Analysis of operating environments of both the organization

Analysis of operating environments of both the organization

Executive Summary

            The presented paper has directed to reflect service delivery system related aspects considered by two different organizations. In this context, two organizations selected for the report are Apex City Hotel and Hotel Sheraton. Both the organizations are operating in hospitality industry. However the span of business activities is different from each other. For instance, Apex city hospital is directed to provide services in a particular region only, while Hotel Sheraton considers international business operations.
In regard to this, the prime quest of the presented paper is to explore such differences as well as similarities in the operational framework of the hotel organization in the light of various crucial theories and concepts related to service marketing. In relation to this paper explores the operating business environment for both the organization. Along with this, the paper also underpins service concepts employed by both the organizations which are reflected in the different service related operations undertaken such companies. In addition to this, the paper also explores some critical quality Issues for each organization so that similarities and differences in the approaches undertaken by organizations in service delivery can be explored in the most effective manner.

Introduction

In the existing scenario, the business environment has been changed quite intensively. There are multiple issues, such as stiff competition and economic dynamism, which are required to be faced by business organizations in the most critical manner.  In order to be successful in such a challenging business environment, there is a need of adopting some crucial strategies. In addition to this, management of quality can also be considered as one of the prime phenomena, which is considered by the business organizations for the purpose of attaining a competitive position in highly competitive market place (Enz, 2010).
In addition to this, for the business organization operating in the core service industry, it is quite essential to ensure the high quality of service delivery to customers. For a service sector business organization, there is no actual product offered to the customers, it is quite essential for business organizations to enhance the level of quality of its services. In context to this discussion, the presented paper is aimed to analyze the service delivery systems and other crucial service operations undertaken by two organizations, which are operating in a similar service industry, i.e. Hospitality industry. The organizations selected for the paper are hotel Sheraton and Apex City hotel. Although both organizations are operating in a similar industry, the span of business activities undertaken by both the organizations are different. Hotel Sheraton is an internationally expanded hotel chain, which is engaging in serving a well-diversified customer base at international level. In contrast to this, Apex city hotel is having more localized business operations. The hotel is based in Edinburgh, UK. The overall customer base for this hotel is comparatively focused and concentrated. Owing to this reason, there can be some differences in the service delivery systems and other related service operations undertaken by both the business organizations (Bardi, 2010).

Analysis of operating environments of both the organization

The operating business environment can play an intensive role in deciding the operative policies and strategic orientation of the organization. In this context, both the business organizations (i.e. Apex city hotel and hotel Sheraton) are operating the hospitality industry of the UK. Although in the case of hotel Sheraton, the span of business is well expanded in the international market, yet still, the UK market is the most profitable market for the hotel. The operating environment for a hotel organization has become quite tough in an existing period of time due to enhancing competition in the industry and increasing dynamism in the global economy which affects the purchasing power and spendable income of people in a negative manner (Enz, 2010). In this context, it has become one of the vital challenges in front of both organizations to undertake some sustainable and successful business operations. In the conditions of stiff competition prevailing in the hotel industry of the UK, every player of the industry needs to have an edge over its competitors so that it can sustain itself in the industry. A foremost step that can be undertaken by a hotel is to address stiff competition of the industry is to provide some intensive and differentiated products as well as services. With the help of this measure, the hotel can establish a distinguished image in the eyes of its customers and other stakeholders (Barrows & Powers, 2008).
In order to explore the operating environmental conditions for both the hotels, five force analysis framework presented by Michel Porter can be used as a strategic tool for assessment. As per this tool operating environment of an industry or a company affects due to five different types of trends prevailing in the market. In this context, the elaboration of these five forces for Apex city and Hotel Sheraton can be presented as below:

1.Bargaining power of customers

In the context of the hotel industry, the bargaining power of customers has been enhanced quite intensively as there are a number of different players in the industry. Now customers have started to demand more personalized and advanced services from the hotel organization so that a high degree of value of their money can be achieved. This condition is positively affecting the intention of the hotel towards modifying their service delivery systems and making them more customers centric (Barrows & Powers, 2008).

2.Bargaining Power of Suppliers

The bargaining power of the supplier in the existing operating environment is not quite high. It is due to the reason that the number of suppliers of raw material in the industry is high and due to this high competitive pressure, the overall bargaining powers of supplier decreases up to a significant level. In the context of Apex city hotel almost all the suppliers are from the local community, while in the case of Hotel Sheraton, the company prefers selecting suppliers from the host country only as it leads to decrease transactional costs.

3.Competitive Rivalry

The competitive position of the market is also one of the major aspects that can able to effects the operational and strategic orientation of the hotel organizations. In existing period of time, the competition in the domestic and international hotel industry has become quite stiff, which is directly affecting the profitability and market share of any organization. In comparison to the Apex City hotel, the perspective of Hotel Sheraton is more positive as it has a wide portfolio of different hotels in different market places across the globe (Kotler, Bowen & Makens, 2011).

4.Threats of new entrants

Due to the attractiveness of the industry, the number of new entrants in the industry is quite high. Moreover, there are low entry barriers in the industry which are providing an effective passage for new entrants in the industry, which is making the survival of existing players tough and complex in the industry

5.Threats of substitutes

In the context of substitutes, there are a number of a different cheap hotels, and motels are available for customers, which are providing alternatives to such high-class service-oriented hotels for tourists and guests (Barrows & Powers, 2008).
In all, it can be observed that the overall operative environment for the company in an existing period of time is highly tough and turbulent. In such an environment, both the companies are required to pay significant attention to the quality of the service delivered to the customers.

Evaluation of the service concept that underpins the service operations for both organizations

The primary service concept which underpins the operations of both the organizations is the customer satisfaction. For a business organization operating in service industry, delivery of customer-oriented and customized services is one of the crucial concepts that can be proved quite helpful for the company to be successful and sustainable in an existing business environment. The orientation of a service company such as hotel is quite different from that of a product manufacturing company. It is due to the reason, for a service-oriented company, there is no any specific and actual product for its customer on the basis of which, quality of operations and business activities can be measured (Purohit & Purohit, 2013). For service companies, customer satisfaction and loyalty are the only measures for mapping the quality of its operations. In relation to this, like product-oriented business sectors, the quantitative measurement of quality cannot be possible in the case of service sector organizations. In relation to this, customer feedback and his experience regarding services delivered to him is the primary means to judge the quality of operations, which is a highly subjective criterion of quality management. The customer satisfaction related concept of service induces both the hotel organizations to adopt some crucial strategies and working norms which is quite customized and customer-oriented (Chena & Chenb, 2010).
In the context of the above-discussed service delivery concept, primary focus all the service operations are undertaken by both the organizations is to enhance the customer experience while staying in the hotel. For this purpose, both the organizations are required to connect with customers at a physical and emotional level. The strategy and tactics used by both the organizations for the purpose of understanding the needs and requirements of customers are slightly different. For instance, as the span of business operations of Apex City Hotel is not as comprehensive as that of the hotel Sheraton, it is feasible for the management of the hotel to maintain personalized relationships with customers. In direction of this, the relationship executives directly contact its guests for the purpose of revealing their experience with the company (Jones & Robinson, 2012).
In contrary to this, due to widely expended business operations, it is not quite feasible for the management of the Sheraton Hotel to established a personalized relationships with its every guest. However, the company employs some crucial strategic measures for the purpose of having a more effective relationship with the customer, which is a primary determinant for the customer satisfaction level ((Great Hotels: Great Possibilities, 2012). In relation to this, the that the hotel’s employs a frequent guest program in which the regular customers are benefited with some intensive offers including special tariff, gift packs, free membership, special packages and services, and so on. Along with this, the author has also identified that the hotel is making continuous efforts to expanding its Internet presence with the help of some intensive online marketing practices. By doing so, the hotel is trying to establish direct contact with its customers. Further, the strategy also helps the company to avail of direct feedback and suggestions about the products and services offered by the hotel to its customers. This enables the company to identify the areas, which require more concentration from the side of upper-level management (Nykiel, 2007).
For the purpose of being aligned with the service concept of customer satisfaction, both the companies are required to track the customer’s journey and different perception points within that journey. In this regard, there are some crucial aspects on which the customers can provide their perception regarding services delivered by hotels to them. For instance, different perception points such as timeliness of services, cleanliness, staff behavior, and cooperation, value-added services delivered to them and complaint handling procedures followed by the company can be considered some of the crucial perception points from the perspective of a customer (William Reed Business Media, 2007). In existing period of time, both the organizations are considering paying some intensive amount of attention over such crucial perception points, while designing their strategies.

Service delivery system adopted by both the Organizations

For a hotel organization, it is quite essential to have an effective and efficient service delivery system so that an intensive amount of satisfaction can be delivered to the customers in the most efficient manner. In direction of this, the delivery of services can be taken into account as the prime considerations by both the business organizations. There are different types of service delivery systems adopted by both the hotels (O’Fallon & Rutherford, 2010).
In relation to the service delivery system adopted by Apex City Hotel, the hotel adopts conventional service delivery system which is directed towards providing some maximum amount of satisfaction and convenience to its guests. There are different customer-centric services such as wake-up calls, same-day laundry services, 24-hour room service, concierge Services, Cots, and high chairs, internet access and message delivery services, and disabled access to rooms and public areas provided by the hotel to its customers (Apex 4 Star Hotels UK, 2014). In addition to this, in the service delivery system of the hotel, along with complementary services, other demanded services are provided to the customers on their demand. For this purpose, the guest can register their special requirements at the time of checking-in the hotel. The front desk officers note all the special services required by the customers. In addition to this, the guest can also order services via the intercom of the hotel. Each of the rooms in the hotel is directly connected with the front desk of the hotel with the help of a specific intercom. In this regard, guests can easily avail of their required services (Apex Hotel in Edinburgh, 2014).
Another important feature of the service delivery system of the hotel is the 24*7 service delivery. The hotel provides services to the guest at any time. In addition to this, another crucial aspect of the service delivery system of the hotel is that the system also allows the guests to provide their valuable feedback regarding the services delivered to them. The customer executives and relationship managers of the hotel handle different types of complaints and feedbacks provided by guests. In addition to the accommodation facilities, the hotel also delivers different other services such as Club Lounge, Chambers Restaurant & Bar, and banquette facilities for weddings and other similar types of functions. In this context, the service delivery system of the hotel is quite elaborative and customer-centric (Vickers, 2005).
In addition to this, the service delivery system adopted by the hotel Sheraton has become quite updated and advanced in a recent period of time. The hotel has adopted some crucial and advanced information systems for delivering some customized and customer-centric services to its customers. In this context, the hotel has adopted a guest interactive touch-enabled computing system for its guests so that customers can be able to register their needs and wants to the hotel and avail desired services (Sheraton Hotels and Resorts, 2012). In addition to this, the hotel also uses an online concierge system at the time of customer’s entry in the hotel for the purpose of capturing the guest related information (Krajewski & Ritzman, 2007). On the basis of this information, customized services can be offered to customers in the most crucial manner.
In addition to this, the company also employs an effective and highly advanced monitoring system with the help of which the management comes to whether there is effective delivery of services or not. From the perspective of the effective management of services, proper monitoring and effective performance evaluation are quite required, which is effectively incorporated into the existing service delivery system. The top-level management of the hotel is quite concerned about the management of the quality of its existing service delivery system (Way, Sturman & Raab, 2010). In this regard, for the purpose of making its services delivery system differentiated from that of its competitors, the hotel undertakes the six sigma approach in its total quality management framework. In relation to this, Starwood hotel, the parent company of Hotel Sheraton, has adopted a culture in which six sigma approaches for the management of quality is considered as an integral part of management culture. Starwood is regarded as one of the few organizations operating in the hotel industry that adopts the Six Sigma approach for enhancing the standards of quality in the organization (Kivela & Kagi, 2008).
As per this approach, the management of quality is the responsibility of every individual employed in the hotel. In this context, the authors have stated that in the Organizational culture of Hotel Sheraton all the managers, employed at the different levels are equally accountable for different measures of quality including Employee attitude, customer satisfaction, Process performance, grievance handling and so on. In this way, in the six sigma approach, the role of upper-level management in quality management becomes restricted. Middle-level managers, who are in direct contact with the customer, are empowered to undertake the decisions for managing the overall quality of the services provided by hotel staff to guests (Kivela & Kagi, 2008).
In this way, it can be illustrated that both the hotels employ service delivery systems as per their requirement, customer demands and span of business operations.

Other significant operations are undertaken by both the Organizations

In addition to the service delivery systems, there are some other crucial service-related operations undertaken by both the business organizations in a differentiated manner. Hotel organizations are required to undertake various other functions and operations such as management of customer feedback systems, marketing management, and management of human resources for the purpose of being competitive in an existing highly dynamic and competitive business environment. These all the functions and operations are taken into considerations by Apex city Hotel and Sheraton hotel in a differentiated manner (Ford, Sturman & Heaton, 2011).
In order to receive and manage the customer feedback system of the organization, Apex City Hotel employs customer executives and relationship managers, who are responsible for recording and reporting different crucial feedbacks provided by guests regarding positive and negative aspects of services delivered to them. For this purpose, at the time of checking out from the hotel a direct contact with the customer is undertaken by the customer executive (Apex City Hotel, 2013). A brief interview is taken for the purpose of revealing his experience in the hotel. In contrast to this, Hotel Sheraton undertakes some advanced system for the purpose of managing feedbacks provided by customers. In this regard, the company undertakes an effective online system on which the customer can register their feedbacks regarding services delivered to them. The relationship managers are accountable for a report such as feedbacks to top-level management so that they can take some effective decisions (Mulvaney, O’Neill, Jeanette & Crouter, 2007).
In addition to this, the management of external communication and marketing functions is also one of the prime functions undertaken by a hotel organization in the most frequent manner so that it can be able to make itself recognized among people. In order to make undertake marketing related activities, Apex city hotel undertakes conventional mode of advertising such as television advertising, newspaper advertising, Hoardings, banners and event sponsorship for the purpose of the market its products and services among potential customers (Kotler, Bowen & Makens, 2011). The main objective behind this function of the management is to make itself recognized among people and potential customers. In this way, brand recognition is the prime quest of the marketing functions of the company (Reid & Bojanic 2009). In this context, the marketing activities undertaken by hotel Sheraton are directed to enhance the brand equity in the market as the brand name has already been well recognized in the market. In direction of this, the company undertakes some non -conventional means of marketing such as social media marketing, and internet marketing (Cohn, Katzenbach, & Vlak, 2008).
Human resource management can also be considered as one of the core tasks undertaken by the management of business organizations operating in the hotel industry. It is due to the reason that the effective delivery of services depends upon the competencies of its human resource. In this regard, it is essential for the management to manage its human resources in the most effective manner (Purcarea, Ioan-Franc & Raþiu, 2010). In this regard, Apex City Hotel operates at national level. Owing to this reason, there is no need of having to manage an intensive amount of workforce diversity in the operations. The human resource department undertakes recruitment, selection, placement and training, and development related functions. In contrary to this, at the international level, management of workforce diversity can be considered as one of the prime aspects of human resource management functions undertaken by Hotel Sheraton (Nykiel, 2007).
For this purpose, cross-cultural training is one of the prime aspects of human resource management related operation of the company. in addition to this, the strategy of Hotel Sheraton about empowering the managers at all levels to resolve any contingent situation is also one of the prime human-resource-related directions of the hotel that makes its service exclusive and intensive (Dev, Brown & Zhou, 2007). The training and development programs undertaken for its ground managers are quite intensive and directed towards imparting a wide range of skills to the trainee. The hotel undertakes frequent Job rotation framework for their ground staff so that they can be able to handle any contingent situation.

Key Quality Issues for Each Organization

Quality of services delivered by the hotel can be considered as one of the key issues that are required to be taken into consideration by the organizations for the purpose of being successful and sustainable. There are some critical quality-related issues faced by each of the organization which can hamper their long term existence and success in existing highly competitive marketing market place (Quelch, & Jocz, 2008).
Apex City hotel, which operates at local level, is facing some critical issues in existing period of time. In this context, the lack of effective customer grievance handling systems is one of the basic issues faced by the company. Existing grievance handling systems, which managed by customer executives and relationship managers is reactive by nature. In other words, the system is directed to manage the problems of customers only after receiving complaints from the side of customers (Walsh, Enz & Canina, 2008). There is a lack of the system which is proactive by nature and can be able to track the potential problems faced by the customers. Owing to this reason, it is quite hard for the management to have better planning for grievance management. In addition to this, for the purpose of sustaining in the existing competitive business environment, the company requires reducing its overall prices so that it can be able to mass market and enhance its market share. In direction of this, the price reduction strategy of the company has put some intensive amount of burden over its financial resources. In direction of this, it is not quite feasible for the hotel to provide high-quality personalized services to every customer at a low cost. This can be proved as one of the core issues faced by the company (Liao & Hsieh, 2011). In addition to this lack of adequate workforce for the hotel is also one of the most critical issues which are hampering the quality of services delivered to the customer. As the hotel is operating at a small level, it is not feasible for it to have a large staff. Owing to this reason, sometimes the lack of adequate staff sometimes results in delays in service delivery which is harming the overall quality of services. These are some of the critical issues are needed to be resolved by the management as soon as possible (O’Neill & Xiao, 2006).
In addition to Apex city hotel, Sheraton hotel is also facing some critical quality-related issues in the existing period of time. Management of workforce diversity is one of the prime issues faced by the organization in its international business operations. As the hotel has a number of different branches across the globe, it is quite obvious for the hotel to deal with differentiated demands and needs of people from different backgrounds, and cultures. In direction to this, there is a need of adopting some intensive amount of marketing research so that it can be able to provide customized values and services to the customer (Great Hotels: Great Possibilities, 2012).
In relation to this, changing its service offering in different regions as per the local demands can be proved as one of the most challenging tasks for the organization, as it can directly harm the quality of service delivery system of the hotel. Along with this, effective monitoring and performance evaluation of such a large workforce is also one of the prime issues faced by the management of the hotel. It is not easy for the management to track the performance of every employee (Roger, 2010). Owing to this reason, there are some critical issues in the performance evaluation function undertaken by the management. This can reflect into the satisfaction and motivation level of employees that affects their performances and dedication towards their responsibilities. From the perspective of the quality of services delivered to the customer, this can be proved quite a negative aspect (Gupta & Srivastava, 2011).

Similarities and Differences in the approaches undertaken by both the Organizations in Service Delivery

For the purpose of delivering effective services to the customers both the organizations considered for the comparison purpose adopt differentiated service delivery systems (Pasiuk, 2005). The service delivery systems adopted by both the organizations are quite influenced by organizational culture, span of operations, financial strengths of the company and competitive position in the market place. There are some similarities and differences in the approaches undertaken by organizations in the delivery of services that can be spotted after an in-depth review.
Similarities in the approaches regarding the delivery of services:
The approaches undertaken by both the organizations in the context of the delivery of services can be considered similar in some places. For instance, ideologies or service concepts followed by both the organizations while designing any strategy are quite similar. Both organizations consider customer satisfaction as the prime service outcome or philosophy of their entire operations. All the new strategies and tactics of the company are quite directed to enhance the quality of services so that the overall value of money paid by the customers can be enhanced up to a significant level (Taylor & Kimes, 2010).
In addition to this, customer-centric and customized service delivery is also the point on which the working approach of both organizations is quite similar. The service delivery system undertaken by Apex City hotel is purely dependent upon feedbacks and perceptions of guests. The organization undertakes a dynamic approach towards the selection of service delivery systems, which keeps on changing on a frequent basis. In a similar manner, the service delivery system of Hotel Sheraton is also highly influenced by the suggestions and feedback provided by customers. The company takes the point of view of customers in a significant manner for designing some new procedures of service delivery within its operational framework. The advanced system of service delivery used by the hotel is directed to help the customers to avail of better and effective services (Sheraton Hotels and Resorts, 2012).
Along with this, both organizations are quite concerned regarding different critical quality issues related to service delivery. The high degree of competition in the domestic and international hospitality industry is imposing pressure over both the business organizations to maintain a high degree of quality in its processes and operations. In this direction, both the organizations are undertaking some effective steps for marinating a high degree of quality in the services delivered to the customers. For instance, Apex City Hotel employs personal monitoring and surveillance system for ensuring the quality delivery of services to guests. In a similar manner, hotel Sheraton employs advanced highly advanced monitoring and customer information system for the purpose of enhancing the quality of services (Great Hotels: Great Possibilities, 2012).
In this way, it can be stated that at some specific points, the service delivery approach of both organizations is similar.
Differences in the approaches regarding the delivery of services
There are some critical points on which the approach of both the hotels regarding the delivery of services can be differentiated. For instance, the primary focus of the service delivery system of Apex city hotel on enhancing personalized attachments with customers. In this regard, customer executives and relationship managers undertakes direct meetings with customers for the purpose of attaining feedbacks regarding services delivered to them. In contrast to this, hotel Sheraton considers technology enhancement and advancement as the most effective measures for enhancing the level of service quality. In relation to this, the company offers some updated and advanced information systems with the help of which, customers can be able to established direct contact with the management. They can also register their demands and needs online to the front desk of the hotel in order to avail customized services (Designing Service Delivery Systems, 2010).
In addition to this, another difference can be spotted in the context of the quality maintenance system adopted by both the hotel organization. In comparison to Apex city Hotel, the quality maintenance system of the hotel Sheraton is quite systematic and effective. Hotel Sheraton has undertaken the Six Sigma system for the purpose of enhancing the level of quality in services. In this way, quality management becomes the prime responsibility of each and every individual employed in the hotel. In contrast to this, in the context of Apex city hotel, the prime responsibilities of quality maintenance are handled by customer executives and relationship management (Pizam, 2010).
Along with this, as Apex City hotel operates at a small level, cross-cultural diversity is not a highlighting problem for the hotel. Owing to this reason, the level of complexities in the training provided to the employees is not quite high. There is a need of providing knowledge of local customs and culture to the employees so that they can be able to serve customers in the most graceful manner. In contrast to this, hotel Sheraton operates at a global level in which, it generally requires facing issues related to differentiated culture and values of customers (Taylor & Kimes, 2010). In this context, for the purpose of maintaining a high degree of service quality, the role of cross-cultural training provided to the employees enhances up to a significant manner.
These are some of the critical aspects on which the approach of both the hotels regarding service delivery to customers can be differentiated from each other.

Recommendation

There can be some recommendations given to hotel organizations:

  1. There should be some intensive amount of focus over researching the entire market before getting entered into the market so that the needs and wants of customers can be revealed.
  2. Employees should be trained in the manner that they can be able to contribute intensively in enhancing the quality of services
  3. Management information system of the organization must be quite effective and strong so that an effective communication channel can be provided.

 

Conclusion

For a service sector organization, it is quite essential to align its service delivery system with the needs and wants of its customers so that an intensive amount of satisfaction to customers can be delivered. In context to this, the presented paper has reflected an intensive comparison between service delivery systems adopted by two different organizations operating in different business environments. Organizations selected for this purpose are Apex city hotel (operates at local level) and Hotel Sheraton (Operates at international level). On the basis of the in-depth analysis of the paper, it can be concluded that the delivery of effective services can lead to enhance the overall satisfaction level of customers which is the key to success for a service sector business organization. Moreover, the paper has also reflected that the span of business activities undertaken by the organizations can be a point that directly affects the delivery of services and their quality.

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