did relatively ok. got a credit (67.5%) for management first individual report, though i expected a higher grade but oh well, shall work doubly hard for the rest of my assignments and the exam.
shall post the report as i have nothing else to write in this hectic schedule. just love my colleagues at FujiXerox~*
1. Introduction
3 Bears Lodge & Backpackers (3 Bears Lodge) was formed in 2002 with the mission of having backpackers experience Australia by providing them with an affordable service that meets the requirements of a budget traveler. 3 Bears Lodge have expanded to 7 Lodges situated at Perth, Adelaide, Melbourne, Sydney, Canberra, Brisbane and Darwin in Jan 2005. The Head Office of 3 Bears Lodge is situated at Perth. With the success of the lodges in Australia, 3 Bears Lodge seeks to expand its operations internationally into France. This business report will cover environmental aspects of 3 Bears Lodge expansion into France and a SWOT analysis with recommendations on the feasibility of France as a possible location for global operations.
2. Environmental Aspects
2.1 Political/Legal Environment
Shoemaker, Lewis and Yesawich (2007) illustrate that the political environment refers to rules and regulations that can either encourage growth and trade or hinder it. World Trade Organisation is one of which that monitors and sets the legislation. World Trade Organisation (2007) reported that the principles of the trading system include treating foreigners and locals equally. Under the General Agreement on Trade in Services (GATS) which is also mentioned in the World Trade Organisation (2007) is to be adhere by 3 Bears Lodge closely.
Stutts and Wortman (2006) state that all lodging organisation are facing a large number of legal policies that affect the treatment of workers. These policies include salary matters, working conditions, contract of employment and other factors concerning the workplace environment. This usually results from national, state or legislation actions. Thus part of the human resource management system from 3 Bears Lodge in Australia will be transferred to France to oversee such matters in regards to the welfare of the employees.
The Australia Taxation Office (2006) reported that Australia and France have a tax treaty that was drawn out since 1976. This affects the directors in Australia as the establishment in France would be under foreign business income for the income tax assessment unless it is a subsidiary in France.
2.2 Economic Environment
Shoemaker, Lewis and Yesawich (2007) explained that the fluctuation of currency values and price resistance have a significant impact. The fluctuation in the Euro dollar would either promote or impede the tourism trade as items in France would be less expensive than it would normally if the Euro dollar was weaker than that of other countries. Another economic factor is price resistance which affects very much in the hospitality industry where corporate controller forces cutback in expenses and travel planning companies are seeking lower priced airlines and hotel companies.
In regards to economy, 3 Bears Lodge would be an advantage if it could provide with a form of service at affordable costs in tune with travel management companies in Australia. That would bring about more traffic from Australia to France which would also increases revenue.
2.3 Socio-cultural Environment
The French as described by Bailey (1999) are deeply civilized with strong etiquettes and are very proud of their rich cultural heritage with franc notes bearing the portraits of well known philosopher, painter and writer.
This socio-cultural environment will thus be adapted in all areas of 3 Bears Lodge in France to ensure the continuity of her culture and give rise to excellent satisfaction from tourists to residents.
2.4 Technological Environment
Olsen, Tse and West (1992) state that technological environment covers aspects such as the equipment, communication, layout, supplies and safety. Equipment are employed by the firm that may increase learning capabilities and replaces manpower, communication which refers to the link way between the traveler and the information that he requires, layout and design as the environment would influence the architectural construction, supplies that has to be transported timely and safety due to the developments of technology to bring about a lodge that is free from accidents.
Robbins et al. (2006) pointed out that an increasing number of companies are using technological advanced operating system to reduce resources and stay ahead in the industry.
By incorporating services that has been available in 3 Bears Lodge such as internet bookings, payment by credit cards, free internet access computers, wireless connectivity for travelers with laptops, common phone that allows overseas call, efficient laundry and dry cleaning services, it will definitely stand out among other budget hotels in terms of technology.
3. SWOT Analysis
3.1 Internal – Strengths and Weaknesses
As 3 Bears Lodge is an established brand in Australia in the past five years, it is known by most backpackers in downtown by its service and overall satisfaction. Thus, with this brand breaking into France, most backpackers in Australia would give the familiar name a stay. Besides that, travel companies in Australia would find it beneficial to tie up with 3 Bears Lodge in France for accommodations for backpackers that are traveling to France. On the other hand, European travelers in France that might not have heard of 3 Bears Lodge might give the Australian brand a miss as they are not familiar with it.
The groups that 3 Bears Lodge are projecting are mainly the young working adults and students that are either backpackers or travelers looking for an affordable accommodation. Budget airlines increase airport passenger numbers (2004) shows that more travelers are looking for alternatives in terms of cost for travel and could well benefit 3 Bears Lodge. Whereas there is a loss in opportunity for groups with capital as travelers that are willing to spend would be looking for higher-end stay in France where 3 Bears Lodge are unable to provide with amenities such as spa facilities.
The resources and services that 3 Bears Lodge provide are part of its strategy in breaking into France market of budget hotels as mentioned in the technological environment. That could be also be a backfire as the costs of maintaining and up keeping such technology will amount to a higher rate of stay.
3 Bears Lodge in Australia are proactive in launching its marketing campaigns online in drawing budget travelers and by applying the same tactic in France; it would be able to expand in a rapid rate by accommodating to more travelers. By editing the existing information in the webpage of 3 Bears Lodge with the addition Lodge in France, the cost of marketing would be incurred in Perth. Moreover, Powers and Barrows (2006) states that the impact of the internet has been revolutionary. (Powers and Barrows 2006, 395) “Online travel sales will more than triple in five-year period between 2002 and 2007 from $18 million to $64 million.”
3.2 External – Opportunities and Threats
Due to the stability of France economy as commented in French GDP (2007), 3 Bears Lodge would be facing a positive outlook in the response for services from foreign traffic. This is so as when a country’s economy does well, trade and tourism would flourish and thus will the industry.
3 Bears Lodge will be a newly renovated and constructed with brand new amenities and this creates an opportunity in its initial stage of having travelers not only from downtown. After a few months of business, there might be a decline in traffic if the system of up keeping 3 Bears Lodge is not maintained especially the conditions of the bed and restroom.
The direct competition in France that 3 Bears Lodge would be facing would be hostels as mentioned in book hostels in Paris (2007) website. The low prices that have been offered for budget travelers will be in demand. In order to compete with the existing hostels, 3 Bears Lodge would have to introduce competitive rates that will match for its services. Other form of competitors would be inns and hotels.
With the success of infiltrating into the French market, an opportunity for 3 Bears Lodge will be seeking foreign investors in its expansion in other parts of Europe and into the world due to its capable management system.
4. Recommendations
3 Bears Lodge would have its headquarters for Europe and lodge situated at Paris where its location is ideal for travelers that come to seek the culture and history of France. It is recommended that a group of senior management personnel from the existing 3 Bears Lodge would set up a similar system of up keep and maintenance to be in placed in France, thus providing travelers with an overall positive stay. The management would also align the construction and services to the regulations and legislations that is required by the state. In addition, with value added services in placed, it will provide a more wholesome stay as compared to budget hostels that compete based on pricing. Whereas for 3 Bears Lodge, the service that it provides will be affordable at its rates.
Besides online marketing, 3 Bears Lodge would have to take a proactive marketing approach in Australia such that it would create plans in line with travel companies to suit the needs a budget traveler to France and the existing lodges in Australia. At France, 3 Bears Lodge would have special packages for groups that are staying together which would also promote backpackers who normally travel with friends.
3 Bears Lodge would welcome foreign investors in investing in other areas to assist in its expansion globally and thus bringing the brand name across Europe besides the existing Australia. This would enable the branding of 3 Bears Lodge to differentiate other hostels or inns.
Reference List
Books
Olsen, M. D., E. C. Tse, and J. J. West. 1992. Strategic management in the hospitality industry. United States of America: International Thomson Publishing.
Powers, T., and C. W. Barrows. 2006. Introduction to management in the hospitality industry. 8th ed. New Jersey: John Wiley & Sons, Inc.
Shoemaker, S., R. C. Lewis, and P. C. Yesawich. 2007. Marketing leadership in hospitality and tourism strategies and tactics for competitive advantage. 4th ed. New Jersey: Pearson Prentice Hall.
Stutts, A. T., and J. F. Wortman. 2006. Hotel and lodging management an introduction. 2nd ed. New Jersey: John Wiley & Sons, Inc.
Robbins, S., R. Bergman, I. Stagg, and M. Coulter. 2006. Foundations of management. 2nd ed. Australia: Pearson Prentice Hall.
Bailey, R. 1999. The national geographic traveler France. Ohio: National Geographic Society.
World Wide Web
Budget airlines increase airport passenger numbers. 2004. http://www.abc.net.au/news/stories/2004/07/13/1152600.htm (accessed August 24, 2007).
Book hostels in Paris. 2007. http://www.hostelsclub.com/step01_city.php?lang=en&country=116&city=134&mese=9&giorno=1&anno=2007¬ti=3¤cy=1 (accessed August 30, 2007).
Government Publications
Australia Taxation Office. 2006. Taxation ruling. Canberra: ATO. http://www.ato.gov.au (accessed August 29, 2007).
World Trade Organisation. 2007. Understanding the WTO. 3rd ed. Switzerland: World Trade Organisation Information and Media Relations Division. http://www.wto.org (accessed August 29, 2007).
National Institute for Statistics and Economic Studies. 2007. French GDP. France: INSEE. http://www.insee.fr/en/home/home_page.asp (accessed August 29, 2007).
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