The term situation analysis is defined as a process of assessing the current situation facing the organisation, arriving at a set of assumptions about future, identifying key strategic issues which are likely to confront an organisation. (Reed, Peter, 2014, p. 65). It therefore commences with a review of the external environment in which there are forces that can be described as being remote or macro-environment which eventually comprises of economic, socio-cultural, climate change, technology and also demographical conditions.
The remote environment or the macro-environment can be classified as those forces which have an impact on the society as a whole including the industry and also the marketplace where the organisation operates within. (Reed, Peter, 2014, p. 65). This type of an environment comprises of forces which are mentioned above which has the potential to bring about change in the nature, shape and size of the market and the market, and the marketplace where an organisation competes in.
Simultaneously on the other hand there are considered to be forces which are therefore comprises of suppliers, clients, staff, market demand and supply which can be classified as near environment. (Reed, Peter, 2014, p. 65). The review of the near environment consists of market demand, attractiveness of the market, competitive landscape, distribution structure, end-consumer buying behaviour, preferences and the supply of the industry. (Reed, Peter, 2014, p. 65). When talking about near environment review it can be said that market demand and attractiveness are the major components of such type of a review.
Market Analysis/ Industry Analysis
Macro Environmental Factors
The key factors which needs to be considered in terms of remote or macro environment forces within Crowne Plaza Canberra are as follows:
1) P – Political, funding from the government
When it comes to political factors affecting Crowne Plaza in Canberra the most prominent political factors have to be the danger and effect of terrorism, international relations, political unrest and changes in the visa structure. Changes in legislation can alter an industry overnight. (Reed, James, 2014, p. 69) An example of a terrorist act can be seen is the siege at Café Lindt Siege Sydney that occurred in the year 2014, where multiple customers at the café were held hostage, some were shot and some were left injured. This can affect such an organisation if they are in close proximity to the act because potential buyers may be deterred if they are concerned that another terrorist act may occur. This can result in cancellations of hotel bookings, and reduction in bookings made; in turn reduction in terms of revenue. This can apply to any hotel in Canberra including the chosen organisation which has been chosen by the author that is Crowne Plaza.
2) E – Economic
Changes in economic conditions and in the policies can have a huge impact on the planning of Crowne Plaza’s future operations. Examples of economic factors comprises of gross domestic product, monetary policies, inflation, deflation, interest rates, foreign currency rates, government spending etc. (Reed, Peter, 2014, p. 67). Consumer spending is based on consumer confidence which is defined by the above mentioned examples. An example when it comes to economic factors is change in the foreign currency rates as it can have a negative impact in hotel and tourism industry. For example if the Great British Pound (GBP) becomes weak against the Australian dollar, then Britisher’s are less likely to travel because they will not get decent value on an exchange. However if the GBP is strong then anyone in Britain will be more likely to travel to Australia and stay in Crowne Plaza because they can get a decent exchange from GBP to AUD. As of now 1 GBP is equivalent to 1.79 Australian Dollars.
3) S – Sociocultural
In terms of sociocultural changes there can be seen different factors such as languages, age, gender structure, family structure, levels of income, how employees are engaged within a particular workplace. (Reed, Peter, 2014, p. 68). At Crowne Plaza in Canberra, there is an employee engagement survey where the sub-ordinates can express their thoughts, opinions, suggestions. Therefore the survey is available in 29 different languages and such an engagement survey is conducted twice a year by a third party. The information of the employees remain anonymous and they can provide expression of opinion and ideas freely.
4) T – Technological Factors
Technology has changed the way people seek information about different products, different services, technology has changed their purchasing behaviour such as directly through online channels. Therefore Crowne Plaza has put a lot of thought and innovation into the technology for the use of hotel guests, and staff members. Guests who are staying at Crowne Plaza have an access to smart phone app technology and also complimentary internet. Smart Phone technology includes express check-in’s, express check-out’s, such an app can be used as a remote for lighting and a key for the hotel room and facilities. This therefore provides the guest anonymity as an option and saves service time for hotel staff, which can improve work efficiency.
5) E- Environmental
Since the year 1980 the word corporate social responsibility has increasingly become the most important issue for the organisations of all shapes and sizes. Mckinsey and company in the year 2011 conducted a global survey and found that 63% of the 2956 companies surveyed had taken initiatives to reduce energy, 61% have taken initiatives to reduce waste, and 51% have taken actions in managing corporate social responsibility. (Reed, James, 2014, p. 70). At Crowne Plaza there are environmental friendly sustainability programs in place to not only support the environment but also create attraction towards those who are environmentally conscious. Crowne Plaza is therefore committed as well as focused towards reducing energy, waste. The hotel rooms each have a light sensor that turns off all the lights after 10 minutes if no movement is detected. All the hotel room bathrooms feature Water Efficiency Labelling and Standards (WELS) rated water saving shower and tap fittings. The room numbers in the key wallets are therefore written with pencil and now with ink so that it can be reused. Another example can be seen where when a guest checks out instead of giving them printed receipts/ tax invoices, receipts and invoices are sent to them electronically.
Market Segmentation/ Target Market
Market Segmentation is a strategy that is based on the partitioning of a market into segments of potential customers who have similar characteristics and similar needs, wants.
In terms of Market Segmentation/ Customer Target Market Profile – Crowne Plaza targets and has the following customer target market profile:
1) Tourists coming to Canberra/ Leisure Travellers/ International Visitors – In the last decade it can be seen that Australia has attracted lot of tourists. Especially tourists coming from Singapore, China has rapidly increased. Based on the facts it is considered that the Chinese and Singaporean tourists travel to Australia at least 2 times in a year.
2) Business Travellers in and outside of Canberra/ Government Delegates/ Corporate Clients/ International Visitors – Canberra has also seen a rapid increase when it comes to business travellers/ government delegates and corporate clients. In the last decade Australia saw a rapid increase in terms of foreign investors seeking for quality assets whereas Chinese investors are looking for long-term generational wealth creation.
3) Wholesalers/ FIT’S, Tour Operators
4) The general demographic that is attracted to Crowne Plaza is guests from 28-50 years old. This demographic entails couples, families and corporate guests. The younger demographic between 18 years old to young 20’s are generally not attracted to the hotel given the price range; which isn’t suitable for a general young person’s income.
The trends within the hospitality industry always seems to be changing. In such an industry latest trends occur on a daily basis. For example working of televisions in the room with the help of voice recognition to answer any queries or problems if the guests have and this will avoid them to call reception (front desk for queries). Another trends that are taking place in such an industry is the building of environmental friendly hotels. An example of environment friendly hotel is Ovolo Nishi, Canberra which delivers award winning sustainability, style. The hotel industry is going to focus more and more on the environment and sustainable practices which will make a better and environmental-friendly place to live for the guests.
Crowne Plaza Canberra’s Competitor Analysis
1) Hyatt Hotel Canberra
Global Branding Unsatisfied staff based on salary issues due to its global networking
Associated with top corporate officials which means they have a solid back up in terms of financial stability, Global Hotel Chain Brand, Technology upgrades in a timely manner Market share is limited due to very tough competition from international brands such as IHG, Accor.