Management of a Firm

Introduction

Management of a firm needs strategy, to make sure that everything goes well in the company, through the use of strategic management everything done in the company is well organized and no detail is being left out. The company needs strategic management to make sure that the company is doing well internally. The term strategic management originates from the Greek language. The person who makes strategies is the strategist who is the leader of an army (Mintzberg & Quinn 1991).Strategic management decisions have multi-functional and multi-business consequences, this kind of decision require broad consideration of the firm’s external and internal environments, and it may affect the firm’s chance of prosperity.

 

The strategic management paradigm is built on the notion that strategic decision making results from intentional actions in the name of individual or collective purpose. The paradigm accords central importance to the cognitive elements of understanding and intention as basic drivers of strategic choice. Strategy is plagued by a stigma of unsystematic reasoning (1988). Strategy is a combination of the company’s objectives, policies and decisions to be done in unison or contingent upon each other. Marketing strategy thus refers to how a company’s products or services its trade is presented to consumers in an effective manner as to gain loyal costumers. Strategy can be used in different ways, one of which is through marketing. Using strategy in marketing makes it more convincing and effective. Strategy makes sure that nothing wrong happens in the marketing process in the company.

 

Hotels are commercial establishment that provides lodging, food, and other services to the public. The hotel business is an important industry in many countries, especially in those attracting a large tourist trade. Hotels can be classified according to location, facilities and services offered, and clientele served. The transient hotel is usually located within city boundaries and caters to people traveling for business or pleasure. Motor hotels or motels cater to the same group of persons, but are often situated near or along major highways. Both hotels and motels provide numerous amenities in addition to sleeping accommodations, including maid service, radio and television, parking space for automobiles, recreational facilities, food and beverage services, and retail shops. Conventions are the most important source of income for some hotels and motels. In the U.S., for example, it is estimated that some 10 million people attend conventions each year (1997).

 

The hotel industry for years was relatively complacent. The demand for hotel rooms generally exceeded the supply. Management was confronted with the problem that hotels cannot be easily remodeled to satisfy customers’ changing needs and that a product differentiation strategy was needed to make an individual hotel distinctive from the others. Many hotels had similar facilities and offered comparable services. To meet these challenges, a strategy of lifestyle market segmentation was employed (1995). Hotels carefully try to match the service offering with the desired target market. Service tangibility can be increased by emphasizing service-provider reliability. Efforts must be made to offer similar services to market segments with different demand patterns. Although hotels endeavor to standardize services, there is the danger that while these services may have more consistent quality and convenience, the personal touch may be lacking (1995).  The paper will provide an evaluation of the strategic environment of the company. The paper will also discuss the company’s process of strategy formulation.

 

Evaluation of the strategic environment

SWOT analysis

Strength

Strengths are the strong points of the business. To know the strengths of the things that should be known includes the sources of the company’s revenue, the market share of the company in various product lines, the availability of strong brands of a company, the effectiveness of the advertisement of the brand or product, the availability of pool of skilled workers, the morale of the employees,   the innovativeness of the company and the ability of the company to withstood international competition. A strength of the company is its continuous and fast growth as the years pass. This gives them a distinct advantage towards their competitors. This also gives the company a distinct identity separate from its competitors. The continuous and fast growth of the company shows how well they are operating and how effective their strategy.

 

Another strength of the company is the employees of the company being trained well. The employees of the company are well trained. The employees were well chosen and well trained to do their respective jobs. These employees are well managed to keep them in line with the objectives and standards of the company. This is strength of a company because it brings out the best employees thus the best service can be given to the clients. If clients enjoy the service of the company they tend to return to avail again the services and products offered by the company this results to satisfaction of the goals of the company. Lastly a strength of Took Inn is the use of a website which serves as a reservation system for clients. The company’s website helps in giving clients ease in reserving a room they will use for their stay in the country. The website saves the clients some time in knowing if there are rooms available and if they can afford the use of such room.

 

Weakness

Weaknesses are the current problems of the company. To determine the weakness of the company the things that should be known includes the products that are least profitable, areas of the company that is not able to recover cost, the weak brands, the ability of the company to raise money when it needs to, the ability of the company to stand price pressures against competitors, the ability of the company to create new ideas, the faith of employees in management and the ability to compete with other companies in the technology front. A weakness of the company is the low number of occupancy during weekends. This shows how inconsistent the company is in regards to attracting clients to avail of their services. The low level of occupancy can be because of better offers by other company or their consistent kind of service. A weakness of Took Inn is it not having an attractable website.

 

Having an attractable website makes client view the website and purchase the product or service they need. It increases the clients of the company and makes the client suggest it to people they know. Lastly the company’s weakness includes the lack of promotional advertisements. The company although has a strong brand name is lacking of promotional programs. The company maybe popular to those who have seen it in the internet, have availed of their services, or have come to know of the company through its other clients but to some people the company is not that known. The company needs an effective promotional advertisement that can give the company more clients.

 

Opportunities

Opportunities are those events or situations that may arise in the future. To determine the opportunities of the company the things that should be known includes competitive position of the company, new technologies that the company can innovate for low costs, the capacity and opportunity to extend brands, the capacity to implement incentive plans to boost employee effectiveness, the ability of the company to move up the value chain, the ability of employees to be multi-skilled to reduce levels of redundancy, opportunities to cooperate with companies that are not competitors for both companies to be beneficial. An opportunity the company has is the website it has. The company can make the website more user-friendly, helpful and informative so that people will be encouraged to use it. The web can also be used as a promotional material that the company can use for more people to know the company.

 

Another opportunity for the company is its wide range of products and services it offers. They can use such products and services to satisfy the needs of the clients and offer these clients everything they need. This can also be used to increase the status of the company against its competitors. Lastly an opportunity for the company is the internet constantly being improved to suit the lifestyle of the people. Through the constant innovations made regarding the internet the company can increase the clients they have at the same time their profits will also increase.

 

Threat

Threats are problems that may arise and should be avoided. To determine the threats of the company the things that should be known includes the capacity of employees to be adequately trained, the capacity of the company to withstand sudden changes in the environment, the ability of the brands to withstand price competition, the financial being on the verge of liquidity, is the company considered a good employer, and the ability of the company to cope up with technological changes. A threat to the company is its competitors. The competitors they have might find a way to equal or exceed the performance of the company in the future. This could cause them problems or major hindrances to achieve their goals. Another threat to the company includes the laws in the country they are operating in. Laws are a vital part of a country. These laws are the ones that initiate order and discipline in the country. There may be laws that can cause some delay in selling the products. These laws can hamper business transactions to be completed. These laws are enacted to protect the welfare of local sellers in that specific country.  Since there are different laws in different countries it can also cause problems for the company.

 

A threat to the company is its low sales during weekends. The low sales during weekends may make perspective clients move away from the company. Low sales give the company a bad image to the clients and it increases the competitor’s advantage towards the company. Lastly a threat to the company is the tariffs and taxes that the company has in different countries, each countries has its own rate of taxes and tariff. Taxes and tariffs are collected by the countries government as additional funds for their projects in that country. The taxes and tariffs collected by a country depend on what the law of the country states. The taxes and tariffs collected by a country is a threat because this causes expenditures to a company. Since its rate varies the company must be wary of the cost of the taxes and tariffs and be able to decide if having a business in that particularly country is reasonable and feasible for the company.   

 

Strategy formulation

Strategy formulation is one very important element of the Comprehensive commercial planning (CP) discipline, but certainly no more important than the others. Comprehensive planning requires management to evaluate internal and environmental business conditions, to select from alternative goals and strategies, to decide how strategy best can be implemented, and to perform these functions continuously. This is hard work; there are no shortcuts. Strategic insight in the abstract, no matter how brilliant, does not satisfy any standard for good planning or a good plan Strategy must be appropriate for prevailing and potential business conditions, as well as for an enterprise’s goals and capabilities. Reliable implementation of strategy also must be feasible. When business conditions change, strategy must change (2004).  Perpetual re planning is essential, because no plan remains viable for very long. Indeed, any single plan of business that is not modified from time to time and implemented long enough probably will lead to a firm’s eventual failure, simply because internal and external business conditions change continually (2004).  In its process of strategy formulation the company initially thinks about the things to be done to achieve its objectives. Afterwards the company considers its environment and creates environment strategies that it believes can help in achieving its objectives without causing problems to its environment.

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