strama paperfinal

Far Eastern University

Institute of Accounts, Business and Finance

I. EXECUTIVE SUMMARY

With continues growth of the hotel industry in the Philippines, there are no doubt

at the growing demand of travel and tourism in the country. People awareness has

increased due to the campaign being done by the different channels of the industry,

specifically, the department of tourism, airlines and hotels.

Traders Hotel is located on Roxas Boulevard and overlooking picturesque Manila

Bay, Traders Hotel is the ideal place to see the best that Manila has offer. It is under

their main brand Shangri-La hotels that are very much known for the number of

prestigious hotels locally even internationally.

An assessment of the company’s external and internal environment reveals that

it still needs to pursue on continuous development of facilities and services, develop

good advertising campaign and powerful promotions, explore areas of concentration

and recruit faculty that will best help in developing the company. The rest of the paper

would explain the stated findings in detail. A presentation and discussion of the various

frameworks and tools of analysis were also included.

Strategic Management 1



II. INDUSTRY ANALYSIS

Economic Forces

Based on the preliminary results of the 2006 Census of Philippine Business and

Industry conducted nationwide, with 2006 as the reference year, the Philippines Gross

revenue earned in 2006 for hotels and restaurants sector reached Php93.5 billion.

Hotels, camping sites and other provisions of short-stay accommodation generated only

Php34.2 billion (36.6%). Cost for operating the industry summed up to 69.2 billion.

hotels, camping sites and other provisions of short-stay accommodation with almost

Php24.1 billion. Revenue-cost ratio, the revenue generated per P1 cost, amounted to

Php1.35. Among industries, hotels, camping sites and other provisions of short-stay

accommodation recorded the highest indicating Php1.42 revenue per P1 cost. Value

added was estimated at Php31.4 billion. Hotels, camping sites and other provisions of

short-stay accommodation had a total value added of Php14.9 or 47.4 percent.

Based on the preliminary results of the 2006 Census of Philippine Business and

Industry conducted nationwide, with 2006 as the reference year, the Philippines had a

total of 2,750 establishments with average total employment (ATE) of 20 and over

engaged in hotels and restaurants. Hotels, camping sites and other provisions of short-

stay accommodation recorded the remaining number of establishments with only 492.

On the regional level, National Capital Region (NCR) had the most number of

establishments with 1,328 (48.3%). CALABARZON (Region IV-A) placed second with

332 establishments while Central Luzon (Region III) followed with 8.8 percent of the

total. Autonomous Region in Muslim Mindanao (ARMM) had the least with only 4

establishments (0.1 %).




Employees of hotels, camping sites and other provisions of short-stay

accommodation were the most productive in 2006 in terms of revenue employee with a

Php877 thousand per employment, 32.9 percent higher than the national average of

Php660 thousand. Value added per total employment, another measure of labor

productivity, was valued at an average of Php222 thousand per employee. Among

industries, hotels, camping sites and other provisions of short-stay accommodation had

the highest average of Php382 thousand. Gross additions to fixed assets in 2006

totaled to Php10.1 billion with hotels, camping sites and other provisions of short-stay

accommodation recording the highest amount of Php8.0 billion (79.7%).

Demand for the hotel sub-sector services particularly that of accommodations,

peak in the months of November, December and January. Foreign visitor arrivals are at

its highest in the last and first months of the year, accounting, on the average, for 18%

of the total. Peak season for balikbayan arrivals, on the other hand, is during the months

of November and December, accounting for 36% of the total.

International deployment of hotel and restaurant workers and professionals, on

the other hand, are subject to laws pertaining to the practice of their profession. Indeed,

most countries have policies preventing foreign professionals from practicing their

profession in the domestic market. In the last five years, hotel and restaurant related

workers and professional deployment averaged more than six thousand seven hundred

forty per year. An estimated 75% of all hotel and restaurant professionals deployed

during the period were cooks, waiters, bartenders and other related workers. Filipino

hotel and restaurant workers and professionals are known for their competence,

trainability, and ease in adapting to different environments and are, therefore, in

demand in the international market. Most hotel and restaurant related workers and

professionals during the five-year period were deployed to United Arab Emirates, Saudi

Arabia, Kuwait, Papua New Guinea, Singapore, Malaysia, and the United States.




In terms of length of stay, however, guests stay longer in standard hotels than in

the higher-rated establishments. Standard hotel guests stay an average of 3.03 nights

compared to the 2.66 nights and 2.13 nights average stay in deluxe and first class

hotels, respectively. Hotel entry barriers, which include economies of scale,

infrastructure, and product differentiation, are significant particularly for those who will

venture in deluxe or first class operations.

While there are already quite a number of players in the market, the hotel

industry can be characterized by still a rigid competitive structure. Hotels sell more or

less the same service but differ in quality and style. The better and wider the service,

the higher the rates. No single hotel, however, monopolizes the market or has power

over the rates of rooms or of other services that are offered. Further differentiation is

reflected on the variety of restaurants and coffee shops that they have and on other

amenities that they offer – each catering to a specific need of clients.

Social, Cultural, Demographic and Environmental Forces

Friendly by nature, Filipinos have a special way of making strangers feel

welcome. Hospitality in the Philippines is both a tradition and an art. Moreover, among

Asians, Filipinos are the most fluent in written and spoken English. Since English is the

world’s universal business language, tourists and business travelers alike are always

pleasantly surprised at the absence of any language barrier in their dealings with

Filipino hotel and restaurant workers.

Opportunities for hoteliers also arise from the country’s strategic location. The

Philippines is situated in the center of Asia, home of the fastest-growing economies in

the world. The archipelago lies southeast of Hong Kong, northeast of Singapore and

almost directly north of Kota Kinabalu in Malaysia and Bali, Indonesia. Owing to its

accessibility and strategic location, the Philippines is a natural Mecca of commerce.

During the last decade, the hotel and restaurant industry has flourished even as it

struggled to cope with difficult challenges. New hotels mushroomed in the capital while




older hotels have done their best to spruce-up both their interiors and upgrade services.

Hotels are the most popular source of accommodation among foreign travelers. In the

past five years, more than 50% of foreign tourists used hotels for lodging purposes.

Indeed, global travel is expected to grow rapidly for at least the next 20 years.

Worldwide arrivals were expected to expand from 613 million in 1997 to an estimated

700 million in 2000, 1 billion by 2010 and 1.6 billion by 2020.

The Department of Tourism (DoT) recently organized a forum on zero waste

management for hotels and resorts, in coordination with the Global Alliance for

Incinerator Alternatives (GAIA) and Greenpeace International.

Hotel chains constitute a classic application of brand strategy. Brands are a quick

way for hotels and hotel chains to identify and differentiate themselves in the minds of

the customers. A brand symbolizes the essence of the customer’s perceptions of hotel

chains, its products, and services. The favorable or unfavorable attitudes and

perceptions formed by brand influence a customer’s hotel preference. Unfavorable

attitudes and perceptions formed by brand influence a customer’s hotel preference.

As foreign tourists are not very price sensitive, they are usually after the

amenities and service that they need during their hectic travel. Hotels that cater to the

tourist market compete mostly in the area of amenities and services. During specific

seasons of the year, hotels offer weekend and/or holiday packages (generally includes

discounted accommodations and meals). These packages are also offered to specific

market segments – wedding parties, honeymooners, and balikbayans.

Political, Governmental and Legal Forces

Government, industry association and trade union cooperation provides the

industry with a strong support system. The Philippine government actively promotes the

country through its numerous tourism programs.




Government effort is complemented by the strong support of industry

associations and trade unions (i.e., Hotel and Restaurant Association of the Philippines

and the National Union of Workers in the Hotel Restaurant & Allied Industries), which

enable the hotel industry, among other things, to undertake programs and projects that

upgrade and professionalize the sector and to influence government regulatory

policies/laws/rules affecting the industry.

There are Laws that hinder or facilitate the hotel and restaurant industry include

Executive Order 219 the domestic and international civil aviation liberalization policy,

the Investment Priorities Plan (IPP) 2000, Intellectual Property Rights, and the Labor

Code provisions on the employment of foreign nationals. Provisions of EO 219 opened

the domestic airline industry market to competition, which resulted in the expansion of

airline seat capacity, reduced airfare and the elimination of the so-called “missionary

routes”. Combined, EO 219 led to a significant increase in tourism, thus expanding on of

the hotel and restaurant industry’s main market. The IPP 2000 offers fiscal incentives to

investors in, among others, the tourism industry (i.e., tourist accommodation facilities,

which refer to hotel, apartelle, tourist inns, pension house, and resorts, tourism estates,

tourist buses, and restoration of historical and cultural sites/properties). All franchise

agreements with foreign franchisors are registered with Intellectual Property Rights

office as well as licensing, technical assistance and services, technology transfer and

distribution agreements. Foreign franchisors in the Philippines, similar to other

industries, are subject to the restrictions on ownership, 40%. The laws on technology

transfer, however, guarantee franchisors in the Philippines royalties of 5% and a

maximum allowable term of technology transfer arrangements of ten years.

Finally, foreign national employment in the hotel and restaurant industry is

subject to the tripartite agreement signed in 1992 by the Department of Tourism,

Department of Labor and Employment and the Bureau of Immigration. The agreement

addresses the following issues regarding the employment of foreign nationals in the

hotel and restaurant industry: positions open to foreign nationals in the hotel and




restaurant industry: positions open to foreign nationals, procedures in the issuance of

visa/permits, and disciplinary/penal provisions.

The presence of external support systems can enhance an industry’s competitive

advantage. Factor conditions (i.e., cost of capital, labor and raw materials), for example,

are affected through subsidies, policies toward the capital markets, policies toward

education, and the like. External support systems can also help stimulate local demand

conditions, establish local product standards or regulations and programs that mandate

or influence buyers’ needs.

The local hotel and restaurant industry external support systems include

government agencies, industry associations and trade unions. Government agencies

and various consultative bodies, which includes but is not limited to the Department of

Tourism, Department of Trade and Industry, Department of Labor and Employment, and

the Hotel and Restaurant Tripartite Consultative Body, Inc., work together to promote

the tourism and hotel and restaurant industries through specifically designed laws,

policies and programs that promote industry growth and industrial peace, safeguard

labor rights, provide training and seminars, and ensure consumer safety. Programs

specifically designed to attract more tourists and therefore expand the hotel and

restaurant industry’s market, for example, is the DOT’s Tourism Master Plan.

The Tourism Master Plan (TMP) is the framework and guide of the Department of

Tourism for the sustained development and expansion of the tourism industry of the

Philippines. Completed in 1991, it serves as the blueprint for tourism development in the

country until the year 2010. The Plan was prepared by the Hoff and Overgaard on

behalf of the World Tourism Organization (WTO), United Nations Development Program

(UNDP) and the DOT. Its aim is to position the Philippines as a leading tourist

destination in Asia.




Industry associations, on the other hand, enable the hotel and restaurant sector,

among other things, to undertake programs and projects that upgrade and

professionalize the sector (i.e., training and seminars for employees and industry

promotion by sponsoring domestic and international exhibits) and to influence

government regulatory policies/laws/rules affecting the industry.

Finally, trade unions in the hotel and restaurant industry, among other things,

safeguard the rights and welfare of industry workers and professionals. They work

closely with government and industry participants in improving working conditions and

employee performance (i.e., recommending additional training and or certification) and

in defending employee rights.

Technological Forces

Most local hotels are quick to respond to changes in technology. To date, most

have computerized bookings, reservations, room service, and accounting systems.

Pressure on hotel prices comes from the drive “for value for money”. Increased

operating efficiency obtained through the computerization has helped to reduce costly

waste in the supply chain. However, higher labor, raw materials, and utility costs

continue to push operating costs up.

Philippine hotels, though quite late in technology adoption, own a mix of

information technologies that appear to slant towards improving guest service. The

intrinsic characteristics of technology seem to be the main factor in the decision to adopt

technology while IT illiteracy and the prohibitive cost are the main reasons for non-

adoption. The research likewise affirmed that ownership structure and firm size

positively affect adoption behavior. The results manifest organizational rationalism and

recognize the power of social and cultural forces to shape IT adoption behavior.

Possible implications were raised regarding strategies that address IT literacy and cost,

and enhancing absorptive capacity of small hotels.




Hospitality - specific studies on adoption of IT are widely varied. There are five

areas of IT adoption in hotels. These are (1) reservation system, (2) property

management systems, (3) ancillary systems that include electronic door-lock system,

energy management system, in-room entertainment systems, internet access,

telephone and call accounting system, (4) catering information systems composed of

recipe-costing system, stock-control system, conference and banqueting system,

electronic POS, and (5) back-office system comprised of accounting systems, payroll

system, human resource system, sales and marketing system.

There are various reasons why hotels adopt information technology. IT offers

advantages in terms of providing service quality, improved administrative processes and

competitive edge in cost or differentiation.

Wifi technology affects a lot on hotels in the Philippines nowadays. Guest is

seeking for Wifi installed rooms that is already equipped on their hotel amenities.

Guests nowadays would prefer to stay in hotels that can offer more than the

usual amenities. Even wired internet access, traditional voice services and cable

television are not enough.

Here are some technological systems that greatly affect the hotel industry in the

Philippines:

Wireless Fidelity - It provides your guests with Internet access using wireless

technology in the rooms and in any other common area. We will even provide computer

units for your business center for guests who do not have laptops.

Voice over internet protocol - It allows your guests to make cheaper International calls

using Internet Protocol technology. We will integrate the service into your PABX to allow

calls to be made from existing handsets provided in the rooms.




Internet Protocol Television - It gives your guests true digital viewing pleasure and a

selection of movies to watch on-demand. The content will be delivered over our network

and will be viewed on the television sets provided in the rooms.

Closed Circuit Television

1. IP-based surveillance and alarm systems

2. Wired and Wireless options

3. Digital Recording for easy search and playback

4. Capable of remote monitoring

Hotel Management System

1. Windows-based and LAN-ready

2. Package includes standard and optional modules:

1. Front Desk

2. Reservations

3. Point of Sales

4. Call Logging




III. INTERNAL ASSESSMENT

a. Company Vision and Mission

Vision

To be the first choice for guests, colleagues, shareholders and

business partners.

Mission Statement

We envision a community of responsible and educated citizens who

are environmentally conscious, practice social responsibility in their daily lives

and inspire others to do the same.

We commit to operating in an economically, socially and

environmentally responsible manner whilst balancing the interests of diverse

stakeholders.

We strive to be a leader in corporate citizenship and sustainable

development, caring for our employees and customers, seeking to enrich the

quality of life for the communities in which we do business, and serving as

good stewards of society and the environment.




b. Company Corporate Social Responsibility

Environment

Our daily operations ensure that we mitigate the impact of climate

change, uphold biodiversity in conservation/habitat restoration, adopt the best

practices in preventing ozone depletion, and continually strive to improve

water-use management, waste-disposal management and indoor air quality.

Health & Safety

We are committed to protecting our customers, employees,

stakeholders and the greater public by providing a safe and healthy

environment based on international standards.




Employees

Our colleagues are our number-one asset, and our source of

inspiration for the greater communities with which we work.

Stakeholder Relations

We value our stakeholders and always engage them with clarity,

honesty, and respect.




Supply Chain

We require that our business partners ensure the highest standards in

environmental, hygiene and labor practices.

Embrace

We believe that caring for others today allows them to care for

themselves and others tomorrow. ‘Embrace’ aims to build, strengthen and

sustain local communities through various and specific education and health

projects.




Sanctuary

Each of our resorts provides a natural habitat for flourishing

biodiversity. The 'sanctuary' is Shangri-La’s project for ensuring the highest

standards in marine and terrestrial habitat restoration and environmental

conservation.

c. Brand Structure




Corporate Officers and Directors

Mr. Rao, Madhu

Vice Chairman

Mr. Dogan, Greg

President and Chief

Executive Officer

Mr. Zhu, Kent

Group Director of Sales

and Marketing

Mr. Offe, Jean Michel

Group Director of Food

and Beverage

Ms. Cheah, Caroline

Group Director of

Rooms

Mr. Sekercioglu,

Cetin

Vice President

Mr. Nessmann,

Lothar

Vice President

Mr. Bormes, Robert

Vice President

Mr. Cottan, Michael

Vice President

Mr. Haechler,

Bernhard

Vice President

Mr. Douin, Thierry

Vice President

Mr. Flecker, Wolf-

Dieter

Vice President and

Executive Director

Mr. Gearing, Darren

Vice President

Mr. Paw, Sunny

Vice President

Ms. Pang, Barbara

Vice President - Sales

and Marketing

Ms. Angeles, Peggy


and Marketing

Ms. Chen, Sarah


and Marketing

Mr. Frost, Austin


and Marketing

Mr. Windle, Brian


and Marketing




Ms. Cheng, Charlene


and Marketing

Mr. Liu, David


and Marketing

Mr. Inns, Brendan

Vice President - Brand

Communications

Mr. Rao, Anand

Chief Information

Officer

Mr. Leung, Vincent

Vice President -

Finance

Mr. Sachdev, Navjyot

Vice President -

Finance

Mr. Yuen, Andree

Vice President -

Finance

Mr. Sen Gupta,

Parikshit

Vice President -

Finance

Ms. Ng, June

Group Director of

Human Resources

Mr. Lui, Ben

Group Director of

Projects

Mr. Leung, Peter

Director of Projects

Mr. Chu, Nelson

Group Director of

Planning and Design

Mr. Lee, Harold

Group Director of

Engineering

Ms. Wong, Carrie

Director of Contracts

and Quantity Surveying




e. Organizational Chart


Chairman of the Board Vice Chairman

Chief Executive Officer

Chief Information

Officer

Chief Operating Officer

Company Secretary

Executive Director

Group Director of Engineering

Group Director of Planning and

Design

Group Director of Projects

Group Director of Rooms

Group Director, Food & Beverage

Group Director, Human

Resources

Group Director, Sales &

Marketing

Vice President Brand Communications

Vice President Finance



f. Hotel rooms and Offerings

Guests of Traders Hotel Manila will not only enjoy a range of facilities but

also an exceptional level of service that Shangri-La is renowned for. It is this

combination of factors that makes the hotel an ideal choice when compared to

other Manila Philippines hotels.

Hotel Lobby




Superior Room

Superior City View Rooms offer contemporary décor, comfort, and a full array of

amenities that make your stay productive and peaceful.

All superior rooms have full-length windows that offer a view of vibrant Roxas

Boulevard.

Complimentary broadband Internet access, in-room safe, satellite TV, coffee/tea making

facilities, and a comfortable working chair and writing desk are standard in all Superior

Rooms.

The room dimension is 36 sqm/387 sqft.




Deluxe Room

Guests may choose between sea view rooms which are overlooking Manila Bay and

the yacht club or city view rooms that offer the view of Roxas Boulevard’s spanning

Manila’s cityscape.

Each Deluxe Room is warmly decorated with comfortable chairs and writing desk with

ample supply of stationery.

Dual line telephones (with dataport connection), complimentary broadband Internet




Deluxe Suite Room

Each Deluxe Suite contains a spacious and comfortable parlour separate from the

bedroom, along with a walk-in-closet.

Bathrooms include separate shower and bathtub areas, with a rainforest showerhead.

Dual Internet access, in-room safe, flat screen television set and DVD/CD player and

elegant writing desks.line telephones (with data port connection), complimentary

broadband




Deluxe Suite Parlor

Lobby Lounge

The Lobby Lounge is ideal for cocktails and listening to live entertainment.

Genuine Japanese cuisine is served at Kikufuji Restaurant.




Latitude

The hotel's Latitude restaurant offers international cuisine and a la carte menus

that originate from the five different countries found in the same latitude as Traders

which is 14.35 ° N 121° E. These countries are Philippines, Guatemala, Mexico, South

Africa and Thailand, U. S. steaks are also offered.

Swimming Pool




Embassy Ballroom

The Embassy Ballroom can hold up to 500 guests. Seven other function rooms,

audio-visual-equipment and wireless internet access are also made available upon

request.

Embassy Ballroom- Conference Set-up




Ambassador Sala

Health Club


http://www.wego.com/hotels/philippines/metro-manila/traders-hotel-manila--175419/photos#5



Club Rooms

Club Rooms are 36 sqm, located on the 17th to 19th floors. They are fitted with a king

size bed or 2 single beds. Bathrooms have a bathtub with an overhead shower. Guests

have the extra Traders Club benefits and facilities: All-day non-alcoholic beverage

service, daily breakfast, afternoon tea, and sunset cocktails at the Traders Club Lounge.

Broadband internet access, Dual line telephones (with dataport connection), in-room

safe, 29 inch interactive satellite TV, coffee/tea making facilities and comfortable writing

desks are standard in all Club Traders Rooms.




Other Facilities:

Restaurants

Spa

Massage

Steam room and Jacuzzi

Children’s pool

Outdoor jogging track

Cruise (near ferry terminal)

Airport Transfer

Baby Sitting / Child Care

Business Centre

Car Rental Service

Complimentary Shoeshine

Service

Conference Facilities

Delicatessen

Express Check-in and

Check-out

Facilities for the Physically

Challenged

Foreign Exchange Counter

Hair / Beauty Salon

In-Room Dining

Laundry & Valet Service

Non-smoking Room

Parking Facilities

Photo Processing Service

Postal / Courier Service

Taxi & Limousine Service

Travel Agency / Tour Desk




g. Internal Factor Evaluation (IFE) Matrix

KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE

Internal strengths1. Exceptional Level of Service .30 4 .802. High standard Facilities .25 4 .803. Superb Sea View .10 3 .304. Wide range of exclusive

privileges.15 3 .45

Internal Weaknesses1. Brand Awareness .10 2 .202. Customer loyalty .10 1 .10

TOTAL 1.00 2.65

Internal Factor Evaluation Analysis:

Internal Factor Evaluation (IFE) Matrix determines the strengths and weaknesses

of Traders Hotel. The High standard Facilities weighted most important strength of the

company. Having the score of 2.65, the company is responding in an above average

way to existing strengths and weaknesses in the industry.




IV. EXTERNAL ASSESSMENT

a. Market Position

b. Market Competitors

Manila Hotel

The Manila Hotel is a 500-room, five star hotel in Manila, Philippines, located in

the heart of the Manila Bay area. The Manila Hotel is the oldest premiere hotel in the

Philippines, built in 1909 to rival Malacañang Palace, where the Philippine president

now lives, and opened in 1912. It was built on 3.5 hectares (376,736.9 sq ft) of land

along Roxas Boulevard. It was the residence of General Douglas MacArthur from 1935

to 1941.

The main lobby was designed for sitting as well as for making grand entrances.

Measuring 125 feet (38 m) long by 25 feet (7.6 m) wide, the lobby is lined with white

Doric columns. The floor is Philippine marble, the chandeliers are made of brass, crystal

and seashells, the furniture is carved out of Philippine


http://en.wikipedia.org/wiki/Douglas_MacArthur

http://en.wikipedia.org/wiki/Major_roads_in_Metro_Manila#Radial_Roads

http://en.wikipedia.org/wiki/Square_foot

http://en.wikipedia.org/wiki/Hectare

http://en.wikipedia.org/wiki/Malaca%C3%B1ang_Palace

http://en.wikipedia.org/wiki/Manila_Bay

http://en.wikipedia.org/wiki/Philippines

http://en.wikipedia.org/wiki/Manila



mahogany which is used throughout the hotel.

The rooms provide exceptional views of the city, especially the gardens of Rizal

Park and Intramuros. Manila Hotel is the first hotel in the Philippines to

offer HBO among other television network systems for all rooms. All rooms make use of

the Ving Card electronic card system for maximum security. The 570 fully renovated

rooms that reflect the hotel’s storied past blend with the conveniences of a modern

luxury hotel. Other amenities include traditional decor with elegant

furnishings, individually controlled central air conditioning, remote-control TV with cable

channels, mini bars, separate bath and toilet with extension phone, and secure in-room

safes.

The three-bedroom MacArthur suite rents for $650 a night. The penthouse, the

most expensive suite (with a private swimming pool) on the 18th floor, has a view of the

Bay, of Rizal Park and the 16th-century ruins of the Spanish walled city of Intramuros,

opposite the hotel. Like the Presidential Suite, which costs $900 a night, the $1,200-a-

night penthouse is decorated with rare paintings, Asian antiques and Filipino crafts. The

MacArthur, Presidential and Penthouse Suites provide 24-hour butler service.

The hotel's guest facilities and other services include limousine and luxury car

rental, a helipad on the roof deck, airport transfer and transport assistance, medical and

dental clinic, a business center with Internet access, 24-hour full menu room service, a

delicatessen, a barber shop and beauty salon, a florist, laundry service, a post office, an

in-house shopping mall, and arrangement of sightseeing tours. The Bay Club, Manila

Hotel's sports and health club, features a jacuzzi, two tennis courts, and one squash

court. Guests also have access to a gym, a sauna, swimming pool with a wet bar, a

game room, and an indoor golf

simulator. Other health club services include a whirlpool, wet sauna, steam box, martial

arts, swimming, massages, and tennis lessons.


http://en.wikipedia.org/wiki/HBO

http://en.wikipedia.org/wiki/Intramuros,_Manila

http://en.wikipedia.org/wiki/Rizal_Park

http://en.wikipedia.org/wiki/Rizal_Park

New EntrantsCarlson Hotels –

Manila BayHotel H2o – Manila

Bay



Sofitel

Sofitel Philippine Plaza is a unique luxury hotel in Manila with a resort setting

next to the largest convention center and close to theaters, museums, government

offices and the Mall of Asia. 5-star accommodation includes 609 rooms and suites

boastingof balconies and spectacular views of Manila Bay sunsets. Flagship restaurant

Spiral is the dining favorite in the metro, Sunset Bar has nightly cultural shows,

7Pecados features live bands and LeBar offers bistro-lounge-patisserie service.

Lagoon swimming pool, tropical gardens in 12-acres with aqua golf, mini golf,

tennis and petanque courts and jogging trail. LeSpa at Sofitel and SoFit center open 24

hours. Playground and indoor Kids Club for superb recreation and sports activities.

c. Porter’s Model




d. External Factor Evaluation (EFE) Matrix

KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED

OPPORTUNITIES

1. Increase in income .35 3 1.05




2. Internet Users .20 4 .8

3. Economic Crisis 16 4 .6

THREATS

4.Fluctuations in international and domestic

tourist arrivals

.10 4 .4

5. Population below poverty line .07 3 .21

6.Growth of existing competitors .13 4 .52

TOTAL 1.0 3.58

Legend:

Weight: 0.0- not important

1.0- important

Rating: 4 – major strength

3 – minor strength

2 – minor weakness

1 – major weakness

External Factor Evaluation Analysis:

The External Factor Evaluation Matrix is used for the assessment of the

current business conditions to visualize and prioritize the opportunities and threats

affecting Traders Hotel. The weight gives the value of the factors while rating indicates

how effective Traders Hotel’s current strategies respond to these factors. Weights are

industry-specific while ratings are company specific.




The most critical and important among the factors listed is the increase in

income. This factor was a weight of .35. the hotel got a weighted score of 3.58 which

indicates that it is responding very effectively to the existing external opportunities and

threats.




e. Competitive Profile Matrix

TRADERS

HOTEL

MANILA HOTEL HOTEL SOFITEL

CRITICAL

SUCCESS

FACTORS

WEIGHT RATING SCORE RATING SCORE RATING SCORE

Promotion and Advertising

.19 3 .57 4 .76 4 .76

Service Quality .27 4 1.08 4 1.08 4 1.08

Price Competitiveness

.22 4 .88 3 .66 3 .66

Customer Loyalty

.14 2 .28 4 .56 3 .42

Financial Position

.10 3 .30 4 .4 3 .30

Market Share .08 2 .16 4 .32 3 .24

TOTAL 1.0 3.27 3.78 3.48

Legend:

Weight: 0.0- not important

1.0- important

Rating: 4 – major strength 2 – minor weakness

1 – major weakness 3 – minor strength




Using Competitive Profile Matrix (CPM), we have identified Traders Hotel’s

major competitors and particular strengths and weaknesses. Manila Hotel, Hotel Sofitel

and Traders Hotel gained 3.78, 3.46 and 3.27 respectively.

V. STRATEGY FORMULATION

a. BCG Matrix

Market Share

BCG ANALYSIS


High

Low

Market Growth



Based on the table illustrated, Manila Hotel is placed in STAR because it is

defined by having high market share in a growing market. Stars are leaders in the

business but still needs a lot of support for promotion and placement. Under

QUESTION MARK, we placed Traders Hotel because it has growing market but have

low market share. Hotel Sofitel is placed in CASH COW, because of its position of high

market share in a mature market. Lastly, Sogo Hotel is placed in DOG because of its

low growth market and has low market share.

b. SPACE Matrix

STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX

FS and IS = +6 (best) and +1 (worst) CA and ES = -1 (best) and -6 (worst)

INTERNAL STRATEGIC POSITION

FINANCIAL STRENGTHS (FS) RATING

Working Capital +5

Liquidity +4

Profitability +5

Budgeting +5

Raise short term capital +4

TOTAL +23

FS average (+23/5) +4.6




COMPETITIVE ADVANTAGE (CA) RATING

Market share -3

Product quality -2

Technological know how -3

Customer loyalty -2

Product life cycle -3

TOTAL -13

CA average(-13/5) -2.6

EXTERNAL STRATEGIC POSITION




ENVIRONMENT STABILITY (ES) RATING

Technological changes -3

Price range of competing products -2

Risk involved in business -3

Competitive pressure -3

Price elasticity demand -2

TOTAL -13

ES average (-13/5) -2.6

INDUSTRIAL STRENGTHS (IS) RATING

Growth potential +5

Profit potential +5

Technological know how +4

Resource Utilization +4

Financial stability +5

TOTAL +23


6

5

4

3

2

1

-6

-5

-4

-3

-2

-1

654321-6 -5 -4 -3 -2 -1

IS4.6

FS 4.6

ES -2.6

(2, 2)

CA - 2.6

Traders Hotel



IS average (23/5) +4.6

Basis/Sources: Environment strength, Financial strength, Industry strength, Industry Analysis,

Questionnaire, Company profile.

SPACE MATRIX Analysis

In the Strategic Position and Action Evaluation (SPACE) Matrix of Traders hotel,

it shows that the company’s position in the market is Aggressive. This means that the


Quadrant 1Quadrant 2

Quadrant 3Quadrant 4

Weak competitiveposition

Strong competitiveposition



company has to use its internal strength to develop market penetration and product

development strategies.

In market penetration financial strength is a dominating factor in the industry. The best

way to achieve this is by gaining competitors' customers. In terms of product

development service are innovated for the ever changing demand of customer. The

company should improve their service to increase sales.

c. Grand strategy Matrix

GSM analysis


Rapid market growth

Slow market growth



Based on the Grand Strategy Matrix, Traders Hotel is positioned in Quandrant 4.

It has a strong competitive position but are in a slow-growth industry.

D. Internal-External Matrix

IE analysis:




Having analyzed the IE Matrix of the company, we have seen that Traders Hotel

falls under the first region or division which is cells I, II or IV can be described as grow

and build.

e. SWOT Analysis

STRENGTHS

Exceptional level of service

High standard facilities

Superb bay view

Wide range of exclusive

privileges

Company image

Competitive price

Value and affordability

Customer service

Facility maintenance

WEAKNESSES

Brand awareness

Customer loyalty

Few advertisements

OPPRTUNITIES

Increase income

Internet users

Economic crisis

THREATS

Fluctuations in international and

domestic

Population below poverty line

Growth of existing competitors




SWOT EXPLANATION

STRENGTH

Exceptional level of service

- Being a 4 star hotel in the country, Traders Hotel’s quality of service

will definitely be an assurance. Adding up is that being of it’s a

subsidiary of chain of hotels of Shangri-La hotels worldwide. Word

class service is a must for Traders Hotel.

High Standard Facilities

- Having a world class service of Traders Hotel, high standard facilities

will definitely be an edge to its leading competitors. First class

furniture, appliances, etc. are expected and available in the said hotel.

Value and Affordability

- One of the competitive advantages of Traders Hotel is letting their

customers experience unique comfort and outstanding services with

reasonable price.

Facility Maintenance

- An efficient and effective management knows the value of facility

maintenance for long run business operations. Hotel rooms as well as

hotel facilities are well maintained by regular inspection as a monthly

ritual.




Customer Service

- Traders Hotel’s long existence, the hotel proved a lot. For these long

years of operations and good company image, it is more than safe to

say that the hotel sustains good relationship and cater excellent

services to their customers.

Company Image

- The hotel’s good image has been maintained and continuously

improving.

Superb Bay View

- An overlook of Manila Bay’s during sunrise and sunset will definitely

blow your eyes away. Having this, Traders Hotel consider this as one

of their competitive advantages. By this way, the hotel does not only

promote the hotel itself but as well as the country’s natural beauty.

Wide ranges of exclusive privileges

- Traders Hotel’s treatment to its customers is like treating a family.

Saving only the best is the only focus of the hotel. Giving exclusive

prinilages to its loyal customers as well as to other customers is an

edge for the hotel.

Competitive Price

- Being a 4 star hotel with reasonable price, truly, Traders Hotel is an

assurance. The price dictates the qualitty of a product or service. But

to Traders Hotel, the excellent quality of service is paralleled with a

reasonable price that is not too much or overpriced compared to its

competitors.




WEAKNESSES

Brand Awareness

- Being a subsidiary of Shangri-La chain of hotels, low brand image of

Traders Hotel is developed. People tend to know other 5 and 4 stars

hotels but not or not so much of Traders Hotel.

Customer Loyalty

- For a hotel industry, customer loyalty is hard to gain. People wanted to

try different hotels to see which the best is. Lack of advertisements and

exposure to the public of Traders Hotel is one of its weaknesses.

Intensive Advertisements

- The hotel may have already established itself and made it popular and

known for others, but still, advertisements will make their status better

for they cannot be complaisant with its status. Continuous changes in

the industry should be coped up by the hotel and one of this is through

intensive advertisements.

OPPORTUNITIES

Increase Income

- A person’s capacity of spending is based on the income. The buying

power of people tends to increase and vice versa. This is an

opportunity for the hotel in marketing the excellent services as well as

the facilities so that people may be enticed to go with Traders Hotel.




Internet Users

- In our fast faced environment, people prefer the convenience offered

by the internet. With just a snap, we can buy food, clothes and even

book a flight. This becomes an opportunity by exposing the hotel to the

internet users as a medium of advertisement.

Economic Crisis

- Economic crisis does not only mean negative. Experiencing this,

people are smarter in spending their money. So instead of having

purchase a 5 star or 4 star hotel room which is more expensive one,

there is a tendency of shifting to a 4 star hotel room, which offers

almost the same service.

THREATS

Fluctuations in the international and domestic arrivals

- Total dependency on foreign tourists can be risky, as there are wide

fluctuations in the international tourism. Domestic tourism needs to be

given equal importance and measures should be taken to promote it.

Population below poverty line

- The increasing and significant number of our population that is

included below poverty line is very much threatening.

Growth of existing competitors

- The continuous growth of existing competitors in the industry will

tighten the competition and may cause the hotel develop further the

operations to maintain its status.

f. Quantitative Strategic Planning Matrix (QSPM)

STRATEGIC ALTERNATIVES

CRITICAL SUCCESS MARKET MARKET




FACTORS PENETRATION DEVELOPMENT

KEY SUCCESS FACTORS WEIGHT AS TAS AS TAS

OPPORTUNITIES

Increase in income .35 3 1.05 4 1.40

Internet Users .20 4 .8 4 .8

Economic Crisis .16 3 .48 3 .48

THREATS

Fluctuations in international

and domestic tourist arrivals

.10 3 .30 2 .60

Population below poverty

line

.07 3 .2 2 .14

Growth of existing

competitors

.13 4 .52 4 .52

STRENGTHS

Exceptional Level of Service .30 4 1.20 4 1.20

High standard Facilities .25 4 1 4 1

Superb Sea View .10 2 .20 1 .10

Wide range of exclusive privileges

.15 3 .45 2 .30

WEAKNESSES

Brand Awareness .10 3 .30 3 .30

Customer loyalty .10 3 .30 3 .30

TOTAL 2.00 12.35 7.14

QSPM Analysis

Based on the above matrix, the total attractiveness score of market penetration

and market development is 12.35 and 7.14 respectively. The highest TAS is market




penetration that would mean it is the most attractive strategy among market penetration

and market development

Market penetration strategy seeks to increase market share for present products

or services in present markets through greater marketing efforts. This includes

increasing the number of salespersons, increasing advertising expenditures, offering

extensive sales promotion items, or increasing publicity efforts.

Market development strategy involves introducing present products or services

into new geographic areas.

VI. STRATEGY RECOMMENDATION

RECOMMENDED BUSINESS ORGANIZATION STRATEGIES

In order to maintain and improve TRADERS HOTEL market share and

competitive advantage, the following business strategies are suggested for the




company to remain competitive in their industry.

1. CONTINUOUS DEVELOPMENT OF FACILITIES AND SERVICES

The hotel may have well appointed accommodations and first of its class amenities and

facilities but it should continuously develop its services to deliver customer’s need. One

way to fulfill the promise of unique stay experience i s by showcasing modern first-class

amenities and facilities that that will make and keep the customers happy and satisfied.

2. DEVELOP GOOD ADVERTISING CAMPAIGN AND POWERFUL

PROMOTIONAL STRATEGIES

Advertising is very important for it is the means of communicating the products and

services offered by the hotel to influence and persuade people to make

accommodations.

The hotel should be aggressive and place TV ads, print ads and internet ads. They can

be cost efficient and take advantage of the internet and its ability to pass out

information.

3. EXPLORE AREAS OF CONCENTRATION

The hospitality industry contains many segments, each with their own special needs.

The hospitality industry includes lodging, foodservice and transportation. Trader’s hotel

management may focus on lodging, but that still includes such diverse segments as

hotels, beds and breakfasts, resorts, vacation ownership, gaming and spas.


http://www.ehow.com/travel/



4. RECRUIT FACULTY

Hotel managers must be skilled in environmental management, revenue (or yield)

management, leading people, investments and technology. Attend conferences such as

the International Council on Hotel, Restaurant and Institutional Management (CHRIE)

where you can meet dedicated hotel management faculty members and get

recommendations. Recruit people with a diversity of backgrounds.




VII. STRATEGY IMPLEMENTATION

Our recommended action plan is to put greater emphasis on the advertising and

promotions of the hotel by having ads on the magazines, newspapers, leaflets/flyers,

viral marketing, and website interaction with customers through Facebook, Blogs,

Multiply and Friendster. By having greater marketing efforts the hotel will be popular and

it will add information to the public. It will attract more foreign and local customers that

will do business or have a reservation with the hotel. Through advertising more

customers are knowledgeable and can be attracted to have corporate meetings and

forums, events like weddings and birthdays and tourist and locals who are looking for a

vacation and relaxation.

In addition to our recommendation, we would like the company to provide the

registered customers with SPA, Discount Card, Covered Swimming Pool, and Sports

Area, so that guest will not go out and seek for other places or business that offers such

services. Also, to set special offers for special occasions like Valentine’s Day,

Christmas, and Summer Vacations.

Magazines the stronger the readers affiliation with the magazine as a brand, the

higher the level of endorsement that the advertising receives from the magazines

personality. The Magazine good for the hotel to set ads is the Good Housekeeping and

Seventeen Magazine.

Good Housekeeping advertising rate for 1month full page colored is Php.

391,185.00 and Seventeen Magazine for 1 month full page colred is Php. 134,000.00

with the total of Php. 525, 185.00.

Newspaper is another way of advertising the hotel in the public and we choose

Manila Bulletin as the broadsheet that we will put the ads. 3 col. x 5 cms




= 5,292.00 (weekdays) ; 6,216.00 (sundays) it will be post for 2 months in the

newspaper. The total for 2 months weekdays Php. 211, 680.00 and for 2 months on

Sundays Php. 49,728.00 and the over-all total is Php. 261,400.00

Leaflets/Flyers will be distributed to major malls in manila like SM North Edsa,

Trinoma, Glorietta, SM Mall of Asia and SM Mega mall. The No. of Leaflets is 100,00

(20,000 leaflets per malls) and the price per leaflets is Php. 2.50 and the total cost for

leaflets is Php. 250,00.00

Viral Marketing is the kind of technique that uses pre-existing social networks to

produce increases in brand awareness or to achieve other marketing objectives (such

as product sales) through self-replicating viral processes. It can be word-of-mouth

delivered or enhanced by the network effects of the Internet. This strategy is one of the

most effective means of advertisement that will give consumers glimpse and also full

information about the company. But with using this maybe some informations being

spread by people are false or has negative impact to the public, so be very careful of

using this as one of the advertisement.

Additional recommended plan:

Discount Card

One way of penetrating the market for a Hotel is to offer discount cards to any

client. This would help the hotel to attract and retain customers who have at least

patronized their services. Especially satisfied customers because those persons would

likely want to have the same experience that they had during their stay at the hotel,

plus, the fact that the hotel will offer them a lower rate than before would be a great help

to have loyal customers. Not to mention that this can create a ripple effect to the

society.

Spa




Another great service that a hotel can offer to their patrons would be a spa.

Relaxation is one of the main purposes that a person stays in a hotel, and a spa can

help the hotel give the most relaxing service to their clients. Having this kind of services

offered inside the premises of the hotel would add to the comfort and security of the

customers and would increase the satisfaction of the patrons.

Covered Swimming Pool

Having a swimming pool inside the hotel premises is a great deal for customers

because some customers, especially young individuals and those that would bring

along children would be delighted to have a swimming pool to indulge themselves with

plus, without the hassle of leaving the hotel premises for convenience, safety and

security, and pleasure.

Sports Area

Another facility that a hotel can offer to its clients is a sports area, usually it can

be composed of a basketball court, full or half, tennis and badminton courts. This can

help the hotel attract and retain customers because sport area is great for the health

and a great venue for people to meet new friends. It can serve as the place for the

clients to unwind after a long day or to keep a healthy lifestyle without any burden of

leaving the hotel grounds. This can add up to the satisfaction that the hotel would want

to give to their patrons.

Financial Implication




The total expenses for the advertisement of the hotel is Php. 1,035,585.00 which will

increase the expense of the firm by 10% - 30% but will possibly increase sale after the

advertisement for also about 20% - 30%.

VIII. CONCLUSION

We therefore conclude that the strategy to be implemented on the hotel is the

Market Penetration, seeking increased market share for present products or services in

present markets through greater marketing offers. It includes increasing the number of

sales persons, increasing advertising expenditures, offering extensive sales promotion

items, or increasing publicity efforts. By increasing primarily in advertising and

promotion, the hotel can provide more information to the public about their products and

services offered.


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