Strategic Marketing Environment: SAGA Holidays
Introduction
The Saga Group is a large, multinational company based at Folkestone, United Kingdom. It provides services including holidays to global destinations, such as cruises in their own ships, a world-class magazine, insurance, financial products, and radio stations for individuals who are 50 years old and older (2007).
It has its origins in the 1950s, when the late recognized three decisive factors for the future success of the company, which would enable its successful operations at present. These three decisive factors include concentrating on older customers, direct marketing, and offering value-for-money. In addition, the company’s enduring commitment to trust, quality, dependability, and value is its foundation, wherein their reputation rests for taking care of the needs and interests of older people (2007).
At present, the company remains to be fully focused on understanding and responding to the changing demands on their older target market, and becoming the fastest growing demographic group in the United Kingdom that is forecast to increase from 19 million to 25 million by 2015 (2007).
One of its successful subgroup, which provides excellent services in line with their aims, is the Saga Holidays. It has been reported that the Saga Holidays is where the Saga Group began more than 50 years ago, launching affordable, off-peak trips first to Folkestone and other British destinations, and later to global resorts also (2007). Its products and services include every type of holiday, such as offering tours to historic or cultural spots in the United Kingdom, and to a wide variety of exotic destinations, adventure holidays, cruises, and more (2007).
Mission and Vision
The mission and vision of the company is to strive continuously to sustain core Saga brand values, which include trust, security, quality, and understanding the needs of older individuals. In addition, the company’s objective is to be an efficient, caring, progressive, profitable, and responsible organization, which searches to serve the needs of their customers and not to abuse them. These aims or objectives are achieved through encouragement of innovative and imaginative new business and product development, thus, maintaining and promoting excellent value, world-class, caring customer service and outstanding quality products. This encourages the company’s future and continuous growth and effective differentiation from competitors, which are dependent on exceptional customer satisfaction from first-rate service (2007).
Strategic Plan
Strategic planning consists of the process of developing strategies to reach a defined objective. This process provides an overview of the entire organization to its leadership. It is also defined as a plan describing how a firm will adapt to take advantage of the opportunities in its constantly changing environment, in order to maintain a strategic fit between firms and goals and capabilities and these market opportunities (2002).
Strategic Plan should serve as a framework for decisions or for securing support/approval. This should also provide a basis for more detailed planning. This explains the business to others in order to inform, motivate and involve. Moreover, this assist benchmarking and performance monitoring and stimulate change and become building block for the next plan.
SWOT Analysis
SWOT analysis can provide a framework for identifying and analyzing strengths, weaknesses, opportunities, and threat. This can also provide an impetus to analyze a situation and develop suitable strategies and tactics, a basis for assessing core capabilities and competences. Moreover, this can provide the evidence for, and cultural key to change and a stimulus to participation in a group experience.
STRENGTHS
WEAKNESSES
1. Wide knowledge of industry
2. Competent top management and rank & file for operation and maintenance
3. Existing customer base
4. Strong financial performance
5. Strong IT returns through internet shopping
6. Dedicated and professional employees
7. Wide range of products and destinations
1. Low supervision on international market
2. Considerably late exploitation of the Internet.
3. High prices of commodity
4. High operational costs
5. Customer losses
OPPORTUNITIES
THREATS
1. Expansion of target market
2. Healthy market environment
3. Diversification
4. Further expansion in Europe
5. Vertical integration
1. Economic restructuring
2. Intensified competition
3. Government regulation
4. Competitive marketplace
5. Volatile market condition
6. Additional supplementary tax charge
PEST Analysis
The PEST Analysis establishes a good analysis of the external effects on a company by breaking them into essential and obvious sorts.
- Political – travel policies and restrictions of British government
- Economic – additional tax and increase in oil and commodity prices; increase in ticket prices, global exchange rates
- Sociological – conflict regarding physical conditions of customers, different shopping patterns of consumers
- Technological – e-commerce impact on Saga Holidays’ distribution costs
BCG Matrix
Saga Holidays can be considered as a Cash Cow because it distributes quality and extra services to its consumers, and equipped with new innovative products and services in the United Kingdom and to other countries. Being a Cash Cow, Saga Holidays exhibit a return on assets, which is greater than the market growth rate, and produces more cash than they can consume ( 2006). Moreover, Saga Holidays can also be regarded as a Star because the company places a lot of effort to increase the awareness of their consumers to the benefits of their rendered products and services.
Strategic Options
Due to the dynamic changes happening in the society at present, including the advancements in science and technology and the development and improvement of market and business strategies, many business organizations or companies focus on adopting suitable strategic options for the successful establishment of their company in the market.
Because of this, Saga Holidays can adopt or use Porter’s Generic Strategies, stating that the firm’s strengths fall into one of two headings, namely, cost advantage and differentiation. Application of this results to three generic stages, including, cost leadership, differentiation, and focus, are not firm or industry dependent (2006).
Cost Leadership strategy emphasizes efficiency, and requires a considerable market share advantage or preferential access to raw materials, components, labor, and many others (2007). It also involves low-cost strategies, which could help the company gain significant market share (2006). With this, Saga Holidays can improve its website, by putting more images of tourist spots and destinations. In addition, they can improve their search engines and the entire website as well.
Another strategy is using the Differentiation strategy, which involves producing a unique product or service that would provide excellent value for the benefit of the consumers (2007). In addition, it involves a good deal of scientific research, the participation of highly skilled and creative product development team, a strong sales team with the ability to successfully communicate the strengths of the products and services, and an excellent reputation for quality and innovation (2006).
Lastly, the focus strategy concentrates on a narrow segment and attempts to achieve either a cost advantage or differentiation strategy. A company that uses focus strategy often enjoys a high degree of customer loyalty, which discourages competitors from competing directly (2006).
Each business strategy can be used by Saga Holidays to ensure its success and gaining profit from their business. However, because Saga Holidays is already an established business in the United Kingdom and to other countries, it can use the focus business strategy, wherein Saga Holidays can center its efforts, time and money to a specific and narrow segment of the market. Through this, Saga Holidays can sustain and maintain loyalty and patronage from its present customers. Because of this continuous loyalty and patronage, the company can prevent high competition levels from their competitors.
Another useful tool for achieving a company’s strategic objectives is Ansoff’s Product or Market Matrix, which offers strategic choices to achieve the objectives, and includes four categories, namely, market penetration, market development, product development, and diversification (2006).
Market penetration involves marketing or introducing the company’s existing products to existing customers and maintaining its quality. Market development involves promoting the company’s existing products to new markets, through export or marketing it to new regions. Product development involves the production of new products that will be promoted or introduced to the company’s existing customers. This involves innovation of the new products to replace old ones. Lastly, diversification involves marketing new products to new markets, either remaining establishing in familiar environments or establishing in new industries (2006).
From these four market and business strategies, Saga Holidays can utilize and maximize market development strategies, which involves promotion of existing products to new markets. This would be applicable and relevant because aside from rendering service to older individuals, the company can also focus on rendering service to younger populations, such as working students. Working students are a possible target market because due to their tight schedules, Saga Holidays can offer them leisure to somehow help them enjoy and have quality time for themselves. In this way, the company will be able to expand their target markets, which would be helpful in gaining more profit and sales from the business. In addition, this strategy can also be implemented through the improvement and further development of the company’s amenities and featured products and services.
Conclusion
From the discussion above, it is evident that certain analyses and tools must be used to identify and recognize the success and failure of a company’s marketing and business strategy in a market. Due to several factors that should be considered, specific strategic tools and business strategies must be implemented, depending on the type of products and market that the company has.
With Saga Holidays, SWOT, PEST, and BCG analyses must be done in order for the company to determine the type of strategic tools to be used. This would be in accordance to the aim of this company, or any company, to obtain and sustain their growth and development in their industry.
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