1. The generic competitive strategy 4
2. The aspects that efforts to execute its strategy 5
3. Critique on the company’s operations7
4. The culture at Shangri-La Hotels 8
5. Challenges the company faces9
6. The company’s financial and operational performance10 7. Challenges Shangri-La face in expanding into Eastern China11 8. The challenges associated with Shangri-La’s expansion 12 9. The threats of expansion of other hotel chains pose into China13 10. Recommendations made 13
Addendum 1: Key financial ratio’s17
Graph 1: Total Revenues22
Graph 2: Total Operating Expenses22
Graph 3: Operating Income23
Graph 4: Net Income23
The generic strategy of the company Shangri La can be defined as a broad differentiation strategy, one that is seeking to differentiate the company’s product offering from rivals’ with attributes that will appeal to a broad spectrum of buyers. The efforts that surface to achieve this strategy the company heavily invest in training of their employees, a well defined career path and a market related compensation package. The critique in using this strategy is that it makes their employees attractive for competitors to make a better offer for employment and this result into a costly exercise. The mission stamen has a impact on the culture by emphasising the companies motto of excellent customer service. The biggest challenge that Shangri- La faces is to personalise their services across different geographical locations with different characteristics and the company also face challenges in transferring its core and distinctive competencies. Shangri-La’s well managed financial system takes care of the operations of the company. It ensures that operations are carried out efficiently. Investors were motivated to invest more in the company because of the efficient financial management practised in Shangri-La. These investments can be used by the company for new projects and expansion of existing projects to add more value to the shareholders. The new facilities provide added competitive strength to the hotel. There are challenges that Shangri-La faces in expanding into eastern China, they are cultural issues, staff retention, pressure on wages and competition in the market as well as tariffs. There are also different challenges that arise into expanding into other markets and countries that is not China. The treats that appose Shangri –La in their Chinese expansion are the development of other hotel groups in the same area. Recommendation is also made to Simon Bridle to improve Shangri-La prospects for continuum and sustainable success.
The hospitality industry constitutes an economic sector with the fastest growth worldwide. At present, the industry continues to receive recognition as a profitable and progressive industry. The hospitality industry offers diverse opportunities for employees and varied services and features to customers. This means that overall industry actual and potential provisions are unlimited, which accounts for continuous shifts or adjustments contributing to industry viability. Diversity in employment and service offerings of the international hospitality industry has resulted to the higher number of people employed in the hospitality industry more than in manufacturing firms. Due to the profitability and viability of the industry, it has also evolved into one of the most competitive economic sectors. Heightened competitiveness in the industry could draw out the untapped capabilities of hospitality firms. On a firm level, hotel managers face the challenges of shifts in its target consumer segments coinciding with changes in consumer demands, issues of liquidity, and intense failure percentage within the industry. To survive,...