Analyse The Business Plan For Elmtree Hotel

TASK 1

1.1: Profile of business to identify its weakness and strength

Small business enterprise are the business having less than € 10m turnover and staff of below 50 people. Elmtree hotel is a UK based hotel who is providing facilities such as luxury and comfortable rooms, lounge, guests house, parking, food and various other modes of entertainment to their potential customers who are seeking for their quality based services. This hotel is providing hospitality services to the people in UK for their comfortable and luxurious stay (Allen and Truman, 2016).

Size:This hotel is a small enterprise with a revenue of less than € 5m and employs a small number of people.

Objective: To provide their quality based services to the clients in order to provide them better accommodation and food during their journey for generating profit.

Structure: Elmtree hotel follows hierarchical structure. The CEO or Owner is the main head and after that comes general manager of hotel. Various employees Under general manager such as workers of food and beverage services, marketing and sales, room service, housekeeping and maintenance departments.

Type: Elmtree is a sole proprietorship type hotel which is owned by a single person who is the CEO of hotel (Barkham, Gudgin and Hart, 2012).

SWOT analysis for identifying strengths and weakness

1.2: Analysis of the business using comparative measures of performance

Comparative performance measure is the method of analysing performance of a business or firm in order to determine its position and areas of improvement in the market. It is the most difficult task done by employees or managers. It is also helpful in determining whether the firm is achieving its goals or not (Bridge and O'Neill, 2012). The measures are given below:

Customer satisfaction: Expectations of customers for buying a product or services must be met by providing better services. Elmtree should provide good quality services to its clients in order to get customer satisfaction. According to the Assimilation theory of satisfaction, customers consider the suitable hotels by differentiating in performance and services which are provided by various hotels. The key elements for attracting customers in the hotel are cleanliness, hygienic environment, price of the rooms and facilities and location. If the level of the services provided exceed the expected level, then customer satisfaction is assured for the hotel.

Employee’s motivation: Employees are backbone of the company and effects directly from the implemented policies and strategies by the management. Thus it is the responsibility of the management to motivate employees for achieving the goals set by organisation. For measuring the motivation level various theories of motivation can be used by management for motivating the employees (Draycott and Rae, 2011). Management of Elmtree should need to understand the issues of workers and motivate them using required strategies and policies.

Operation quality: In this, Total Quality Management (TQM) can be implemented by Elmtree hotel to determine the needs and expectations of the customers for delivering the services. The aim of hotel is to serve quality services to consumers in a hygienic and healthy environment at a reasonable price. The inadequacy in the planning, low motivation level among employees can negatively effect the performance and the quality of services provided by hotel.

It is seen that company is able to achieve the objective of increasing the profit of the company from year to year. In the current year the company has received a profit of Euro 159 million, where as in the previous year they have achieved the profit of Euro 98 million. This is raised to 62% in the current year.

As the gross profit ratio of the company is 577/1008*100 which gives the figure of 57%. as per industry benchmark it is considered as best figure.

Also the net profit ratio of the company is 159/1008*100 which shows a percentage of 15%. this needs to be increased so as to achieve more profit as per industry benchmark.

From the balance sheet of the company it is seen that they are having a current asset of 541 million Euros which is more than its previous year. It shows that the companies cash and cash equivalents has increased in the current year. This shows a positive growth for the company.

TASK 2

2.1: Actions to overcome the identified weaknesses with justifications

Every company faces several issues and conflicts which needs to be overcome in order to gain performance and productivity. Many barriers are directly or indirectly affecting the performance of business firms as well as lowering the employee's productivity. Organisations are concentrating on implementing new policies for performing well in the business which helps in reducing these issues and conflicts. Several actions are described below:

Problem solving strategy: It is not easy for managers to track every employee's performance and activities who are working in the hotel, which is considered as a main weakness of Elmtree Hotel. In order to overcome this problem, management of Elmtree is focusing on appointing new heads for each department whose responsibility is to track performance and activities of their departments. The head of department will be responsible for establishing an efficient communication system with employees for providing easy solutions of the problems faced by employees (Dunning, 2013).

Provide training: Elm Tree Hotel is a small business due to which the management is not able to provide additional training to the workers of hotel. The delays in serving is mainly due to this unprovided training which can often leads to dissatisfaction among customers. For resolving this, hotel should spend huge amount of money for providing training to the workers for developing required skills for performing well in their assigned activities.

Conduct research: The Elm Tree Hotel is focused on conducting an effective marketing research through which it is easy for firm to know about various present needs and wants of customers, so that they can serve them in most efficient manner. Elmtree is focusing on conducting a research analysis of market and their customers for determining the change in behaviour and trends of customers as well as of market (Fassin, Van Rossem and Buelens, 2011). Through this, they can identify the needs and demands of customers for serving them in an efficient and effective manner.

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2.2: Analysis of the ways for maintaining and strengthening the current performance

It is essential requirement of any small company to sustain and survive in the given market due to huge competition from big players of industry. Maintaining and strengthening the existing business performance is a difficult task for management which can be overcome by innovative and creative ideas. Some of them are described below:

Market share: Market share refers to the share of products or services of a company in a given market which is determined in percentage (Goffee and Scase, 2015). A standard percentage must be maintained by the Elmtree as a market share for sustaining in the market for further growth and success.

Business Penetration: For strengthening the performance of company, Elmtree needs to penetrate different segments of the market by reducing prices of services and increasing the quality of services provided to the customers.

Customer Relationship: Elmtree should establish close relationship with customers in order to gain their loyalty and trust regardless of whether the client is existing customer or potential customer. It will help company to attract these customer for visiting again.

Maintaining Performance: Management of Elmtree should need to monitor and evaluate the performance and activities of their employees. Such measure will provide the details of employees regarding efficiency, punctuality, productivity, absence, high labour turnover etc. for understanding the behaviour and issues of employees for performing a task.

Product Quality: R&D department of Elmtree should continuously work to improve the quality of services and facilities provided by hotel for ensuring customer retention. This will help the employees to serve easily and conveniently to the customer without any issues or conflicts among employees and customers (Gronum, Verreynne and Kastelle, 2012).

2.3: Recommend new areas where the business could be expanded with justification

Source: Ansoff matrix for expansion. 2008

Business expansion is considered as an important factor for a small firm in generating more profit for the company. Organisations are working for developing new strategies for the expansion of their business. Ansoff matrix is one of the most effective theories which is used by various organisations for expanding their operations. There are four features of Ansoff matrix which helps companies to chose suitable option for expansion which are discussed below:

Market penetration: Market penetration refers to the process of introducing new products in a new market by the Elmtree. Adopting this strategy helps to increase market share and use of products or services by the existing consumers for securing growth in the market.

Market development: It is the strategy which is adopted by various small businesses in which existing services or products are introduced in the new market. It will enable Elmtree to sustain in the new market using new pricing policies, supply and distribution chain.

Product development: Product development helps the Elmtree to introduce new and improved product or service to the existing market. This strategy will allow the Elmtree to develop new products, gaining insights on the needs and wants of customers and attracting new potential customers towards the hotel.

Diversification: Diversification is adopted by organisations to develop a new and improved product for entering in the new market. It is a risky strategy which requires huge amount of investment.

Using Ansoff matrix, Elmtree can expand their business in the developed and developing countries such as India, China, USA where the emerging market have huge opportunities for the hospitality sector due to the high demand of quality services and products. The company can improve their revenue and profit by entering into these new markets.

TASK 3

3.1: Producing an assessment of the existing business objectives and plans

Business Plan refers to the formal documentation in which information associated with aims, objectives, mission etc. is provided of the firm. The business plan is necessary for guiding the employees as well as to direct them for performing better.

Vision: To maintain the reputation of best hospitality firm in Llandudno Bay for achieving the customer loyalty.

Mission: To provide the best quality products and services to the travellers and visitors at reasonable prices for enhancing the profitability.

Strategic Objectives: The objectives of the firm is to expand its business operations in other parts of United Kingdom. The firm also desires to provide its services to a large number of customers for enhancing their satisfaction level. The company wants to expand its services portfolio so that the customers can get more services while staying in the hotel. The firm has also developed SMART objectives which are specific, measurable, achievable, and realistic and time bound. The time period for achieving these objective sis 1 year and the target customer of the hotel is upper class people or business persons.

Financial information

For entering in a new market, Elmtree needs sufficient funds for investing in marketing, production, HR etc. The management of the hotel needs to develop an effective budget which is given below:

Total forecasted budget

3.2: Revised business plan to incorporate changes

Vision: To enhance the market share of the firm for providing the best quality products and services to the travellers and visitors at reasonable prices.

Mission: To maintain the reputation of best hospitality firm at global level for achieving the customer loyalty.

Strategic Objectives: The objectives of the firm is to expand its business operations in other countries for covering more market share. For expanding the business in new countries, Elmtree should take decisions regarding the change in operations plan such as employees base, policies, financial structure etc. for accommodating the changes. For implementing such changes, Elmtree should need to adopt suitable strategies for entering into new market. Company needs to determine the methods and strategies by gathering required data. Elmtree needs to hire new staff for this expansion as the current employees will find it hard to be transferred outside of UK. Various promotional plan are also necessary for the promotion of services and company in these new countries. Elmtree should develop the new promotion plan based on the segment of targetted customers and behaviour of those customers. The time period for achieving these objective is 5 year and the target customer of the hotel is upper class people or business persons.

Financial information

For entering into new countries, the expected funds for the expansion is given below:

Total forecasted budget

3.3: Prepare an action plan to implement the changes

The changes in an organisation tends to improve the performance of the organisation. Changes brings misunderstanding and confusion among the employees which can interrupt the business of Elmtree. So change management is necessary for effectively implementing these changes. The firm is expanding in new countries due to which the business environment is always changing hence changes are required by companies to run the business smoothly.

Action plan- It is defined as a simple list of all tasks that are essentially required for finishing so that desired objective can be fulfilled in given time-frame. These are very useful and always assists the management in determining the ways how will the project will be completed in efficient manner. For making such kind of plans or policies, it is very essential to carrying out the tasks in effective manner so that preset objectives or targets will be achieved in the given time period. In the context of Elmtree, Their managers have decided to expand their market share and revenue in new countries therefore, it is very essential for them to formulate some effective plans and strategies so that desired outcomes will be received in a short time period. Steps of action plan are discussed as under:

Identify tasks – As the organisation wants to expand their market share for this, it is very essential for them to identifying the objectives and then make plans accordingly. Management have decided to expand their market share at international level therefore, they should allocate proper funds so that any issues can't be faced by them in future period. It is also essential for the managers of firm to provide better training programme to their staff members so that they will be handle all the complexities of new market areas in an easy manner.

Analyse and delegate tasks- Main tasks of expansion are decided by the managers of Elmtree are expanding market share along with allocation of funds therefore, they should delegate the tasks in their departments such as for recruiting HR department, for allocating funds, finance department, for promoting products marketing department etc. with the help of this categorisation they will easily make expansion of their market share in new market areas.

Double check with schemes- It is also essential to making cross check of schemes so that expected outcomes will be received in the given time-frame. Schemes can be defined as Space, cash, Helpers, equipments, materials, experienced employees, systematic structure these should be mainly considered by the managers of Elmtree and should be maintain in proper manner while expansion. So that objectives of expanding market share will be achieved in desired manner.

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TASK 4

4.1: Impact of the proposed changes on the business and its personnel

Changes in business operations directly effects the complete functioning of the company. The effect of changes can be either positive or negative. Changes effect the culture, environment and development of the company. Positive changes can help the company in gaining a upper edge over competitors whereas negative changes can destroy the business and its image.

Work load: Workload of employees increase with expansion. The employees of Elmtree are assigned with different tasks and assigning more tasks to them will increase the work load and leads to reduced productivity.

Finance: Finance of the company also effects with expansion. Expansion can effects the finance positively or negatively depends upon the expansion plan.

Morale: Due to the increased workload, company will hire new employees which will effects the morale of existing employees as their work will be shared with these new employees.

Structure: With expansion the roles and responsibilities of different functions also changes which leads to change in culture and structure of organisation. It depends upon companies on how they deals with the changes to accomplish the targets.

Plans should be made for implementing the changes in technology and other advancements that takes place in the hospitality industry(Olszak and Ziemba, 2012). Advice must be taken from experts and experienced people before adopting these changes. Management should convey thee changes to the employees with justification for the development and utilisation of plan by the employees.

4.2: how the changes will be managed in the business

At Elmtree hotel, proposed changes can affect the business and individuals. By entering in a new field, company can face new levels of success. The firm can earn more profit due to satisfying the demands of their customers. In starting, performances can be effected, but after re-establishing policies and strategies company can gain more profit.

With time, Employees will become confident in their field which will improve their performance. Changes are unavoidable So, it is essential for workers to become flexible and boost their will to adjust in new field. The existing employees should be trained accordingly based on the new fields.

During the changes team spirit should be maintained for solving issues and problems with team efforts and support. Employees should be encouraged to share their feedback and opinions. Changes also effect the policies, management and workers of the company. These changes also provides broad range of improvements when accepted with patience and positive attitude. Elmtree should take necessary actions to motivate their employees for achieving their goals (Rainnie, 2016).

Kurt Lewin’s theory of Change Management should be used by Elmtree for managing these changes.

• Unfreeze: In this, the owner of the Elmtree relates the changes with employees by showing their low efficiency in the task assigned. The scope of Elmtree can be enhanced if these changes are implemented effectively (MacDonald and Coffield, 2015) . Management should convey the importance of change to the employees for enabling them to adapt according to the change.
• Change: In this stage, the changes will be implemented and employees follow them for increasing the growth of Elmtree. The positive outcome from these changes will motivate employees to work efficiently and effectively.
• Refreeze: It is the last stage in which the change will indicate the benefits of this new work process. Misunderstandings can be reduced and company will get improved productivity from the workers.

4.3: Monitor improvement in the performance of the business

There are different methods which can be adopted by Elmtree for monitoring improvements in the performance of the business. Several theories which can be adopted by company to monitor improvements are:

Goal setting theory

This theory was proposed by Edwin locke which states that by setting the objectives of company to every employee will help in monitoring the improvements in the performance of the organisation. Company can set their goals for achieving in order to improve the productivity and performance of the employees. By achieving their setted goals, company can evaluate their performance.

Expectancy theory

Expectancy theory was proposed by victor vroom. The theory is based on the behaviour of individuals of an organisation (Schaper, and et. al., 2014). By applying this theory, company can determine the working behaviour of employees and motivate them to attain their goals.

These theories will help the company to monitor the improvements in the performance on the business of Elmtree hotel.

The following method can be used to monitor the new plan:

• Comparing the expected goals with the actual goals to determine the gap in performance of the employees.
• Tracking the progress helps in understanding the flaws and faults between the various process for taking appropriate actions.
• Generating records will help in decreasing the future faults which has been occur in the past and present.

CONCLUSION

It has been analysed from above report that the comparative measures of performance should be adopted by the Elmtree hotel in order to improve their efficiency in providing their services. The weakness must be overcome by organisation to enhance the performance in the market. Company should adopt suitable strategies and plan to maintain the performance and expansion in new areas. A assessment of business objectives along with a plan to incorporate changes has been discussed. Further impact of proposed changes along with managing changes and monitor improvement in performance of business has been also discussed.

REFERENCES

• Allen, S. and Truman, C., 2016. Women in business: Perspectives on women entrepreneurs. Routledge.
• Barkham, R., Gudgin, G. and Hart, M., 2012. The Determinants of Small Firm Growth: an inter-regional study in the United Kingdom 1986-90. Routledge.
• Bridge, S. and O'Neill, K., 2012. Understanding enterprise: Entrepreneurship and small business. Macmillan   International Higher Education.
• Draycott, M. and Rae, D., 2011. Enterprise education in schools and the role of competency frameworks. International Journal of Entrepreneurial Behavior & Research. 17(2). pp.127-145.
• Dunning, J.H., 2013. International Production and the Multinational Enterprise (RLE International Business). Routledge.

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