Strategic Plan report for hotel Shangri-La.

Prepare a strategic plan for one year for the hotel Shangri-La Hotel which management has been taken over.


This study has been conducted to prepare a strategic plan for one year for the hotel Shangri-La Hotel which management has been taken over. It is necessary to create a new strategic plan for the hotel to meet the desired result. The strategic plan is created to achieve the long-term goal of the organization (Powers et al., 2015). Without proper and effective strategic plan it is very difficult or almost next to impossible to achieve the long-term goal of the organization. The strategic plan is not only created to accomplish the long-term goal, but it also helps in achieving short-term goal of the organization. In this paper, the strategic plan is to be created to accomplish the short-term goal. The strategic plan should include the short-term goals and objectives of the marketing, short-term goals and objectives of the expense, the goals and objectives of revenue, and the goals and objectives of service (Ginter et al., 2018). But before creating a strategic plan we need to analyze the business environment of the organization. The analysis of the business environment such as internal environment as well as the external environment will provide inputs to formulate the strategic plan for the hotel (Phylip-Jones et al., 2015). To formulate the strategic plan for the hotel, we will analyze the BCG Matrix, Porter's Five Forces, and PESTLE Analysis.

Mission Statement 

The mission statement of the hotel is to make the customer satisfied and delighted each time they visit by creating an attractive experience from the heart.

Vision Statement

The vision statement of the hotel is to first choice of the potential consumers, shareholders, business partners, and colleague. 

BCG Matrix 

BCG matrix is also known as BCG Growth-Share Matrix. BCG matrix is a model of portfolio planning which is used to analyze which unit of the business is more profitable and which one is least (Torquati et al., 2018). BCG matrix gives much information that stated above. There are four quadrants of the BCG matrix which separately depicts which business unit of the organization is more profitable or having a maximum share in the market and which is less profitable with less market share.
BCG Matrix 
The Shangri La hotel has different business units such as Shangri-La Hotels, Shangri-La Resorts, Traders Hotel, and Kerry Hotels. The Shangri-La hotels are the stars of the Shangri-La group. The hotel generates huge revenue for the group, but the usage of money in the hotel is very high (Alcock et al., 2014). The market share of the Shangri-La hotels is high as well as the market growth rate of the hotel is also high. So, the Shangri-La Hotels are the Stars of the Shangri-La group. The resorts of the group are the cash cows of the group which generates more profit than any of the business units. The market share of the resorts of the group is high. Apart from this the resorts also generate high revenue for the group, but the usage of cash is less. So with the less money, it generates maximum revenue (Alcock et al., 2014). Therefore, it is kept under cash cows of the group. The Kerry Hotel of the group is under the category of Dogs because this unit of the Shangri-La group has a low market share and generates low revenue for the group. The usage of money in this unit is also low, and the rate of the growth of the market is also low. The question mark of the group is Traders Hotel (ANNEX, 2017). Traders Hotel of the group does not yield high revenue, but the usage of cash is very high in this unit. But there is a high potential for this unit in the market.

Strategic Plan

The group should enjoy the benefits of its cash cows. The group should maximize the share of its cash cows to enjoy more profit. But there is a high potential for the question marks. The company should analyze the environment of the Traders Hotel to expand the market share of this unit to generate more cash. The group should also control the cash usage of its stars to maximize the profit by cutting the expenses. 

Porter’s Five Forces

Porter’s Five Forces is a tool to analyze the competition of a business in the market. The five forces are used to determine the intensity of the competition in the market (Yunna et al., 2014). Apart from this model also determines the attractiveness of the industry regarding profitability. The five forces are bargaining power of suppliers, bargaining power of buyers, threats of new entrants, threats of substitutes, and competition from existing rival firms (E.Dobbs, 2014). 
Bargaining power of the suppliers: the bargaining power of the suppliers is moderate. The group has signed agreements with big brands to deal with the bargaining power of the suppliers (Kang et al., 2017). However, due to the less number of big brands the bargaining power of the suppliers is little high. 
Strategy: the group should sign long-term agreements with the big brands to lower down the bargaining power of the suppliers. The relationship with the suppliers should be good.  
Bargaining power of buyers: there is very tough competition in the hotel industry. Due to the tough competition in the industry the bargaining power of the buyers is high. However, the buyer or customers of Shangri-La group are loyal to the group because of the quality of services provided by the group (Hwang et al., 2016). 
Strategy: the group can lower down the bargaining power of the customers by making them delighted. The quality service of the group can make the customers delighted and loyal to the group.  
Threats from new entrants: the hotel industry is highly profitable which attract new players to enter the market. Therefore, there is a high possibility that some new players will enter the market. So, the threat of new entrants is also high.
Strategy: the group can reduce the threat by positioning the group differently into the minds of the customers. Differentiation would be an effective strategy to reduce the threats of new entrants.
Threats of substitutes: as we discussed above that there is very tough competition in the hotel industry, in fact, there is cut-throat competition in the industry. So, the threat of substitutes is also high due to the availability of the substitutes.
Strategy; Differentiation strategy would also be effective to reduce the threats of substitutes. 
Threats from existing rival firms:  due to the cut-throat competition in the market the treats from rival firms is also high. There are some direct competitors of the group such as The Westin Sydney, Great Southern Hotel, etc. (Hwang et al., 2016) 
Strategy: Unique selling proposition and unique service quality would help in reducing the threats from existing rival firms.


PESTLE Analysis

PESTLE analysis is also one of the most important marketing tools to analyze the business environment of an organization (Zalengera et al., 2014). PESTLE analysis mainly deals with the external environment of the business which cannot be controlled by the organization. But it is very important to keep close eyes on the external environment to avoid any uncertainty (Morris et al., 2016). 
Political: There is political stability in the country which is beneficial for the Shangri-La group. Although there is political interference in the business regarding the education of the employees, the health of the employees, etc. (Morris et al., 2016). 
So the group should follow the instructions of the government to avoid any action against the group by the government. 
Economic: the economy of the country is very vibrant. The economy of the country is growing rapidly which is favorable for the group. The cost of living is also low comparing the major cities of the world. The per-capita income of the people is also high (Basu et al., 2015). 
Social: the majority of the population belongs to the working class. Although there is also middle as well as upper class. Social trends of the country are changing which ultimately leads to the change in the demand pattern of the population. So the hotel needs to analyze the changing demand pattern of the population to meet their demand. There is no discrimination in the country by caste, race, and religion (Jackson et al. 2017). 
Technological: Australia is one of the most developed countries in the world. Australia is also advanced in technology. The government also encourages innovation in the technology. Australia also adopts the new and updated technology. With the help of advanced technology, the cost can be reduced, and quality of the service can be improved. So, the hotel should get the benefit of the advanced technology by adopting the new and innovative technology. 
Environmental: the government, as well as the people of the country, is very much concerned for the environment. To protect the environment the government formulated legislation “The Environment Protection Act.” The government is eager to maintain the high quality of air and water in the country. So, the hotel needs to follow the same principle of the government to avoid any uncertainty against the hotel. 
Legal: the constitution of Australia does not allow discrimination (age, race, gender, religion). There is also legislation for the minimum wage. So the hotel should fulfill the legal requirement of the country to avoid any legal issue (Jackson et al., 2017). 
Table of Figures 
BCG Matrix
Porter’s Five Forces
PESTLE Analysis


Shangri-La Hotel is one of the luxurious hotels in the country. There are various units of the Shangri-La groups. Shangri-La hotels are the cash cows of the group. Traders Hotels have the potential to increase the market share. It can also generate more cash. The business environment of the country is also favorable for the hotel. The only problem before the hotel is cut-throat competition in the market. So, by implementing differentiation strategy and unique selling proposition, the hotel can position itself into the minds of the customers and can enjoy high profit in the market. 


The following are the recommendations for the hotel;
•    The Shangri-La hotel should invest in its Traders Hotels because it has high potential to capture the large share of the market. 
•    It should make its customers delighted by providing quality service to make them loyal.
•    It should adopt advanced technology to increase the quality of the service.
•    It should also follow the legal requirement of the country to avoid any legal action against the hotel.

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