Banyan Tree

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Assignment Questions: 1. For Banyan Tree Hotels & Resorts, what are the advantages and disadvantages of listing? Should the company go ahead with the IPO? 2. What are the strengths and weaknesses of the company and what are the opportunities and threats facing it? The SWOT analysis of the company is given below. Strength The strength that the resort has includes higher credibility and loyal customers which certainly has good word of mouth. The CSR portrays a positive brand image of the company. It recognizes the impact and importance of resource conservation. It also has a unique Green Imperative Fund mechanism to support worthy environment action and CSR. It stands out from the rest by promoting good service quality and unique selling. It also has a strong management team and a well maintained staff, who are enthusiastic and passionate for their work. Weakness The weakness of the company is that it has firm ethical standards set up so it will definitely face some challenges in building new resorts due to the limited choices of suitable lands and a resort requires a large area. Another challenge faced would be competitors providing the same luxury, wellness and comfort at probably lower cost. Since the resort chain is mainly spread in the Asian part of the world, the downfall of economy may have an adverse effect on the overall financial structure. As the company has expansion plans in to the west it might face communication barriers, as most employees, from the third-world Asian countries, are not well educated in English. Thus, it is not easy to train them. However, this issue can be easily overcome by employing a translator The threats the company might face are from the new entrants are relatively low. There is relatively low threat of new entrants

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Banyan Tree

Transcript of Banyan Tree

Assignment Questions:1. For Banyan Tree Hotels & Resorts, what are the advantages and disadvantages of listing? Should the company go ahead with the IPO?

2. What are the strengths and weaknesses of the company and what are the opportunities and threats facing it?The SWOT analysis of the company is given below.StrengthThe strength that the resort has includes higher credibility and loyal customers which certainly has good word of mouth. The CSR portrays a positive brand image of the company. It recognizes the impact and importance of resource conservation. It also has a unique Green Imperative Fund mechanism to support worthy environment action and CSR. It stands out from the rest by promoting good service quality and unique selling. It also has a strong management team and a well maintained staff, who are enthusiastic and passionate for their work.WeaknessThe weakness of the company is that it has firm ethical standards set up so it will definitely face some challenges in building new resorts due to the limited choices of suitable lands and a resort requires a large area. Another challenge faced would be competitors providing the same luxury, wellness and comfort at probably lower cost. Since the resort chain is mainly spread in the Asian part of the world, the downfall of economy may have an adverse effect on the overall financial structure. As the company has expansion plans in to the west it might face communication barriers, as most employees, from the third-world Asian countries, are not well educated in English. Thus, it is not easy to train them. However, this issue can be easily overcome by employing a translatorThe threats the company might face are from the new entrants are relatively low. There is relatively low threat of new entrants due to extreme high capital required to support business operations. An investment of at least $200 million will be required for first resort, Laguna Phuket. This makes it difficult for new entrants to enter and non-performing firms unable to exit easily without suffering great losses. The competitive rivalry threat is high as the competitiveness in tourism industry is getting more intense.OpportunitiesSome opportunities that can be taken up by the banyan tree are it can choose to expand in the western countries and having reputable name is an advantage. Many of its current consumers are from the western countries. Banyan Tree has the intention to expand aggressively in America and European countries. It intends to expand in Europe as well as there is a market demand. With its own spa academy, spa products, residences, destination club memberships, museum shops, and retail outlets, Banyan Tree may want to consider a joint venture with a local restaurant or chef to complete the whole package as a resort.3. If you were a prospective investor in Banyan Tree Hotels and Resorts , would you support the companys pro-environment policy, or would you see it as an unjustifiable drain on bottom line profits? Why?Banyan Tree has a strong branding and has always been associated in being rich in culture and heritage, excellent spa and wellness services, interior structures and designs that provide an exquisite feel. To maintain its strong branding and value, the primary support in its value chain is the most important factor. For an organization to excel in providing service several challenges will be faced in which includes capitalizing at converting intangible things such as feelings, perspective and senses into economic value.For instance, all employees are trained to be a practitioner of corporate social responsibility, to understand the needs of customers and constantly be eco-friendly in all ways of working. Thishelpstopromotethecampaignofenvironmental friendliness, provide an income for the natives and understand and preserve the heritage of the country. With these factors, Banyan Tree uphold to their Eco philosophy. The company is doing a great job as it is working for the environment and society. I completely support Banyan tree for the following reasons.a. Innovation: It is an innovative company with news ways of protecting the environment. All the set up used by the company is worth appreciating. It is environment friendly and at any cost doesnt want to compromise with the ethics of the company. It has good relationship with the employees, community and customers, which shows they would definitely be promising towards the investors.

b. Brand Differentiation: It stands out from all the other companies who are working in the same sector. The goal of this company is different from the other which makes its stand out from the rest.

c. Long Term Thinking: It works towards long term sustainability, which makes it a promising firm. It would always be good to invest within someone whose ethics and standards are high and static.

d. Customer Engagement: It engages the customers with kind of services they provide. The same customer wants to visit the place time and again. Also people are well aware of climate change and other disasters it causes, so want to contribute in nay possible way.

e. Community Engagement: It engages the community and uses the local resources; this keeps up the tradition as well as keeps the community involved. Also when the community is involved with the local skill there are rare chances of migration. Banyan tree is doing a great job since 90s when CSR was not a fancy word as now. Today there are lot of organization working for CSR. But Banyan tree stands out because of the work they do and services they provide are unique and not merely a show off.