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Strategic Agility of Oak Tree Inn - A case study sample
Introduction of Case Study on Strategy at Oak Tree Inn ( Scotland )
Oak Tree Inn is one of the most popular tourism companies in Scotland which provides a large variety of services to the customers who are visiting the country or an amazon vacation for the individuals who are the citizens of the country (Case study). The company has been successful due to its friendly staff members and natural stay cations which further helps the customers to spend valuable time with their loved ones. The managers of the company have employed around 100 employees and staff members who provide clean rooms and required services like spa or free body massage to the target audiences.
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One of the main reasons through which the company has been able to attract and retain the customers includes the free as well as authentic food services like breakfast, lunch and dinner in association with a bar. The company has also been able to maintain a positive relationship with the stakeholders by acquiring their changing needs and portraying it in the form of innovative services (Case study). However, the main focus of the managers is to expand in the global market with a sustainable profit margin through which it will also be able to gain a huge base of loyal customers for the long term. The study focuses on providing brief discussion on the strategies management of the company in association with the proper analysis on the internal and external factors through which it will be able to maintain long term sustainability in the competitive world.
Critical analysis of the Oak Tree Inn’s strategic position and identification of strategic capabilities, along with strengths and weaknesses
VRIO analysis
The VRIO analysis of the company shows its competitiveness in the marketing environment on the basis of the four different aspects that are the valuable resources, rare resources, the inimitable and the organized resources (Xu et al., 2019). In relation to this, the services provided by the company such as hotel rooms are the competitive disadvantage for the company as most of the first in the tourist industry of the company provides this service to the target audience base. The rare resources include the highly skilled employees who are able to provide user friendly service experience to the customers (Case study). The company gets a competitive parity with the help of the staff members as they also help to enhance the customer relationship management by addressing their current needs.
The inimitable resources of the company includes the natural luxurious rooms and the free accommodations such as food for the tourists helps the company to provide temporary competitive advantage as these resources can be copied by the new entrants in the marketing environment of the tourism industry (Duric, and Poto?nik Topler, 2021). In association with the scenic and romantic areas of the hotels are also loved by the customers a lot. Lastly, the organized resources include the strategies planning of the company which is changed according to the shift in the demand of the consumers (Xu et al., 2019). For example, according to the pandemic restrictions made by the government of the country the company has implemented artificial intelligence in its workplace which further helps it to provide long term competitiveness in the marketplace.
SWOT Analysis (focusing on Strengths and Weaknesses)
The strengths of the company shows that it has a strong view of providing high quality staying services to the customers from all over the world and the sustainable growth of the company is also based on the necessary changes undertaken by the managers (Case study). The staff expansion of the company also shows a positive sign as it helps to manage the consumer needs efficiently (Duric, and Poto?nik Topler, 2021). The weakness of the company on the other hand includes that the decision making process of the managers are quite slow as per the requirements of the customers and the increase in the competitiveness in the marketplace.
Construct a Macro-environmental Analysis
External threats and opportunities/challenges the Oak Tree Inn is facing from both the wider macro and competitive environments
PESTLE Analysis
The political factors if the company shows that the changing regulation of the government on the labour laws can affect the investment of the company through which its profit margin can also be lowered for the long term (Grazzini et al., 2018). On the other hand, the increase in the liberalization of the trade policies can also lower the rate of return on the investment of the company and can also slow the process of strategic planning. Apart from this, with the growth in the population of the country there is an increase in the segmentation of the customers through which it is becoming difficult for the managers to track their changing needs (Paek et al., 2021).
The technological factors show that the company has an efficient Research and Development (R&D) through which it has an opportunity to expand in the global market. Through this the company will also be able to manage the full utilization of resources such as labourer are done appropriately and the innovation of new services according to the shift in the trends in the marketplace are also possible. The environmental factors such as increase in the pollution in the social environment is a big threat for the company as it can promote strict norms in its performance(Grazzini et al., 2018). However, the legal factors can help the company to maintain proper ethics in the internal structure through which the issues of an increase in the operational cost can be solved for the long term.
Porter’s 5 Forces Model
As the tourism industry has tough competition in the marketing the switching cost of the customers are externally low and the differentiation of the services are high due to which the company is not able to achieve its sustainability for a long period of time (Järvi et al., 2020). The potentiality of the new entrants in the marketing environment due to the extensive opportunity. In this case, the capital cost of the company increases through which it is unable to retain the interest of the consumers. The bargaining power of the suppliers as per the company is comparatively lower than any other industry as there are very less staff members and the demand of customers is increasing. The power of the buyers on the other hand is high in the marketing environment as the hotel rooms are required in bulk during the holidays and certain occasions all over the country (Ratnayaka, Kumara, and Silva, 2020). The threat of the substitutes in the tourism industry is low as most of the companies cannot provide satisfactory services to the customers in the marketing environment. All these factors denote that there is not too much pressure on the company to achieve its competitive advantage or desired profit margins.
SWOT Analysis of Oak Tree Inn
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Strengths
1. Huge base of skillful workers
2. Top level management is implemented in the internal structure of the company
3. The feedback channels are efficient to maintain the loyalty of the customers
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Weaknesses
1. Poor decision making process of the company (Järvi et al., 2020)
2. The extra pressure leads to poor retention of the staff members
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Opportunities
1. The vacation trends leads an increase in the profit margin of the company
2. Expansion in the emerging economies can be helpful for the company (Järvi et al., 2020)
3. The planned developments of the interiors and the application of the green services can be helpful for the company to enhance its sustainability
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Threats
1. High competition in the marketing environment
2. New companies can lower the brand image of the company (Paek et al., 2021)
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Table 1: SWOT Analysis of Oak Tree Inn
(Source: Created by the Learner)
The opportunities and threats of the company determined from the above table shows that the managers should enhance the strategic planning through which it will be able to lower the competitiveness for the long term.
Two potential strategic options (growth options) from your SWOT analysis
In order to enhance the potential capability of the company in the marketing world and to address the constantly changing needs of the customers, the managers can implement new strategies such as recruiting new staff members who are able to solve the customer demands with friendly behaviour (Ratnayaka, Kumara, and Silva, 2020). The strategies however should be planned according to the laws and regulations made by the government. In relation to this the managers of the company can also take help of the social media platforms which can help to enhance the customer reach in the marketing world.
The main strategic options of the company should revolve around training the employees so that they are able to interact with the guests appropriately even during the rush periods. This can also help the company to reduce the threats of high competition in the marketplace and can provide high flexibility in the workplace (Hu, and Yang, 2020). This can also help the company to generate valuable alliances with the stakeholders and can provide long term opportunity of an increase in the rate of return on the investment.
Apart from this, the managers of the company can also innovate new services as per the changing trends. For example, the managers can provide free lounging areas for the customers who are purchasing the hotel rooms (Hur, and Jang, 2019). This can also help the managers to enhance the performance of the staff members and make appropriate decisions through which the loyalty of the customers can be improved. However, the gap created between the generation and the process of implementation of the strategy can also be resolved through the innovation of new services as the operations of the company can be enhanced (Hu, and Yang, 2020). On the other hand, the development of the company in future can be improved as the managers will be able to transfer the useful information to the staff members.
SAFe Analysis on Two potential strategic options
The first option of increasing the staff base is quite suitable as it addresses most of the opportunities by providing high performance as well as effective quality of services and it is also useful to maintain the competitive edge in the marketing world (Hur, and Jang, 2019). In terms of the acceptability, this option also meets the expectation of the stakeholders as the training of the staff members can help them to understand their roles and responsibilities in the workplace efficiently. The level of risks is also acceptable in this case as it can promote the profit margin of the company by attracting a large base of customers. The strategy can however have a little difficulty on the basis of financing as the company as the capital cost of the company is low and the required resources means the existing staff members are also unable to interact with the new ones (Bigné, William, and Soria-Olivas, 2020).
The second option, which is the innovation of new services by the company, is the most suitable one as it not only addresses the opportunities such as expanding in the global market but also reduces the risks of waste of resources. This strategy also helps to reduce the threats of low brand image in the competitive world through which the loyalty of the existing as well as the new customer base can be increased. It is also acceptable by the stakeholders as it can help to meet their needs (Hur, and Jang, 2019). For example, innovation of new services with the help of the green methods can resolve the current requirements of the customers and can also reduce the negative effects of pollution from the social environment of the country. Lastly, the staff members will be able to incorporate the strategy with their daily activities through which it is also feasible.
Conclusion and Recommendations
From the overall study it can be concluded that the company has the capability to stay sustainable and attain the competitive advantage at the same time in the marketing world but due to the growing challenges as well as the increase in the threats of the newcomers the managers of the company have to change its strategic planning. In this case, the internal as well as the external analysis of the company shows that it has the potential to expand in the global market and to do so the manager needs to change its strategies and implement the innovation of the new services. However, in order to implement the new strategy in the internal structure of the company the directors should enhance the communication channels and should promote quality so that the rate of retention of the staff members can be increased with an increase in their commitment.
References
Bigné, E., William, E. and Soria-Olivas, E., 2020. Similarity and consistency in hotel online ratings across platforms. Journal of Travel Research, 59(4), pp.742-758.
Duric, Z. and Poto?nik Topler, J., 2021. The role of performance and environmental sustainability indicators in hotel competitiveness. Sustainability, 13(12), p.6574.
Grazzini, L., Rodrigo, P., Aiello, G. and Viglia, G., 2018. Loss or gain? The role of message framing in hotel guests’ recycling behaviour. Journal of Sustainable Tourism, 26(11), pp.1944-1966.
Hu, X.S. and Yang, Y., 2020. Determinants of consumers’ choices in hotel online searches: A comparison of consideration and booking stages. International Journal of Hospitality Management, 86, p.102370.
Hur, J.C. and Jang, S.S., 2019. Is consumer forgiveness possible? Examining rumination and distraction in hotel service failures. International journal of contemporary hospitality management, 31(4), pp.1567-1587.
Järvi, H., Keränen, J., Ritala, P. and Vilko, J., 2020. Value co-destruction in hotel services: Exploring the misalignment of cognitive scripts among customers and providers. Tourism Management, 77, p.104030.
Paek, S., Kim, J.Y., Mun, S.G. and Jun, C., 2021. In hotel REITs, are institutional investors beneficial for firm value?. Tourism Economics, 27(4), pp.820-840.
Ratnayaka, R.M., Kumara, P.S. and Silva, M.W.S.W., 2020. Impact of Organizational Citizenship Behavior on Perceived Service Quality in Hotel Industry. Journal of the University of Ruhuna, 7(1).
Xu, X., Zhang, L., Baker, T., Harrington, R.J. and Marlowe, B., 2019. Drivers of degree of sophistication in hotel revenue management decision support systems. International Journal of Hospitality Management, 79, pp.123-139.
