Banyan Tree Case Study
Executive Summary
Banyan Tree offers a unique experience with its hotel and spa experiences in the South East Asian region. Labeling itself as an aspirational brand, the company was established by the Ho family in 1992 and has boasted a gross profit of $52.1 million in 2006. Its superior branding, excellent corporate social responsibility practices and its careful investment and expansion strategies attribute to its success. As the company goes public it faces the new possibilities, offered through increased capital, and new challenges such as demands imposed by shareholders. How will the company continue to expand its profitability while preventing brand dilution through overexpansion?
Key issues
Branding
Banyan Tree is an exclusive brand, catering to affluent travellers. In order to expand its customer base, Banyan Tree launched a brand, Angsana, which meets the needs of a broader customer base. Angsana does not currently operate in the same regions as Banyan Tree hotels, this separation has occurred to prevent cannibalization and dilution of the brand. While being effective, this reduces the number of locations in a given area. Spreading the company’s resources and knowledge over many regions may not be cost effective. Banyan Tree should continue to be cautious in expansion but not over cautious as to limit the brands` profitability.
The brand has also been extended to offer spa services, retail outlets and other shops. The company continues to manage its brand portfolio while preserving its distinctive identity and strong brand image. The strong brand image has allowed Banyan Tree to open 3 brands of spas throughout the world. Opening spas is one way Banyan tree can build an image, gain regional knowledge and assess profitability prior to opening a resort in that area or location.
Banyan Tree relies on customer experience as its strongest promotional tool. Delivering a consistent product may be challenging in the service industry because of the
Banyan Tree offers a unique experience with its hotel and spa experiences in the South East Asian region. Labeling itself as an aspirational brand, the company was established by the Ho family in 1992 and has boasted a gross profit of $52.1 million in 2006. Its superior branding, excellent corporate social responsibility practices and its careful investment and expansion strategies attribute to its success. As the company goes public it faces the new possibilities, offered through increased capital, and new challenges such as demands imposed by shareholders. How will the company continue to expand its profitability while preventing brand dilution through overexpansion?
Key issues
Branding
Banyan Tree is an exclusive brand, catering to affluent travellers. In order to expand its customer base, Banyan Tree launched a brand, Angsana, which meets the needs of a broader customer base. Angsana does not currently operate in the same regions as Banyan Tree hotels, this separation has occurred to prevent cannibalization and dilution of the brand. While being effective, this reduces the number of locations in a given area. Spreading the company’s resources and knowledge over many regions may not be cost effective. Banyan Tree should continue to be cautious in expansion but not over cautious as to limit the brands` profitability.
The brand has also been extended to offer spa services, retail outlets and other shops. The company continues to manage its brand portfolio while preserving its distinctive identity and strong brand image. The strong brand image has allowed Banyan Tree to open 3 brands of spas throughout the world. Opening spas is one way Banyan tree can build an image, gain regional knowledge and assess profitability prior to opening a resort in that area or location.
Banyan Tree relies on customer experience as its strongest promotional tool. Delivering a consistent product may be challenging in the service industry because of the