Marketing Strategies of Aman Resorts Hotel - Case Study Example

Aman Resorts Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction This purpose of this report is to discuss the various strategies which have been applied by Aman resorts hotel in excelling in the market. Aman resort is a hotel which was started in 1998 by Zecha in Thailand. This report will discuss at the external factors which influenced the growth of the hotel at early stages. It will also discuss the industry in which Aman resort is as well as the portal’s 5 forces which has helped Aman resort to have a competitive advantage. Finally, the recommendations are given on how the hotel can be improved. External factors that allowed Aman resorts to be successful The external factors that influenced the successful growth rate of Aman resort include the following, political stability (Graham & Beamish 2007). During the early stages of the introduction of the Aman resort many states were stable politically. This enhanced the environment for doing business in many countries and made good profits from the rates charged except when the tsunami hit Thailand in 2004 when they were forced to lower their rates as the number of tourists went down. Another external factor that facilitated the success of Aman resorts is the stable world economy (Graham & Beamish 2007). The economy of the world was good and this led to many tourists travelling thus they needed the resort for their hospitality. Therefore the Aman resort made huge profits because of continues number of customers who visited the resorts. Competition in the same industry was low (Mulcaster 2009). During the introduction of the Aman resort there were less hotels providing the same services as the Aman resort. Therefore Zecha took advantage of lack of stiff competition and made huge profits and opened new many resorts in various parts of the world like Thailand. International trade on the other hand enabled Aman resort to make advances into different countries in the world without barriers. Zecha was able to open establish many resorts over the world because there were no barriers of entering into a foreign country. Therefore Aman resort was able to capture a wide market share and made huge profits. The external factors that drove the changes the way Aman did their business The following are the external factors that drove the changes the way Aman did their business; cultural and traditional beliefs of the stakeholders (Graham & Beamish 2007). Because many of the Aman resorts were located in the rural areas, it was forced to cater for the cultural beliefs of the community. Aman resort was forced to design their properties in a way that will not provoke the beliefs of the community. For example Amandari was built at the top of the ridge for sacrifice offerings because sacrifices were not offered beneath the roof. Therefore the cultural systems changed the way Aman resort did their businesses. The legal systems also changed the way Aman resort did their business. For instance, after the tsunami in 2004, the Thailand prime minister asked zecha to lower their rates about 50 percent so as to attract many tourists and that the economy was bad. This affected the business and the rate of income because the profits would be less by 50 percent. Aman Resorts are in the hospitality industry Aman resorts are in the hospitality industry. This is because they offer hotel services including accommodation and recreational facilities. We are told that Zecha ventured into the hotel industry which can also be termed hospitality. This industry is an attractive one for Aman because they have the competitive advantage according to the porter’s forces as shown in appendix A1 below (Michael 2008). First there has no been threats of substitutes. There are no hotels offering the same services and products like constructing hotels in rural areas and with traditional architecture as Aman resort therefore faces no much competition. The bargaining power of the buyer is low (Michael 2008). This is because there in no much competition of the same resorts in the market thus Aman resort is well placed to dominate in the market in terms of negotiation. The customers are many than the resorts available. The suppliers’ powers of Aman resorts are weak. The architecture that is used by Aman resorts is the traditional ones and uses the traditional materials in the building which have less market hence the buyer will have a bargaining strength than the supplier. There are no threats to new entrants into this kind of resorts which use traditional materials and architecture. Not many resorts hotels will be attracted to invest in the rural areas like Aman resorts and therefore there is no possibility of new entrants thus the resorts will continue dominating in the industry. Finally, there is no rivalry competition which may lead to zero profits. Because there is no much competition in this category of resorts, Aman resorts will continue to charge the same rate hence will be making profits all through its operations. Resources that Aman Utilize The resources that Aman resorts utilize best are the non-tangible. For instance the customer services offered at the resorts are based on the human skills and resources (Nag et al 2007). The Aman resort utilized the human resources available to show hospitality of the highest class to the customers. The driver and the receptionists created a good relationship with the customers through interaction and courtesy. Also Aman resorts utilized the skills and knowledge of Edward Tuttle the architecture to design the resorts. Because of the limited space and finances, Zecha and Edward had to come up with a design that will utilize the space effectively hence the human skills were used the best. They also used the financial resources effectively. Instead of using the modern materials which are expensive in constructing the resorts, they opted to traditional materials which are simple, durable and less expensive materials which are readily available. They therefore maximized the financial resources they had. Finally, they utilized the space which was available in Thailand to build the first resort. They build many rooms and recreational facilities like the swimming pools in the rural areas. They designed the resort in such a way that when the guests are resting in their rooms they can be watching and enjoying the sounds of birds from the trees which is pleasing to hear. Aman and Core Competencies Aman resorts have high potential of gaining competitive advantage (Snyman & Cornelius 2004). For instance the services offered by the employees of the Aman resort could be applied to improve the competency of the resort. Quality services like preparing different types of foods could enable Aman resort to gain competitive advantage. Variety of foods attracts customers from all over the places because they will know in Aman resort they will definitely get their kind of meals. This will attract many customers to the resort as compared to the resorts with specific meals only. The resort can also use the borrowed funds to increase the quality of services they offer to customers. For instance they can install Television systems in the rooms to suit the demands of all customers who visit the resort. New Competencies for the Future Aman resorts need to develop new competencies to suit the changing demands of the customers (Tim 2006). First they need to use modern advertisement methods like use of internet to advertise their resort. This will reach a large number of people as well as attracting more customers. They also need to develop a design of constructing the resorts using the modern materials. This will help to cater for customers who would like to spend their money in places with modern facilities which may look attractive than the traditional designs. The employees should undergo some fresh training so that they will have knowledge on how to accomplish tasks like the cooks should be well conversant with cooking all types of foods so that they can prepare any meal as requested by the customer. This will improve the quality of services offered to customers. Aman’s Business level strategy The business level strategy of Aman resorts is distinctive advantages strategy level as shown in appendix A2 below. The resorts have applied various distinctive features to gain competitive advantage for example traditional construction houses build with traditional building materials (Michael 2008). These features make the resort to be unique from others and thus they gain competitive advantage. They also construct the resorts in rural areas where very few investors would like to invest therefore this distinction gives the resort a competitive advantage and continue to excel in the market. This strategy is also economical in that the resort opted to use traditional materials which are readily to construct that resort hence maximized the financial resources. Direction Aman should Take in the Next 5 Years Aman resorts should contemplate on how to increase their revenue. This can be achieved if the employees are trained and application of modern technology is used to manage the resorts (Michael 2008). In this regard in the next five years it should design programs for the employees to be trained on information technology so that the operations will be done electronically. This technique will retain the employees in the resort as well improving the public image of the resort. The resort should also start being concerned with corporate social responsibility so that it will improve the living standards of the community in rural areas where it is investing. Recommendations I recommend that Aman resorts should begin investing in urban areas to meet the demands of the customers who could wish to spend their leisure time in towns. In this case it will have many customers both who could wish to be in rural areas’ resorts and those who could wish to be in urban areas. Furthermore, Aman resorts should construct both modern and traditional architectures to serve the demands of different customers. Advertisement of the resorts should also be done using modern technology like the internet so as to reach many customers and attract them to the resort. Conclusion Aman resort has succeeded to gain competitive advantage in the market by applying appropriate strategies. Its location is unique as well as the services its offering. The strategy that the resort is applying is the distinctive advantage strategy. This strategy has helped the business to be unique in the industry hence it has been able to competitive advantage and has made huge profits. It has gained high bargaining power because it receives many customers because the facilities of its kind are few. References Graham, H. & Beamish, P. (2007). Strategic management: Thinking, Analysis, Action. Australia: Pearson Education. Mulcaster, W.R (2009). "Three Strategic Frameworks," Business Strategy Series, Vol. 10, No. 1, p. 68–75. Michael E. (2008). The Five Competitive Forces that Shape Strategy. San Francisco: Jossey-Bass Publishers. Nag, R., Hambrick, D. & Chen, M. (2007). What is strategic management? Inductive derivation of a consensus of definition of field, Strategic Management Journal, Vol. 28, No. 9, pp. 935–955. Snyman, R. & Cornelius, J. (2004). The interdependency between strategic management and Strategic knowledge management, Journal of Knowledge Management , Vol. 8, No. 1, pp. 5–19. Tim, B. (2006). Integrating strategic management and budgeting, Journal of Business Strategy, Vol. 27, No. 6, p. 5-79. Appendix Diagram A1: Porter’s 5 forces Diagram A2: business level strategies Read More