A Business Strategy Reflection and Evaluation
Table of Content
Section 1: Status of the Strategic Report 3
Things that could be Improved. 5
Section 2: Changes on the Strategy. 6
Income Generation Implications. 10
Section 3: International Market Development Strategy. 11
Implementation of international strategy. 14
Availability of a Similar Target Market 15
Developing a strategic plan is the most critical process for the success of any business. While advancing the strategic plan for the business, it is critical that a thorough analysis of the internal and external business environment is considered. Such was the case when the group was developing the strategic plan for Butlin’s, a tourist resort based in the United Kingdom. Following the realization of key factors affecting the tourist industry in the country, the rationale for a new strategic direction was realized. Thus, the group was interested in a strategic analysis of the business with the objective of developing a new strategy that would propel the company towards success in the future. However, the strategy established can only succeed if the most appropriate market for the business is identified, also following thorough analysis of the market environment. Therefore, such a concept forms the rationale the discussion, which begins with the identification of what, went right, what could be improved in the last strategic report, the major changes necessary, and finally an identification of the most appropriate international market for the brand.
Section 1: Status of the Strategic Report
Before performing the strategic analysis and coming up with a recommendation of the most appropriate tactic for the business, it was necessary to establish the current environment. Such initiative would inform the need for change, something that was successfully done. The report includes the factors underlying the need to change the current strategy of the company, including the realisation that the current business environment in the country is changing due to increase in life expectancy and the transforming structures of families. In addition, such changes also initiate the need of the people and families to be dynamic, a move that trickles down to the business, which is expected to serve the needs of such individuals and groups. Identification of these needs went well, informing the reasons why the group deemed it right to come up with a new strategic direction for the business such that it continued to operate profitably and productively.
Adequate information was obtained during the analysis of the external environment of the company, that is, the factors inherent in the country where it has business operations and such other aspects that affect the operations of the business. A PESTEL analysis provided the critical information necessary to establish these factors and the way they affect the business towards the end of coming up with major changes in how the company interacts with its external environment. The political, economic, socio-cultural, environmental, legal, and competition factors are adequately discussed. The report also includes information on how each of these factors affects the business operating within the tourist sector in the United Kingdom (Ernst & Young, 2013). Indeed, such information is critical to decision making by the management of the company as any changes within the environment has critical impact on the operations of the business. Therefore, it is imperative that the underlying factors are identified and discussed in details.
Besides the external environment that affects the operations of the business, an internal analysis is critical since the productivity of the business depends on the interplay of the internal and external factors. Such factors identified as resources & core competencies, organizational performance, and product/service evaluation, underlies the critical standing of the business as at the present with the aim of making critical changes, if need be, to improve the operations of the business. Besides the analysis of these three factors, the group carried out a thorough SWOT and TOWS analysis, which further shed light on the interaction between the business and its environment. With such information, it would show the things about the company that need to remain, those that needed to be improved to make the business stronger and those that needed to change completely. The thorough analysis was critical in the efforts to come up with strategic changes in the business.
The problem analysis, informing the strategic solution was well formulated from the onset. However, important information was not considered, or rather, the group ignored a very critical market segment that should have been included in the analysis. The group assumed that the resort is only meant to cater for the needs of families in terms of seeking tourist destinations. In fact, such perspective ignored the input the current business organizations are making in such businesses. Companies are always seeking out destinations for their business activities such as team building among others (Lin & Wu, 2013). The resort could play an important role as a destination for such activities based on its location and the facilities it offers. Thus, such a target population should have been considered in making the strategic changes in the business to assist the organization to increase the clientele. Generally, it would be better for the company if a wider client base were considered in making the strategic plans.
It is critical that the mission and objectives of the company are included in the report. These are imperative ingredient for every company since they provide necessary information to the audience as to what the business is all about and what it seeks to achieve. Thus, in writing such a report, it would be critical for the reader to know the business in details before delving further into the strategic direction of the company. From such a point of view, it would have been better for the vision, mission and objectives of the business to be written as early as possible in the report, such that the reader understands the business before further analysis. Besides these three, it would also be better for the writers to include a core values section for the reader to become better versed with the business. In essence, it is through understanding the status of the business that a future can be planned.
Section 2: Changes on the Strategy
In this section, various areas require to be changed to make the strategy better and more effective in achieving success for the company. The proposed strategy is dubbed a national strategy to be used to better the operations of the company. However, it will be better for the company to move its operations to an international market, which means that its strategy should be global as opposed to national. Globalization is a reality that companies should take advantage of in expanding their operations (Warner, 2010). Thus, the company should change the proposed strategy such that the one devised takes into consideration the potential of the international market, targeting individuals, families, and other businesses. Countries have opened up their boundaries to business operations, an element that should be taken into consideration in coming up with an international business strategy. That kind of a strategy assumed a specific approach used by the business seeking to expand the operations in the international market.
It is not enough that the company should seek to expand its sources of income by targeting more households targeted in the marketing process. Clearly, competition in the market is a reality that should be considered, which means that a narrow strategy cannot work on improving the productivity and profitability of the company (Eversham, 2016). The proposed strategy seeks to target more diversity in terms of the families and households targeted by the company, both nationally and internationally. However, increasing the focus to children and youth in families and households is not enough. It is time for a change to be made such that the company targets other businesses to expand the sources of income. Businesses are always seeking destinations for their human resources for different activities. Such is another area of focus that the company can benefit from as long as such strategic considerations are made. As the facilities expand, it is necessary to ensure that the target market is also expanding.
Targeting the new breed of super grandparents is a good strategic option for the company, but it is not sufficient. The role of grandparents has changed in the recent past (Butlins, 2012), such is a reality; however, this is not an adequate target population for the company, given the increase in competition both in the country and internationally. The proposed strategy for the company has a very narrow focus regarding the clientele. Such an approach will not ensure that the business addresses its competition. There are major opportunities for the company nationally and internationally. It is indispensable that the company targets the increasing clientele internationally and also takes advantage of technology in moving further away from targeting households and families. Thus, to begin with, the strategy should be changed such that it targets the business clientele in addition to the families and households. Such strategic consideration will widen the scope of the company regarding the target customers.
For Butlin’s, it is critical for the management to move the operations past the comfort zone, which is something the proposed strategy advocates. Therefore, to ensure competitiveness and productivity, the company should be prepared to address the economic and non-economic challenges inherent in the international business environment (Bowie & Buttle, 2013). The strategy should be created in such a way that the international business environment is adequately assessed and addressed. Thus, it is necessary that the proposed strategy should consider the environment in other countries outside the United Kingdom. Therefore, it is critical that the company seeks to bring in clients from outside the country and even take operations outside to those clients who are unable to travel to the United Kingdom. In fact, such a move will be achieved by considering transferring the operations to other environments where they realize potential for the operations. The realistic threats and challenges, as well as opportunities in the potential markets, should be adequately understood.
Alteration in the strategy suggests that there will be major changes in the marketing process for the company. For a national strategy, the marketing process is not highly complex. However, where the company moves further to target an international market, the marketing process will become more complicated. From the analysis of the business environment, it becomes evident that technology is one of the critical factors. Most of the countries in which the company can invest its operations have developed technologically. Such creates a major opportunity for the company in that it can be used in reaching as many of the target clients as possible (Bowie & Buttle, 2013). The media, including the new media, will provide the company with an important marketing channel for the brand. Thus, the most important step for the company is to move away from the current marketing strategies to adopt greater use of technology.
The brand, Butlin’s, is a well-known brand in the United Kingdom, having been in existence since the 1930s (Butlin’s, 2012). Thus, in the country, the efforts to market the brand might not be as critical as would be the case when the brand moves to another market. It is from such a perspective that a change in the strategy would necessitate major changes in the branding of the business. The manner in which the brand is marketed in the country will not be the same as how it will be marketed to an international audience. The management of the company will be required to come up with changes that will reflect the demand for tourist destinations in the international market. It should be noted that even the target companies have their brands, which means that a lot of effort will be necessary to create a demand for the brand as opposed to those offered by competitors.
The aspects of organizing and resourcing are critical in the implementation of a strategic plan. Necessary resources are in the form of people, technology, and facilities among others. Indeed, to implement the current strategy, human resources will be required since people are the main implementers of change. There will be a sales and marketing team, which will be responsible for selling the brand to the target audience. Technology is another resource that is critical, whether the strategy is national or international (Martin, 2013). Facilities will be critical, especially in the event that the strategy moves the operations of the company to another country. However, even the proposed strategy involves expansion of the current facilities to accommodate the additional targeted clients. Such investment will be done for the successful implementation of the proposed national strategy. Hence, to achieve success, the management should be prepared to invest, but in a project that will have returns.
The national strategy will involve a great deal of resources, but not as much as where the strategy becomes international in nature. Regarding the human resources, the company will have to involve both local and overseas workers to implement the initiative successfully. For instance, in case the operations move to a country like Malaysia, local workers from the host country will form an important part of the human resources. Thus, the company will have to invest in more workers to achieve the objectives of the international strategy. Technology is another resource that will be greatly used in implementing the international strategy (Martin, 2013). Marketing, for instance, will only be effective if the company invests in new and modern technology. The company will have to use complex information and communication systems to reach as many clients as possible, locally and internationally (Berthon et al., 2012). Conventional media will not be adequate necessitating the need to incorporate new media, including the Internet and social media.
Income Generation Implications
The proposed strategy looks at the potential for increasing the income of the company by targeting more households and families. In fact, such inventiveness would be achieved in an event where the company increases the products and services offered to the clients as a way of increasing the revenue for the company. One of the ways that can be achieved is increasing the accommodation to cater for an increase in the number of clients (Bardis, 2012). Building larger accommodations in Butlin’s hotels and resorts for the potential increase of the clientele is proposed. The goal would be achieved by constructing large spacious pent-house-style apartments. The facilities would work in accommodating more people, hence, provide more income for the company. The strategic move would require a great deal of investment for the management of the company (Srivastava & Maitra, 2016). However, the proposed strategy is not adequate in taking advantage of the current potential in the tourist industry.
An international strategy would more appropriate for the company to achieve its strategic objectives. Hence, it means that the company will be targeting the proposed clients, in addition to business clients, both nationally and internationally (Okumus, Altinay & Chathoth, 2010). As a result, the current facilities will not be adequate to cater for the increased demand and to provide the projected growth in revenue. Thus, Butlin’s will have to invest in more facilities in the country and in another market where there is greatest potential. The proposed changes in the facilities will work, but there will be a need for more approaches. After identifying the international market to move the operations, the management will have to work towards getting adequate accommodations for the increased clientele. The facilities will be developed in the United Kingdom and in the other target country, which will cost the company a great deal of investment. However, given the reality that the move is aimed at increasing the revenue for the company, there will be a return on investment.
Section 3: International Market Development Strategy
Following a comparative analysis of three countries, it is evident that the most suitable country for the business to expand to is Norway. The external business environment of the country is more favourable compared to those of the other two countries (see Appendix 1). Clearly, the tourism in the international market strategy is characterized through political, economic, legal, environmental and technological factors. Such informs the conditions that exist in the economy as well as trends in the aspects of cultures, business behaviour, legal requirements of international market development strategy and other factors closely linked to the entire business cycle in the international tourism sector. A scrutiny of the macro environment characteristics allows the strategic influence of performance depending on the consumer culture and the overall economic conditions in various countries.
Strategic decision-making ensures that the company will venture into a business environment in which it is most likely to operate profitably and productively. From the following PESTLE analysis of Norway, there is no doubt that the country has an environment that is suitable for the business (see appendix for a summary PESTEL analysis).
Norway’s political environment is anticipated to remain amongst the best across the world (Brendemo, 2015). Additionally, the Norwegian Progress Party has attracted international attention since it won the elections last year. Nonetheless, Norway has a stable and predictable political environment that is conducive for successful business operations with more freedom. The Norwegian overall regulatory structure is competitive and transparent. Moreover, in Norway, there are not many government barriers to the international trade as well as investment, although investment in certain sectors might be screened. Therefore, the country’s sound regulatory environment can encourage entrepreneurial activity as well as innovation.
Norway macroeconomic environment, as well as financing opportunities, is projected to stay the same. In addition, the country’s real GDP growth is expected to increase from 0.8% recorded in 2013 up to an average per annum of about 2.5% a year between 2014 and 2015. Norway enjoys the second highest per-capita GDP and the fourth highest per-capita GDP (PPP) across the world. However, this higher per capita GDP also comes with higher costs of living than in other countries. However, their relatively small population enhances the higher cost of living (Brendemo, 2015). In addition, the country’s inflation rate dropped to 0.7% in 2012 from 1.3% in 2011, while the unemployment rate also declined by 0.1% down to 3.2% in 2012 from 3.3% in 2011. In essence, the Butlin’ operations will be be enhanced by the country economic environment, which is favourable for international firms.
The diversity regarding lifestyles, culture, and attitude that characterise the Norwegian market will most certainly affect the internationalization of Butlin’s tourism business in Norway (Brendemo, 2015). The wide variety of cultural practices and with a population that cuts across various social classes inform the thinking that Norway as a potential market for Butlin’s is composite of significant customer base of affluent and the middle-class client base that will afford the products of the company.
Technological environment, new inventions, changes in information and elements of e-commerce in the Norwegian market is likely to lead Butlin’s to automate its operations. As a result, the company will develop social media platforms to advertise, sell and carry out market survey (Brendemo, 2015). The resonance of these strategies exists within the platform of improving the quality of services offered and thus gain a competitive advantage.
In Norway, there is a critical need to comply with environmental safety measure through waste disposal, green technology, and corporate social responsibility. The regulations set by environment regimes have shaped the trajectory through which strategies have designed waste disposal control measures of the company. The Norwegian government expects Butlin’s to comply with the measures of reducing waste generation, cut on its resource consumption to minimize on the possibility of product radiation, environmental emissions and disposal (Brendemo, 2015).
Norway is signatory to international trade regulations and national employment rules. Therefore, being a participant of a global rule will promote the international market environment of Butlin thereby rethinking its trading patterns. The company will most likely comply with the existing legal requirement. Norway tax compliance measures require that every international company engage in consumer protections (Brendemo, 2015). As a result, the business of Butlin’s must be in line with the safety and health regulations to ensure the health of its customers is assured. Laws of employment govern the working conditions of the employees, and the terms of employment between the employer and the employees has to be adhered to by the company.
Implementation of International Strategy
Marketing to the international audience is very different from marketing locally. Thus, there will be major changes in the marketing for the company such that it creates awareness in Norway and other international markets, the company will be targeting. There will be increased use of technology in marketing, which is not challenging since technologically, Norway is a highly developed market. From the analysis, the country is among the most innovative countries in the world, a reality that the firm can take advantage of in its marketing. Technology provides a major opportunity for the company in that it can be used in reaching as many of the target clients as possible (Bowie & Buttle, 2013). Use of technology will diversify the company operation and ensure that many clients are reached.
The brand, as known in the United Kingdom will have to undergo major changes to match the requirements of the new market. The brand will no longer be domestic from the sense of its being marketed to families in the UK, but will assume an international perspective. The new brand will go beyond targeting families to targeting businesses from all over the world. The management will have to change the brand such that it matches the needs of the international market, and such that it becomes more competitive (Martin, 2013). The new brand will face increased competition from other tourist companies in Norway and other countries internationally. Thus, it will have to be designed in such a way that it effectively competes with others.
Depending on the internationalisation strategy, the company will have to invest in new resources. The management can choose to build new resorts in Norway or use an existing company, through merger or acquisition. Whichever the choice, the company will have to create new facilities that reflect the brand. The company will have to use technology in marketing and other business processes (Martin, 2013). Most important, the company will have to recruit new workers, from UK, Norway and other countries around the world, to take advantage of diversity in its operations. Management of the human resource will determine the success or failure of the company in the new business environment.
The target market for the company is international in nature, suggesting the importance of setting up the operations in an environment where the needs of this market will be effectively met. In Norway, a majority of the target customers will be reached. Besides Norway, there are three other countries where the company could establish its operations, Kenya and Malaysia. Kenya is an African country while Malaysia is in Southeast Asia. The analysis is founded on the need to identify how the company would operate in the markets in the three different regions.
Availability of a Similar Target Market
Due to the economic development in Asia and the potential in Africa, there has been an increase in the number of companies that are moving their operations to those regions. Such highlights the importance of establishing the company in an environment where similar companies are not crowded. In Norway, although there are similar businesses (Brendemo, 2015), they are not as many as in Asia and Africa where many multinationals have moved their operations. Additionally, the political stability of Norway makes it better suited for the business.
Competition cannot be avoided within the tourism industry given the reality that there are many companies operating the business all over the world. However, in making the decision as to which market to operate, it is necessary to look at the level of competition and ensure that the company maintains an edge in the competition. In Asia and Africa, the competition is vast. However, since the company has been operating in Europe, setting up in a similar market will allow it to have an edge on the competition by having a better understanding of the market.
From the PESTLE analysis the macroeconomic environment of Norway, as well as financing opportunities, are projected to remain the same (Brendemo, 2015). Such is a major risk for a company seeking to start its operations in the country. It is in the best interest of any business to invest in an environment where the economy is growing and developing. The lack of change means that the company might be affected regarding revenue generation and profitability.
Given the reality that the cultural environment of Norway is not so different from that of the United Kingdom, the company will not have to undergo major changes. Still, such does not suggest that no changes will be made at all. However, diversity in employment is one of the changes that are necessary to match the diversity regarding lifestyles, culture, and attitude that characterize the Norwegian market (Brendemo, 2015). Such changes are also necessary because of the diversity in the clientele that will be served. In essence, to make the change, the company will have to make the human resource more diverse by changing the human resource policy.