Feasibility Analysis of Tour Business, Accommodation and Restaurant Businesses - Assignment Example

FЕАSIBILITY АNАLYSIS Name Course Lecturer Date Table of Contents Table of Contents ii 1.0 Business & Industry 1 1.1 Current and Future Trends 1 1.2 Key Driving Forces 2 1.3 Key Success Factors 4 1.4 Opportunity Pursued 5 2.0 Products / Services 5 2.1 Product Lines and Attributes 5 2.2 Area of Differentiation 6 2.3 Operations Objectives 6 3.0 Physical Presence 7 3.1 Location 7 3.2 Premises 7 3.3 Layout 8 3.4 Facilities Expansion & Maintenance 10 4.0 Processes and Supplies 11 4.1 Production/service process 11 4.2 Materials and Suppliers 11 4.3 Inventory Management 11 4.4 Managing Seasonal Variations 12 5.0 Human Resource Planning 12 5.1 Employees and Positions 12 5.2 Termsof Employment 13 5.3 Recruitment Sources 13 5.4 Training 13 5.5 Performance Appraisal 13 5.6 Remuneration 14 5.7 Legal Requirements 14 5.8 Technical Feasibility 14 6.0 References 16 FЕАSIBILITY АNАLYSIS 1.0 Business & Industry 1.1 Current and Future Trends There is great demand of tour business, accommodation and restaurant businesses in this area. There is great business opportunity that can make a difference in the organisational performance through the demand contribution in the long term through the demonstration of the highest level of potential. There is systematic attraction, development, engagement, identification and availability of resources in terms of equipment, cost wise and human capital. These will add high potential and particular value to the business as Peeters et al., (2006) adds. Another trend in this business that I am very keen on is pricing of the first generation products. This will provide the business with opportunities because there is no stiff competition. The current trend is very promising because of the unexploited opportunities. There exists great opportunity for growth and expansion as well. Social structural, demographics and sociocultural developments will lead to changes in the demand of these services and this will provide the business with a huge opportunity to adjust and define how tourism, restaurant and accommodation business is provided to the clients (Kwag & Lee, 2009). They will also intensify the public awareness of these businesses and hence make the industry to boom in the increase of customers and consequently increase in revenues. On the contrary, the existing business in the tourism and hospitality industry has demonstrated latent vulnerability and therefore their survival depend decisively on the luck rather that setting appropriate and relevant business practices. This is a huge opportunity for this business to demonstrate to the other businesses in the hospitality industry how to conduct business on the basis of viable and fruitful business practices as Lellinger (2009) acclaims. This business will provide unique and outstanding services to customers; it will demonstrate consistency in quality and excellence in provision of services as Rixen et al., (2011) emphasis. This will enable the business to report profitability in providing value at different price levels while demonstrating its unique and own points of distinction. In essence, the current trends in this industry are globalisation, security and safety, diversity, service, technology, demographic changes and price value. The future trends in this industry are greener and eco-accommodations, development of mega hotels with multiple purpose facilities, more boutique hotels, and increasing employees’ salaries in order to retain the existing staff are very important. In addition, Solnet et al., (2013) adds that such factors as emphasis on technology and internet, customer’s physical and virtual social networks serving as the best channels for distribution and intelligent business and advanced technologyare essential in this industry. The future trends indicate a move towards high level of service delivery and client oriented services produced at a high level of intelligence and quality (Erfurt-Cooper & Cooper, 2009). 1.2 Key Driving Forces The key driving forces determines the form that these businesses will take in future as Dwye et al., (2009) points out. There are changes taking place globally that will influence experiences that customers would want in future. Managers of these businesses should place their determination in managing it as the most preferred destination centre. This is because it will determine the type of services and products that the business will offer today to match the future needs of the industry. The future is not known with certainty and therefore this business must take the necessary actions to correct decisions to allocate resources currently in order to achieve and maintain competitive advantage in the future as Hjalager (2010) suggests. One of the key driving forces in this industry is long term economic trends and globalisation. In the long run, continued moderate and eventually good rates of global economic growth are significant in the future of this business. The future prospects of this industry depend on the likeliness of the global economy continuing to record impressi1ve growth on a consistent basis. There is growing interconnectedness of all aspects of life and this reflects the expanded flow of technology, capital, goods and services, information and people. This interconnectedness in an overarching mega trend, it is a force that is so ubiquitous that will substantially shape these businesses. Another key driving force is destination management; this is in the way business policies, development and planning, organisation of the accommodation, hotels and other destination centers in this business, marketing management, tourism education and risk management (Murphy, 2013). These are core factors that determine the success of the business in the future. The host society is increasingly becoming sophisticated, skeptical and demanding in respect to leisure development. There is increasing requirement for developers to demonstrate social, economic and environmental benefits. As such, developing tools for measuring these features is very important to avoid exposing the business. These aspects determine the future of the business and therefore a key driving force. Another driving force is security and health risks. The steady increase in travel business is a key driving force in the global spread and emergence of health risks and security threats. As demand for services and products increases, customers from around the globe bring unprecedented risks of infectious diseases and security threats (Middleton & Clarke, 2012). As such, putting in place the necessary mechanism to counter such risks and threats determines the future of the business. Other key driving forces are technology, human resource management, the demographic trends, the political trends, environmental trends and science trends. These factors play a significant role and influence the future of the business, they are external aspects and therefore the business must itself very well according to the aspects on the positive side. 1.3 Key Success Factors Law & Buhalis (2010) report that these are the factors that will help this business to achieve its mission; they are the critical activities and factors for ensuring success of the business. They involve a combination of significant factors required in order to accomplish the goals and objectives of the business. They also include the strategies that the management will put in place to help the business realize its potential and record growth. One of the key success factors for this business is customers. The purpose of setting up the business is to serve the increasing demand by from customers. Without customers the business cannot grow or record revenue. Customers are the most valuable in the business and therefore this business will reassure them by providing quality services and products. Customers are external to the business and they are willing to pay for the business services and products. As such, this business will harness and enhance customer relations. The main purposes of customer relations will be acquire customers and keep them. This will involve creating awareness through marketing and sales (Sit et al., 2009). The business will seek to provide the customers with what they need and not what the business want to sell. This will help keep in touch with the customers. Another key success factor in this business is the developing and managing people. Brotherton (2012) indicate that the world is evolving in terms of serviced delivery and therefore it is very important to manage and develop the human resource through skills and knowledge. This will involve balancing the constraining factors through providing direction, rules, structure and organisation in the business. In addition, strategic focus is a key success factor. The rapidly changing world requires purpose and not just existing. Strategic focus will position the business to greater opportunities in the market and attract a wide range of customers not only locally but also internationally. This will keep the business focused on the desired results like increasing sales and revenue and customer satisfaction while constantly steering the business in the marketplace. Other key success factors are the business operations, physical resources, products and services marketing and making sales, establishment of a strong network and supplier network as Avcikurt, Altay & Ilban (2011) recommends. 1.4 Opportunity Pursued The opportunities pursued are the tourism opportunities, hotel services, accommodation, restaurant services and products and transportation of customers as Rimmington et al., (2012) outlines. 2.0 Products / Services 2.1 Product Lines and Attributes There are different product lines and attributes, this are necessitated by the various opportunities in the tourism and hospitality industry in this region. Some of the product lines are hotel, inns and guest houses, café bars, caravan and camping sites, holiday centres, restaurants including fast food outlets and café services and products as well as contract catering at event venues. The attributes of product lines will be food and drink services like tray, table, and counter and take away, different types of foods such as buffet, full meals, snacks and fast foods, different types of drinks such as alcoholic, nonalcoholic, hot and cold drinks and accommodation services. These will be the primary products to this business. The business will look to provide other services and products such as visitor attracts through live musical performances, conference facilities, cinemas and theatres and leisure outlets. 2.2 Area of Differentiation Differentiation is showcasing different features and quality of products and services as Holcombe (2009)eports. This business will provide more attractive productsby contrasting the unique features of the products from the competitors’ products. This will increase the competitive advantage of the business in all product line and services. The business products will be packaged differently from the competitors in a unique way that indicates creativity. The products lines will be different but will retain the unique feature of the business in the packaging (De Loecker, 2011). In addition, the advertising and sales promotional campaigns will feature different message and instant. 2.3 Operations Objectives These are short term aims of the business, the attainment of these objectives will move the business towards achieving the long term goals and targets as well as accomplishing the mission of the business. These objectives define a clear, measurable outcome of the business operations and processes to be achieved within a period of time usually not more than one year. These operational objectives are Improved production Increased use of information technology Maintain the desired sales and profit levels Increase effectiveness and efficiency in the human resource Operate within the legal and environmental requirements Market the business appropriately To ensure that the operations of the business are cost effective Maintain and increase the quality of the products and services To satisfy the customers and met their expectations through provision of the desired products and services 3.0 Physical Presence 3.1 Location The business will be located at Parramatta, this area and region is unexploited and therefore offers a great opportunity to start this business. The area is saturated with social amenities, there is good road network connecting all the big cities and airports in Australia. The presence of an international airport three kilo meters away is a very huge boost to this business. There is adequate clean and safe water, the electricity is available as well. 3.2 Premises I will secure my own premises instead of hiring. This is because the business is a long term venture and continues to perpetuity, hiring is expensive in the long run and therefore it is better to have own premises instead of hiring. There will be accommodation houses with complete accommodation facilities. In addition, there will be restaurant premises with full catering equipments. Other premises include conference facilities, casino facilities, bar and café as well as studio. 3.3 Layout The rooms in the hotel and accommodation facilities will be divided in to different categories such as single, triple, quad and double room, queen and king room, studio and sico room, efficiency room, family room, penthouse and executive room. In essence, the layout will be as indicated below; 3.4 Facilities Expansion & Maintenance The design and layout of the facilities and premises accommodates expansion and future developments. This will allow additions and expansions. The business will have a comprehensive maintenance procedures and program in place. 4.0 Processes and Supplies 4.1 Production/service process To ensure quality in production process, the management will have production manuals and software to help in the production process. The employees will have to follow the procedures in production of products and services. There will be production specialists to control product processes as DeHoratius, Mersereau & Schrage (2008) advises. 4.2 Materials and Suppliers This is a very important area because the materials and supplies determine the quality of products. As such, the business will appoint suppliers on contractual basis. The contracts will be renewable upon appraisal and evaluation by the management. Before appointment, the management will follow procedures to ensure that the suppliers meet the requirements. For suppliers to quality for a contract, they must be members of the respective bodies, have compliance certificate, have been in the business for more than five years in the business and they comply with the organizations requirements. 4.3 Inventory Management The business will seek to oversee and control the ordering, storage and use of various components in the production of goodsand services as Stevenson & Hojati (2007) recommends. As Michalski (2009) adds, it will also control the finished products for sale to ensure value addation. The inventory represents one of the major business assets representing investment and therefore proper management will be applied. The business will use and apply inventory management software NetSuite software as Michalski (2008) recommends. This software comes with a complete inventory management, purchasing and manufacturing capabilities; it will help in management of the inventory. 4.4 Managing Seasonal Variations To help in managing seasonal variations, the management will have contingency plans for every activity as Barut & Sridharan (2005) suggests. As Capó Parrilla et al., (2007 outlines, the contingency plans will be applied wherever there will be variations in results or expectations. The business will use retention strategy, a lot of communication; team support and reassessing the goals to deal manage seasonal variations. 5.0 Human Resource Planning 5.1 Employees and Positions The business will hire many employees according to the needs of various departments and tasks (Capó et al., 2007). The starting point will be hiring professional business managers to establish the foundation of the business as Knox & Walsh (2005) points. The managers will be in the production department, restaurant department, human resource department, finance department, accommodation department and conference department. There will be a general manager and company secretary to add to the managers, they will form the management of the business. They will set the procedures and criteria for hiring employees based on their respective skills and expertise in the departments (thus the reason for hiring them first) as Barron (2008) recommends. The business will need 327 employees. 5.2 Termsof Employment Employees will be hired on contract basis of three years and which is renewable based on the employees performance. After two contracts successful employees will be hired on permanent basis. Under the departments there will be positions as determined by the departmental managers. The organisation will also hire part time employees to help during the high peak seasons. Part time employees will be recruited on first come first served basis. 5.3 Recruitment Sources The business will use corporate staffing firms to hire employees. This is because the firms have good record of the potentials candidates and therefore it is important to hire from such firms as Deakin & Morris (2012) advices 5.4 Training Training is very important;Aguinis & Kraiger (2009) assert that it keeps the employees up to date with the most recent service delivery and products in the market. Training will be on a continuous basis, as Erdogan & Bauer (2005) recommends, and it will be provided by the human resource department. 5.5 Performance Appraisal This will be very essential for this business, the human resource department will appraise the performance of the employees in order to improve their performance, motivate them and improve the overall company morale as Brown & Heywood (2005) suggests. There will be routine documentation accomplished through completion of a performance appraisal form. This will motivate the employees because they know that the management is mindful of their performances and that they will be rewarded with merit and promotions (Bernardin &Wiatrowski, 2013). Appraisal will be carried out annually and it will determine if it meets the mismanagement’s expectations. 5.6 Remuneration The management will set a subcommittee responsible for setting the remuneration of the organizations staffs. It will set the procedures and basis of remuneration and it will be linked to the performance of the staffs. The organisation will contribute superannuation contribution of 9% of the employee’s salary as required by the law. 5.7 Legal Requirements The organisational secretary will ensure that the business complies with all legal requirements. There will be a specific division in the secretarial office for ensuring compliance to all legal requirements. This is very important as it will ensure adherence to the rules and regulations as well as the laws governing the various activities in the organisation (Goedertier & Vanthienen, 2006). The employees will be informed of the laws under which they are expected to comply with in carrying out their activities as Breaux et al., (2008) underscores. 5.8 Technical Feasibility The business may not have all the necessary facilities and resources to provide goods and services at reasonable costs. The business needs heavy financial outlay ion order to be able to acquire the facilities and resources. To enable the business to provide products and services at reasonable prices, the owner will use borrowed funds in order to acquire the necessary resources and facilities. I, as the proprietor of the business have the ability and capacity to operate the business. I have nine years of experience working in tourism and hospitality industry. 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