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13294 Downloads I Published: 26 May ,2017
In current scenario, organizations are having plenty of opportunities in order to explore themselves. So, in this case, various organizations are there that are either expanding themselves to earn more profit so that they can remain in the competition or innovating the products in the current sector. Not only large firms, but also the small enterprises are doing the same by transforming their business and making alterations in it for earning high profits as well as revenues (Human capital, entrepreneurship, and the theory of the firm, 2015). By entering into global markets and through increasing the customer base, companies are facing intense competition from the rivalry firms. Thus, there are many small enterprises that are making several initiatives in order to gain maximum market shares. The present study is entirely focussed on Shire Hotel which is situated in some areas of United Kingdom (Shire Hotels, 2010). The services which this firm is offering is exclusive in nature that plays a significant role in attracting the customers. The report will focus on the existing weaknesses of business model of this firm along with the modifications to cope up with that.
Shire Hotel is a very well known organization in hotel industry which is having its headquarter in Kettering and is leading its chain in Fareham, Bristol, Knutsford, Leeds and Penrith. This firm is having only one objective while serving the customers, that is, “every visitor is exclusive”. This hotel is taking all initiatives to attract the customers by providing the lowest range of services in UK. Shire Hotel is only dealing with hospitality services that it is offering to the people and also this is the only source by which it can do publicity (Arnold, 2004). The hospitality industry has always been a profitable sector that generates huge revenues for the organization. All the firms that are working in this industry are earning high profits and revenues which they are investing in other projects through expanding itself with making diversification. Along with that, this sector proves to be very helpful in generating capital for the economy through serving the society with superior quality products and services in order to make them satisfied (Daft, 2009).
Shire Hotel is having very flexible transportation services that it is providing to the customers that are associated to it and which are using its services. With the help of transportation services, company keeps the customers satisfied as they feel very convenient by having this facility. However, sometimes this service proves to be costly for the firm as if it is used unnecessarily, hotel needs to pay high amount for that. Apart from that, the internal environment of Shire Hotel is also very friendly which plays a crucial role in making the employees of firm well satisfied. This hotel has the biggest advantage of satisfied manpower which proves to be very helpful in retaining them for longer duration (Gillin and Schwartzman, 2010). Thus, the hotel is successfully making its human resources stay in the firm in the long run that provides higher profits as well as revenues. So, it can be critically evaluated that organization needs to make effective efforts in order to retain the human resources for as much time as they can. In addition to this, in Shire Hotel, the working environment is very healthy and positive that makes the people to put efforts with the highest level of potential (Ireland, Hitt and Hoskisson, 2008). This ultimately enhances the productivity by which sustainability of the organization in highly competitive market increases.
Shire Hotel is having many competitors like hotel Hilton and Marriott International by which it is having the biggest threat as these firms are generating intense competition for this hotel. These firms are providing high quality products and services but it does not offer them at the same reasonable prices at which Shire Hotel offers. Thus, it is the USP of this organization which is still making the customers associated with it. However, just on this basis, firm cannot survive in the long run. For that, it is needed by the hotel to have some innovation and diversification in products and services which it is providing to the customers so that they can be retained and will remain loyal towards the firm (Ward and Lewandowsko, 2006). It is because, it can be critically analyzed that if Shire Hotel will not focus on this aspect then it may have to face huge losses which hamper the image of it as well.
According to existing business model of Shire Hotel, there many weaknesses which this organization is facing. Thus, in order to make the firm to sustain its business in the long run, it is important to make initiatives and put some efforts so that it can survive for longer duration with success. As per the business model that Shire Hotel is following at present, there are some channels of distribution which it is using for the purpose of making things available to the ultimate customers. Organization is having chain of hotels for which it is situated at various locations (Badi and Badi, 2005). This proves to be helpful for the firm customers in order to check-in in the hotel easily. It provides convenience to them as they do not have to travel at a long distance. It is the reason, this plays as its strength because chances of switch over becomes low. However, it can be critically analyzed that sometimes it proves to be a weakness for the firm as well. Reason behind this is that organization faces high expenses and costs associated with this as all the hotels at various locations demand expenses to be incurred for running the operations.
In the existing business model of Shire Hotel, there are the key resources which involves tools and techniques, human resources and the locations at which it is situated. Organization is gaining huge advantages through these key resources. However, these sometimes prove to be major weaknesses as well because at present, due to increased competition and globalization, hotel needs to have innovation and diversification in its product line so that customers would stay with firm in the future (Bessant, 2011). In Shire Hotel, information is not managed with the help of any kind of MIS which plays a significant role in providing threat to the firm from other competitors. It is because, in other hotels like Hilton and Marriott, appropriate database management system and management information system is being used for managing the information. Thus, if Shire Hotel will not give due consideration to this then it may have to face severe consequences as outdated technologies will make the customers feel dissatisfied and they would switch over to other competitor organizations (Coelho and McClure, 2005). So, hotel has to adopt the latest technologies as at present, it is maintaining all its records and data manually.
Along with that, there are some key activities that the business model of Shire Hotel is having which are like maintenance of workers and quality control. Firm is putting various efforts for making its employees retained in the long run and to gain success in the competitive market. However, it can be critically assessed that this proves to be a major weakness for this hotel as it is suffering with the issue of lack of trained employees. In Shire Hotel, firm is not providing proper training to the employees because of which they feel difficulty in understanding their jobs which ultimately affects their performance (Li and Liu, 2011). Arranging training sessions for the employees will incur some costs and expenses however, it can be critically evaluated that this would play a significant role in making the human resources efficient enough which will finally lead to satisfy the customers with the services rendered by them. Training would prove to be expensive for Shire Hotel as it is a small enterprise as well as time consuming too but with the help of this, people become skilled and proficient enough through which they render high quality of services which makes the people satisfied to a high extent (Acs and Audretsch, 2010). This is the reason, to provide sufficient training to the employees of this hotel is very important.
Apart from that, there is one thing in the existing business model of Shire Hotel which plays a vital role in its success which is that of competition strategy. The firm is lacking in this as it is not focussing much on this aspect and is not spending enough on the publicity for the firm along with the services and products which it is offering to the customers. Because of this, hotel has to face many disadvantages like many parts of UK are still not in touch of this organization due to which it cannot increase its customer base. This is the reason it is very important for Shire Hotel to have some different and innovative strategy by which it beat the competition well and can enhance the number of customers by spreading its awareness among them to earn more profits and revenues (Baron, 2012). The competitors of this hotel are leading with their own strategies and are successful. Thus, to remain in the competitive market, it is important for the enterprise to have a strategy that can help it in making its own different identity in the eyes of customers. As the hotel is using cost leadership strategy at present, it can work on that with more innovative manner and by putting some extra efforts on that to become successful in such a manner that it can survive with sustainability in the future for longer period. So, in order to make people aware at a larger scale, this is important for the Shire Hotel to invest some amount so that customer base of the firm can be increased (Boyd and Vozikis, 2011). However, it can be critically analyzed that if organization would not do so then it may have to face various issues like its profit would be decreased as lack of promotion will make the customers to switch over other hotels. It is because competitors are continuously making strategies to capture the attention of them in order to attract them towards their firm and services which they provide with attractive offers. So, it can be said that promotion and publicity are the things that can make Shire Hotel survive with a great success in the future with sustainability along with having diversification strategy too (Kolvereid and Isaksen, 2006).
In case of shire hotel which is the leading hotels in UK is famous for its services which it provides to its customers (Badi and Badi, 2005). The business model which is applied in the hotel is very successful as because of this model only the hotel is doing its operations effectively. As the competition is growing in the hotel so it is essential for the Shire hotel to analyse its weakness. By evaluating the weakness in the hotel will help in creating future sustainability in the organization. The major weakness which has been analysed in the business model of Shire hotel is of the lack of technology which they are using in their hotel. As the technology is upgrading, it is very essential for the Shire hotel to use machines which will help in improving the services of the customers (Bessant, 2011).The data of the hotel is not managed properly by the staff as they do not use the software which can make the work easier in the hotel. Because of lack of technology staff takes times to render the services to its customers.
In the season time, Shire hotel is full of customers and at that time to manage the customer and provide them services is difficult. So, they need modifications to improve their business model and make according to the convenience of the customers (Coelho and McClure, 2005). The main modifications needed in the business model are to introduce new technology. They can introduce machine which can help the firm to see the check in and check out of the customers. This will help them to maintain the record of the customers. The major change which is needed in the business model is that of the strategy which the Shire is using in the current business model (Halabí and Lussier, 2014).The weakness which can be analysed in the hotel is that of the lack of publicity as it is the small hotel, so it needs promotion to be recognizable in front of their customers. This can be made possible by adopting the expansion and diversification strategy. To become famous in the eyes of the customers they can promote their brand by diversifying in different field. The modification that can be done by the Shire hotel is that they can introduce extra services which can make clients more comfortable. They can tie up with the tours and traveller so that they can provide roaming services. This will help the shire hotel to promote their business as well as it is good for the long term stability of the firm. It is beneficial for the Shire hotel as they can provide customer with package it will benefit both the users and the hotel (Li and Liu, 2011).
Besides this, modification in the business model can be done by expanding its hotel in the area where they can gain more number of customers. The hotel can expand its chain in those areas which are considered as the tourist attraction city. This increases the scope of the business and attracts customers. For the future business sustainability, the Shire hotel has to create competitive image in the minds of people and it should also have to make brand image so that it can be able to hold the market (Acs and Audretsch2010). By increasing the number of chain the financial stability can be managed which will the help the hotel to introduce the technology that can make the work easier. After a specific period, of time changes are necessary in the business model. Because of the increasing competition in market, the hotel is required to change its strategies according to this dynamic environment. It is important for the Shire hotel to know that future stability is essential to survive in the competitive market. In case of its competitors all the hotels have distinct image in the minds of the customers and they are operating different business to gain profitability in the organization. The best modification the Shire hotel can do is to expand its market chain in the tourist area and attract more customers (Baron, 2012). This will solve the purpose of promotion and will benefit the hotel in targeting new customers.
Changes in the business model are actually needed in the Shire hotel at this point of time. The most important modification is to update technology to make the work easier. The staffs which are working in the hotel are not skilled. So it is very important for the hotel to introduce new technology to operate its activities. Another modification is expansion and diversification (Boyd and Vozikis, 2011). The best way to sustain sustainability in the market is to expand. London is one of the most famous tourist places, so for the firm it is better to expand its business in these countries. With expanding its chain, the consumer will get the choice to choose from different brand of hotels. The main benefit for Shire hotel in future is that, expansion will create brand image in the minds of its customers.
According to the modification, there are several changes which are required in the organization so that they can proper mange their changes. The most important change that is needed in the organization is in the structure. The working of the Shire hotel depends upon the structure which is been followed in the company (Kolvereid and Isaksen, 2006).In case of introducing new technology they require creating a different department so that the employees who are working in the firm are skilled. To introduce new technology they require different section and even they need new machines to manage the work. In case updating the technology they have to invest money in the material which are needed to successful operate the business. In case of structure, in Shire hotel they follow hierarchical structure in which every junior have one senior on the top. Same is the case with the technological department they have to hire the experienced man who can manage the operation. With this, they have to hire the executives which are from the technical field. With the new modifications they have to change their structure so that the operations which they are carrying out in the market can give them benefit (Stokes Wilson and Wilson, 2010). By introducing new thing in the business has impact on the process which is followed in the hotel. At present when there was no technology upgradation all the work was done manually. So the hotel needed more staff members to carry out these activities. But with the introduction of new technology Shire hotel has to change its processes, as all the time staff were needed to manually see the check in and checkout time. But at this point of time, all the work is done by machines. Even the security system of the hotel can be made strict as they now have the skilled workers which can contribute in making the hotel secured (Chase, 2006). Presently a particular time was given by the Shire hotel to check out but because of the system they can easily mange this task. There are several changes that are required by the firm to adopt new technology.
Besides this, for promoting the brand of hotel in the market the step taken is to expand its market. This is a very important task as to implement it’s in their business model the hotel needs to introduce change in its structure as well as the processes. As it is a small hotel, so to expand it has to increase management level so that proper monitoring of the employee can be done which will help to achieve the goal and objective in desired manner. To increase the management level it has to promote the existing employee and recruit new manpower resources in the firm (Gennard and Judge, 2002). To make the expansion successful human capital resourcing is very beneficial because of the human resource only they can achieve success in the competitive market. With this, they also require technology which can support them and make the expansion successful. There are several technologies and sources which can be used by the Shire hotel to promote their expansion. So to modify in the business model change in every field is required by the hotel. Besides this, operational processes changes very drastically because new members are added in the firm so the hotel have to train them and allot the task accordingly. For this reason, they require the manger do train them and make them do the work accordingly. The hotel has to adopt different functional means and strategy to make the employee work in the hotel (Ward and Lewandowsko, 2006). With the fewer employees, there were identified techniques which were used by the hotel. But now, with the increasing staff they have to change the process to function in the company. New department is formed so the process carried out in the hotel will be linked with the technology which is introduced in the hotel.
Another modification which is needed in the business model is the diversification of the services which are rendered to the customers. In this case, the hotel has to tie up with the tourism company so that they can provide them with best deals to customers. No change in technology is required as with the existing system they can manage the work. But they require human capital resource to do the additional activity and to manage the existing activity of the hotel. To do the modification in business, the first and foremost thing is that they need the human resource so that they can accomplish the task in the effective manner (Czinkota and Ronkainen, 2012).
With the expansion of Shire Hotels, some aspects which are directly related to the business will be affected with the changes in the business policies. There will be increment in the numbers of visitors with the expansion of the business unit. Due to this increase in the number of visitor, the brand image of the firm will become strong and gradually, it will be the most preferred place for gathering or meetings. Along with this profit generation, lots of responsibilities will be added for the staff members of the hotel. However, the major challenge for the employees is to serve the customers and simultaneously, provide maximum satisfaction to them during every visit (Gennard and Judge, 2002). In addition, the staff members will readily accept the changes in the management of the firm with the appraisal techniques. Furthermore, the hotel can live up to the expectations of the customers through rendering proper training. The hotel will become a leading firm by fulfilling all the objectives of the business. At the opening, there may be fewer customers for the restaurant but with time period, the crowd will automatically increase (Alsos, Ljunggren and Pettersen, 2003).
According to the expansion of Shire Hotel in the restaurant segment, lots of changes will take pace in the existing operations of the firm. With the recruitment and training of the new staff members, the current employees will also be included in the training program as they have much understanding with the management. They will help in proper delivery of services to the customers as per the way of Shire Hotel. For the betterment of the workforce, some changes in the roles and responsibilities along with improvement in the salary part will be made. Also, a proper checklist will be created for the overall management of the changes accordingly. In this way, these changes will be introduced and monitored in the cited firm. However, certain measures will be implemented on the hotel in fixed duration for attaining better results. The evaluation will be made by analysis of records maintained by the hotel. Furthermore, regular brainstorming session and group discussion will be held for the consultant and the team of Shire Hotel. In this way the changes will be effectively implemented for the overall performance development (Czinkota and Ronkainen, 2012). In addition, financial resources and profit will be properly evaluated for accordingly planning the future investment. Along with this, some new ideas will be shared with the hotel and as per the blue prints new techniques will be designed for implementation. Also, proper feedback will be taken from the customers for bringing changes in the areas which are lacking behind. Moreover, the hotel will provide all the services as per the needs of the visitors (Kolvereid and Isaksen, 2006).
Any change in the organization has major impact on the staffs which are working in the company. In case of the Shire hotel the impact is positive as well as negative on the staff members. With the expansion in hotel chain their morale got increased as the Shire hotel will promote its employees at the upper post at the time of recruiting employees. This created motivation among the staff as they all are working hard to get promotion in the company. Same was the case in the diversification strategy as introduction of new service opened the door of position in the hotel which is beneficial for the employees who are working in the hotel. These all new changes created motivation among them (Stokes, Wilson and Wilson, 2010).
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But at certain times, there are situation when the human resources do not accept the change which is introduced in the company. In case of the technological up-gradation, it created negative impact on the morale of the staff. With the new machines, hotel needs less staff to carry out the functions (Chase, 2006).So this reduced the morale of the employees as because Shire hotel has to fire the staffs which are doing the work which is now done by machines. This makes them dissatisfied with the management and become resistant to change.
From the above report, it can be concluded that Shire Hotel is facing many issues because of which it can lose its existing customers and profits as well. Thus, in order to sustain the business in the long run and to remain in competition in the long run, it is important for the hotel to adopt strategies like expansion of business and diversification with innovation in the products and services so that new customers can be attracted and existing people can be retained.
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