Regis Hotel in Bangkok is outdated. The management needs to implement innovative technologies to diversify its services and stay ahead of its rivals (Blair, 2016).

The strengths of St Regis Hotel Bangkok have been presented herein below:

• Developing Economies:Thailand is one of the developing economies of the world with great potential to grow in the future. The percentage of tourism receipts have increased in the few years up to 37 percent in the region. On the other hand, it is one of the attractive tourist spots in South Asia with different attractions and modern facilities (Vorina and Veljkovic, 2012).
• Emerging Market:Thailand is one of the emerging markets for multinational organizations. Furthermore, the potential to do business in Thailand has increased in the recent years due to its growing economy (Monlapak Thespol and Ngugi, 2015). Hence, St Regis has good opportunity to grow its business in the upcoming years.

The strengths of St Regis Hotel Bangkok have been presented herein below:

• High Level of Competition:The high level of competition is a major threat for St Regis Bangkok. Some of the primary competitors of the firm are Grand Hyatt and Four Seasons Hotel. Therefore, it becomes difficult for St Regis to continue its operations using a fixed strategy.
• Political Factor:The political unrest in the country has emerged to be a threat for the hospitality and hotel businesses in Thailand. On the other hand, the hotel industry needs to follow several new regulations related to environment to operate in the Thai market (Panvisavas and Stephen Taylor, 2016).
• Natural Disaster:St Regis Hotel is located in a low area, which is highly affected during the rainy season. Hence, the business of the hotel falls due to the occurrence of flood during the rainy seasons.

The market penetration strategy is one of the four alternatives of the Ansoff Matrix developed by Igor Ansoff in the year 1957. The strategy focuses on developing the brand in the existing market by implementing certain changes in the policies and practices of the firm (Promsivapallop, Jones and Roper, 2015). St Regis must pursue the market penetration strategy by focusing on product diversification and marketing activities to enhance its market share in Bangkok. The two major strategies to grow the business of St Regis Bangkok have been presented herein below:

The management of St Regis must implement new technologies in order to diversify its products and services. The technological development can help the firm to seek competitive advantage in the market. On the other hand, new services can be introduced with lower prices to have a better positioning in the market (Rodtook and Altinay, 2013).  The improvement of the current services with the help of modern technology will enhance the market share of the current products and drive out the high level of competition in the Thai market.

On the other hand, the management of St Regis Bangkok must focus on developing its marketing strategy by implementing digital marketing tactics. The culture of the South Asian population must be considered while planning the marketing activities (Wiriyakitjar, 2013). Furthermore, traditional media can also be used such as printed media and television to advertise the brand in the local market. The new market strategy will create brand awareness and help the firm seek growth in the existing market (Meissonier, Houzé and Bessière, 2012).

By using the Dutch Model, the study has identified the leading problems associated with the business of St Regis Bangkok. Meanwhile, in this particular section, by identifying the real issues, critical objectives have been set. Moreover, the constraints and boundaries have been defined as well (Greiff, Holt and Funke, 2013). On the other hand, option prioritisation has been delivered as per the requirement. Lastly, the limitations and restrictions have been listed.

Strategic intervention can be identified as one of the major problems for the St Regis Bangkok Hotel. Though the amenities, services standards, and hospitality of the St Regis Hotel are unmatched, there are some difficulties in growth tactics. Precisely, due to fierce market competition from Grande Central Point Hotel, Eastin Grand Hotel, and BelAire Bangkok and others, the St Regis Bangkok needs to concentrate on product and service diversification to impress the royal guests and international target demographics (Ariffin and Maghzi, 2012).

St Regis Bangkok’s Strategic Direction

By evaluating the SWOT analysis, the major threats and weaknesses of the business environment of St Regis Bangkok can be defined. Apparently, high level of competition and political interference in the hotel and hospitality businesses has created major challenges (Greiff, Holt and Funke, 2013). On the other hand, there is some hiring as well as management issues in the workforce due to cultural distinctiveness.

Setting objectives will be crucial to create sustainable long-run business in the target market. Therefore, St Regis Bangkok needs to find suitable decision-making management to recover from the problems. First of all, the product and services diversification strategy must be evaluated against expansion strategy (Chen, 2011). By defining the positives of the diversification strategy, substantial management planning and improvisation need to be done.

Alternatively, customer satisfaction will be crucial so that the target demographics can become loyal towards the services of St Regis Bangkok. By utilising the brand name and lavish accommodation and services of St Regis, the hotel must provide unique services and facilities that cannot be matched by the competitors. Such valuable goal setting will be efficient for long-run growth in the target market (Sandler, 2017).

In the business environment in Thailand market, St Regis Bangkok has to deal with a number of constraints and boundaries. First of all, there are legal regulations for hotel and hospitality business. Besides, the cultural differences of the hotel staffs as well as the guests can create significant challenges for the management team of St Regis Bangkok. Therefore, regional trends and cultural preferences must have been maintained to impress the target market demographics (Ariffin and Maghzi, 2012). However, geographical as well as financial constraints must be taken into consideration that can create an adverse impact of the productivity and services of St Regis Bangkok.

By following the traditional hospitality culture in Thailand market, the strategic options must be selected according to the brand image of St Regis Bangkok. Most importantly, the luxurious hotel accommodation of St Regis Bangkok has selected client base, to say the least. As the target demographics have paid massive cash for the services, the hotels are bound to deliver the best accommodation and services (Jäämaa, 2015). Therefore, product and service diversification strategy will impress the international as well as the domestic guests of St Regis Bangkok.  

Alternatively, the management of staffs and services towards the guests should be flawless. Meanwhile, in order to eliminate any services issues, the staff members should be trained according to the culture to welcome the guests (Wiriyakitjar, 2013). However, latest technological support should be maintained so that that safety and security of the guests will be listed as the highest priority.

In order to improve the target market positioning and management functionality, a well-diversified product and services strategy must be introduced. Critically, a thorough market research and the current market share of the leading competitors must be analysed. Meanwhile, this is the best strategic option to be selected. However, the operational burden and financial status must be verified before implementing the strategy into real phase (Jäämaa, 2015). Secondly, the management team and human resources must be trained according to the standards of the hotel. During hiring, the job positions must be suitably described to the candidates to avoid any complications at working phase (Zarei, 2014).

Market Penetration Strategy

Lastly, by evaluating the Thai culture, particular services in the hotel must be recommended to impress the domestic public. Critically, the hotel must identify the Asian culture so that the Asian target demographics will select the St Regis Bangkok during their visit in Thailand (Weerakit, 2007).

During the utilisation of the Dutch Model, all the suggestions given as options are subjective. Based research, the proposed option must be verified with the human resources and financial sections so that an affirmative planning will be developed. Moreover, the evaluated strategic options must be introduced to the actual practices of the firm following regulations and management suitability. Therefore, the strategic options have certain limitations as well.

Conclusion

By considering the above analysis, St Regis Bangkok faces several challenges due to the changing business world. The growing competition and increasing legal obligations have become major constraint for the organization. Hence, the management of St Regis needs to implement certain changes in its current strategies to survive and seek growth in the Thai market. For example, the product diversification can be a primary factor to seek competitive advantage. On the other hand, the modern marketing techniques can be helpful for the firm to create brand awareness in the local market for increasing the number of visitors. The changes in the marketing policies will help the firm seek a better positioning in the Thai market and compete with its rivals in the long run. Finally, the Thai and Asian culture must be considered while planning the market penetration strategy for the expansion of business. 

References

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