Corporate Strategy and Hospitality (Research Paper Sample)

Corporate Strategy and Hospitality
Name:
University College Birmingham
Introduction
According to Pearce, (2007) a strategy is a way which an organisation plans to pursue its goals and objectives given the present threats and opportunities, versus the resources it allocates for implementation. It is a lesser part of the broad cover of strategic management which is used by organisations to become competitive. According to Thomas & David, (2008) strategic management is a process which entails planning, implementation and evaluation of through a set of decisions based on the organisational goals and objectives. It is the area which informs a business to form a strategy, to have a vision, mission, goals and objectives.
According to Fred, (2010) Strategy occurs at three levels within a corporate organisation. The three are corporate level, business level and operational level. The corporate level is the top most level in an organisation, and it is the level which deals with the overall plans of pursuing the organisation plans taking in the interests of the stakeholders. The business level is the second from the top most, and it is concerned with how a business can compete successfully within a given market segment. It achieves this through strategic choices such as the products to present to the market. The last strategy should be based on, the operational level, the lowermost level in an organisation. It is the level which deals with the way each part of an organisation has been organised in order to achieve its overall goals.
The strategy made should be made in relation larger picture, purpose of existence and objectives of an organisation. Vision is the picture which an organisation has about how it wants to be in the distant future. Mission is the purpose why a business is in existence, or rather, what it exists to do. Objectives are the specific short-term goals which an organisation has set in order they may propel it in achieving its objectives in bits. The strategy, then is developed in order to aid achieve the objectives which then dictate how the organisation is likely to work towards its vision. That way, an organisation will have a strategic direction, or a roadmap which guides it to the desired destination which is the vision in this particular case (Thomas & David, 2008).
According to Pearce, (2007) the initial strategy by an organisation is known as intended or deliberate strategies and they are informed by aforementioned factors, plus the external environment. There are cases where an organisation will be forced to change its tactic, or its strategy. The result could be because of the external changes which cannot be controlled by anyone. The new strategy is known as emergent strategy, because it was not intended, even though, it is up for the good of the organisation. The external environment includes threats, and opportunities. The managers are the ones who do an external environment audit of an organisation using the SWOT analysis tool. It helps them to determine the strategic position of the business. Opportunities refer to advantages business openings which an organisation can take advantage of and become successful. Threats are situations which are unfavourable to a business and make it at danger of competition from peer competitors (Fred, 2010).
About Merlin Entertainment
Merlin entertainment will be the case study for this particular assignment. It is in the tourism sector, and it is packaged in a peculiar way, different from what other tourism companies focus. It is tailored for making its visitors be entertained. It is located in 22 countries in four different continents. Their vision is to be able to lead in the industry, by giving the right package to the family, and ensuring that they are entertained (Merlin entertainments, 2004).
Merlin entertainment is the largest of its kind in Europe. Merlin was begun to put smiles in the faces of people. A well thought purpose is bearing in mind the problems that people undergo on a daily basis. According to Merlin entertainments, (2004) their strategy is to ensure that they create to ensure that they yield the most profits out of the theme parks they offer. It is among the beset though out strategy it fits in with the vision and purpose of the company, and above all, it is real and specific.
The firm does not operate in the market on its own; it has competitors, but it has been able to secure the leading position in Europe. How has this been possible? The strategies are in line with the immediate and the distant environment. Melvin Company is knowledgeable on the effect the external environment may have to a business and good enough, they have been able to respond by doing an analysis of the external in order to have a workable strategy.
The company’s external environment has been analysed using different models. They are all looking to check for different factors in the external which can affect the way it can operate successfully. The external environment dictates the success or the failure of a business, and the wise choice of strategic decisions of Merlin in regards to its external environment is what has caused it to be the competitive the way it is (Merlin entertainments, 2004). The models are the SWOT analysis, which tackles both the internal and the external environment, referable as the strengths, weaknesses, opportunities, and threats respectively (Pitts & Lei, 2006). The second is the macro environment, which is described by the acronym PESTEL meaning, Political, economic, social, technological, and environmental and the legal framework of a business. Lastly, is the Michael porters’ model of five forces, which threats of substitutes, threat of new entrants into a market, competition, bargaining power of the suppliers, and the bargaining power of the buyers (Pearce, 2007).
External environment
The first analysis is the threats and the opportunities of Merlin Entertainment. According to Bristol banking and investment society findings, the following are the threats and opportunities which are available at to Merlin. The first threat is an economic downturn, which may be present of the ever changing market conditions. This becomes a threat to them because of their operation in many countries in four different continents. There are possibilities that, at a time, one of the continents may be facing an economic downturn. The fact is that, in case economic downturn happens in one country, it can be covered with the other countries. The above will be the case, unless, there is a major economic downturn which affects the whole world because of a crisis of the major world currencies (Thomas & David, 2008).
The second threat is the possibility of policy rate increases for the tourism and entertainment companies, in some of the countries. If this is done, then there are operations will be curtailed in that, it will be difficult for them to establish new businesses in new destinations of investment. It will also be expensive for them to operate; hence reduced profits. They will have to change the strategy, of to have an emergent strategy, which may not even favour their plans. Changing of tactic will require them to opt for differentiation of products, and with their focus in the middle-level class as their target market; this may not workout well as intended (Fred, 2010).
The opportunities are not any lesser, because of the emerging markets such as China. According to Jingchen, (2014) China is a developing nation, among the nations with the highest populations in the world. The population is estimated at one billion, and its tourism market is not yet saturated. It is among the middle-income countries in the Middle East which the company can exploit and increase its base as well as its profits. The market will help them to cut on costs of operation by taking advantage of economies of scale. The population is one of the promising factors in china, and the fact that it is the countries with high economic growth with a GDP growth of more than 7% per year, Merlin is likely to be among the multinational companies which enjoy the benefits of a growing economy.
Merlin can have the opportunity of Acquisitions in many parts of the world. Not all government policies favour MNEs in the country, in a bid to protect their companies from competition. This is one of the big challenges which the multinational face in expanding to new regions all around the world. The advantage which Merlin entertainment has is that it has a capital base, unlike many other competitors in the industry. In order to remain competitive, the company will only be able to access the regions which they wish to invest in by acquiring the existed entertainment companies (Merlin entertainments, 2004). According to the explanations it is there is ease to penetrate in a market, avoid governmentally restrictive policies of protecting local companies from competition, and lastly, they will have considered the people from the country. The people from the country have more knowledge on their culture, and they will appreciate it more if they are given the chances of leading the organisation. That way, Merlin will have the advantage of expanding to many localities in a short period.
There have the opportunity of increasing profits by rolling out extra midway attractions. According to the statistics which the company released, the Visitors have been increasing steadily based on the midway attractions. Increased visitors’ means more profitability to the organisation. According to Ollie et al., (2004) the statistics show that, the victors who came visiting with Merlin in 2010 were 41 million, and 46.4 million in 2011. The amount change is translated to a percentage increase of 13.2. The profits increased too, from £800.8 in 2010 to £928.4 in 2011. This translates to the per...