Strategic Growth Option

Strategic Growth Option

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Table of Contents

Introduction.................................................................................................3

Situation Audit..............................................................................................3

Issue Statement..............................................................................................5

Alternatives...................................................................................................5

SFA Evaluation Criteria......................................................................................5

Analysis of Final Three Options...........................................................................6

Recommendation.............................................................................................9

References.....................................................................................................10

Introduction

Banyan Tree Hotel Group is an influential developer and manager of high class hotels, spas and resorts in Asia Pacific. The Group owns and manages more than 30 hotels and resorts, over 80 galleries and more than 60 spas. It also has three golf courses (Banyan Tree Hotels & Resorts, 2010). As a leading player in the hospitality industry, the Group has substantial ownership interests in major hotels and resorts. In a nutshell, the Group's primary business interest is the development, management and ownership of hotels and resorts. Apart from the Group's current hotels and resorts, Banyan Tree Hotel Group has expanded its activities to Central America, Middle East, Africa and Europe (Banyan Tree Hotels & Resorts, 2010). In particular, the Group is keen on expansion in China where consumerism and acceptance of foreign products and services has been gaining momentum. The purpose of this report is to explore strategic growth options for Banyan Tree Hotel Group. The report highlights the importance of Corporate Social Responsibility to the organization's endeavor to take a leading position. It also seeks to dissect the organization's commitment to a non-organic growth strategy for 2014-15 and beyond, and the proposal for partnership received from three firms namely IMG, Village Road and GPT.

Situation Audit

The contemporary world is characterized by the interdependence of different groups in any society. Consequently, social involvement of business organizations has intensified. The contemporary business organizations appreciates the fact that they have social involvement and taking seriously their social responsibilities is critical to the successful implementation of their local, national and international business strategies. The social responsibility of a business organization is formally referred to as Corporate Social Responsibility (CSR). CSR involves an organization's social relations with and treatment of people within and outside the organization who are affected by its operations and who impacts its activities. In essence, CRS is the social implications of the decisions made by the company. From a practical point of view like the one facing Banyan Tree Hotel Group, the management of a company should seriously consider the impacts of its decisions and actions up on the wider society. In other words, the management of the Banyan Tree Hotel Group should see its CSR as a critical social responsiveness or the ability of their organization to relate its policies, activities, and operations to the company's social environment in a manner that is mutually beneficial to the company and stakeholders including, clients, employees, shareholders, suppliers and the society at large.

Owing to the increasingly competitive domestic, national, and global markets, modern business enterprises whether Business to business (B2B) or retail, small, medium or large consistently require innovative business strategies in order to expand, retain loyal clients and win new customers. As a modern business organization, the Banyan Tree Hotel Group must incorporate in its overall business strategy an aspect that can give it a cutting edge and competitive advantages in the fastest expanding hospitality industry. The non-organic strategy being pursued by the Banyan Tree Hotel Group should be all about enabling it to differentiate itself from other competitors in the competitive hospitality industry. The desire to expand into the emerging markets in the Asia Pacific and other parts of the world is critical to enabling the company position itself as a market leader. Partnerships with reliable industry players will enable the Group to penetrate targeted markets in the wider Asia Pacific.

Strengths

A creatively designed and effective marketing strategy

A strong brand

Strong leadership and relatively good financial base Weaknesses

Adverse effects of the Tsunami aftermath which swept over 20 resorts- There are still pending court battles with the Group's Insurers

Temptation to lean towards management as opposed to ownership

Opportunities

Increasing purchasing power of the Asia Pacific population

Increasing demand for high quality travel and hospitality services and products

Expanding consumer markets in Asia Pacific especially in China

Threats

An increasing taste and preference for Western products and services in markets such as China

Upsurge of Western business organizations in Asia pacific especially China which is the Company's major target for its growth strategy

Issue Statement

Strategy alternatives for a private sector player like Banyan Tree Hotel Group are more or less similar to the policy