The Shangri-La Hotel in Sydney is among many hotels managed by Shangri-La International Hotel Management Limited. Currently, the company operates over 100 luxury hotels spread across different parts of the world. The founder of the company, a Malaysian native called Robert Kuok, established the first hotel in 1971. Furthermore, the name Shangri-La comes from a fictitious novel to mean pleasant and beautiful place. The Shangri-La hotel in Sydney is a true definition of its meaning.
Strategic development of the Hotel
Shangri-La International Hotel Management Limited first started operating its Sydney hotel in July 2013. Formerly known as ANA Harbour Grand Hotel, Shangri-La hotel is currently among the best performing hotels under the hospitality industry. Situated in the Rocks district, the hotel provides a panoramic view of the Sydney Habour Bridge and Sydney Opera House (Luxury Hotel in Sydney). The hotel has hundreds of rooms, a spa, three restaurants, and a bar. In March 2005, the organization undertook a total refurbishment of the building at an estimated cost of $37 million with the aim of providing luxurious services to its customers (From 0 to 100). Consequently, this move resulted in exponential growth for the company because, in December 2006, it was ranked the best based on its revenue share index and average revenue per day. Besides, the hotel received seven awards which include the Best Luxury Accommodation, Australian Hotels Association Most Creative Marketing Campaign, and NSW Tourism Awards among others (From 0 to 100). Consequently, since its inception, the Shangri-La hotel has been performing exemplary well to meets its strategic goals.
Internal and External Environment of the Organization (SWOT Analysis)
Strengths. The organization’s selling point over the years has been its ambiance and service quality. Also, it faces some of the major monuments in Sydney, Australia, for instance, customers with a passion for opera have a chance to attend all concerts given the hotel’s proximity to the Sydney Opera Housen. Additionally, the service quality provided by the hotel meets all international standards of quality because it aims to attract local and foreign tourists. Moreover, the hotel’s business philosophy emanates from core Asian values, such as respect, courtesy, selflessness, humility, sincerity, and helpfulness. Such ethics ensure that customers receive exceptional care during vacations. Also, the organization has customer a loyalty program called Golden Circle where frequent visitors earn points for each visit. Thus, the customers can redeem earned points for free stays within the hotel, up-gradation of rooms, and provision luxury tailored meals. Effective brand communication strategy is also a vital strength within the organization because it uses emotional appeals to lure clients as opposed to the use of amenities. Therefore, given the hotel’s location and strategic selling points, the organization will achieve its set goals.
Weaknesses. The hotel has a very expensive taste and running a hotel of that nature incurs more expenses. Being a high-end facility, the management has to ensure that all the amenities are readily available for the clients at all times and this increases the overhead costs. Furthermore, the cuisine provided in the hotel must meet the clients’ taste; therefore, the organization has to outsource most of its items. Another big challenge for the hotel is the staffing level. The management of the firm expects all employees to work the same way as workers in the Asian Shangri-La hotels despite the cultural backgrounds. Consequently, employees feel overworked given that other chains employ more workers compared to Australia.
Opportunities. The trends in the hospitality industry are dynamic and the customers have become very specific with what they want. Furthermore, customers are willing to pay extra money for value-added services. As such, the use of social media has become a trendy and integral part of any organization. It is customer-driven and creates a platform where clients communicate with the management freely (Ryan, 2017). Likewise, the organization builds on customer engagement and brand awareness. Therefore, the Shangri-La Hotel in Sydney can accelerate the use of media platforms like Instagram, Facebook, Pinterest, and Twitter among others.
Threats. Competition remains the biggest threat to the growth of the company. Shangri-La faces serious competition from the Four Seasons, Sheraton, Intercontinental and Westin hotels. The issue of culture is another threat faced by the organization. The hotel’s core values come from the Asian culture; therefore, teaching these values to predominantly Australian staff can be a challenge. As such, the organization has to find a balance between the two cultures.
Since its inception in 2003, the Shangri-La hotel continues to be among the best hotels in Australia. Its location is strategic in that it is home to some of Australia’s monumental buildings. The strengths of the organization include excellent customer service quality, strong philosophical values, good ambiance, customer loyalty programs, and an effective brand communication strategy. However, the organization also has some weaknesses which include high management costs and difficulties in staffing levels.
The Shangri-La hotel in Sydney ranks among the best hotels in Australia given its business strategies. However, it needs to tap into the opportunities presented by the ever-changing trends in the hospitality industry. For instance, the management team needs to strike a balance between the Australian and Asian cultures so that all employees can feel comfortable working in the same environment (Yu, 2002). Furthermore, this will attract international clients who may want to experience Australian culture. Another way the organization can combine both cultures is by exhibiting paintings or drawings of famous Australian artists on the walls of the hotels. As such, local and international tourists will experience the culture of both countries. Also, the firm needs to accelerate the use of social media in its marketing campaigns. The accounts should be active at all times and provide timely response to questions posed by clients. Such implementations will provide a strategic competitive edge for the organization (Hitt, 2017). The organization has some of the best strategies in the world but improving adjusting them will increase the profit margins.
Furthermore, the use of Asian values in the business creates sustainable competitive advantage from its core competitors such as the Four Seasons hotel. As such, competitiveness ensures sustainable development for the firm (Rogers, 2012). Furthermore, such strategies make it difficult for other firms to copy and that is why the Shangri-La hotel is leading in its operations. For the company to increase its profit margins and growth opportunities it needs to incorporate the Blue Oceans Strategy which aims to establish new uncontested market space (Kim, 2015). As such, the organization needs to advance the use of technology to attract a broader client base. Moreover, the Blue Ocean Strategy does not require benchmarking against the leading competitors, but instead, it focuses on creating a new experience for its clients (Kim, 2015). Given that fact that customers are willing to pay extra for value addition, the hotel can capitalize on this to create greater values for the customers (Parniangtong, 2018). Therefore, the hotel should make its competitors irrelevant and focus more on the clients.
Staffing level which is another challenge for the facility must be addressed by creating flexible work schedules for the employees and hiring more professional. Indeed, employees are an integral part of an organization and keeping them motivated improves overall performance (Stack, 2013). Therefore, the management team needs to revise its leadership style to make sure that communication travels from top to bottom and vice versa (Booher, 2017). Additionally, the company needs to restructure the business functions and hire more employees like the other oversees hotels operating under Shangri-La Hotels Limited. Human Resources are crucial to any firm; hence, the need for proper management and leadership skills.
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