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Esther Yeh | Jasmine Tan | Josephine Hau | Lo Chuan Jian | Melanie Chew | Merlisa Pung | Pearlica Chan
Presentation Outline
Company Overview Internal Analysis: Resources, Capabilities & Core Competencies External Analysis: PESTLE, Porters 5 Forces Competitors Analysis Current Performance Recommendations
Company Overview
Company Overview
Listed on SGX since 2006 Developer, owner and manager of spas and resorts 2 brands Banyan Tree Angsana
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Company Overview
3 revenue sources
9% Hotel investments Fee-based businesses Property sales
29% 62%
Source: Banyan Tree Annual Report 2010 Company Overview Internal Analysis External Analysis Competitors Analysis Current Performance
Recommendations
Experienced & Effective brand management multi-disciplinary management team Constant innovation Well-trained & innovative workforce Trusted brand Excellent reputation
Company Overview
Ability to leverage on strong brand equity in delivering superior customer experience Leads to customer loyalty & satisfaction
Current Performance
Recommendations
Business-Level Strategy
A Broad CrossOverall Low-Cost Provider Section of Strategy Buyers
Market Target
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
What are macroeconomic factors in China that Banyan Tree are exposed to?
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
15
% real change in GDP
10 5 0 -5 -10 2003
2006
2009
2012
Source: EIU Market Indicators & Foecasts Company Overview Internal Analysis External Analysis Competitors Analysis Current Performance Recommendations
China hotels & motels industry value: $billion, 2006-2010 16 14 12 10 8 6 4 2 0 2006 2007 2008 2009 2010 70 60 50 40 30 20 10 0
Source: DataMonitor Company Overview Internal Analysis External Analysis Competitors Analysis Current Performance Recommendations
2002
Total millionaire HH AuM (US $Tn) Average AuM per millionaire HH (US$ Mn) 0.45
2003
0.55
2004
0.64
2005
0.76
2006
1.01
2007
1.44
2008
1.79
2009
2.16
2010
2.63
2011
3.20
2012
3.87
3.08
3.18
3.25
3.30
3.47
3.68
3.84
3.98
4.14
4.32
4.51
Source: BCG Wealth Market Sizing Database 2008 Company Overview Internal Analysis External Analysis Competitors Analysis Current Performance Recommendations
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Luxury hotels and resorts in China are generally lucrative Low to middleLow end hotel and resorts industry
Medium
How is the competition in the luxury hotels & resorts industry in China?
Competitor Analysis
Companies Critical Weight Capabilities Banyan Tree Raw Score Brand Management Innovation Quality service Sustainable development 50% 10% 25% 15% 100% 6.5 7 8.5 8.0 Weighted Score 3.25 0.7 2.125 1.2 7.275 Aman Resorts Raw Score 5 5 7 5 Weighted Score 2.5 0.5 1.75 0.75 5.5 Accor Group Raw Score 7 6.5 7.5 8 Weighted Score 3.5 0.65 1.875 1.2 7.225 InterContinental Group Raw Score 7.5 7 8 8 Weighted Score 3.75 0.7 2.0 1.2 7.65 Starwood Raw Score 7 7 8 6 Weighted Score 3.5 0.7 2.0 0.9 7.1
Company Overview
Internal Analysis
External Analysis
Competitor Analysis
Current Performance
Recommendations
Competitor Analysis
Accor Group & Aman Resorts Offer similar resort concepts Neither has a strong foothold in market InterContinental Group & Starwood Major players Mostly dealing with hotels & business travellers Different target market segments
Company Overview
Internal Analysis
External Analysis
Competitor Analysis
Current Performance
Recommendations
2008
Future
2010
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Thailand
9%
China resorts yet to meet 77% high-quality standards expected 28% Total no. of reviews: 319
91%
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
6% return over 6 years 4% return over 10 years 1/3 share of its yearly prots
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
4 Banyan Tree & 2 Angsana resorts operating in China in 2010 Assume Banyan Tree contribute 67% of revenue Assume operating prot margin is 9.84% (average from past 3 years)
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Assume total number of resorts opening in 2015 is 19 (Banyan Tree website) Assume China corporate tax remains unchanged at 25%
Recommendations
Total returns from investments will fall short of investors expectations by $1,036,00
Company Overview Internal Analysis External Analysis Competitors Analysis Current Performance Recommendations
Summary of Evaluations
Hotels & resorts industry is generally lucrative in China Competition in this niche market is not strong Quality of resorts compromised in midst of expansion plans Current expansion plans is insufcient to meet investors expectations
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Implementation
Resorts should be located in rural areas with rich local cultures & good supporting infrastructure 3 possible locations Hunan province Henan province Guizhou
Benets
Excess returns of $335,000 Excess prots could be used to make up any shortfall in Banyan Trees Angsana brand resorts in China
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Benets
Opportunity to build a highlytrained and dedicated workforce in China Opportunity to increase knowledge capital
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Benets
Increase access to business opportunities & information Reduce risk of compulsory acquisition by government Increase stability & certainty of business in China
Company Overview
Internal Analysis
External Analysis
Competitors Analysis
Current Performance
Recommendations
Conclusion
Conclusion
Recommendations Open 2 new resorts in 2015 Improve quality of resorts in China Open another Banyan Tree Management Academy in China Establish & maintain strong guanxi with investors & municipal governments Potential for Banyan Tree to become market leader in its premium segment in China