Investment Opportunities - Cambodia

Topics: Investment, Developed country, Emerging markets Pages: 9 (3100 words) Published: March 10, 2012
Title: Executive Summary Investment Opportunities – Business Metrics

The intention of this report is to provide an overall definition for a business investment opportunity in the geographical region of Asia, in particular, Cambodia. The specified investment of choice should be a hotel within the mid-range segment and the operational approach should be aligned to establishing a franchise and management contracts for future expansion.

Target Market should determine the segmentation
Geographical region and political establishment
Emerging market limited technology and infrastructure
Limited competition within the segmentation
Future outlook and trends within the hotel industry
Innovation and trend opportunities

Establish initial mid-range hotel 100 + rooms hotel along the coastal region of Sihanoukville, Cambodia •Investigate management opportunities
Investigate franchising and leasing opportunities with larger chained hotels •Develop initial hotel and commence expansion and individual franchising opportunities

1.Feasibility study for mid-range hotel within desired geographical region 2.Communicate desirability with hotel development company
3.Investigate further leverage either with financial institutions, shareholders or continue alone 4.Build mid-range limited service hotel along the coastal region of Cambodia

A suggested move would be to go from a tangible asset to an intangible asset, that being one of an asset-light strategy similar to that of the Marriott International Group. The focus would be to ensure that branding and awareness of the brand is critical to the future success of any such investment. By following a similar strategy to Marriott International and building a portfolio of differing hotels in differing segments the investment will ensure the diversification of risk across many platforms (Marriott Int'l, 2010). Of critical importance to the investment decision is to ensure that the target market is defined by the strategic investment decision, following on from this is the opportunity to build and define segmentations that we can then invest within. Consequently determining a segmentation prior to identifying the market strategy will ultimately lead to an investment within the wrong market and potentially could impact further diversifications and/or segmentation opportunities (Echeveste, 2011). Concentrating heavily within one target market or geographical region will limit future potential growth opportunities and can be damaging to our brand awareness goal of global saturation. It is, however; critical that we regard the asset-light strategy as the core strategic principal of all future investments throughout our company’s evolution. In following this asset-light strategy the preferred path to follow for future investments should be a strategy aligned to the target market and segmentation of brands. Ideally a diversification of strategies that incorporates a mixture of management contracts, leasing through other subsidiaries and/or franchising specific hotels dependent upon the geographical regions that would be undertaken. Critically investigation into the target market would be aligned with the investment strategy that is to be undertaken. In particular whilst establishing this investment strategy we should look for the potential growth opportunities within the defined markets and also the competition not only within the geographic region but also importantly within the segmentation that we intend on marketing towards. Segmentation Challenges:

The initial investment strategy should be to define a target market within the mid-market limited service segment. Research shows that this segment accounts for 30% of the average room rate across all chain hotel markets which is equated to the market value within the 40-70% range, (not the bottom economy & budget range and not the top tier...
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