Unit 7 Business Strategy

Table of Contents
Introduction ........................................................................................................................... 2
Introduction to Shangri-La ..................................................................................................... 3
LO1 Understand the process of strategic planning ................................................................ 4
How business missions, visions, objectives, goals and core competencies inform strategic
planning (1.1) .................................................................................................................... 4
The factors that have to be considered when formulating strategic plans (1.2) .................. 5
Future direction of the competition..................................................................................... 5
Needs of customers........................................................................................................... 5
Gaining and maintaining competitive advantage................................................................ 6
The effectiveness of techniques used when developing strategic business plans (1.3) ..... 8
BCG growth share matrix .................................................................................................. 8
The Directional Policy Matrix (DPM) .................................................................................. 8
Profit Impact of Market Strategies (PIMS) technique ......................................................... 9
LO2 Be able to formulate a new strategy ............................................................................ 10
The strategic positioning of a given organisation by carrying out an organizational audit (2.1)
........................................................................................................................................ 10
Carry out an environmental audit for a given organisation (2.2) ....................................... 12
The significance of stakeholder analysis when formulating new strategy (2.3)................. 14
Direct stakeholders .......................................................................................................... 14
Indirect stakeholders ....................................................................................................... 14
Present a new strategy for a given organisation (2.4) ...................................................... 16
LO3 Understand approaches to strategy evaluation ............................................................ 19
The appropriateness of alternative strategies relating to market entry, substantive growth,
limited growth or retrenchment for a given organisation (3.1) .......................................... 19
Justify the selection of a strategy (3.2)............................................................................. 22
LO4 Understand how to implement a chosen strategy ........................................................ 23
The roles and responsibilities of personnel who are charged with strategy implementation
(4.1). ................................................................................................................................ 23
The estimated resource requirements for implementing a new strategy for a given
organisation (4.2) ............................................................................................................ 25
The contribution of SMART targets to the achievement of strategy implementation in a given
organisation (4.3) ............................................................................................................ 27
Shangri-La SMART strategic objectives .......................................................................... 28
Conclusion .......................................................................................................................... 30
References ......................................................................................................................... 31

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Introduction
The intention of this assignment is to impart the knowledge of business strategy and to give a
broad knowledge about the processes of strategic planning, how to formulate a new strategy,
approaches to strategy evaluation and to understand how to implement a chosen strategy to
a chosen organization. In this assignment we will focus on concept and processes of strategic
planning, formulating, implementing and evaluating by using concepts like PESTEL analysis,
Stakeholder analysis, Porters five forces analysis, benchmarking, Ansoffs matrix, value chain
analysis, PIMS model, evaluating roles / responsibilities and evaluating organizational
objectives and by applying these concepts in to a chosen organization.

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Introduction to Shangri-La
The Shangri-La story began in 1971 with our first
deluxe hotel in Singapore. Inspired by the legendary
land featured in James Hilton's 1933 novel, Lost
Horizon, the name Shangri-La encapsulates the
serenity and service for which our hotels and resorts
are renowned worldwide. Today, Hong Kong-based
Shangri-La Hotels and Resorts is Asia Pacific's leading
luxury hotel group. We are also regarded as one of the
worlds finest hotel ownership and management companies. Owning and/or managing over
90 hotels and resorts throughout Asia Pacific, North America, the Middle East, and Europe,
the Shangri-La group has a room inventory of over 38,000 (Shangri-la.com, 2016).
In Sri Lanka they have a Resort and Spa at Hambanthota already in operation, as for the
future soon in 2017 they will open their new 5 star hotel in Colombo.

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LO1 Understand the process of strategic planning

How business missions, visions, objectives, goals and core competencies
inform strategic planning (1.1)
Mission statement of Shangri-La Hotel Sri Lanka
The definition of mission statement is a written proclamation of an organizations core
intentions.
To delight our guests every time by creating engaging experiences straight from our
heart.
Vision Statement of Shangri-La Hotel Sri Lanka
The definition of vision statement is an ambitious statement of what an organization would like
to attain in the future.
To be the first choice for guests, colleagues, shareholders and business partners.
Goals and objectives of Shangri-La Hotel Sri Lanka
Goals and objectives of Shangri-La Hotel Sri Lanka for next 5 years

To be number one leading hospitality service provider in Sri Lanka by 2020.

To be the best customer service provider in Sri Lankan tourist market by end
of 2020.
To be the best hotel that providing best added features in Sri Lanka by end of
2020.
To be the largest hotel (in terms of rooms) in Sri Lanka by end of 2020.
To increase the market share of the hotel by 20% by end of 2020.
By take over a hotel having a 3-5% of a market share in Sri Lankan tourist
market by end of 2017.
Expand the business operations of Shangri-La Hotel to other provinces in Sri
Lanka by end of 2020.
Increase the volume of repeat of local visitors by 15% by end of 2020.
Increase the revenue by 25% by 2020 opposed to 2016.
Increase the volume of total (local and international) repeat visitors business
by 20% by 2020 opposed to 2016.
Increase the expenditure on marketing (international and local) by 18% by end
of 2020 opposed to 2016.
Keep increase of the prices of Shangri-La Hotel Sri Lanka below 7% by end of
2020 in order to facilitate more local customers.

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The factors that have to be considered when formulating strategic plans

(1.2)
When considering about formulating a strategic plan for Shangri-La Hotel Sri Lanka, the
management of the hotel have to consider the following.

Future direction of the competition.

Needs of customers.
Gaining and maintaining competitive advantage.

Future direction of the competition

How to outcompete rivals
Companies need to be better than each of their rivals if a company wants to survive in the
market. Shangri-La Hotel Sri Lanka has to focus about how to outcompete its rivals here in Sri
Lankan market not only using the most traditional techniques like lowering the price of the
services but considering other possible methods to outcompete rivals in the market like John
Keels and Aitken Spence by focusing about providing more rarer and fast service delivery,
wide range of services and being more ethical services providers etc. in the Sri Lankan market.
How to respond to economic and market conditions and growth opportunities
How to respond to economic and market conditions and growth opportunities is defining the
adaptability of a company. Shangri-La Hotel Sri Lanka needs to consider how to respond
sudden and gradual market and economic conditions and sudden and gradual growth
opportunities in the Sri Lankan market prior to develop strategic plans for the hotel.
How to manage functional pieces of the business
Functional pieces of a business have a direct major effect to a business and its operations.
Shangri-La Hotel Sir Lanka has to consider about how to manage the hotels functional pieces
like human resources of the hotel, marketing process of the hotel, customer services of the
hotel, finance process of the hotel and supply chain process of the hotel prior to formulate the
strategic plans for Sri Lankan operations.
How to improve the firms financial and market performance
Shangri-La Hotel Sri Lanka has to consider about how to improve the hotel financial and
market performance ahead of developing its strategic plans for Sri Lankan business
operations. In order to improve the hotels financial and market performance the management
has to focus about improving the cash flow within the company, improving the work-in progress
management, develop new businesses, monitoring the cash flow of the Shangri-La Hotel Sri
Lanka.

Needs of customers
The definition of customer is a party that buys/receives goods or services and possesses the
power of selecting different products or services providers in the market. Needs of the
customers and how the management of the Shangri-La Hotel Sri Lanka addresses these
needs of its customers as follows

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Value for money

Always the customers are expecting the value for money that they are spending on product or
service. Shangri-La Hotel Sri Lanka has to focus about of providing services that satisfies
customers expectations to a greater extent. In order to accomplish this management can
focus areas like quality of the service, delivery speed and customer service prior to develop
strategic plans for the hotel.
Acceptable quality
While the customers expecting the value for their money they also expecting the acceptable
quality from the service provider. Shangri-La Hotel Sri Lanka has to look at the degree of the
quality of the services that hotel providing. In order to deliver the quality services the
management can concentrate areas like the speed of service delivery and customer service
ahead of formulating strategic plans for Sri Lankan operations.
Accurate quantity
Customers are constantly anticipating the accurate quantity of the service / products for their
money. The management of the Shangri-La Hotel Sri Lanka has to focus about the accuracy
of the services and products that hotel providing for its customers before develop strategic
plans.
Speed of delivery
Shangri-La Hotel Sri Lanka has to focus about the delivery speed of services prior to develop
strategic plans for Sri Lankan operations because the speed of delivery has a direct effect of
satisfying the customers.
After sales service
Without providing a great after sales services, Shangri-La Hotel Sri Lanka is not capable of
retaining the customers of the hotel. Hence prior to formulate the strategic plans for Sri Lankan
business operations the management has to concentrate about delivering a good after sales
service for customers of the hotel.
New features
Since Shangri-La Hotel is a new entry for Sri Lankan market, hotel should introduce new
features prior to start its business operations. This will leads to gaining competitive advantage
for the hotel while attracting more customers and this will supports to brand the hotel in Sri
Lankan tourism industry.
Ease of use
The management of the Shangri-La Hotel has to focus more about ease of use of hotels
services and the convenience of methods that providing the services to its customers prior to
make strategic plans for Sri Lankan market for instance customer care service, online booking
and new features of the hotel.

Gaining and maintaining competitive advantage

The definition of competitive advantage is a transcendence earned by a company when it can
offer the similar value as its contenders but at a lower price, or can charge higher prices by
offering greater value by differentiation. Shangri-La Hotel Sri Lanka has to consider about
gaining the competitive advantage over its competitors in Sri Lanka in order to settle down in
the Sri Lankan tourist market and to support the process of branding the hotel in Sri Lanka.

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The management of Shangri-La Hotel can look into various scopes to gain competitive
advantage over competitors. For instance the management can look into scopes like superior
services and customer support, innovation, service flexibility, high quality services for low-
pricing and introducing new features for Sri Lankan tourist industry.
Benefits of gaining competitive advantage includes

Improved chances of being success

More prominent action plans
Supports branding the companys brand name
Chances of being unique in the industry
Will heighten customer loyalty
Ability of earn more profit
Ability to spread the business
Ability to attract more customers
Heighten the chances of capturing the market share

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The effectiveness of techniques used when developing strategic business

plans (1.3)
The techniques that Shangri-La Hotel Sri Lanka can use when develop a strategic plan for the
new operation as follows.

Ansoffs growth vector matrix

PIMS technique
BCG matrix
The directional policy matrix (DPM)
The best techniques that Shangri-La Hotel Sri Lanka can use when developing the strategic
plan are discussed in detail as follows.

BCG growth share matrix

The BCG growth share matrix was developed by the Boston Consulting Group (BCG) in the
1970s. The BCG matrix is a planning tool that applies graphical representations of an
organizations products and services in an attempt to support the organization to determine
what it ought keep, invest or trade more in. BCG growth share matrix plots an organizations
offerings in a four square matrix, with the y-axis presenting the rate of the growth of the market
and the x-axis presenting share of the market (Investorwords.com, 2016).
Benefits of using BCG growth share matrix for Shangri-La Hotel Sri Lanka when
developing the strategic plan.

This technique is very simple and easy to understand.

Since Shangri-La Hotel Sri Lanka going to invest on the proposed hotel in the eastern
province, this technique attracts attention to the investment needs.
This technique attracts attention to the cash flows of the Shangri-La Hotel Sri Lanka.
This method is quantifiable.
This technique provides a base for the Shangri-La Hotel Sri Lanka management to
determine and set up suitable actions for the future business operations.
Limitations of using BCG growth share matrix for Shangri-La Hotel Sri Lanka when
developing the strategic plan.

This technique can be too simplistic.

This technique ignores the consequences of synergies amongst business units.

The Directional Policy Matrix (DPM)

The Directional Policy Matrix (DPM) is a technique capable of helping Shangri-La Hotel Sri
Lanka to decide what its more desirable segments are. In carrying out a Directional Policy
Matrix Shangri-La Hotel Sri Lanka can distinguish what Shangri-La Hotel ought to invest in
and the direction Shangri-La Hotel Sri Lanka have to take. The Directional Policy Matrix
evaluates the attraction of each segment and the potentiality of the Shangri-La Hotel Sri Lanka
to endorse that particular segment.

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Shangri-La Hotel Sri Lanka has to focus below mentioned variables to assess the
attractiveness of the market segment.

Size of the tourism market in Sri Lanka.

The rate of growth of the tourism market in Sri Lanka.
Current purchasing power of the tourism market in Sri Lanka.
Accomplishable market share giving the promotional budget that Shangri-La Hotel Sri
Lanka ready to spend.
Benefits of using the Directional Policy Matrix (DPM) for Shangri-La Hotel Sri Lanka
when developing the strategic plan

Ability to know about required capital and human resource investment that Shangri-La
Hotel Sri Lanka has to invest.
This technique will demonstrate the likelihood of the future market share of Shangri-
La Hotel Sri Lanka.
This technique will present the required competitive capability of the Shangri-La Hotel
Sri Lanka against its marketing mix.
This technique capable of exhibiting the potentiality of the market segments of Shangri-
La Hotel Sri Lanka.
Limitations of using Directional Policy Matrix for Shangri-La Hotel Sri Lanka when
developing the strategic plan

Since Shangri-La Hotel Sri Lanka yet to start up operations in Sri Lanka, it will be
difficult to find the accurate data for evaluate the attractiveness of the market
segments.

Profit Impact of Market Strategies (PIMS) technique

The Profit Impact of Market Strategies (PIMS) is a comprehensive, long-term study of the
performance of strategic business units (SBUs) in 3,000 companies in all major industries.
PIMS database is a collection of statistically documented experiences drawn from thousands
of businesses, design to support understand what kind of strategies work best in what kinds
of business environments (Inc.com, 2016).
Advantages of using the Profit Impact of Market Strategies (PIMS) technique for
Shangri-La Hotel Sri Lanka

Since PIMS holds a collection of statistically documented data base drawn from
various businesses, it is simple for Shangri-La Hotel Sri Lanka to develop an image of
what kind of strategy will work in the Sri Lankan environment.
Accuracy and easiness of collecting data.
By using PIMS technique Shangri-La Hotel Sri Lanka can look into the strategies of its
competitors are following.
By using PIMS technique Shangri-La Hotel Sri Lanka can heighten the chances of
gaining the competitive advantage quickly comparing to its competitors because of the
collection of statistically documented data base.
Limitations of using the Profit Impact of Market Strategies (PIMS) technique for Shangri-
La Hotel Sri Lanka

Subscription charge is moderately high.

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LO2 Be able to formulate a new strategy

The strategic positioning of a given organisation by carrying out an
organizational audit (2.1)
To analyse the strategic position of Shangri-La Hotel Sri Lanka, we have to carry out an audit
for that we have to consider about the following techniques.

Benchmarking
SWOT analysis
Product positions or positioning
Value chain analysis
Demographic influence
Scenario planning
Synergy culture and values
Next well see the strategic position of Shangri-La Hotel Sri Lanka by conducting a SWOT
analysis

Helpful Harmful
in achieving the objective in achieving the objective

Strengths
Sri Lanka consists with a long (1600
km) and beautiful coastline along with
the Indian Ocean and with a tropical
climate.
(attributes of the system)
Weaknesses
Limited international air
connectivity (lack of international
flag carriers)
Currently inadequate transport

Since Shangri-La brand name facilities for the Eastern province.

already in the world tourism industry, it Most of native guests are adapted
Internal

will attract guests more quickly. to low-budget hotel destinations.

Sri Lankan government is providing a Government regulations, for
substantial support towards the instance casino.
industry.
Sri Lanka is a low cost tourist
destination.
Ability to provide a sub-continent
experience to the guests.
Only 3-4 major competitors in the
market comparing to regional market.

Opportunities Threats
Onset of peace to attract greater Since Shangri-La Hotel is new
(attributes of the environment)

numbers of tourists. entrance for Sri Lankan tourist

Major infrastructure investment industry native tourists will take
programs planned for the Eastern some time to adapt to the
External

province. organizational culture.

Focus areas for Sri Lanka - beach
tourism, cultural tourism, tea tourism,
Eco-tourism.
Ability to provide quality and
exclusivity based packages for guests.
Only 2-3 major competitors in the
Eastern province.
Competition from adjacent
countries like India, Malaysia.
Limited air connectivity for Europe,
America and Oceania.
Competition from already settled
organizations.

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Advantages of carrying out a SWOT analysis

SWOT analysis address weakness of the Shangri-La Hotel Sri Lanka hence the
management can look out for possible and suitable solutions.
SWOT analysis take advantage of current opportunities that available for Shangri-La Hotel
Sri Lanka.
SWOT analysis capitalizes of the strengths of Shangri-La Hotel Sri Lanka.
SWOT analysis will help to overpower the threats of Shangri-La Hotel Sri Lanka.
SWOT analysis is a source of data for strategic planning for Shangri-La Hotel Sri Lanka.
SWOT analysis will help to setting up objectives for strategic planning for Shangri-La Hotel
Sri Lanka.
Limitations of carrying out a SWOT analysis

Since Shangri-La Hotel Sri Lanka is a new entry to Sri Lanka poor industrial relations will
affect to carry out the SWOT analysis.
Since Shangri-La Hotel Sri Lanka is a new entry to Sri Lanka inadequate research facilities
will affect to carry out the SWOT analysis.

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Carry out an environmental audit for a given organisation (2.2)

Before entering the Sri Lankan market Shangri-La Hotel Sri Lanka conducted a
comprehensive environmental audit using PESTEL

Political factors
Sri Lankan government is consisting of the parliamentary and presidential system. Head of
the state is the president and present President is Mr. Maithripala Sirisena who was elected
in this year. When a company develops and carries out its business strategies the political
factor has an immense influence upon the regulation of businesses and also with the spending
power of the customers. Shangri-La Hotels Sri Lanka have to consider about the stableness
of the political environment in Sri Lanka, influence of polices to business in Sri Lanka
(especially tax policies), the Sri Lankan government's perspective on marketing and marketing
ethics, monetary policy of Sri Lanka and Sri Lankan government opinion on culture and
religion.

Economic factors
Sri Lanka is having an open economy. Tourism and hospitality sector is giving a significant
assistance to the Sri Lankan economy. Economic impacts are turned into all important factors
when formulating a business strategy because of marketing and management decisions are
directly affecting from these economic impacts. Sri Lankan government has acknowledged
that tourism will provides great possibilities for regional / territorial development especially for
regional areas like eastern province that already experiencing structural change. Shangri-La
Hotel Sri Lanka have to focus on economic factors in Sri Lanka like monetary policy,
employment rate, taxes, price and income elasticity and about foreign exchange rate prior to
formulating the strategic plan.

Social factors
Sri Lanka is a multi-religious and a multi-ethnic country with a population of 22 million. The
culture of Sri Lanka is a great blend of the interaction of diverse cultural patterns. The
population consists with religions which are Buddhism - 69%, Islam - 15%, Hinduism - 8% and
Christianity - 8%. Overall the Sri Lankan culture is predominately based upon an effect of the
impact of the introduction of Buddhism which happened more than 2,300 years ago and
Hinduism and Christianity sharing the second most frequent religions in Sri Lanka. The literacy
rate of Sri Lanka is 92% and 83% of total population had secondary education. These facts
illustrate that Sri Lanka is one of the most literate population amongst developing countries in
the world at present. Tourists are appreciating the hospitality of Sri Lankans to a greater
extent. Prior to formulating the strategic plans for Shangri-La Hotel Sri Lanka have to focus on
social factors like Sri Lankan culture and sub cultures that existing in Sri Lanka, cultural trends,
what the acceptable tourists trends for Sri Lanka and cultural values in Sri Lanka.

Technological factors
Technological factors are playing a vital role with the tourism industry in various manners
which are includes the act of using the up to date inventions and engineerings that make
easier the business operations like telephone facilities, high speed internet facilities, Wi-Fi
technology, large LED screens, online room reservation systems, property management
systems and also online information exchange systems etc. In the modern world the
technology is changing daily. Adapting latest technology will help Shangri-La Hotel Sri Lanka
to gain the competitive advantage in the tourism industry. Shangri-La Hotel Sri Lanka has to
focus on technological factors like electricity, telecommunication and high speed internet etc.
prior to make strategic plans for Sri Lankan operations.

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Legal factors
Regarding the legal factors that Shangri-La Hotel Sri Lanka has to focus on include the tourism
act, consumer law, employee discrimination law and employment law and health and safety.
These legal factors are capable of playing a vital role in the tourism industry while directly
affecting the business operations of Shangri-La Hotel Sri Lanka. Looking into more about the
tourism act of Sri Lanka, the tourism act No 38 of 2005 came into effect in October 2007 by
replacing forty years old act. Attracting and promoting tourism is managed by the tourism
promotion bureau of Sri Lanka while hotels schools operations are managing by the Sri Lanka
institute of tourism and hotel Management.

Environmental factors
The propose area for Shangri-La Hotel Sri Lank is situated in eastern province. The eastern
province is arguably contains the most beautiful beach in Sri Lanka. Adding to that after ending
the civil war that lasted for 30 years the Sri Lankan government is developing the
infrastructural facilities in eastern province rapidly which is very much beneficial for promoting
tourism in Sri Lanka. Shangri-La Hotel Sri Lanka has to consider about environmental factors
like sewage disposal facilities, environmental pollution, logistics and sustainable
environmental practices before making strategic plans for its operations in Sri Lanka.
Advantages of conducting a PESTEL analysis for Shangri-La Hotel before entering the
Sri Lankan market

PESTEL analysis provides an uncomplicated and easy to use framework for the
analysis to Shangri-La Hotel Sri Lanka.
Facilitates to dilute the impacts and effects of potential threats to the Shangri-La Hotel
Sri Lanka.
Facilitates and advocate the development of the strategic thinking of the Shangri-La
Hotel Sri Lanka.
Enables Shangri-La Hotel Sri Lanka to evaluate implications / significances of entering
to Sri Lankan tourist market.
PESTEL analysis extends ways to search possible sustainable advantages for the
Shangri-La Hotel Sri Lanka.
Limitations of PESTEL analysis

Users can oversimplify or exaggerate the data that employed for arriving at
conclusions.
Considering above mentioned PESTEL analysis, it is evident that the management has to
especially consider about Political factors, Economic factors, Social factors, Environmental
factors, intensity of existing competitive rivalry, threats of new international and local entrants
to Sri Lankan market and threats of substitute products when formulating the business strategy
for the hotel in Sri Lanka.

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The significance of stakeholder analysis when formulating new strategy

(2.3)
Stakeholder is an individual, group or an organization that is interest and concern in an
organization or a company. As mentioned previously the management of the Shangri-La Hotel
Sri Lanka conducted a stakeholder analysis regarding the stakeholders of the Shangri-La
Hotel Sri Lanka. The significance of stakeholder analysis is comprehensively described as
follows. Stakeholders of the Shangri-La Hotel Sri Lanka are Shareholders of the company, Sri
Lankan government, employees of the hotel, suppliers of the hotel, the press, interest groups,
customers and prospective customers, analysts, the public, future recruits, the community.
Stakeholder analysis is important for the development of knowledge and understanding about
other organisations in the firm's environment. The first step is to list all stakeholders, and then
position them on a stakeholder map. This indicates the main relationships and patterns of
interdependence between stakeholders (Riley, 2011).
Direct stakeholders are the parties who focus about the daily activities that can affect to the
business. Direct stakeholders of the Shangri-La Hotel Sri Lanka and their expectations and
powers are mentioned below.

Direct stakeholders
The direct stakeholders are shareholders of the hotel, employees of the hotel and customers
of the hotel.

Shareholders of the company Expectations of the shareholders are business to be

highly profitable and offer good returns for their investments. Shareholders having the
power of influencing every decision of Shangri-La Hotel Sri Lanka.
Employees Expectations of the employees are flexibility, dependability,
cooperativeness etc. Employees having the power of acting upon the management
decisions and ability of acting upon increment and decrement of profits of the hotel.
Customers Expectations of customers are the perceived values customers look for
from a good or a service that they purchased. Customers are having the powers to
directly influencing the hotels profits and the brand name.

Indirect stakeholders
Indirect stakeholders are the parties who are not impacted by the daily activities of the
business and most of the time indirect stakeholders are looking at the aspects like the quality
of the product or service, price of the product or service or about the practices that the
company following when operating the business. The indirect stakeholders of the Shangri-La
Hotel and their expectations and powers are mentioned below.

Government Expectations of the government to business is to execute the policies

and carryout the ethical business practices. Government having the powers likes
directly effecting with the hotel by influencing with policies, rules and regulations.
The press Expectations of the press is to report truth about the practices of the
business carrying out and give a clear idea to the public regarding the business. The
press having the powers likes affecting with hotels brand name and increment and
decrement of profit and growth of the hotel.

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The public and the community Expectations of the public and the community are
to getting a good service while carrying cooperate social responsibility by the hotel.
Public and the community having the powers like influencing hotels brand name and
its profits and management decisions.
Advantages and limitations of stakeholders analysis are mentioned below.
Advantages

Get to know the stakeholders of the Shangri-La Hotel better.

Ability to develop better strategies by using the stakeholder analysis for the Shangri-
La Hotel.
Ability to point out the risks that Shangri-La Hotel Sri Lanka has to take.
Ability to call attention about the stakeholders interests regarding the strategic plans
of the hotel.
Ability to inform the key people of the Shangri-La Hotel Sri Lanka involving the future
strategic moves of the hotel.
By using the stakeholder mapping ability to focus about the negative stakeholders
viewpoints regarding the future strategic moves of the Shangri-La Hotel Sri Lanka.
Stakeholder analysis will heighten the chances of finding out new mechanisms to
influence the stakeholders of the Shangri-La Hotel Sri Lanka.
Limitations

Have to continue with significance of each stakeholder on continuous basis.

Not all the interests of all the stakeholders can be satisfied at the same time.
Most of the time this method is only focusing on the main stakeholder of the Shangri-
La Hotel Sri Lanka.

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Present a new strategy for a given organisation (2.4)

In Sri Lanka for hoteliers the new almost untouched market is the eastern province so the
current leaders of the industry are making moves to make sure to get a head start on the said
market, so with the future plans of John Keels Hotels and Aitken Spence Hotels to entering
the market in the eastern province, the strategies that Shangri-La Hotel Sri Lanka can use to
gain and maintain the competitive advantage are mentioned bellow.

By offering high quality services for possible lowest prices in Sri Lanka
Providing new added features for guests
Provide coastal / marine travel experiences and fun beach activities for guests
By offering high quality services for possible lowest prices in Sri Lanka
Price is the most general objection the visitors will face when they are travelling. Regarding
the current tourism industry in Sri Lanka there are various hotels providing high quality
services. But when consider about the price that customers have to spend in order to receive
a high quality services it is considerably very high. Shangri-La Hotel Sri Lanka can focus about
providing high quality services for its customers for a low price comparatively its rivals in the
Sri Lankan tourism market in order to gain competitive advantage. These services includes
customer service of the hotel, online checking in and checking out features, offering different
meals for visitors, offering tours around the eastern province and around the country and
offering technological facilities for visitors (for instance Wi-Fi facilities) etc. for the lowest price
in Sri Lanka while maintain the heights level of the quality of these services. In order to provide
a high quality services for customers, the management has to focus about developing the
quality of following aspects.

Customer service This is the most obvious factor that any organization in the tourist
industry has to continually focus on. This can be attained by establishing a service
culture in the hotel, by focusing on the quality of the instead of quantity, by listening to
customers more frequently and putting more effort to understand them, understanding
the training and development needs of the staff, focusing on new challenges and
areas.
Customers centric By being more / increasing the quality of customers centric will
heighten the chances of creating the brand loyalty and this will support to brand the
companys image. This can be attained by understand the requirements of customers,
increasing the quality of getting customers involved in decision making process,
increase quality of being the openness and by increasing quality of the processes to
monitor customer interactions.
Providing new added features for guests
In order to attract more customers and to gain competitive advantage, nowadays hotels have
to consider about providing best, new added features for its guests. The management of the
Shangri-La Hotel Sri Lanka can focus about following aspects / features in order to carry out
this strategy.
Transform lobby areas
The lobby area is the relevant area of meeting guests and interaction space of the hotel, and
this area should be planned for function from the early morning hours into the evening hours.
The vastness / wideness of the lobby area is dispelled with the introduction of a very
comfortable social and work spaces that invite guests to hang around in the lobby area.

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Dining with flexibility

This concept should reflect the customers capability of choosing different choices and the
convenience of those choices to the customer. With the arising demand for healthy and
organic food choices approachable at any hour in other hotels, Shangri-La Hotel can focus
about the flexibility of these choices to the customer in order to be different from the
competitors. For illustrate this, Shangri-La Hotel can provide food choices that customers
demanding instead of providing food choices that only displayed on the menu, Shangri-La
hotel can ask from its customer personal preferences for celebrate special occasions, Shangri-
La Hotel can add features like 24 hours dining and offer single and multiple dining spaces
while playing the music that customer prefer.
Using the technology in an innovative manner
Shangri-La Hotel can add features like online check-in and out both by using computers and
mobile, providing high speed free Wi-Fi facilities for customers, on demand movies and
television shows, 3D movie theatre that showing latest movies, ordering room service via
intercom, on demand photography and video services for customers to capture their special
moments, providing complimentary iPads and iPods to guests, use thumb reader locks for
doors to feel the customer more secure and use universal bedroom remotes for control the
rooms temperature / curtains / lights / sound levels in order to gain and maintain competitive
advantage.
Facilitating the needs of health, fitness and recreational activities Regarding the customers
health and fitness needs Shangri-La Hotel can provide added services like free gymnasium
and workout facilities, running track, meals that more centric on nutrition value, on demand
supplements, on demand workout plans, Yoga mats, complimentary foot bikes and adding
adventure features like adding rock climbing wall, sea diving will help the hotel to standout
from other competitors in the market.
Provide coastal / marine travel experiences and fun beach activities for guests
Tourism based on sun, beach and sea is the most trending combination in Sri Lanka especially
in the eastern province. In order to gain competitive advantage Shangri-La Hotel can focus on
promoting coastal / marine based tourism as a tactic. The management of Shangri-La Hotel
can consecrate following areas / aspects in order to carry out this strategy.
Surfing
Southern Asia is one of best place to practice this art surfing. Since Shangri-La Hotel
operating from eastern province, the hotel can easily provide surfing facilities for the guests
who are looking for some adventure. With the increment of international tourists coming to Sri
Lanka the hotel can target this niche market and promote surfing. Shangri-La Hotel can
provide packages like single and group surfing, lending surfing equipment for a small fee, free
life guard facilities to ensure safety of guests, provide surfing lessons for beginners and since
most of native guests are not familiar with this activity the management can install a surfing
simulator to gain the competitive edge over the competitors.

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Boat / cruise rides

Shangri-La Hotel can provide boat / cruise ride packages for customers. And the management
can introduce packages like single / small group boat rides and large group cruise rides with
features like fishing and whale watching. Shangri-La Hotel can target both international and
local travellers for this boat and cruise rides in order to stay ahead of the competition.
Activities on the beach
The management of the Shangri-La Hotel can conduct activities on the beach like beach
parties, sun bathing, fun games that guests can participate in, open bar on the beach, group
partying areas, on demand beach barbeque on the beach and on demand beach fires at night
for keep customers interest and to give the customer a different beach experience not only
limiting to international guest but also including local guests for these activities.

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LO3 Understand approaches to strategy evaluation

The appropriateness of alternative strategies relating to market entry,
substantive growth, limited growth or retrenchment for a given
organisation (3.1)
Possible alternative strategies available for Shangri-La Hotel Sri Lanka to start up business
operations in eastern province in Sri Lanka

Use innovative methods to carry out the advertising strategy

By merging with other hotel
By taking over other hotel (acquisition)
Use innovative methods to carry out the advertising strategy
Shangri-La Hotel Sri Lanka can put into practice an advertising strategy in order to promote
the hotel and to attract more customers. Innovative ways to advertise are discussed below.
Partnering up with online booking sites
Shangri-La Hotel can collaborate with world famous online booking sites like Agoda.com,
bookings.com, hotels.com in order to promote the business and to attract more customers.
This method will give the hotel extra advantages like

Ability to attract more international customers.

Reduce the advertising costs.
Ability to branding the name Shangri-La without putting much effort.
Advertising on social networks
Shangri-La Hotel can advertise on social networks like Facebook, twitter, Google+ and
YouTube in order to promote the hotel and attract more customers. This method has
advantages like

Capable of attracting both local and international customers.

Chances to address huge market at same time.
Ability to reach to customers with ease.
Heighten chances of getting customer feedback quickly.
Extending sponsorships
Shangri-La Hotel can extend sponsorships in order to promote the brand name and this will
especially lead to attract more local customers. Shangri-La Hotel can extend their
sponsorships occasions like fundraising events, safety awareness events and sponsoring
television programs on national television.
Advantages of this method are

Ability to reach local customers.

Heighten chances to build public relationships.
Ability to reach niche markets.
Disadvantages of using above mentioned methods as follows.

Lack of control of these methods can demolish the brand name.

Have to spend more money.

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Lack of chances to measure the effectiveness above mentioned techniques.

By merging with other hotel
Shangri-La Hotel Sri Lanka can merge with another hotel who already operating their business
in the eastern province. But when merging with another hotel, the management of Shangri-
La Hotel has to consider about following factors regarding the other hotel

Reputation of the affiliated hotel.

Market share of affiliated hotel.
Customer perception of affiliated hotel.
Organizational culture.
Terms, conditions and policies.
Advantages of merging with other hotel as follows

Reduced costs.
Quick market penetration.
Ability of using best skills and talent of both companies.
Will provide a greater efficiency.
Ability to get best management talent.
Ability to find new markets.
Heighten chances of developing the product and services.
Disadvantages of merging with other hotel as follows

Possibility of cultural clash.

Fewer choices for customers.
Possibility of leadership issues.
Cost of merge with the other hotel.
By taking over other hotel (acquisition)
Shangri-La Hotel Sri Lanka can use the acquisition method as an alternative strategy in order
to start up business operations in eastern province. But when taking over another hotel the
management of the Shangri-La Hotel has to consider about following factors

Market share of the hotel.

Acquisition cost.
Reputation of the other hotel.
Advantages of using acquisition as an alternative strategy

Expanded market reach for the Shangri-La Hotel Sri Lanka.

Ability to generate more revenue.
Chances of gaining cost efficiency.
Ability to gain the market power quickly.
Chances to find new resources and new competencies.
Heighten chances of financial gain.
Ability to overcome other market entrants.
Great method to increase market share.

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Disadvantages of using acquisition as an alternative strategy

Can face with integration issues.

Cost can be high.
Have to focus too much on the acquisition process.
Can distract from goals and objectives of the company.
Tax and legal implications.

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Justify the selection of a strategy (3.2)

The best strategy that Shangri-La Hotel Sri Lanka can put into practice to start business
operations in eastern province of Sri Lanka is by taking over another hotel (acquisition).
Reasons for selecting the acquisition strategy

Speed This strategy will provide ability to Shangri-La Hotel Sri Lanka to quickly take
on organizational resources and competencies / skills. And this strategy will
appropriate to enter into new products / services and new markets.
Ability to gain market power This strategy will fabricate market presence of
Shangri-La Hotel and this strategy will heighten the market share of the Shangri-La
Hotel in a short period of time.
Ability to overcome the competition This strategy will allow for Shangri-La Hotel
Sri Lanka to overcome the market competition of Sri Lankan tourist market by
closedown of capacity.
Heighten chances of get the better of entry barrier This strategy will support
Shangri-La Hotel Sri Lanka to overcome Sri Lankan market entry barrier by taking on
an existing hotel and adding to that by using this strategy, the possible risk of
competitive reaction will reduce.
Ability to implement other strategies quickly By using an acquisition approach,
Shangri-La Hotel Sri Lanka will be able to implement other strategies like
Offer high quality services for possible lowest price in Sri Lanka
Provide new added features for customers of Shangri-La Hotel Sri Lanka.
Provide coastal / marine travel experiences and beach activities in a short
period of time.
Ability to reach out to local customers quickly By taking over other hotel that
already operating its business functions in Sri Lankan tourist market, Shangri-La Hotel
will be able to capture the local customer audience of that hotel.
Having a lower risk comparing to developing new products and services New
products and service development processes are involve high risks for Shangri-La
Hotel Sri Lanka, because moving into the Sri Lankan tourist market and making a
satisfactory return on investment of the Shangri-La Hotel demands substantial
resources (human and monetary) and time. But at the same time, consequences of
the acquisition are capable of forecasting with ease and more precisely making an
acquisition is the best strategy for Shangri-La Hotel to move into Sri Lankan tourist
market.

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LO4 Understand how to implement a chosen strategy

The roles and responsibilities of personnel who are charged with strategy
implementation (4.1).
Roles of personnel who will be in charge of strategy implementation of Shangri-La Hotel
Sri Lanka

Planning role
Balancing role
Translating role
Provoke dialog role
Provide feedback role
Planning role
Planning role is the first and most important role in strategy implementation and in the failure
to be present of planning the activities of the strategy, the strategy will turn to be meaningless.
The quality of being important of planning role has enhanced in perspective of the size of
organization and depth of the organizational strategy. The planning role will provide the right
direction. Planning role will define the strategic objectives of the organization to a greater
extent. The most evident result of this planning role is that all the employees of the Shangri-
La Hotel will get guidance from this planning role and all their efforts will be centred on the
strategic objectives of the Shangri-La Hotel Sri Lanka. Adding to that planning role will cut
down the overlapping and time wasteful activities and this role will help to attain organizational
goals and objectives within the exact given time frame. The planning role will set up future
actions of the Shangri-La Hotel in order to attain objectives and goals of the hotel and in this
process the matters of when, where, what and why are will be determined in order to execute
strategic plans of the Shangri-La Hotel.
Balancing role
Balancing role is another crucial role in strategy implementation. The role of balancing will be
depending on the organizational goals, objectives and the profundity of the strategy which
Shangri-La hotel Sri Lanka putting into practice. The obvious outcome of this balancing role is
the ability to evaluate the pace of attaining organizational goals and objectives. The balancing
role have to be watchful with the over speed of the goals attaining and the lower speed of
goals attaining of the Shangri-La Hotel Sri Lanka because these both can be functions as
destructive ways for the strategic plans of Shangri-La Hotel Sri Lanka. The over speed of
attaining strategic goals and objectives will lead to waste the resources of Shangri-La Hotel
Sri Lanka while lower speed of attaining strategic goals and objectives will lead to overshoot
the strategic goals and objectives of the Shangri-La Hotel Sri Lanka.
Translating role
Translating role is another essential role in the process of strategy implementation. When
Shangri-La Hotel Sri Lanka implementing strategies, this role is playing a very vital role
because this role letting other parties to know what to do and this role is providing a clear
understanding regarding the strategic goals, objectives and strategy implementation process.
Employees of the Shangri-La Hotel require guidance from the management when
implementing the strategy of the hotel and they require a well-defined purpose and a condition
to correspond in to.

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Provoke dialog role

This is another all-important role when implementing strategies. Provoke dialog role will
enhance the quality of getting more ideas from different parties of the Shangri-La Hotel Sri
Lanka. It is evident that the provoke dialog role picks out the best ideas out of the many
available when implementing strategy. All these ideas are not coming to the higher
management of their own. These ideas have to be discovered within the company when
implementing the strategy. The provoke dialog role adds an extra power of thinking in the
management of Shangri-La Hotel Sri Lanka adding to that provoke dialog role will extend to
getting innovative and creative ideas from different parties within the Shangri-La Hotel.
And also provoke dialog role will ease up the decision making process of the Shangri-La Hotel
Sri Lanka. Decision making process signifies the process of taking decisions within the
Shangri-La Hotel Sri Lanka. Therefore, different types of options are determined and the best
option will be selected. The provoke dialog role will influence the way for decision making
process.
Provide feedback role
This is another essential role for strategy implementation process. Provide feedback role can
be used as to know where the other parties of the Shangri-La Hotel stand when implementing
strategies. Providing feedback role is the cheapest but most powerful role that Shangri-La
Hotel has at the administration. Providing feedback role is powerful as this role assists
employees of the Shangri-La Hotel to get on track and providing feedback role functions as a
steer to help employees of the Shangri-La Hotel to know how they and others expecting
performance when implementing strategies.
Provide feedback role can also helpful when motivating the employees of the Shangri-La Hotel
Sri Lanka especially when implementing strategies. Provide feedback role has firm
connections to the productivity and employee satisfaction of the company. Employees of the
Shangri-La Hotel Sri Lanka prefer to sense involved and distinguished for the organization
and provide feedback role is facilitate to accomplish that state for the management when
implementing strategies.
Responsibilities of personnel who will be in charge of strategy implementation of
Shangri-La Hotel Sri Lanka

Setting up SMART organizational goals and objectives for Sri Lankan operation.
Governing the Shangri-La Hotel by setting up policies for the Sri Lankan operation.
Selecting the best employees for the organization.
Appointing the best possible employees for the organization.
Supporting and critiquing of employees of the organization.
Guaranteeing adequate resources for the Sri Lankan operations.
Allocating adequate recourses for the Sri Lankan operations.
Monitoring the progress of implementing strategies for Sri Lankan operations.
Evaluate the progress of implementing strategies of Sri Lankan operations.

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The estimated resource requirements for implementing a new strategy for

a given organisation (4.2)
Resource allocation
Resource allocation is the process of designating and handling assets of an organization in
order to support its strategic goals. Resource allocation has as a part of managing tangible
assets of the organization such as hardware, monetary and material resources and intangible
assets such as human resources (skills).
Resource allocation requirements of the Shangri-La hotel in order to bringing in Thai tourists
can be divided into four main categories.

Finance resource allocation

Human resource allocation
Material allocation
Time allocation
Finance resource allocation
Finance resource allocation is the process of how Shangri-La Hotel Sri Lanka is divides their
financial resources and other capital resources into different processes and projects.
Basically, it is the Shangri-La Hotel managements goal to optimize finance and capital
allocation so that will yields as much profit as possible for shareholders of the Shangri-La Hotel
Sri Lanka.
When Shangri-La Hotel allocating finance resources, the management of Shangri-La Hotel
has to consider about following factors / aspects

Risks involved in allocating financial resources

Evaluating the return of investment of shareholders of the Shangri-La Hotel
Ensuring adequate and timely provision
Monitoring effective utilization of funds
Human resource allocation
Human resource allocation is the process of how Shangri-La Hotel Sri Lanka is designating
its human resources (employees of the hotel) into various processes and projects of the hotel.
When Shangri-La Hotel allocating human resources, the management of Shangri-La Hotel
has to consider about following factors / aspects

Have to focus about the strategic goals of the Shangri-La Hotel

Have to appraise the required outcomes and possible outcomes
Have to ensure availability of adequate / tolerable talent, numbers and time
Monitor / supervise effective performances

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Material allocation
Material allocation is the process of how Shangri-La Hotel Sri Lanka is designating and
handling its material (mostly hardware) into various processes and projects of the hotel.
When Shangri-La Hotel allocating its material, the management of Shangri-La Hotel has to
consider about following factors / aspects

Have to consider the outcomes

Have to assess required inputs and resources
Have to ensure on adequate quantity, quality and timely provision
Have to monitor effective and efficient utilization, minimizing waste and rejects
Time allocation
Time allocation is the process of how Shangri-La Hotel Sri Lanka is designating and handling
the time into various processes, procedures and to projects of the hotel.
When Shangri-La Hotel allocating the time, the management of Shangri-La Hotel has to
consider about following factors / aspects

Have to consider about overall strategic plan of the Shangri-La Hotel Sri Lanka
Have to evaluate the time frame in relation to different stages / phases
Have to ensure adequate time duration for each stage of processes, procedures and
projects
Have to monitor progress / advancement according to time slabs of the strategic plan
of the Shangri-La Hotel
All in all these 4 resources are important in implement a strategy where Shangri-La hotels
focus is giving to capturing and attracting more Thai tourists.

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The contribution of SMART targets to the achievement of strategy

implementation in a given organisation (4.3)
When we consider about the contribution of SMART targets in achieving strategy
implementation we can focus on its strategic objectives.
It is impossible to plan for every eventuality, some decisions of strategic importance may not
be anticipated in the strategic plan. Mentioned below are some implementation problems that
may occur along the way

Implementation takes longer than expected

Major unexpected problems arise
Implementation activities are inadequately co-ordinated
Management's attention is distracted from other activities
Employees do not have the necessary capability or training to implement the strategy
Managers fail to give a sense of direction at unit level
The implementation tasks are not defined properly
Information systems are not adequate
The overall goals are not communicated
When we think about strategy implementation of an organisation these strategies are likely to
have far-reaching consequences and it is therefore important that they should be carefully and
systematically implemented. So in order to minimize we can use the SMAR target technique
because it has the following attributes that will help to focus the intentions of any strategy to a
precise and understandable goal.

Specific With regard to what is intended

Measurable Based upon performance criteria that can be

used to judge whether the objectives are
being achieved according to plan

Agreed With the people responsible for achievement

Realistic Relevant to the needs of the organisation

and the people involved, and capable of
being achieved within the time and
resources available

Timetabled Set to a timetable that will give signposts for

fulfilment and a final date for completion

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Shangri-La SMART strategic objectives

Mentioned below are some of the key strategic objectives that have to be implemented in
order to be successful.
To be the best customer service provider in Sri Lankan tourist market by end of 2020
In this objective Shangri-La Hotel is anticipating being the best customer service provider in
Sri Lankan market end of 2020. In order to achieve this Shangri-La Hotel have to focus on
areas like

Develop clear communication skills of employees of Shangri-La Hotel.

Develop time management skills of the employees of Shangri-La Hotel.
Improve goal oriented focus of employees of Shangri-La Hotel.
Regarding the appropriateness of this organizational objective, by achieving this objective
Shangri-La Hotel Sri Lanka will be able to gain an extra edge from its competitors.
Positives of this objective

By achieving this strategy Shangri-La Hotel will be able to brand its name as the best
service provider in Sri Lankan market.
Heighten chances of attracting more customers.
Chance to getting the attention of local customers.
Negatives of this objective

Not easy to evaluate the progress of the objective.

Expand the business operations of Shangri-La Hotel to other provinces in Sri Lanka by
end of 2020
In this objective Shangri-La Hotel Sri Lanka going to expand business operations to other
provinces in Sri Lanka. Regarding the appropriateness of this objective, by expanding
business operations to other provinces in Sri Lanka Shangri-La Hotel will be able to find new
markets and will be able to starting to operate with another tourist dimension (eco-tourism)
adding to the current dimension (coastal-tourism) which will be a high revenue booster.
In order to achieve this objective Shangri-La Hotel has to emphasize following aspects

Profitability of eco-tourism.
Have to review the feasibility of this objective.
Cost of expanding business operations.
Positives of this objective

Heighten chances of finding new market.

Ability to attract more international visitors (because of eco-tourism)
Negatives of this objectives

Can be a distraction to the coastal-tourism.

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Increase the volume of total (local and international) repeat visitors business by 20%
by 2020 opposed to 2016
In this objective Shangri-La Hotel Sri Lanka is looking forward to increase the volume of total
(local and international) repeat visitors by 20% by 2020 opposed to 2016. Regarding the
appropriateness of this objective, by increasing the volume of total (local and international)
repeat visitors by 20% by 2020 opposed to 2016 Shangri-La will be able to supercharge hotels
profit margin as this is one of hotels prime goal.
In order to achieve this objective Shangri-La Hotel has to focus following areas

Methods to attract more international crowd.

Have to continuously maintain the hotels standards which suitable for international
visitors.
Have to focus about local advertising strategy.
Positives of this objective

Ability to earn more revenue for the hotel.

By carrying out this objective, heighten chances for increase the market share.
Ability to brand the hotels name.
Negatives of this objectives

Have to continuously focus on hotels standards which can be hard to maintain over a
longer period.
It takes comparatively a huge cost to market the hotel in overseas.

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Conclusion
Shangri-La Hotel is regarded as the one of the best in the field of hospitality in the world. To
fulfil this outstanding effort, Shangri-La has attempted put their effort for prolonged period of
time to establish itself in the competitive environment of hospitality arena. The key components
in success of Shangri-La Hotel Sri Lanka consists according to my perspective is hotels
innovation, make services to specifications, understanding the importance of the local and
international customers, substantially good management in business operations and most
especially the strategic plans adapted and followed by the management of Shangri-La Hotel
Sri Lanka.
In conclusion Shangri-La Hotel has confronted different kinds of challenges from its business
environment including the being a new entrant for Sri Lankan tourist market and the hotel is
capable of overpowering those challenges by using organizational goal and objectives,
PESTEL and SWOT analysis, Stakeholder mapping, introducing new added features, by
carrying out primary and alternative strategies, understanding the roles of personnel who
implementing hotels strategies ,allocating resources and evaluating organizational objectives
in an exceptional manner.

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References
Inc.com, 2016. Profit Impact of Market Strategies. [Online]
Available at: http://www.inc.com/encyclopedia/profit-impact-of-market-strategies-pims.html
[Accessed 17 September 2016].
Investorwords.com, 2016. BCG growth share matrix. [Online]
Available at: http://www.investorwords.com/16964/BCG_growth_share_matrix.html
[Accessed 14 September 2016].
Riley, P., 2011. Business Strategy. 1st ed. New Delhi: Viva Books.
Shangri-la.com, 2016. About Us. [Online]
Available at: http://www.shangri-la.com/corporate/about-us/
[Accessed 15 September 2016].

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