Savannah Tourism Ventures - Case Study Example

Savannah Tourism Ventures Feasibility Study Name of the student: Course Tittle: Name of the professor: Date Table of Contents 1 Table of Contents 2 3 1.0 Introduction 4 1.1 Company Vision Statement 4 1.2 Company Mission statement 4 2.0 Tourism industry background 4 Indications of Tourism Demand in 2013 6 3.0 External factors with significant impact on performance in an industry 6 4.0 How products/services will be differentiated 7 5.0 Location of the business 12 5.1 Procurement process 13 6.0 SWOT Analysis 15 7. Characteristics of target market 16 Reference 18 1.0 Introduction Tourism is taken to be a business that bears the potential to form several small industries and hence, promote the creation of job in many countries. We frequently think of the tourism activity as simply accommodation (lodges, hotels, B & Bs etcetera) journey services, and the facilities for the transport (Scott, 2010). For sure, several services lead to the tourism activities and make it functional. Therefore, there is high demand to think widely and emphasis on the economy for the tourism industry, and many services that boost the tourism industry (Kagitcibasi, 2012). Savannah Tourism Company will be an international company dealing in tourism industry. The firm will be helping the customers by identifying potential areas of interest in the field of national and international tourism. The company headquarter will be located in Australia with international agent in major tourism destination around the world. 1.1 Company Vision Statement To be the world class tourism company center 1.2 Company Mission statement To provide our customers with the best services concerning tourism destinations in the world 2.0 Tourism industry background Savannah Tourism industry is a service industry. It is centered on people, and reliant on people. This is what will make tourism unique and special, and hence one should bear in mind that, there is need to provide excellence, quality, and top service every day (Brignall and Modell, 2000). There is ample rivalry in the tourism, and only the excellent service and quality that Savannah will offer would set prices and tariffs, so it is not easy to distinguish yourself in those regions. So one must ensure that has the best quality services that will set them apart from others’ (Brignall and Modell, 2000). When reviewing the trends and the needed skills in tourism, it is often interesting to begin with some evidences and figures on the contemporary situation of the worldwide tourism effect. The overall overview for this vibrant sector is, in comparison to economic sectors, constructive and quite hopeful for the coming years (Brignall and Modell, 2000). Tourism is a common and worldwide business that contributes to economic development through foreign exchange and job creation. The capacity for tourist space in Europe shows dissimilarity between hotels and campgrounds. Generally, the hotel department overshadows in several destinations, except few areas in the West and Southern parts of France, the coastal areas of Belgium, Netherlands, the northeast of Spain, and the United Kingdoms including Australia (Robert and Joe, 2011). Particular trends in Europe and Africa tourism have been well known, signifying that the arrival of tourist will double in the next 20 years to come and the multiplication will occur. This will imply that by 2020 over 700 million cross-border tourists per year will land in Europe and Africa. At the equivalent time, there will be a high increase in mature tourists; the natural and cultural heritage tourism will be the firmest growing sector and certain driving forces such as the internal markets, liberalization, and money will only gain more significance for the additional advancement of tourism (Robert and Joe, 2011). Nonetheless, choices taken by individual tourists are mostly subjective and thus susceptible to external effects/ forces. Topical history in this concern displays that tourists are highly sensitive to conflict consequences and violence, increasing environmental accidents and health risks. The whole process of decision-making is caused even more complicated through habit changes (Brignall and Modell, 2000). The likelihood of Internet reservation and resulting individual travelling, the trend in the direction of late and compliant travel decisions, and the obtainability of low-cost carriers and strengthened search for price advantages, makes tourism none of the greatest unstable and dynamic economic sectors. Indications of Tourism Demand in 2013 International tourist arrivals (x 1,000) Nights spent by foreign tourists (Mill) International tourism receipts (Mill. ECU) Austria 17,173 63.8 11,168 Belgium 5560 12.8 4776 Denmark 1614 10.8 2814 Finland 835 3.3 1320 France 60,110 54.3 20,742 Germany 14,847 35.5 12,408 Greece 10,130 39.6 3138 Ireland 4231 14.0 2059 Italy 31,052 113.0 20,993 Luxembourg 767 2.3 4776 Netherlands 6574 19.7 4946 Portugal 9706 22.2 3330 Spain 44,886 107.8 19,431 Sweden 683 7.9 2652 United Kingdom 22,700 164.9 14,366 EU 230,868 672.0 124,143 Iceland 190 0.8 127 Liechtenstein 59 0.1 n/a Norway 2880 7.1 1826 EEA 233,997 680.0 126,096 Switzerland 11,500 34.0 7236 Europe-19 245,497 714.0 133,332 3.0 External factors with significant impact on performance in an industry The leisure time boom participates, may be as a result of the constant reduction of working hours, and is one external force that affects tourism. For instance, the mean working week in 1950 in Germany was six days in 48 every 48 hours. However, the average individual works a six to eight hour daytime and a 34 to 36 hour week (Brignall and Modell, 2000). As well as, the increasing number of the retired employees, those have acquired a lot of wealth and need more time for enjoyment purposes. This has stiffly encouraged me for the achievement of my main goal. The elevated leisure status has resulted into the shift in the patterns of recreation and the developing commercialization of relaxing time. Free time has resulted into a vital module of life quality. Many people are therefore on high demand for both active and passive leisure. Intensified awareness for the health is additional factor that influences leisure behavior. Wellness and fitness are essential considerations when choosing leisure activities and the selection of the travel products and services. Savannah will construct leisure activity sites that will enable people to recreate freely. The state of the economy can support such a shift. Constant decline, increasing unemployment and usually undefined labor market collude to raise cost awareness. Savannah is going to act as the recruitment site, where many people with different skills and ability will be absorbed. An increase in of lone travellers takes theme-based holidays where they could integrate themselves with groups of people of like-minded to become familiar with the external cultures, join courses and study languages. Savannah will act as a center of attraction for all these clients. The site will have a full network of resources that are needed by the customers to enhance the tourist’s attraction. 4.0 How products/services will be differentiated Well you know how much product or services might be the same and thus very difficult to be differentiated from other rivals’ resources. Therefore, the tourism venture will tend to incorporate wide innovation to improve its products and services in the fields of: Supply and supply-related factors Demand drivers The level and the competition pace The availability of technologies that are new will lead to the development of new skills, new services, new materials, and new design of organization. This is particularly true when the role of technological innovation is crucial. There will be new skills in tourism management (e marketing), for instance, this is necessary for variety of training and interactive skills in the fields of adventure and wellness tourism. The incorporation of new information services for guests as databases can ease processing customer behavior and profile. Not only supply will change, but also customer needs and wants. Basic driving forces for the quality and the availability of basic service quality factors are accountability, convenience, punctuality, price, and speed. All other factors, like individual attention, aesthetics, and multiple selections are secondary factors, which are taken as added features (Kagitcibasi, 2012). The orientation to the customer plays a significant role in innovation of the service. Appreciated information can be achieved from the customer behavior during the process to the service. Savannah will provide new products that give a unique or special value to the customer and are more popular than the one without the participation and consideration of the client. Several parts of the tourism industry but notably such businesses as airlines, transportation, hotel chains, car rental agencies and tour operators are more concentrated and act as players globally within the industry. With the market maturity, sharp technological change in the IT field and the slowing of the demand, in several parts of the industry, competition has turned into disastrous rivalry. The Savannah has been sketched with the IT parameters; this will enable the industry to compete some other industries in a modern style. Many a time, no one will like to taste or experience the same condition, situation, food or everything. The company is well prescribed with more refined services upon customer choice. The master plan on meals and drinks is well spread. The industry will have good hotels that will be operated under qualified personnel with the modern cooking mechanism; the client should be served upon their need and not on the available demand. Modern gadgets for food preservation and treatment will be used. According to Kagitcibasi (2012) most industries have failed to apply the best modern technology on the food or drinks preservation. 5.0 Operational Plan The plan for production or operational plan will used to regulate the inventories, production, average waiting time, backlogs, and the expenses for operating and purchasing. Within the venture, there will be capacity planning which includes setting and adjustment of the capacity usage and levels with the complicated cases, possibly requiring plans for checking capacity building and development. Strategic Intent Objective Strategy Performance Indicator Budget Timeline Responsibility Progress Establish Business operation Base To start business Accumulating capital Renting house $ 1000 2months Director Monitored weekly Recruiting of employees To have team to work with Competitive approach of recruitment Performance based on academic and professional qualification $500 1month Replacement firm Application Developing marketing To develop 5 year marketing strategy Taking marketing analysis and data of market performance Completion time $ 200 3 months Marketing officer Weakly reporting Developing financial plan To determine forecasting Budgeting Completing time $ 150 2 months Accountants Monthly report Developing control system To monitor financial and resource management Through accounting system Desirable management of resources $ 600 6 months Accountant weakly Capacity building To equip employees with new skills Through team building Increase in sales and customer satisfaction $ 3000 Quarterly Human Resource Reported annually Marketing Campaign To make company known and its product Social media, TV marketing, Newspaper Increase in sales $ 4000 1 year Marketing department Monthly Employee To recruit Interview Retention rate $ 5000 5.0 Location of the business The study evaluated the best location for establishing Savannah industry by considering the advantages and disadvantages for the site. Savannah is going to be situated at the outskirt of the city Veer, along river Tennessee, where the population is denser. The most notable advantage for the location will be considered on its abundant and low-wage labor. The savannah premises are going to be unique and attractive. The conventional plans for establishing the premises stated that the Savannah premises would be invested on new buildings. The chief advantage on this has taken a wider focus on the long term investment—the minimization of the output while the management will tend to maximize the profit. Buying or renting a premise was viewed more very expensive than building the site. According to Jerry and Peter (2010), the previous study showed that the nearby industry, Wales Tourism industry, has been spending a lot of money in renting the houses and other apartment for offering their services. Wales has been using 60% of its profit to rent premises of which could be slashed to 50% when building, and 35% when building. However, the amount is still incomparable because it will be often paid monthly. Savannah dedicated $120 billion for building the premises. Were it for renting or buying the premise Savannah would have used $120 billion per month and $300 billion consecutively. Flow chart to illustrate and explain the various stages of production and service delivery The service system includes the process of the service delivery and all the propping processes that are needed in the co-creation of value for the customers. Service System means service organization. However, service system can be enlarged to employ suppliers’ part of the process for the service delivery. Service Delivery Process (SDP): is the end-to-end method that interacts directly with the customer. It comprises of all the steps (srep1 to step4), that a customer passes through during the co-creation value. The SDP starts when the customer first interacts with the system or service organization and ends when the delivery of the preferred service is finished and the customer exeunt the process. 5.1 Procurement process Procurement will followed laid down procedure while inventory will be recorded on first in first out basis and the accountant will be accountable 5.2 Organization structure The president followed by operation manager, human resource and finance resource managers will head the company. Support staff will be very instrumental in implementing organization objectives. Financial projections and cash flow statements Savannah Tourism Statement of cash flows for the year ended 31st June 2014       $ $ Cash flows from operating activities                   Profit before taxation     14,148.20   Adjustments for:           Depreciation   1,034.00     Amortization   -     Investment income   46,572.00     Interest expense   380.00           62,134.20   Increase in trade receivables   -     Increase in inventories 6 14,045.00     Increase in short term borrowings   6,000.00     Increase in trade payables 7 4,940.00 (24,985.00) Cash generated from operations         Interest paid     22.00   Income tax paid     4,244.46 4,266.46 Net cash from operating activities       41,415.66           Cash flows from investing activities         Purchase of property, plant and equipment         Purchase of intangible assets         Proceeds from sale of equipment   $ 11,340.00   Proceeds from sale of intangible assets     $ -   other investments     $ 11,250.00   Interest received     $ 22.00   Net cash used in investing activities       112.00           Cash flows from financing activities         Proceeds from issue of share capital   11 26,000.00   Proceeds from long term borrowings     2,000.00   Dividend paid     830.00   Net cash used in financing activities       28,830.00           Net increase in cash and cash equivalents       70,133.66 Cash & cash equivalents at start of the period       3,587.00 Cash & cash equivalents at end of the period       73,720.66 From the projected cash flow, technically the company is capable of thriving in a competitive business environment since the net cash flow is positive indicating a positive business health. 6.0 SWOT Analysis Strengths The company will employ qualified personnel who will be able to drive the company a head. Qualified and competent personnel will be a competitive advantage over other firms in the industry. Strong capital base will be another strength the company will ride on as they will be able to have and purchase modern tourism facilities. Good marketing strategy with low prices, which will attract many customers while at the same time keeping off competitors out of the market.\\ Good infrastructure Weakness The company is new in the market hence has not developed the brand of its product Opportunities Wide market that has not been exploited both internationally and nationally Increase in the number of both domestic and international tourism Threats Existence of well-developed companies The recent decline in the value of sterling has had the effect of increasing the cost of many of the raw materials and components sourced from outside the UK, and the price 7. Characteristics of target market Political factors: The political environment of UK as widely remains certain over a long period creating conducive environment for business. There is no likelihood of a change in government at an upcoming election currently and this good environment for carrying out business for the company. The policies and fundamental beliefs belonging to the political party that is in power supports entrepreneurship. The level of government interference in the market place is minimal allowing market forces to adjust and control both demand and supply of goods and services. Economic factors Business cycles (booms and busts) within the UK and Eurozone in general are encouraging with stable interest rate movements and exchange rate movement’s overlong period making it easy to access credit facility for business to operate. Inflation rate has been stable with steady growth in GDP since the financial crisis. The employment levels have increased making consumers to have more disposable income that they can use for torism. Consumer confidence is high with stable economic activities, per capita income is high. Socio-cultural factors Demographics characteristics that refer to the different attributes of a country’s population, the targeted country market mostly composed middle age people and old people who value living at comfort. The genders are both men and women though women are higher than men in number making it at the most favorable market for tourism. There are high numbers of Christians than any other religions in the area though other religions like Muslims Buddhist also exist. Living standards of the target market is high composing both low and high level of people. Technological factors Improvement in technology like online booking, internet services offered by tourism firms have changed the tourism sector. Legal factors The different types of laws that apply in business include registration of business and taxation law which apply to all companies operating both import and export goods. Specifically to those businesses the manufacturing and export sector. Laws are flexible and encourage businesses within the area. Environmental factors The commodity does no affected by climatic changes hence can thrive well in all climatic conditions. Weather condition affect influx of the number of tourism in the area hence a very important factor. Reference Kagitcibasi, C. (2012). 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