BM633 Strategic Agility at Oak Tree Inn Assignment Sample

A Historical Scottish Inn's Strategic Growth Analysis

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BM633 Strategic Agility: Oak Tree Inn Analysis and Management Strategy Assignment

An overview of Oak Tree Inn

The Oak Tree Inn was created in 1997 using slate from neighbouring excavation sites, resultant in a structure that perfectly balance Balmaha's charming lochside society. On the Eastern Edge of Loch Lomond along the route of the renowned West Highland Way walk, the Oak Tree Inn is located in the centre of the charming Balmaha village (Eilmann, et.al. 2015). Both the inn's upper floor and cottages with loch views provide B&B accommodations. The Oak Tree serves traditional Scottish cuisine from its well-liked menu and also provides a large selection of whiskies, locally brewed beers, and cider

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The study will examine and assess the rank of commerce that is attained by Oak Tree Inn even as appealing when considering internal as well as external aspects. This study will analyse and analyze the performance for Oak Tree Inn while taking into account external, internal as well as competitive concerns. It will also present the management strategy that will guide the operation of the property. In addition, two options will be presented to directors' consideration. Oak Tree Inn will choose one of these options as the one it prefers. The report highlights VIRO analysis and SWOT analysis of Oak tree inn to understand the strategic position of the company. The report also outlines the management plan for the hotel. Additionally, the report includes the external dangers, opportunities, and problems that Oak Tree Inn is experiencing from the larger macro and micro/competitive settings. The report also highlights detailed SWOT analysis as well as theoretical models like PESTEL and the 5 Forces model.

Oak Tree Inn

Figure 1:Oak Tree Inn

(Source: Tripadvisor, 2022)

Critical analysis of the Oak Tree Inn’s strategic position and recognition of strategic ability, together with strengths and weaknesses

VRIO analysis

A strategic management technique called VRIO model is used to assessinterior corporate power and wealth. It assists in shaping which of its interior competencies with its resources can offer a foundationfor competitive advantage in the long run (Knott, 2015). The VRIO framework isbased on the belief that assets are indeed a basis of constant competitive benefit for a business if they are appreciated, unusual, unrivalled by the competition, and prearranged to make best use ofworth to the business.

Resources

Valuable

Rarity

Imitability

Organization

Use of technology

yes

no

no

yes

Competitive edge

yes

no

yes

Yes

innovation in products

yes

no

no

yes

Product and service

yes

no

no

yes

Brand image

yes

yes

yes

yes

&n;bsp

SWOT Analysis (focusing on Strengths and Weaknesses)

A hospitality sector is a form of business where customers leave their casual setting and travel to a separate location for leisure activities (Arif and Hossin, 2016). The goal of hospitality is to renew a person's spirit by freeing the person from the confines of home, place of business, or place of employment.

Strengths of the Hospitality Industry

  • Local Festivals - The local celebrations are one morefeature of cultural legacy. In many parts of the world, they vary. Some actions are so unique, so this attract traveller who desire to understand them personally (Leigh, 2015). Hotel Oak tree inn’s location is the main strength of the company. Visitors can visit local festivals easily.
  • Quality Accommodation Facilities - The Oak tree inn provides the best accommodation facilities and b&b (bed and breakfast facility). This is the biggest strength of the company.
  • Travelling Convenience - More persons would migrate to a country with a healthy transport system, counting roads, railways, and airports. This is because travel accessibility is a criticalelement of the hotel segment.

Weaknesses of the Hospitality Industry

  • High Turnover Rate - The hospitality division has a comparatively high staff leaving rate. It is since the period has tremendously high work demands and minimumwage (Helms and Nixon, 2015). The employees are continuallylooking for better occasion.
  • Seasonal Staff - Companies in the hospitality sector don't hire workers for long period. The managers do not expendfunds on development along with training and pay their staff low salary. In hospitality industry, job satisfaction is quite short.

A Macro-environmental Analysis (600)

PESTEL analysis

PESTEL, 2021

Figure 2: PESTEL, 2021

(Source: lars de bruin, 2021)

  • Political factors:These factors play a crucial role in the operation of the oak tree inn as part of the hotel industry. The hospitality and hotel industry faced some challenges in covid 19 pandemic and it has have a greateffect on the business (Hassan, al. 2020). Scottish Government supports small-scale hotel business and tries to strengthen it. The efforts of the government have a optimistic impact on the oak tree inn.
  • Economic factors: the hotel is facing difficulty in retaining its employees because after covid19 many companies stopped their business and people are planning to move. Even though the visitors’ number is going up for the Oak tree inn but the company is facing labor shortage.
  • Social factors: visitors prefer a vacation that is economic with all facilities such as free wifi, beverages, and food. Oak hotel inn provides all these facilities, the hotel also provides outdoor facilities where all visitors and tourists can interact and engage in outdoor activities. Tourist also looks for a hotel that should be near the local amenities and have access to transportation. The oak tree location is perfect it is near the parks, and it has its food court.
  • Technological factors: hotels and resort uses various social site and social media to reach out to potential visitors. It is the best way to provide information to the customer and attract them to choose Oaktree hotel for their holiday stay (Gregoric, 2014). The Oak tree Inn has a very appealing website that displays all the goods and services offered by them. The company has its online store and it sells various products under its trademark image. These products include ice cream, t-shirts, and coffee. The company is using digital marketing to grow its business.
  • Environmental factors: environmental factors have a great impact on every business, now a day it's gaining more attention due to global warming. The Oak tree can take part in environment-friendly programs to build its brand reputation.
  • Legal factors: the cost of travelling and visiting Scotland is pretty high. The UK is ranked 140th out of 141 countries on hospitality price competitiveness by the world economic forum (Pan, al 2019). These high costs are a barrier for the hospitality industry: a hospitality tax imposed by the government can reduce the competitiveness of Scotland.

Porter’s 5 Forces Model

  • The threat of entry: The threat of entry for this industry is low. Government support entrepreneur to enter into this market. New players can also easily get access to the suppliers and distribution centre.
  • The threat of substitutes: oak tree inn has a high degree of threat of substitutes. The major competitor of the company is B&B arrochoile, balmaha lodge, and clachan inn.
  • The power of buyers: the buying power of visitors is high in the case of the hotel industry. The switching cost is also low because there are other hotels available. This is a crucial threat to the business.
  • The power of suppliers: this is not a threat to the hotel industry; the bargaining power of the supplier is low. The switching cost is low for the hotel and no threat of supplier competition.
  • Competitive rivalry: the competitive rivalry is high for the Oak tree inn. There are High fixed costs and high exit barriers, are involved (Grundy, 2016)

SWOT Analysis

Subsequent SWOT analysis captures the companies' key strengths and weaknesses the company and describes the opportunities and threats faced by The Oak Tree (Bilan, 2019).

Strength

Weakness

o Middle location to beaches, urban area, and interstate

o Sufficient accommodations, elevated quality place to stay, newer residence structure

o Innkeeper’s dealing management background and connections with the communities

o Room number is small judged against the competition

o Operating efficiency is not up to the mark

Opportunity

Threats

o Increasing market allows new big business for the Oak TreeB&B

o Position the company in the wine and fruit marketplace will help to offer marketplace diversity

o Participation in the environment-friendly program helps businesses to grow their reputation

o The Oak tree inn’s Competition from the existing, glamorous Bed & Breakfast inns in Melbourne

o A drop in the economy by reducing the discretionary income of the people of the country

o Cyclone season is also one of the biggest threats to the company.

Two potential growth options based on SWOT analysis

The resources and competencies that a business can employ to add value for consumers or clients are the focus of strategic capability. The foundations upon which a contributing to a better decisive benefit and is distinguished from rivals are distinctive resources and core competencies. The two strategic growth options are given below for the Oak tree inn:

  • Partnerships with other businesses

The oak tree is an established business in the hospitality industry; they have several holiday pods and a cottage. The company is popular in Scotland and they are best in their area, the company can grow its business in a new market by partnering with well-established companies. This move will help to gain a competitive advantage over companies' rivals; this is the most trending growth strategy in the UK hospitality industry. This growth option will help in gaining more reputation from its competitors and brings positive outcome from the strategic management. This will allow sandy and lucy to transfer to foster innovation in the organization with the help of a merger. This will further help to deal with present and future challenges face by the company, especially related to the expansion objectives of the company. This option will contribute to an increasing market share of the Oak tree inn, it will enhance the revenue of the company.

  • Expansion in the other part of Scotland

The government of Scotland provides a high degree of support to the tourism and hotel industry, it also hosts Visit Scotland named the tourism department to boost tourism in the country. This department gets an annual budget of 45 million pounds, and a key objective of this is a contribution to tourism promotion in Scotland. The government is also trying to provide an international marketplace to promote tourism so that the entire country can be benefited. The company can use the support of the Scottish government and expand its business into a new market by opening franchises. New franchising can own and provide home-grown products to the visitor as original Oak trees do. This will bring immense growth to the company.

SAFe Analysis on Two potential strategic options

Option one: merging with other businesses

Option two: expansion in more parts of the country

Suitability

The suggested strategy is concentrated on the merger with other businesses. The merger and acquisition will help the Oak tree to resolve the issue of more customers but a shortage of accommodation. It will help the company to expand its business and it will further bring growth to the company.

This strategy will help in expanding into the new market of the country. This will help in increasing the revenue and market share of Oak tree inn. By entering a new market company can build a strong consumer base for its icecream and coffee. The positive review on social media by the consumer will build the reputation of the company.

Acceptability

The suggested strategy will fulfill the expectation of all stakeholders and it will be effective in serving more customers and growing the market share of the company.

Opening more hotels in the form of franchises will help to generate more revenue.

Feasibility

Bu checking Oak tree inn’s net income it can be assumed that it can finance mergers and acquisitions (Bhosekar and Ierapetritou, 2018). The Scottish government also provides support for this industry.

The franchise's strategy will require a lot of money. The money can be funded by stakeholders of the company or by the Scottish government. The company will receive high revenue which can be used for future development.

Recommendations

The Oak tree managers should use the strengths of the company and try to achieve new objectives. It is recommended that the company can expand into a new market and increase its market share the company can also use the introduction of new branches to increase income and the size of the market. Based on the analysis done in the above report with the help of PESTEL, VRIO, Porter five analysis, and SWOT analysis the two growth options are presented. The two options recommended Partnership with other businesses and Expansion in the other part of Scotland. it is also recommended that the company should focus on the number of rooms to increase the accommodation facilities.

References

Arif, T.M.H. and Hossin, M.Z., 2016. A comparative analysis of internal and external environments between Hotel Hyatt, UK and Hotel The Cox Today, Cox’s Bazar, Bangladesh. IOSR Journal of Humanities and Social Science, 21(6), pp.13-22.

Bhosekar, A. and Ierapetritou, M., 2018. Advances in surrogate based modeling, feasibility analysis, and optimization: A review. Computers & Chemical Engineering, 108, pp.250-267.

Bilan, S.M., 2019. Understanding Neoliberalism Regimes and the Operations of Global Corporations. In Neoliberalism in the Tourism and Hospitality Sector (pp. 158-173). IGI Global.

Eilmann, B., Zweifel, R., Buchmann, N., Fonti, P. and Rigling, A., 2015. Drought-induced adaptation of the xylem in Scots pine and pubescent oak. Tree physiology, 29(8), pp.1011-1020.

Gregoric, M., 2015. PESTEL analysis of tourism destinations in the perspective of business tourism (MICE). In Faculty of Tourism and Hospitality Management in Opatija. Biennial International Congress. Tourism & Hospitality Industry (p. 551). University of Rijeka, Faculty of Tourism & Hospitality Management.

Grundy, T., 2016. Rethinking and reinventing Michael Porter's five forces model. Strategic change, 15(5), pp.213-229.

Hassan, A., Roy, M. and Chowdhury, S., 2020. Ecotourism and Hospitality in Bangladesh: The Application of PESTEL Analysis and Determining the Internal Factors. Tourism Products and Services in Bangladeshconcept Analysis and Development Suggestions, pp.181-215.

Helms, M.M. and Nixon, J., 2015. Exploring SWOT analysis–where are we now? A review of academic research from the last decade. Journal of strategy and management.

Knott, P.J., 2015. Does VRIO help managers evaluate a firm’s resources?. Management Decision.

lars de bruin, 2021. pestle analysis. (online) <https://www.business-to-you.com/scanning-the-environment-pestel-analysis/> accessed on 20 December 2022.

Leigh, D., 2015. SWOT analysis. Handbook of Improving Performance in the Workplace: Volumes 1?3, pp.115-140.

Livingstone, R., 2019. Oak Tree Inn: growth challenges facing a family-run tourism business. In Exploring Strategy: Text and Cases (pp. 723-730). Pearson Education.

Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity enhancement strategies: A case study of three economies. Journal of Management in Engineering, 35(1), p.05018013.

TripAdvisor, 2022. Oak Tree Inn. (Online). :<https://www.tripadvisor.in/Hotel_Review-g551932-d243078-Reviews-Oak_Tree_Inn-Balmaha_Loch_Lomond_and_The_Trossachs_National_Park_Scotland.html&gt.; (Accessed 20/12/2022).

 

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