Four Seasons’ Strategic Choices
A company’s strategy can be identified by figuring out what business approaches and actions the company undertakes. Thompson et al. (2009) outline the key elements to look for in the process of understanding a company’s strategy. Four Seasons’ differentiation based focused strategy is evident from the organisation’s strategic actions. Sharp’s decision to build on high-end luxury and modern amenities so as to outdo the old grand hotels (p.3, para.3) is an example of efforts to pursue new opportunities or defend against threats as well as actions to outcompete rivals, which provides basis for differentiation. By focusing on medium-sized hotels of exceptional quality with exceptional service levels (p.3, para.3), Four Seasons defines the business scale and differentiates itself from competitors through providing superior quality and service. This is one of the moves to build a competitive advantage thus outcompeting rivals. The action to go public to raise funds (p.3, para.4) is a response to changing external circumstances, which supports the business growth and paves the way for Four Seasons to be the market leader. In order to serve diverse needs of the customers, Four Seasons extends into the fields of luxury resorts (p.4, para.1) and residential properties (p.4, para.4). With such action to diversify, it enables Four Seasons to serve a market niche. An example of actions to merge or acquire rival companies is the ownership acquisition of Regent (p.4, para.2), and a strategic alliance is formed via selling stake to Prince Alwaleed (p.4, para.4). By doing so, Four Seasons improves its competitive position as the market leader. The shift of focus from ownership to management services (p.4, para.3) reflects Four Seasons’ efforts to pursue new opportunities or defend against threats and its responses to changing external conditions. The business model of Four Seasons is defined by this strategic shift. The regional management structure (p.5, para.4), the finalisation process of budget plan (p.6, para.2), the human resource management (p.8, para.3), and the recruitment policy (p.8, para.5) are examples of how functional activities are managed in Four Seasons. By optimising functional activities, it enables improved quality and customer service provided. Four Seasons’ actions to alter geographic coverage lie in its international expansion program (p.7, para.3), which enables business growth by reaching new markets and new customers. The distinctiveness of properties that reflects the local culture (p.8, para.1) is another example of actions to diversify, which leads to differentiation. The actions to strengthen resources and capabilities that support quality and customer service improvement include the training and development programs (p.9, para.1) and the new initiatives to offer added convenience to guests (p.10, para.2). By linking the actions with the strategy, it can be summarised that a company’s strategic actions are driven by the strategy it employs (Thompson et al., 2009).
Strategic Fit with External Environment
Strategically relevant influences from the external environment can have a significant impact on the company’s strategy. Therefore, the strategy that the company employs must be responsive to the external environment (Thompson et al., 2009). The external environment outside Four Seasons affects its strategy in many aspects.
The events such as the Iraq war, the September 11th attack and terrorism impact the hotel industry significantly, which lead to decreased profitability. As a response to the circumstances, Four Seasons dedicates to international expansion. Through wider geographic presence, it allows Four Seasons to make more profits in the areas that are less impacted thus enhancing the overall profitability. Amidst these challenges, Four Seasons manages to maintain its position as the market leader, which owes to its globalisation strategy.
References: Ganesan, S. and Nagabhushan, M. (2009) ‘Four Seasons Hotels and Resorts’, IBS Research Centre.
Thompson, A., Strickland, A. and Gamble, J. (2009) Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. Seventeenth Edition. New York: McGraw-Hill Higher Education.
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