banyan_tree_powerpoint_aziz_ayman

Report
BANYAN TREE: SUSTAINABILITY OF A
BRAND DURING RAPID GLOBAL
EXPANSION
Presented by
Ayman Minkabu
Abdulaziz Janbi
HT 600 Hospitality Strategic Management
Introduction
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https://www.youtube.com/watch?v=FAEUUNvO5DE
Introduction
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Banyan Tree Holdings Limited
A leading manager and developer of premium
resorts, hotels and spas (Asia-Pacific region)
35 hotels and resorts
72 spas
90 retail galleries
3 golf courses in 27 countries
Expansion plans for the future.
Business & Brands
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Business (management, development and
ownership of H&R with interesting in a niche
market)
What has occurred in the case
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Established in 1992 as a family business
Headquarters (Singapore)
1st resort opened in Phuket, Thailand(1994)
Brand targeted high end travelers
Brand building to be sustainable in the global
marketplace
Disasters e.g. Asian Financial crisis 1997, SARS
2003, Tsunami 2004
What has occurred in the case
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The need to diversify risks across geographic
regions.
IPO (Initial Public Offering)
2 challenges
- Adequate labor & infrastructure
- The danger of brand dilution
+400 awards and accolades by 2006
Closest Competitors
The Environmental Analysis
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The broad environment (PEST)
Political Influences:
- involved in a little part
- affected by various local laws related to:
(construction, ownership rights, and taxes)
- e.g. Thai Law
- e.g. China
The Environmental Analysis
Economic Influences:
- large influence on the business
- e.g. tax rate, stability of economy, exchange
rate, crisis and disasters such as Asian Financial crisis
1997, SARS 2003, Tsunami 2004
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The Environmental Analysis
Social Influences:
- People’s lifestyle, culture, tradition, size of the
population and education
- BT focus on these factors
- physical and human environment (associated with
brand)
- corporate social responsibility (CSR)
- Green Imperative Fund 2001 “program”.
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The Environmental Analysis
Technological Influences:
- BT responds very quickly to new update
technology, e.g. high usage of internet
- possesses a world-class IT infrastructure in
Maldives
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The Environmental Analysis
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Industry Analysis (Porter’s Five Forces)
Bargaining power of suppliers: Low
- operation relies upon (local resources)
- maintain the relationship with the suppliers
- most of countries (lower cost)
- easier for BT to substitute suppliers
The Environmental Analysis
Bargaining power of customers: Moderate
- Sanctuary for the Senses (brand & location)
- corporate social responsible (CSR) “positive”
- brand identity = high bargaining power towards
customers
- Other companies may create strong branding with
strong service + unique experience “Negative”
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The Environmental Analysis
Threat of new entrants: Low
- high capital required to support business
operations
- e.g. 1st resort in Laguna Phuket cost $200 mill
- difficulty to find suitable locations
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The Environmental Analysis
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Threat of substitute: Moderate
- easy to find similar distinct services and amenities
- depends on the guests (budget)
The Environmental Analysis
Competitive Rivalry: high
- New hotels competed for the same customer
segments in locations (BT)
- e.g. JW Marriott (Phuket)
- competitors (different location + same facilities
and amenities)
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The Environmental Analysis
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Key success factors
- Established Brand
- Corporate Social Responsibility CSR
- Good service quality & unique selling
- Strong management team
Organizational Resource Analysis
Strategic Direction
 Vision Statement
“To build in its brands, Banyan Tree and Angsana, to
create a diversified group of niche resorts and hotels
in strategic locations throughout the world, which
would be a complemented by residence and property
sales, spa and gallery operations”
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Organizational Resource Analysis
Mission Statement
“We want to build globally recognized brands which
by inspiring exceptional experiences among our
guests, instilling pride and integrity in our associates
and enhancing both the physical and human
environment in which we operate, will deliver
attractive returns to our shareholders”
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Organizational Resource Analysis
Values
“Banyan Tree defines success not just financially, but
also socially and environmentally. Sustainable
development as a socially responsible business is a
core value of the Group”
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Organizational Resource Analysis
strategic direction has changed over the time.
- disasters & crisis
- need to diversity risks across geographic regions
- need to expand the venture outside familiar
territory
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Organizational Resource Analysis
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Internal Environment
- Hotel 50-100 rooms
- Employees +8000
- Revenue in 2013 $356.1 million
- growth 2-5% last 5 years
Organizational Resource Analysis
Business Model (7 segments)
1- Hotel investment
2- Hotel management
3- Spa operation
4- Gallery operation
5- Hotel residences
6- Property sales
7- Design & other services
Board of Directors of Banyan Tree
Holdings Limited
Ho kwon ping
Executive Chairman & his
wife, Claire Chaings, Senior
VP of the retail &
merchandising arm
 Ariel P Vera
Non-Executive & NonIndependent Director
 Chia Chee Ming Timothy
Lead Independent Director
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Organizational Resource Analysis
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Performance evaluation
Vision and Overall Strategy:
“Becoming global has always been part of our vision because a long-term,
sustainable
Business requires that we grow our re venue base and diversify worldwide.”
It has always been Banyan Tree’s vision to be a global business with a string
of Properties strategically spread around the globe.
Greater breadth and depth globally- Strategic geographic expansionExpand into low cost locations
Close to key customer markets.
Vision of being global brands articulated in many places in Pieces.
Overall business strategy also not clearly articulated.
Summary of Situation Analysis
(SWOT) Analysis
Strengths
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549 ha land bank that is spread over Phuket, the Seychelles,
Vietnam, Lijiang and Lhasa
Integrated business model
Strong Brand Recognition
Integrated capabilities- including in-house design, project
management and centralized marketing
Reduced time needed to launch new offerings
7000 people from 50 nationalities
BTH Management Academy
4 Spa training facility with capability to turn out 200 therapist a
year
Low cost operating environment
Experienced, qualified management team
Summary of Situation Analysis
(SWOT) Analysis
Weaknesses
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High dependence on Thailand business~60% of the total revenue
Many small business like Hotel Residences, Spa Operations,
Gallery Sales, Design Fee & Others
Overlapping Businesses in Property Sales and Hotel Residences
Heavy Administrative Cost Structure (14% of revenue in 2008)
High Financing Cost ~4% of revenue
Poor operating margins in Hotel Management, Spa Operation and
Gallery Sales businesses
Lower occupancy of Angsana vs. Banyan Tree Hotels
Summary of Situation Analysis
(SWOT) Analysis
Opportunities
 Property Development and sales in Seychelles, Vietnam and
Lhasa.
 Aggressive growth in spa operations and Hotel
Management.
 business within existing fixed cost structure.
 Merge Gallery Operations with Spa Operations to improve
the operating margins of both businesses.
 Merge Property Operations and Hotel Residences into one
Business Unit.
 Optimize the Administrative Infrastructure
 Strengthen Angsana Brand.
Summary of Situation Analysis
(SWOT) Analysis
Threats
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Global Recession.
Continued Political Turmoil in Thailand.
Season and Cyclical Fluctuations.
Country specific event risks like terrorism, epidemics
and natural.
disasters, especially in Thailand like Tsunami in
2004 end.
Developing the Strategic Plan
Strategic Direction & Major Strategies
Formulation of a clearer Company Vision:
¾ Will provide a more coherent and clear direction to all the people
in the company.
¾Channel the efforts of the all the people in same direction ensuring
better execution of the plans.
Formulation of R&D Strategy
¾Ensure that R&D efforts are aligned with other functional strategies
and aims to deliver
the company goals.
Developing the Strategic Plan
Review of Divisional Strategic Planning Process:
¾Will ensure that the longer terms goals like that of
2011 are more attainable.
¾Exploit the growth potential of smaller but
strategic segments like Spas.
Developing the Strategic Plan
Formulation of a Organizational Strategy:
¾Will ensure that the organization structure is
optimally designed for the company.
¾Improved the cost structure of the smaller divisions
and overall company.
Developing the Strategic Plan
Review of Brand Development Planning Process for
Angsana
¾Will improve the revenue and occupancy of the
Angsana hotels.
Developing the Strategic Plan
Evaluation of Opportunities & Recommendations
supporting the local communities and businesses.
Recycling water.
community development and supporting
environmental projects.
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Developing the Strategic Plan
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Implementation & Control
collaborate with a restaurant, because it was reported that such
JV happened before (Frumkin 2000).
Implementation
BTH has selected Vabbinfaru resort in Maldives to kick-start the
joint-venture with Guy Savoy in year 2014. This particular resort
was selected due to its prime location in Maldives, and it will be
available for receiving dining guests from Banyan Tree Madivaru
and Velavaru. The staff training will be handled by Guy Savoy.
The restaurant will be open for lunch and dinner. The chefs are
expected to greet the diner and find out personal preference of
how they like their meal to be cooked.
Conclusion
Sustainability is an important factor to the progress of a company. However, it
requires appropriate assessment of the environment and setting up adequate
strategies that will ensure that the company competitiveness is enhanced. As
such, Banyan Tree has indicated the best ways in which it can ensure that it
manages to go through the rapidly changing and growing environment. It aim has
been ensuring that it embraces diversity and sustain quality of its service to its
customers. In spite of these endeavors, the critical thing has been to maintain its
culture, ethics and standards of its operation, thereby growing to remain relevant
and competitive within its industry.
Thanks

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