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Shangri La Hotel Competition and Business Analysis

Keywords: shangri la hotel swot, shangri la hotel analysis

Introduction

Shangri-La Hotel is a global school deluxe Asian hotel string which provides services and places for business and leisure travelers relating to its Asian standards of hospitality. Shangri-La Hotel provides customers with a number of excellent services. More specifically, friends may enjoy high quality room services and resort, facilities such as sauna, Jacuzzi health club, lounge and pub. Furthermore, the hotel chain also provides different and unique products like, The Spa at several hotels and resorts. Through its high quality services, Shangri-La obtains international awards and recognition from prestigious magazines and industry partners.

Historical data

Shangri-La Hotels and Resorts was founded in 1971 by the Malaysian-Chinese tycoon Robert Kuok and maintained by Westin until January 1983. The head office are positioned in central Hong-Kong. Its name was encouraged by Adam Hilton's legendary novel "Lost Horizon". In 1982 the business incorporates Shangri-La Hotel and Resorts.

Business Description

Shangri-La Hotel is highly identified because of its service superiority. The hotel string highly helps its mission statement, relating to which "customers should be delighted every single time» More specifically, the business focuses on offering clients an memorable experience by blending cultures, exotic art work and lively atmosphere. . "Shangri-La Hospitality" has developed five core key points: admiration, humility, courtesy, helpfulness and sincerity. These key principles have favorably damaged the successful functioning of the business and thus they have got consequently the creation of nice customers and employee relations.

The service key points that Shangri-La is rolling out is steady to every country they operate. In other words, customers receive the same degree of services and treatment in every hotel no matter the country of location. That is very important as the clients identify Shangri-La hotels as high quality and trustworthy.

The company performs 62 deluxe hotels and resorts under the Shangri-La and Stock traders Hotel brands in Asia and Midsection East. Moreover, the business is happy to develop in Europe and THE UNITED STATES. Apart from Shangri-La's possession and operation of hotels, the business also leases commercial office structures, retail space, rentals, real house development and procedure and golf club ownership and operation.

Competition

Competition generally speaking is one of the factors that have an effect on company's lifetime and growth. Despite the fact that Shangri-La is one of the most notable luxurious hotels in Asia, there continues to be dread from other top companies functioning in the varied hotel management industry. The success of every company depends upon efficient procedure because many costs are fixed and on effective marketing. The very best three competition of Shangri-la hotel are:

The Hong Kong and Shanghai Hotels Ltd which also operates in Asia, Australia and North America with 24 deluxe hotels, commercial and residential properties.

New World Development is the next rival of Shangri-La; the business builds up and invests in properties in Hong Kong, mainland China, and Southeast Asia. Its property and infrastructure trends include flats, office properties, hotels, shops, roads, and normal water and power crops.

The third competition is Mandarin Oriental Hotel Group which is integrated in Bermuda and possesses, manages and functions 40 upscale hotels in two dozen countries.

The 2008 Olympic Games Event has afflicted Shangri-La Hotel since high quality hotels such as Regent, Ritz-Carlton, Hyatt and Sheraton extended in various towns in China, specifically in Beijing and Shanghai. Since Shangri-La is an Asian Company, it is highly accepted in Asia, the hotel string possessed a competitive benefits so far as brand awareness can be involved. However, as many esteemed and luxurious hotel chains began broadening in the Asian continent Shangri-La confronted more powerful competition than before. The primary competitor of Shangri-La could be discovered as the Marriott string, which runs the Ritz-Carlton, Renaissance and Courtyard brands (26 hotels in China and extending its stock portfolio to 100 by overdue 2010. )

Driving forces in the company

In order for the business to keep to be competitive within in the industry, Shangri-La chosen expanding its hotel chain. It experienced a rapid extension in the early 1980's and built 29 hotels over another 10 years, and by the end of 1999, it was declared that these were working 35 hotels within the Asian continent. Shangri-La's management group decided on broadening even more aggressively and for that reason took good thing about their current success and elevated fund during this time period for further growth. As a result during the early '00 Shangri-La started entering new marketplaces through both management contracts and owner/operator development. In 2003 Shangri-La Dubai and Sydney were exposed.

The technology of core brands of Shangri-La Asia Ltd, like the four-star Traders that was established in 1989, provides luxurious experience and elegance to the business traveler, Rasa Resort and Spa which was launched in 2006 as a new brand spa provides treatment and relaxation based on Chinese language principles, ASIAN Plaza Hotel and Shang Palace will be the force generating the changes on the market. These hotel chains provide differentiated and unique products to a niche market.

Key Success Factors:

The key success factors of Shangri -La Hotel are the following:

1. Unique characteristics of Asian hospitality and high luxury quality of service and products offered to its customers

2. Differentiated products (spa and treatment in hotels and resorts)

3. The use of culture training program in day-to-day performance More specifically, Shangri-La Care and attention Modules that collection out just what a service personnel must do as well as how to provide their customers in the best possible way

Care 1: Shangri-La Hospitality from Caring People

Making the guests feel very special and important throughout their stay in the hotel and concentrating on the core ideals of Shangri-La's hospitality.

Care 2: Delighting Customer

Delighting guests constantly not just the first time they visit but each and every amount of time in order to accomplish srotng customer devotion.

Care 3: Recover to get Loyalty

The need for recovery when flaws happen. A well done restoration may be an possibility to gain further determination and loyalty, and the other way round if recovery is poor. The five steps to recovery as developed by Shangri-La hotels: Hear, Apologies, Delight, Fix the Problem and Follow-up.

4. Take Possession.

Effective campaign and special offer to get the customers' attention about the Shangri-La hotel. Promotion and special offer build long term relationship between Shangri-La hotel and their dedicated customer. The promotion and special offer by the Shangri-La hotel include special festival, weekend special, value rate and value holiday.

5. Effective process management point of view.

This refers to the machine used to aid the business in delivering the service. Shangri-La demonstrates processes involved in delivering the services provided into six encounters including among others check-in, room come across, restaurant and breakfast time, holiday trip, spa and check out.

Check in Face: Shangri-La ensures that friends will be served directly at the receptionist counter-top or online.

Room Encounter: it provides extra room accommodation for friends. For example, they offer extra foundation for children under 12 to remain with the parents in the same room.

Restaurant and Breakfast: Shangri-La provides Children's Food Plan; this accommodates hotel guests under 12 can enjoy complimentary meals in Coffee Retailers and Pool Cafes.

Vacation Trip: Specially trained personnel is given in controlling booklets with valuable information concerning rooms, airfare and car rentals at popular Shangri-La destinations, in order to make friends' planning holiday easier.

The Spa: provides unique service for treatment activities such as rub, aroma remedy and bathe.

Check-Out: identical to check-in but may be crucial to determine the ultimate end result of satisfaction.

6. The use of effective advertising through tv and online commercial

7. Compensation and Career Expansion: this is a driving make for the employees to perform high standard shows within the business and making its employees valuable. If employees are encouraged they are willing to provide and fulfill customers in any circumstances, therefore gain customer devotion.

Resource strengths and competitive capabilities of the company:

Valuable organizational assets

Organizational design can be an important aspect in every company. Lacking any organized String of Command word severe issues could arise in the company. Shangri-La's organizational design involves five major levels to be able to group its employees. More specifically:

Level 1: Divisional Manager

Level 2: Departmental Manager

Level 3: Sectional Manager

Level 4: Front Front-Line Supervisors

Level 5: Front-Line Employees

Note: Decision comes from the upper level of the structure

Valuable intangible assets

The employees are one of the most important intangible possessions of Shangri-La. Therefore, Shangri - La's corporate management intensely invests in employee development (to get know-how asset)

Another intangible assets of Shangri-La is its brand name, a synonymous for providing services with the initial characteristics of Asian Hospitality

Unique products such as spa and treatments could also be regarded as their intangible assets

Valuable physical asset

One of the most important and crucial physical belongings of Shangri-La hotels are its architectural design externally and internally. Every single hotel of the string has different characteristics and features that differentiate it from other Shangri-La hotels in the world. The design of every hotel matches the culture and environment where it operates. For instance, an average Shangri-La hotel occur lushly landscaped tropical gardens with huge pools that creates an oasis from the city' flourishing business and public center. Furthermore, Shangri-La hotels and resorts provide hotel facilities like Air port Transfer, Parking, FOREX, Non-Smoking rooms, baby-Sitting or Child Health care, Facilities for Disabled, Dining and Entertainment, Restaurant, Bar/Lounge, Sports activities & Leisure, Spa, Sauna, Heavy steam Room and Fitness Center. They have invested in these assets in order to provide customers with great experience throughout their stay in the hotel.

Competitive Capabilities

One of the strongest competitive features of Shangri-La hotel is the service quality that is provided to its customer. Shangri-La is an award receiving hotel as it is highly praised for offering world class service and gracious hospitality that has received a trustworthiness of quality throughout Asia.

Identifying strongest and weakest items of competitive forces

Competitive pressures created by the rivalry among contending sellers

Competing with other world class luxurious hotels in the world is a solid competitive pressure that influences Shangri-la hotels. These other hotels have strong competitive strategies to maintain their position on the market. These hotels provide the same high quality of service to the same focus on group.

Competitive pressure of new entrants

New entrants have always been considered as a hazard by the existing ones. This is a strong power for the company since they concentrate on the same customers on the market.

Competitive pressure from the retailers of replacement products

High quality Motels and other local hotels are believed to be replacement for Shangri-La. That is a fragile competitive push in the company since Shangri-La customers look for high and unique quality of service

Competitive Stresses Stemming from provider bargaining ability and supplier-seller collaboration

Supplier bargaining electricity is a strong competitive push to Shangri-La hotel. Shangri-La has amounts of different suppliers; for example, food suppliers, material suppliers and information suppliers. If these suppliers increase price of goods and services to its customers then Shangri-la would also increase its operating costs. Because of this, Shangri-La would increase prices, in order to cover its operating costs. Competitive Stresses stemming from buyer bargaining power and seller-buyer cooperation.

Buyer's bargaining electric power is a weak competitive make for Shangri-La Hotel since Shangri-La has a fixed price charge; and this can't be negotiated.

Business Strategy

Strategy for Growth to the East and West

The company's main strategic plan is to incorporate the goal of extending the Shangri-La brand internationally with a solid basis and reputation for its brilliance in Asia, the Middle East, European countries and North America. Corresponding to industry analysts, China was one of the very most attractive destinations for holidaymakers in 2008 because the Olympic Game titles were performed there. Because of this particular reason new hotel innovations started to put in your community.

Shangri-La's strategy to expand in the East is an advantage since their center principles of ethnic values matches almost all of the countries in the Asian market but is still an effort since almost all of the luxurious top hotels in the world have the same procedure.

In standard Shangri-La has poor expansion progress in other part of continents like European countries and THE UNITED STATES. Nevertheless, it was declared that the business decided to extend its hotel chains in different parts of the world particularly in European countries, THE UNITED STATES and Australia concerning have the ability to contend with their major competition in the market. Even though the business constantly enters new market segments, they still maintain and provide its worldwide service quality criteria to its customers and ensure that Shangri-La's quality and service standards are translated to new hotels in new marketplaces in order to deliver consistent connection with "Shangri-La Hospitality". When Shangri-La gets into new marketplaces in new countries, the company brings new social understanding and anticipations to these market segments. This is an effort for the business since bringing the substance of the brand to new cultures is difficult.

Another strategy of the business is to enhance Corporate Sociable Responsibility activities in five key areas: Environment, Health and Safety, Employees, Supply String Management and Stakeholder Relationships.

In the surroundings section its main focus is in local climate change, drinking water use management, misuse removal management, ozone depletion and inside air quality. Shangri-La has regarded that source conservation, biodiversity and pollution protection are ways to keep up a ecological environment.

By providing safe and healthy environment, Shangri-La protects its customers, employees, suppliers and the public. This consists of training employees for disaster situation like fire, earthquake and some other natural devastation. Also, the company promotes wellbeing program to improve the health and well-being of the employees.

As discussed earlier, Shangri-La management identifies that staff is one with their most important assets and they also are focused on providing fair employment opportunities, dignity and personnel development. Shangri-La will provide a host where employees may achieve their personal and profession goals and fair labor practices concerning avoid any activity that results in human being right abuse.

For the company to be able to mange its immediate and indirect impacts in the surroundings, Shangri-La has to work effectively using its supply chain companions. The suppliers need to meet the local legal requirements associated with the environment, individual rights and other regulatory work methods. Also, suppliers are expected to be part of the system to ensure that the meals offered is safe and of high quality.

According to CSR all stakeholders include customers, employees, people of the neighborhoods where they operate, shareholders and suppliers will take part in a clear, honest and respectful way to the company.

SWOT Examination:

Strengths

  • Brand recognition
  • Unique services quality (Shangri-La Hospitality)
  • Expansion network in Asian Continent
  • Luxurious facilities like the Shangri-La Spa and Trader
  • Expansion globally
  • Strong suppliers relationship
  • Innovation of unique products

Weaknesses:

  • Not having enough range of hotel chains in Europe and N. America to contend with other luxurious five star hotels operating there.
  • Shangri-La is dependant on other hotel owners companies since it generally does not own most of its hotel chains
  • One of the issues that Shangri-La's hotels in China faces is the fact that front-lines employees are unpleasant in making decisions. Chinese employees are dependent on operational guidelines

Opportunities:

  • Its market placement in China; since China has become the world's fourth most significant economy and one of the most attractive destination as far as tourism is concerned
  • Training program facilities to prepare first-line employees to better utilize decision-making authority
  • The Olympic Games Situations in China increased Shangri-La's sales
  • Expand to other geographic destinations
  • Acquisition of local hotels

Threats:

  • Intense competition
  • Local Hotels are thinking about developing alliances with international brands to manage and operate the business enterprise.
  • Pressure on wages (expanding into high-wage economies)
  • Since Shangri-La is an Asian company and has been working in Asian place, its management group is employed to having lower labor costs compare to European countries and N. America
  • Global recession
  • Since Shangri-La is extending with its principles values, from the great task for the business to increase beyond its Asian territory where cultures will vary. Is the company able to adapt in some other environment. . ?

Target Market

Shangri-La Hotel manages in the five course hotels industry associated with luxury and well-being for customers. Hence, the mark market mostly originates from the upper class. We focus on this section to both Shangri-La Hotels and Resorts that produce greater profitability to the business.

The Golden Sands Resort that is located in Batu Feringgi Beach that is mostly visited by travellers who result from European and American countries. It is believed these travelers have high consuming ability compared to local travelers. Therefore, Shangri-La management targeted the tourists that are of higher financial and consuming ability.

The marketplace for Trader Hotel mostly contains business travelers and the ones which come from the upper class sets of society. Business travelers are able to acquire services from high quality hotels as their expenditures are accommodated by their companies.

Strategic Positioning

All of the hotels and resorts of Shangri-La can be found at proper locations that are frequented by a high amount of people, either for business goal, venturing or other reasons. The positioning selected usually includes places that are popular for their travel and leisure industry and that are highly seen each year.

Business Model

For the fiscal calendar year ended in December 31, 2006 the management reported that Shangri-La net income was 202. 2 million us dollars from its services. The company's sales continued to boost in 2006 with 1, 002. 9 million dollars sale compared with 842 million money in 2005. The business owns 50 hotels in Asia and the center East and pretty much of 40 tasks under development in Europe and North America. The company utilizes about 18, 400 employees worldwide.

Shangri-La's case is unconventional among international hotel companies since it has a significant proportion of its hotels,

As shown in the stand below, Shangri-La performance on the market seem to improve annually and ascend to better market positioning.

Shangri-La Income Statement

 

Our personal Tips for Shangri-La Hotel

Improve and give more emphasis to its employees' training program; specifically for the front-line employees to build their self-confidence and efficiency at the work area in order to boost its hand at hand interaction with the customers.

Having achieved brand market control in Asia, Shangri-La should now try to increase the amount of hotel chains in Europe, THE UNITED STATES and the center East.

Since Shangri-La stresses its cultural principles in every hotel chains, Shangri-La should take a closer look of its environment in general, to see if the products and services that they offer match the needs of the client in general. For example, if Shangri -La works in foreign locations like the Middle East, they should adapt to its culture and combine it to their own to avoid issues between two different civilizations.

In general, every one of the hotels and resorts of Shangri-La can be found at proper locations that are stopped at by a high number of men and women every year, either for business purpose, exploring or other reasons. The positioning decided on is usually places that are popular for its tourism industry that are highly visited each year.

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