Strategic Management

Internal and External Business Environment

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Introduction to Strategic Management

The hospitality industry in the world is growing exponentially and thus the Middle East is the best place for flourishing the hotel industry. Radisson Blu UAE is undertaken which creates iconic buildings with great individuals invoking tourists to use the services and also offering  holistic hospitality experience. Company operates more than 230 hotels worldwide with another 51 projects under development (Cravens, 2010). Radisson Blu is a first class full service provider and assists 100% guest satisfaction guarantee.

Furthermore, company employs over 17,000 people across the UAE in the business. The company offers services like catering, cleaning and a variety of soft services such as manpower, messenger and other facility management related requirements. Moreover, the business provides varied services to numerous clients across the Middle East. These involves food service, soft service and technical services. Food service includes banqueting and hospitality, retail food outlets and tea  services. While, soft services include office cleaning, security, laundry etc. On the other hand, technical services include electrical maintenance, plumbing, pest control and many more (Doole and Lowe, 2007).

1. ORGANIZATION AND ITS OBJECTIVES

The organization undertaken is Radisson Blu Hotel which has its branches all over the world. Hotel is also located in Middle East which invites its guests to enjoy a slice of Gulf Coast paradise. Business provides thrilling visits to the Formula 1 racetrack and Ferrari World theme park or beautiful Yas Links golf course. It serves delicious meals, provides playground and swimming pool to attract clients. There are various facilities that includes a steam room and state-of-the-art fitness room which attract people to book their rooms in such luxurious hotels. 

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Organization's objectives is to render special hospitality service from other competitors (Percy, 2008). Being a hospitable business is all about delivering the guests an undivided attention and when guests visit the hotel, the manager, waiter, receptionist and every one plays a vital role in delivering a memorable guest experience.

The mission of the company is  providing a way of life that guides us to meet any challenge and also identify the opportunities. Business aims to provide excellent services whether the guests are from any part of the world. Furthermore, the company aims to overview the expansion of hotels of the company that assists in managing a number of hotels in the cities across the globe and attain high revenues. The aims and objectives towards which company is committed includes well being of the planet and also simply striving to improve the overall ecological balance in company.   Further, the carbon emission without compromising on the guest's experience and thus satisfying the clients through providing satisfaction services (Proctor, 2014). 

The commitments of hotel include responsible and restorative business management that involves CSR activities in order to enhance the business practices  and provides benefit to people. Food security is to create and build healthy food system which is based on the understanding that it is significant for hotel to provide healthy food to guests. Also, responsible water management helps in improving the water footprint which impacts the emphasis on production, usage and consumption in all the areas of management and operations. Business also aims to enhance the zero waste management so that they can efficiently improve the management of waste through emphasizing on recycling and re manufacturing (Schnaars, 2000).

The ownership structure of the company states that Carlson which is a privately held global hospitality and travel company plus the majority shareholder of the Rezidor Hotel Group together have more than 90 hotels in different countries and 240 hotels project under development. However, Rezidor signed the fist Master Franchise Agreement with Carlson for operations and development of Radisson brand in Europe, Middle East and Africa. Further, Carlson become the largest shareholder and also they launched strategic partnership in order to enhance the revenue (Wood and Young, 2000).  

The internal mechanism control the organization through setting foremost sets of control for a corporation to attain goals. It monitors and controls the progress and activities of hotel and also takes corrective action at the time when business requires attention. It is essential for business to serve the internal objectives as well as internal stakeholders that includes employees, managers and owners. However, the objective is to provide smooth operations and develop effective performance management system so that hotel can deliver the best experience and satisfaction to guests. While, the external mechanism is controlled by those who are outside an organization and also serve the objectives of business in order to improve the financial performance (Johansen, 2012). External mechanisms are often imposed on organizations by external stakeholders in the forms of regulatory guidelines. Furthermore, any forms of external control on business influences the hotel to improve the company's performance and thus attain desired goals.

2. SOURCES OF COST AND DIFFERENTIATION ADVANTAGE

There are various sources of cost and differentiation advantage that provides choice of strategy on the analysis of the competitive situation, strengths, weaknesses and opportunities as they relate to those of competitors. Moreover, there cannot be two business same strategies but there can be few generic types to identify the common strategic characteristics. Redisson should adopt effective sustainable competitor advantage which is related to the amount of value a firm that creates for its clients.the Michael Porter analysis has been done that assists firms creating superior value for customers either by offering them a preferred product or service at somewhat higher price or by offering them a basic product or service to retain them in business for long run. It through incurring additional costs firm can enhance the business and thus creates superior value for clients (Leatherman and Leatherman, 2008). However, the cost and differentiation strategy advantage that helps the hotel in distinguishing the products or services on the basis of varied attribute such as technology, design, location, skill and experience of employees. Furthermore, the second strategy is low cost leadership which is based on efficient cost production. For instance, Redisson is trying to attain a competitive advanatge by producing at the lowest cost through seeking some combination of efficiency and attains desired goals. 

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Thus, the hotel adopts low cost leadership differentiation strategy that helps in attracting customers through all over the globe in the hospitality industry. An example of differentiation focus strategy through providing differentiated products and services so that hotel can attain desired results. However, it is essential for business to be associated with a particular strategy and thus hotel operates various brands simultaneously through its different brands and business units. Further, Redisson owns prestige brand and uses differentiation strategy by offering outstanding facilities and superior services within the culture of hotel. Differentiation strategy assist business to provide different price point that is offered by full service comfort and value to the market that offers a focused strategy in a hotel experience (Lussier and Achua, 2012). The strategy adopted by Redisson is probably best described as low cost leadership because of its broad appeal to the mass travelling to Middle East and thus business emphasis on limited services such as cleanliness, timelessness and also cost efficiency.  However, cost and differentiation strategy focuses on offering products or services that customers perceive to be different and better than the offerings of the competition. It is effective strategy which is popular in the hospitality industry and primarily focuses on hospitality services through creating tremendous opportunities for differentiation.

There are various competitors of Redisson Blu in UAE such as Jumeirah Beach Hotel, JW Marriott, Raffles Hotel and Grand Hyatt etc. Among all these hotels Redisson Blu is at strategic position so that it can attract varied clients to use the services and enhance profitability. Different business provides varied services so that they can fulfil the needs of customers and assist in positioning the business effectively and efficiently. The strategies adopted by businesses are diverse and thus it influences the firm to provide better services to people and thus increase the clientele base. Cited firm adopts a differentiation strategy so that they can deliver distinct services as offered by other competitors in hospitality industry (Crane, 2000).

3. VALUE CHAIN ANALYSIS

The Value Chain Analysis is a set of activities that an organization carries out to create value for its clients. However, Porter proposed a general purpose value chain that hotel can use to examine all of their activities and also assist how they are connected. Thus, the way in which value chain activities are performed that determines costs and affects profits. It is essential for firm to evaluate that in order to create value and change in business inputs into outputs in such way they have a greater value than the original cost of creating those outputs. Thus, hospitality companies offer policies to customers that provides customer friendly services and distributes them to the mass audience. However, the value that's created and captured by a company is profit margin. However, the more value an organization creates the more profits it incurs (Fahy and Smithee,2000). And when the business provides more value to your customers it builds competitive advantage. Understanding that how company creates value and also looks forward for different ways to add more value in order to develop competitive advantage.

The elements in Porters Value Chain focuses on systems and how inputs are changed into outputs as purchased by customers. For instance, Radisson Blu provides effective services to clients in order to attract them and thus attain high profits. The primary activities that relate directly to the physical creation, sale, maintenance and support of a product or service. It includes inbound logistics these are all the processes that relates to receiving, storing and distributing the inputs internally. The operations that includes transformation activities that change inputs into outputs like services and products that are sold directly to the consumers (Flint, 2004). It creates value for business. The outbound logistics are those activities that deliver the product or service to the customers. Furthermore, the marketing and sales are the processes that persuades customers to purchase the services from Raddison instead of other competitors in UAE. However, it provides benefits that is offered by company to communicate them through different sources of value and attain desired goals.

The support activities helps in supporting the primary functions that assist in supporting the secondary activities in order to attain desired goals. For instance, the procurement that supports operations with certain activities that helps in supporting the marketing and sales with other activities. The procurement or purchasing activities helps the business to receive the resources which the hotel requires to operate the business. It involves the customers to receive the best prices and services as there are several competitors available in the hospitality industry. While, the human resource management should be effectively recruited by company so that they can entertain the guests well and also helps in retaining the skilled employees in business for long run. Human resources are significant source of value which helps in creating advantage for businesses through developing good HR practices. The technological development activities that relates to managing and processing information and also assists in protecting the company's knowledge base in order to attain desired goals (Frankwick and Ward, 2005). Furthermore, the infrastructure helps the hotel to support and allows customers to attract. Thus, all these support activities helps the firm to maintain effective value chain sources and creates competitive advantage in industry.

4. VIRO ANALYSIS

VIRO analysis assist in utilising the sources of competitive advantage in order to determine whether they are strategic resources in hotel. It is an analytical technique that helps in considering the resources that helps in evaluating the dimensions for the hotel as well as for its competitors. VRIO includes Value, Rare, Imitability  and Organization. The VRIO analysis adopts effective sources of competitive advantage in order to determine the strategic resources and helps the hotel to attain desired goals (Vorhies and Morgan, 2003). The VRIO framework is a tool that helps business to analyse the organizations internal resources and capabilities in order to discover a effective source that helps the firm to attain a competitive advantage. However, the VRIO analysis considers the following elements of resources which are as follows- 

Value- It states that firm is able to exploit an opportunity or neutralize an external threat with the available resources. The resources available with business adds value to firm through enabling the hotel to exploit opportunities like developing effective customer relationship management and thus defend against threats. For instance, business can increase differentiation through decreasing the price of the products or services so that clients can be attracted more towards the business (Snyman and Kruger, 2004).

Rare- It involves the resources that can only be acquired by few hotel in UAE and thus it is considered rare. Thus, the companies who have the rare resources like human skills that affects the business in gaining more customer base assist in attaining desired results. Also, the firm can use effective resources in order to implement the similar strategies and thus organization to attain superior performance (French, 2009).

Imitate- However, it is costly for business to imitate the resources which are not available with the business and thus they should purchase the substitute of it at reasonable price. It helps in providing the services at decreased price and satisfy more number of customers. Radisson is required to purchase the resources which are not available with it or discover the alternative of it so that they can effectively satisfy the customers wants (Clayton, 2014).

Organization- However, it provides value to business as it confers value to organize and capture the value from them. Therefore, business should organize its management systems, policies and culture so that they can attain sustain competitive advantage in firm.

Thus, through this framework it helps in improving the performance of business through using the potential resources and thus decision making should be done in order to attain advantage about the internal and external process in business. However, for financial resources there are various financial indicators which evaluates the financial condition or performance of the business from different perspectives (Kader, 2012). Thus, the development of these resources assist in enhancing the corporate governance mechanisms so that it helps in controlling the internal and external factors in hotel and attain desired results. However, corporate governance identifies that the rules and procedures for making decisions to attract clients. It also helps in monitoring the actions, policies and decisions of corporations and their agents. Moreover, it also affects the attempts to align the interests stakeholders.

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Thus, the VIRO analysis helps in developing the competitive advantage and determine the strategic resources for business in order to attain desired results. This framework helps Radisson to analyse the resources available and assist in developing the resources with the help of corporate mechanism. Corporate governance mechanism assists in developing effective relationship with stakeholders so that best results can be attained (Lussier and Achua, 2012).

5. RECOMMENDATIONS 

Through developing the strategic resources in business like developing the technological advancement helps the firm to gain competitive advantage of the hotel. It also assists in enhancing the customer value through developing effective resources and employ it in business that assists in attaining opportunities for hotel in UAE. Business should develop effective resources that assist in adopting the corporate governance process and also enhance the competitiveness of business among all the hospitality firms because while staying in the same strategic group firm is able to attain desired goals. The development of strategic resources like manpower also helps the business to attain desired results through employing effective resources in hotel and attracts varied clients. The corporate governance process helps business to increase the competitiveness of Radisson Blu while staying within the same strategic group of hotel in Middle East (Cravens, 2010). It develops effective target market and thus provides them cost leadership strategy to attract and enhance the customer base.

Furthermore, business should create effective competitive advantage consistent with the organizations current competitive advantages. Thus, business is required to develop effective services like adopting effective technological advancements so that business can create competitive advantage in order to attain desired results. Moreover, hotel provides effective services to its clients so that they can create consistent competitive advantage and attract various customers towards business. Corporate governance process assists firm to enhance the competitiveness in hotel and also develop competitive advantage through attracting wide range of customer from all around the globe. Therefore, business should increase the use of strategic resources so that hotel can employ competitive resources in business and give competition to other rivals (Percy, 2008). 

Moreover, Radisson should adopt effective strategic resources in business and thus increase the competitiveness of business. Also, adopting effective corporate strategy helps business to  identify the resources and achieve competitive advantage so that goals can be achieved. Through developing competitive advantage in business it attracts various clients to use the services and products offered by firm. Furthermore, through developing the technological advancement in business it assists in increasing the clients base and thus providing effective services to them in order to improve the performance of company (Schnaars, 2000).

The corporate governance process assists hotel to increase the competitiveness of the business through staying in the same strategic group. It also helps business to train their employees by providing specific training and development programs which are not provided by other hotel within UAE. It should also provide effective services to guests at low cost strategy and thus attract more customers in business (Proctor, 2014). Thus, business is required to develop effective competitive advantage so that they can develop competitiveness among hospitality industry. Also, through enhancing the business activities, hotel can develop effective strategies and thus attract more number of clients.

CONCLUSION 

From the above report it can be concluded that strategic management is the process that helps in developing both internal and external environment of firm in order to attain desired results. Furthermore, Radisson Blu in UAE is required to develop effective objectives so that it can develop competitive advantage and attain desired goals. The effective cost and differentiation strategy adopted by firm assist them to attract varied customers and enhance the products and services so that competitive goals can be attained. Also, the VRIO analysis framework helps hotel to develop effective resources and use it so that effective results can be attained.

REFERENCES

  • Cravens, P., 2010. Strategic Marketin, 8E. TATA MC GREW HILL.
  • Doole, I. and Lowe, R., 2007. Strategic Marketing Decisions 2007-2008. ROUTLEDGE.
  • Johansen, R., 2012. Leaders Make the Future: Ten New Leadership Skills for an Uncertain World. 2nd ed. Berrett-Koehler Publishers.
  • Leatherman, W. R. and Leatherman, D., 2008. Quality Leadership Skills: Standards of Leadership Behavior. Human Resource Development.
  • Lussier, R. and Achua, C., 2012. Leadership: Theory, Application, & Skill Development. 5th ed. Cengage Learning.
  • Percy, L., 2008. Strategic Integrated Marketing Communication: Theory and Practice. ROUTLEDGE.
  • Proctor, T., 2014. Strategic Marketing: An Introduction. ROUTLEDGE.
  • Schnaars, S. P., 2000. Marketing Strategy. SIMON AND SCHUSTER.
  • Wood, J. E. and Young, V. L., 2000. Strategic Marketing for Libraries: A Handbook. GREENWOOD PUBLISHING.
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