The Pantaloon Hotel
Assessment of Organizational Resources
Organizational resources include human resource, the management and physical resources.
Pantaloon Hotel always regarded their staff as the greatest resources. The Group is currently employing a total number of 1,600 people in the region. They have a very loyal and experience group of people working for them at all levels. The majority of their senior staff has been with them for a long time and is very experienced. However, there is a quite high staff turnover in the lower levels. This could be a problem to the Group since staff turnover would cost them. Cost would include advertising and interviewing, and other hidden costs, such as time spent orienting and training the new employee, lost productivity, potential negative impact on member service, and lower department morale.
The group must act quickly to solve this problem. It is must for the organization to manage staff turnover to have a more effective recruitment, to reduce costs, to have better staff morale, to improve knowledge of the labor market as a whole and to have a more constructive development of the organization’s knowledge base. To this, the Group must consider retention strategies.
An effective retention strategy is comprehensive and starts with a commitment to examine the issue and work toward improving it. These would include salaries, benefits, communications, training, a supportive management staff, and, when possible, a promote-from-within philosophy. The following are some of the strategies (Surliness, 1999):
Another valuable organizational resource of the Group is the management. Their Board of Directors is generally young and dynamic. James is the current managing director which is the sixth generation of the family to hold the post.
Moreover, another organizational resource is their physical resources which are their hotels. The Group has a total of 8 hotels, 3 were at the seaside and others were in the towns. All of these are large hotels. Currently, the group’s hotel falls into the accepted segments of upscale and upper upscale. Their hotels cater both business and leisure. They have a very high standard facilities and décor.
External Analysis
Market Environment
The popularity of the traditional Victorian style seaside hotel has declined in recent years. Three of their hotels are such seaside hotels. In addition, the number of tourist especially from the US has recently declined due to tourist concern at terrorists attack. In the global travel and tourism business, threats of terrorism continue to cause the travel industry to evolve.
Competitive Analysis
The identified competitor of Pantaloon Hotel is the UK Marriott Group. The Marriott hotels have considerable expertise in the hospitality industry and in particular how restaurants are run. In addition, the company’s logistics are superb.
Consumer Analysis
The Pantaloon Hotel caters both business and leisure. The ones at the seaside cater for a mainly leisure market with business guests. The others are mix of business and leisure. Predominantly their customers are composed of international guests.
Strategy
The choice of competitive strategy is one of the most important decisions for small business success. In order to achieve high performance each strategy must be supported with appropriate resources and distinct competencies (1980). The effects of the strategies are determined by the characteristics of the resources and how they are combined. Contingencies like the firm’s age, size, competition, industry, and environment are also expected to be of importance, and may have a direct relationship on resources as well as on strategies, in addition to various effects on the relationships.
In the case of the Pantaloon Hotel, after assessing the organization’s resources and external analysis, it is recommended that the Group should adopt a differentiation strategy. Differentiation requires that business offerings have sustainable advantages that allow it to provide buyers with something uniquely valuable to them. A successful differentiation strategy allows the business to provide a product/service bundle of perceived higher value to buyers at a “differentiated cost” below the “value premium” to the buyers (Porter, 1980). Differentiation usually arises from one or more activities in the value chain that create a unique value important to buyers.
A differentiation competitive advantage prescribes that a firm achieve and maintain a means of making its product unique from its competitors’ products (Galbraith and Schemed, 1983; Kothari and Oren, 1989). The advantage of differentiation is based on the additional value the product possesses, for which the customer will pay a premium. While additional value may be created through a variety of means, such as quality, service, brand image, or distribution (Desks and Davits, 1984), superior quality is the means of differentiation which is most often used (Galbraith and Schemed, 1983). Thus, successful differentiation permits a firm to command premium prices (Porter, 1990) for this additional value. A differentiated product engenders customer loyalty, reducing customer sensitivity to price and protecting the business from other competitive forces which could reduce price-cost margins (Phillips et al., 1983).
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