Case Study of Aber Gardens Hotel Essay - 2200 Words

Case Study of Aber Garden's Hotel (Case Study Sample) Content: Case Study of Aber Garden's Hotel (Highbrow Limited)Students NameInstructors NameCourse NameUniversity nameDate Question 1Graham Seghmas the CEO of Aber Garden Hotel (AGH) should address a number of environmental factors influencing the operations of the hotel. This is to enable it achieve the organizations goal of becoming a top international luxury and guest destination hotel that offers restaurant, gym, golf, and swimming pool facilities (West, Ford, and Ibrahim, 2010). Graham Seghmas intends to attain at least 90% hotel occupancy throughout 2015 for him to realize the business objective. The CEO further plans to acquire an adjacent 40 hectares piece of land that will be partly developed and partly used for hunting. The CEO also intends to attract more customers to the company. At the same time, the CEO plans to improve the quality of the hotels services by encouraging regular feedback and following meetings with the staff members. As a result, the companys strateg ic plan implies that the management would deal with a number of issues such as political, economic, social, technological, legal and environmental (PESTLE). Ideally, addressing these factors appropriately would contribute to the companys success immensely. Political FactorsThe companys management should study the political environment where it operates to enable it understand and adapt to the political factors that might influence its operations. For example, the company should implement appropriate measures to tackle the unfavorable political trends to allow it operate smoothly irrespective of political challenges (Simerson, 2011). It would prevent political interference in its operations by remaining neutral regarding the political issues (McDonald, 2007. This would enable the company to prevent adverse affects of unstable political environments such as wars and public demonstrations. Economic FactorsThe company should manage the economic influencers such as changes in prices, e ntry of new firms, and availability of substitute services. For example, the management should anticipate changes in the prices of its services because of the possible changes in the prices and availability of raw materials (Hoskisson, 2008). Therefore, the management should initiate strategies to realize the required revenue and hotel occupancy level despite the possible changes in prices of the hotel services. The company might also be forced to advertise its services to create awareness; this is because there are some competitor hotels and organizations that offer similar facilities (Hoskisson, 2008). The management might be forced to minimize the companys overhead costs to increase its profit margin.Social FactorsThe AGH management should also deal with social factors such as the supplier power and the buyer power. Such factors might negatively influence the companys profitability. For example, few suppliers might mean relatively high prices for raw materials because of the high demand for such resources by producers. Therefore, the AGH management should initiate appropriate measures to curb the high prices of raw material to allow the company to maximize the profits. The management should further implement appropriate measures to maintain current customers and attract new clients (Hoskisson, 2008). The move is to prevent the hotels customers from being influenced by the prices and quality of other substitute services. Technological FactorsThe management should embrace technological advancements to promote the companys quest to realize the business objectives. The company should use different forms of technology such as the Internet in managing its processes. For example, the company can opt to advertise its products through the Internet since most potential consumers often use the Internet to search for the hotel facilities both at the local and international level (Simerson 2011). The AGH should also allow the use of online enquiries and bookings to impr ove the efficiency in its operations. Legal FactorsGiven that the company cannot operate in the absence of the commercial laws, the management should ensure that it adheres to all the laws governing business operations. Such laws include commercial and tax laws, tariffs and quotas (Simerson, 2011). For example, the company should pay the right taxes and tariffs where applicable to avoid fines or suspension of operations.Environmental FactorsAGHs management should deal with the environmental factors that might influence its operations to allow it maximize its revenue. For example, the company should conduct regular workplace improvement as well as engage in corporate social responsibility to preserve the environment (Hoskisson, 2008). In most cases, clients prefer associating with organizations which are sensitive to the environment. The company should further ensure that clients can easily access its premises to encourage more potential consumers to visit the place. Question 2aAmana can use the following types of pricing strategies in order to increase the hotels revenue. Premium PricingThe company can apply premium pricing by charging its prices higher than the competitors prices. This would allow it realize higher profits even with fewer visitors to the hotel. However, the premium pricing requires the company to create some unique features of its facilities that clearly distinguish it from its competitors (Pride, Hughes and Kapoor 2012). The pricing might further help persuade some class of consumers to believe that the services at AGH are better than other substitute firms that charge lower prices.Penetrating PricesThe company might also use the penetrating pricing for some few months by charging lower prices than the competitors. This is meant to entice more people to consume its products and services at lower rates (Pride, Hughes and Kapoor 2012). This might be important in creating awareness about the hotels facilities through its cheaper pricing.Psychol ogical PricingAmana might also find the psychological pricing useful by avoiding quoting of blocked figurers for pricing of its services. For example, the company might avoid pricing figures such as  £100 and  £1000 and instead use  £99 and  £999 (Hoffman, 2000). This is meant to psychologically persuade potential consumer that the prices are relatively lower. Customer Based PricingThe company might further price its services based on price that they believe the consumers will comfortably pay (Porter, 2008). This is important since it can help maximize the number of consumers given that they will have favorable prices for them to pay.Cost Based PricingAmana might also use cost based pricing by charging the services based on the costs incurred to offer such products. This involves charging a particular percentage on the cost of production (Porter, 2008). The cost based pricing would ensure that the company does not experience loss resulting from higher cost of production than the sales prices. Product Line PricingThe company might further find it useful to price different lines of services differently based on the quality of services expected by the consumers (Porter 2008). This strategy will allow pricing flexibility and fairness to the consumers.Bundle PricingBundle pricing might encourage the potential consumers to purchase a number of products at reduced prices. This would help entice the consumers to pay for more than one service from the organization (Porter 2008). The bundle pricing would help generate increased revenues even with fewer numbers of consumers.Question 2bCost Based and Bundle Based PricingAdvantages of cost based pricingCost based pricing would ensure that the company charges prices above the entire cost of production and make profits in the long-run (Porter 2008). It also helps to easily determine the prices to charge without conducting a market survey. This is because the company often charges desired profit markup on the cost of production.Disadvantages of cost based pricingDespite the advantages of cost based method, the pricing strategy might limit the flexibility in pricing since the company would be compelled to charge its desired profit percentage on the cost of production (Porter 2008). The prices of the firms services will also keep on changing due to changes in the firms costs of production as a result of changes in the cost of raw materials, labor, and other overheads; therefore, it would make it hard for the potential consumers to build their loyalty since the company does not have constant prices (Porter 2008). This type of pricing will also make it tedious for the company to calculate the total cost of production before establishing the selling price for the products. Advantages of bundle based pricingBundle based pricing will increase sales volume since that most people will be encouraged to purchase the hotels products in large quantities to allow them enjoy the discounts. This pricing strateg y will also ensure that the company sells some of its least popular products since the consumers will want to maximize the discounts provided (Porter 2008). It might also help the company to sell the services that are highly priced than the competitors prices (Porter 2008). This would involve carrying-out collective pricing of the bundle without the customers knowing the actual price for individual products within the bundle.Disadvantages of bundle based pricingThis type of pricing might make the company lose substantial profits due to price cuts especially when most people buy products in large quantities. Moreover, it is tedious to calculate the collective prices of the services (Porter 2008). This is...