Effectiveness of Rebranding on Organizational Performance. a Case Study of African Sun (Pvt) Limited.

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CHAPTER ONE

GENERAL INTRODUCTION

1.0Introduction

This chapter focuses on the elements relevant to the organisation that were surveyed and the objectives of the research, encompassing also assumptions, delimitations and the purpose of the study.

1.1 Background to study
African Sun formally Zimbabwe Sun Limited was co-founded in 1968 as part of Delta Corporation. The Company was known as the “ZimSun Leisure Group” hence, the brand name ZimSun Leisure, which reflected the groups’ core activities in the leisure industry. To date, African Sun has grown into a holding company with twelve (12) strategic business units, under its banner is ZimSun Leisure Limited now known as African Sun Zimbabwe (Pvt) Limited. This is the largest business unit under the group of companies in Africa. In Zimbabwe too, it is the largest hotel and leisure group with 12 properties covering all the main tourist destinations and cities. The city hotels include five Inter Continental Hotel Group affiliated Hotels; a group to which African Sun Limited is the biggest partner in Africa. The hotels are namely, the Crowne Plaza Monomotapa in Harare and Holiday Inns in Harare, Bulawayo and Mutare whilst in Beitbridge there is an Express by Holiday Inn. In addition the group operates the Great Zimbabwe Hotel at Masvingo and three resort hotels among other leisure outlets.

In the last 40 years ZimSun grew to be a renowned hotel and leisure operator ranked as number 1 in the 2006 - 2007 annual survey held by the Zimbabwe Independent Group publishers of the Zimbabwe Quoted Companies Survey journal. Their brand strategies positioned them as a market leader improving revenues and earnings on investments. The ZimSun Leisure brand distinguished itself with the “sun” for its logo and a slogan that promised “Unforgettable – Convenience, Choice, Experience, all this was embedded in their bold orange colour. The organisation was also geared towards market expansion, in 2001 an investment was made through the acquisition of The Grace in Rosebank South Africa and this developed into a growth/survival strategy and since 2002 numerous regional projects have been pursued to include expansions into South Africa, Mauritius, Nigeria and Equatorial Guinea. ZimSuns’ regional initiatives were being undertaken through the “African Sun” brand. The Chief Executive Officer’s(CEO) report in the groups Annual Report of 2006 cited that, “Over the past two years, ZimSun has pursued numerous regional expansion projects, some of which have fallen through …the corporate structure is now better poised to support the growth strategy. Regional expansion plans which will be driven through African Sun Limited are focused on three key regions, namely Southern Africa, West Africa and East Africa.” With such strategic focus the organisation performed fairly well both locally and regionally. The Chairman’s statement in their Annual report of 2006 reported that foreign arrivals by 2006 had grew by 17% from the previous year, however, arrivals from the domestic market into the Groups’ local hotels contracted as a result, “the shedding off of volumes from the domestic market resulted in the Group ending on overall room occupancy of 35% compared to 38% achieved in the prior reporting period (2005).” In the same financial period, the Group recorded an operating profit after tax of Z$ 937.7 million for the eighteen month period. This translated to an operating profit margin of 23% compared to 5% achieved in the twelve month period to March 2005. These figures are reflective of an oscillating, turbulent performance which had adverse effects on the ZimSun Leisure brand.

In 2008, the United Nations World Trade Organisation (UNTWO) issued out statistics stating that overall, Africa had sustained above average tourism growth with international arrivals above 8% in 2007, representing forty-four (44) million additional travelers. Though accurate by their barometer measure, these statistics were...
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