There are several strategies adopted by the hospitality organizations in the current business scenario. These are said to be as the new business realities in the business world. The hotels are adopting different expansion strategies for growing and achieve competitiveness in this business world. This helps the hotels to grow with a greater pace and speed and get an edge over the competitors. The research is conducted to identify different strategies adopted by hospitality organizations. The research is stressed towards the aims and objectives of the research which is explained in the first chapter of the dissertation, followed by other chapters.
In the next chapter the literature review is done, which sheds light on the views of several scholars and researchers with respect to the aims ad objectives of the research. The next chapter includes the research methodology, which explains the methodology adopted in the research for collection of the data. The survey method is used to collect the first hand data. The responses of the respondents were analyzed and presented in graphical manner. The analysis of the graphs presented are analyzed and explained in the research. Then the conclusion and recommendation has also been represented in the research. At last the reflective statement has been resented in the dissertation explaining the experience and learning’s from the research.
The following research paper includes the description about the new business realities in the hospitality sector which has proved to be the major changing factor in hospitality sector. The whole research is related to the changing scenario of the hospitality sector with reference to the mergers and acquisitions. The research discusses about the new strategies adopted by the hospitality sector for growth and development in the industry (Barrows and Powers, 2008).
The major strategies adopted in the merger and acquisitions of the small or other entities for the expansion of the business. The research with relation to the adoption of these strategies is important because there is a huge amount of capital required for the expansion process in the hospitality industry. With the adoption of such strategies the business organizations in the hospitality industry can tap large markets by utilizing the resources of the acquired or merged firm. So the research is of vital importance for the hospitality sector looking towards their expansion by utilizing such strategies.
The hospitality sector is dominated by several of the hotel chains, however there are several of the micro business and hotels running in certain good localities and employing 10-15 or fewer staffs, and have large amount of scope to expand. Looking at these growth aspects in the hospitality industry the majority of the large hotel chains and big hotel organizations are adopting the strategy to tap the far reached market by merging and acquiring the pre existing firms or small hotels (Koh, Liu and Jin, 2010).
The prime aim of the research is to analyze the strategies adopted by the hospitality sector for the sake of expansion. This research will help the hotel undertakings in evaluating the best strategies which they can adopt in order to expand.
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A number of the objectives need to be accomplished in order to achieve the aim of the research:
1.To analyze the strategies that can be adopted by the hospitality sector for their effective expansion (Peters and Frehse, 2005).
• What are the strategies available for expansion?
• Which strategy will be the most suitable for the different kinds of organization available in the hospitality industry? The advantages and disadvantages of each strategy available?
2. To compare and contrast in between the strategies that will be the most suitable for different type of organizations.What are the different types of organizations prevailing in the hospitality industry?The comparative analysis of the type of the strategies available?
3. To recommend the strategies that will be most suitable for the multi-hotel chain organizations (Peters and Frehse, 2005). The major available options and which one will prove to be most rewarding in long term?
To construct this investigation and provide help to the research work with respect to the strategies adopted by the hotel industry for their expansion with regard to this the research questions are as follows:
1. At what extent the hospitality industry supports the organizations to acquire small potential players? What is the role of the strategies adopted by the hospitality sector for their expansion and how it is helping in the sector growth?
The sub questions of the research are as follows:
a) How the expansion strategies facilitate the leading hotel industry players to acquire international or local players?
b) What are the advantages and benefits of implementing these strategies? Discuss with some example of such strategy?
In this highly competitive world, all the leaders of the hospitality industry are in the process of expanding their businesses beyond limits or boundaries, thus implementation of the expansion and merger strategies is essential for the development and growth of these companies and acquire small players by analyzing the potential of the small players located in several parts of the world. This requires the adoption of the major strategies of expansion to increase the customer’s base of the company and increase the company approach in the major available markets (Boella, 2000).
In this global era, numerous of the well known and practical studies have explored the scope and the depth of the opportunities available in hospitality sector in transforming the small business or hotels having scope into large businesses (Cunill, 2006). This progression in the sector has presented a wonderful prospect to the traditional hotels or business and practitioners to improve their sales and gains by using the expansion strategies platform and increase their area of working and improve their sales and revenues. Most of the studies have evaluated the role of expansion strategies to acquire small players and increase the market of the hotel chains and big hotel players (Esty and Simmons, 2011). As several of the evidence suggests that the expansion platform has resulted to be of tremendous possibilities for the businesses to acquire customers and to succeed in this competitive business era that is highly dominated by the traditional players.
There is large scope for the smaller firms in the hospitality industry to be tapped by the larger firms in order to become larger. This processing can be done by larger firms by using the strategy of mergers and acquisitions. The merger and acquisition strategy is new in the industry as this helps the larger firms to enter the new market with a small established setup and also with the captured market. With these strategies the market can be tapped by the larger firms in order to enter new market avenues.
The research is aimed towards analyzing the strategies which the large hospitality organization can use in order to tap the new market places and which will ensure the processing’s of the new business in a shorter time period and with a new business reality. There are several hotel chains which have large market places and try to enter the new markets to cover more area of business, so these new business strategies are the good source for the hotel organizations in order to expand. Expanding by using these strategies helps the organization to grow and make a setup in an easy and analyzed manner.
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It can be seen that the location factor in the hospitality sector is vital for the development of the hotels. The geographical location choice of the hotels established is highly pervasive for the effective business of hotels, the location factors or the choice is based on the demand as well as the perceived level of competition in the locality. So, setting up of the new hotel or entering into different geographical area affects the costing of the hotel, and it also includes substantial sunk costs in its construction, so the initial entry of hotel become important. There are several researches on the hotel sector focusing on the strategies, entry and competition. So the, research is focused towards analyzing the need of adopting the new business strategies by which the organization can avail the benefits of location and low costs. The merger and acquisition comes as an answer for organizations to opt these strategies and also attain the benefits of appropriate location and competitive advantage with pre-established structure.