Business Strategy _ Irushi Ratnaweera_21273184

Internal Analysis

and New Strategy

Recommendation

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i. Executive Summary

This report stems down from the Assignment one done on the Five Star City hotel industry. In this the

focus is narrowed down to an organization from the same industry which is Cinnamon Grand Hotel

Colombo (CGC).

analysis was utilized to understand the activities involved in creating value which then continued to

recognizing resources and competences where it was further categorized into threshold and distinctive.

Furthermore identification of core competences allowed understanding the elements which gives the

competitive edge to CGC.

Previous assignment was taken into consideration when the SWOT analysis was done where the

opportunities and Threats were derived from that and the organizations Strengths and Weaknesses

were looked at by different credible sources which then was carried on to the TOWS matrix.

Before looking at the new strategies a brief overview was done on the organizations culture to grasp on

how culture would impact on the new strategies and then a financial analysis with few ratios were done

to compare the financial stance of CGC in terms of its competitors.

Then with the aid of TOWS matrix several strategies were recommended out of which two were further

analyzed in terms of their suitability, feasibility and acceptability and one was taken into consideration

mplementation.

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Table of Contents I. Executive Summary ............................................................................................................................... 1

1.0 Introduction ............................................................................................................................................ 3

2.0 Company Overview ................................................................................................................................. 3

3.0 Internal Analysis ...................................................................................................................................... 3

3.1 Value Chain ......................................................................................................................................... 4

3.2 Strategic Capability: Resources and Competences ........................................................................... 6

3.2.3 Distinctive / Unique Capabilities (Resources and Competences) ................................................ 6

3.3 SWOT................................................................................................................................................... 7

3.4 VRIN Identifying core competences ................................................................................................. 8

3.4.1 What is VRIN ? .............................................................................................................................. 8

3.5 Culture of CGC ......................................................................................................................................... 9

4.0 New Strategies ...................................................................................................................................... 11

4.2 TOWS Matrix ..................................................................................................................................... 11

4.2 Strategy one (01) in Focus................................................................................................................. 12

4.3 Strategy Two (02) in focus ................................................................................................................ 15

4.4 Strategy Two (02) Implementation ................................................................................................... 17

Appendices .................................................................................................................................................. 19

Appendix 01 ............................................................................................................................................ 22

Appendix 02 ............................................................................................................................................ 23

Appendix 03 ............................................................................................................................................ 23

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1.0 Introduction

This report consists an Internal Analysis on Cinnamon Grand Colombo (CGC) where the author has

analyzed its strategic position and then provided with new strategies based on its resource,

competences, strengths, weaknesses, financial stance and culture.

Further information with regard to the external environment was utilized from the previous assignment

as the need arose.

Many strategies were recommended while two were comprehensively discussed and one was expended

to the level implementation with consideration of change management and implementation process.

2.0 Company Overview

he flagship hotel

PLC, 2013)

CGC holds the highest number of rooms and the dining options (Restaurants) in the country with a 32%

market share under the city hotel sector. (Asian Hotels and Properties PLC, 2013) Given the scale of the

business the actions, strategies and initiatives of the business has a great impact on the industry as

much as the external environment has on the business.

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3.0 Int ernal Analysis

Stemming from the Assignment 01 External environment analysis, it is essential to understand the

internal part of the organization in focus to understand its strategic positions.

In doing so firstly we have looked at the activities of Cinnamon Grand Colombo which brings its final

products and services to what it is today.

3.1 Value Chain ether, create a

(Johnson, 2010)

Exhibit 01

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Below depicts the Value Chain of Cinnamon Grand Colombo

Exhibit 02

Sources: (Asian Hotels and Properties PLC, 2012)/ (Asian Hotels and Properties PLC, 2013)

Sources: (Asian Hotels and Properties PLC, 2012)/ (Asian Hotels and Properties PLC, 2013)

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Above presents a comprehensive understanding of the activities that adds value to the final product/

service of CGC, however it is then essential to understand the strategic capability of CGC ( resources and

competences) that allows these activities to be performed in such manner for which below analysis on

resources and competences were done

3.2 Strategic Capability: Resources and Competences need to be

distinguished

clear cut guideline, as we identified as a threat in the Assignment 01

all threshold resources and competences that every five star city hotel must hold, which clearly CGC has

achieved and maintained to remain in the title of the Market leader of th s in

Colombo.

With all competitors holding similar threshold capabilities what makes CGC stand out as the market

leader is showcased below with the distinction of the capability as to a Physical, Financial or a Human

3.2.3 Distinctiv e / Unique Capabilities (Resources and Competences)

Sources: (Asian Hotels and Properties PLC, 2012)/ (Asian Hotels and Properties PLC, 2013)

*MICE Meetings, Incentives, Conventions and Events

* GDS Global Distribution Systems

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With the understanding

weaknesses while combining the assignment findings on Opportunities and Threats to see the impact of

those towards CGC.

3.3 SWOT Strengths and Weaknesses will enhance the capabilities and opportunities will give the edge it requires

to grow in the business while been aware of threat will minimize any risk that could come in the way.

Sources: (Assignment 01, 2014) / (Asian Hotels and Properties PLC, 2012)/ (Asian Hotels and Properties PLC,

2013)

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Value chain analysis, Resource and competences and SWOT analysis done it is much evident of the core

competences of Cinnamon Grand Colombo that has made it the market leader in the city hotel industry. Below

highlights the summary of the core competences with the aid of VRIN to understand how it gives a competitive

edge to CGC among the rest.

3.4 VRIN Identifying core competences

3.4.1 What is VRIN ?

ssed in terms of their providing a basis

for achieving competitive advantage:

Value: When the competences provide potential competitive advantage in a market at a cost

that allows an organization to realize acceptable levels of return such as Taking advantages of

opportunities and neutralizing threats , value to customers , providing potential competitor

advantage, cost allowing to making expected return

Rarity: Are those possessed uniquely by one organization or by few others

Inimitability : Those that competitors find difficult to imitate or obtain

Non- (Johnson, 2010).

1. Strong Brand Image / Flagship hotel under the cinnamon brand

2. Highest Number of Rooms and the dining options ( Restaurants)

3. Principal employer of the city holding the most skilled set of employees

4. Holds the first venue in South Asia to win the Carbon Neutral Certification

5. Trip advisor, the travel website , positioning Cinnamon Grand at the Zenith as the City Five Star Hotel

Equipped with above highlighted capabilities / Core competences in order to focus on the future it is essential to

see the financial strength of the organization as well.

Therefore below are some financial indicators that enable to understand that CGC has a better stance in terms

of returns looking at ROCE. Further very minimal Gearing ratio indicates fewer debts

all in all a very stable and a healthy financial position it stands in

Sources: (The Kingsbury, 2013)/ (Hotel Developers(Lanka) PLC, 2013)/ (Asian Hotels and Properties PLC, 2013)

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3.5 Culture of CGC Consequently we are then looking at the future and introducing new strategies, In order to introduce

the culture of the business for which below

analysis was done

Source: (Mindtools.com, 2014)

Source: (Asian Hotels and Properties PLC, 2012)/ (Asian Hotels and Properties PLC, 2013)/ (Daily FT, 2011)

Further to above Daily FT, 2011 states of a strategic management paradigm shift where they are

concentrating on focused leadership and strategic direction, to continue the innovative, creative and