Strategic Agility Analysis of Oak Tree Inn in Hospitality Case Study

Introduction - Evaluating Growth Strategies for Oak Tree Inn's Success

This report shall enable establishment of detailed nuances applicable for determining the strategic agility of an organisation. In order to publish detailed nuances of strategic agility, the selected organisation is considered to be Oak Tree Inn, whose associated industry is considered to be Hospitality. Critical analysis of strategic position, identification of strategic capabilities and determination of strengths and weaknesses shall also be conveyed in this report. This report shall also highlight overview of the UK hospitality sector as well as offer a macroenvironmental analysis by highlighting potential opportunities and threats. Further emphasis shall be offered for evaluating the potential growth strategies and its navigation to tackle present and future challenges. Recommendations shall also be offered in this report to determine which potential growth strategy must be selected by Oak Tree Inn to encourage business growth and development.

Identification of Strategic Capabilities, Strengths and Weaknesses

Critical Analysis of Strategic Position

The strategic positioning of Oak Tree Inn is considered to be weighed on the basis of establishing a healthy holiday business comprising holiday pods as well as cottages. The availability of numerous cottages and holiday pods is a favourable indicator that the company is in a positive direction to maximise its stronghold in the hospitality sector. The strategic position is further influenced by Oak Tree Inn’s management emphasising on formulating strategies for capacitating mergers and acquisitions. The prospects of merger are considered to be highlighted by Oak Tree Inn emphasising on formulating strategic business partnerships with an industry major to maximise business scalability in the near and distant future. The strategic positioning of Oak Tree with respect to acquisition is considered to be associated with taking over a relatively smaller capital size company to maximise its business reach.

However, as per critical statements and illustrations of Xing et al. (2020), the strategic position for an organisation with respect to merger and acquisition is considered to be in jeopardy when adequate monetary consideration is absent. This could ultimately hamper the financial backbone of Oak Tree Inn and could strip them off to maintain a healthy and dominant industry positioning. Furthermore, strategic positioning of Oak Tree Inn could also be in jeopardy when accurate holiday pricing strategies are not being offered. This would lead to low customer acquisitions and customer orientation percentage, thereby leading to business downgrading in the near and distant future.

Identification of Strategic Capabilities

The identification of strategic capabilities is further considered to be an important and vital component that is needed to be encouraged and empowered by the concerned organisational spearhead of Oak Tree Inn. As idealised and narrated by Ahammad et al. (2020), the core components involved in determination and identification of strategic capabilities for an organisation are considered to be associated with reliance on data, assessment of market trends and future projections. Hence, the reliance on data applicable for Oak Tree Inn could offer a degree of high strategic capability as it would allow the organisation to identify its historical performances and determine the key areas of improvement. The determination of key areas of improvement can be further rectified by taking corrective measures to justify organisational stability in the current industry domain.

The second strategic capability that could be applied by the management of Oak Tree Inn is considered to be associated with assessment or evaluation of market trends. As per illustrations and explanations of Doz (2020), the assessment of market trends is also considered to be a beneficial tool as an organisation could revise their current business strategy in comparison to the market trends. Hence, Oak Tree Inn could compare their current business performances as per market standards and evaluate potential deviations that require a detailed degree of emphasis in order to mitigate business risks in the future. Future projections are considered to be the third important strategic capability that could be applied by Oak Tree Inn to ascertain projected future fund flows and how revenue could be maximised to ascertain a strong and competitive market positioning.

Identification of Strengths and Weaknesses

Following is a detailed determination of strengths and weaknesses that the company concerned Oak Tree Inn possesses.

• Strengths: The primary strength possessed by Oak Tree Inn is deemed to be associated with availability of a strong internal supply chain and logistical circle. The availability of a strong internal supply chain cycle is deemed to be advantageous as raw material costs incurred for operational activities are generally considered to be lower. As per illustrations and opinions of Elali (2021), the availability of low raw material costs further allows an organisation to maximise its turnover generation propositions in order to determine a healthy market competitive advantage. The second advantage possessed by Oak Tree Inn is considered to be related with empowering adequate business growth and expansion opportunities. The availability of ample business growth and expansion opportunities by Oak Tree Inn further allows the organisation to cater a wide range of customers in the UK and potentially across other parts of Europe.
• Weaknesses: The main weakness associated with the company concerned Oak Tree Inn is considered to be associated with its centralised form of business progression. The centralised form of business organisation is mainly attributed to Oak Tree Inn being considered as a family business where inputs from members outside of the family are generally neglected. This could cause major disruptions in proposing feasible business decisions in the long as well as the short run (Shams et al. 2021). The second important weakness considered to be plaguing coherent business progression for Oak Tree Inn is considered to be its rigidness with promoting traditional forms of business. Hence, the non-adherence for involving new-age business promotional schemes including online and social media promotions could hamper long-term business sustainability for the company in the UK.

Overview of Competitiveness in the UK Hospitality sector

Overview of UK hospitality sector

The UK hospitality sector is considered to be an affluent and a promising industry as the prospects of maximising revenue generation and profit-seeking attributes remain higher. The main components considered as an integral part and parcel of the UK hospitality sector are considered to be food and beverage organisations, hotels, entertainment and recreational-based organisations. In order to ascertain the overall revenue generation prospects in the UK hospitality sector, the expected turnover for 2023 is considered to be GBP 21.52 billion and a projected growth of 1.59% is being stipulated (statista.com, 2023). Hence, the prospects of profitability are also considered to be highly prevalent in the UK which offers companies including Oak Tree Inn a glorified opportunity to expand its business exponentially. Moreover, the business competitive advantage for Oak Tree Inn could also maximise when appropriate business tactics are being employed by the concerned management.

Figure 1: Protected Revenue from UK Hospitality Industry

Overview on the local Loch Lomond Area

The overview of the local Loch Lomond Area is considered to be a neighbourhood filled with picturesque backdrop and scenery where the hospitality industry has a wider potential to grow significantly in stature. Hence, the hotel and hospitality industry in Loch Lomond area has a high prospect of churning tourism revenues and income which would offer organisations a healthy business competitiveness. Since, the company concerned Oak Tree Inn is mostly situated in this area the chances of magnifying business credentials remain at a higher stead thereby encouraging growth and future development prospects.

Macroenvironmental Analysis of recent events

Macroenvironmental analysis

The macro environmental analysis of recent events in the hospitality sector can be further determined based on assessing the available external factors including social and political factors. The social factors relevant as part of the macroenvironmental analysis for Oak Tree Inn are considered to be associated with customers wanting to avail state of the art hospitality services at relatively lower prices. The political factors associated with the operational functionality of Oak Tree Inn are considered to be associated with governments and federal bodies encouraging tourism through various campaigns and government aided activities.

Impacts identified in the hospitality sector

The impacts identified in the hospitality sector could be assessed based on financial and non-financial viability that is applicable for the organisation concerned Oak Tree Inn. As per the financial viabilities, the impacts mainly consist of lower financial relevance and lack of opportune profitability as Oak Tree Inn needs to lower their price point for attracting a higher customer orientation. The impacts associated with non-financial viability could be ascertained based on loss of business competence owing to non-implementation of new-age technology driven business attributes.

Identification of Opportunities and Threats

• Opportunities: Opportunities available for the company concerned Oak Tree Inn is considered to be primarily associated with having thorough and continuous governmental and tourism support for maximising business credentials in the industry. Other opportunities include encouragement for availing new-age technological strategies and tools for maximising business outreach in the near and distant future.
• Threats: Major threats associated with the company concerned Oak Tree Inn are considered to be related with availability of high market competitors who offer the same level of services at differentiating price points. The additional threats involve lack of adequate human resources to facilitate healthy and streamlined operational conduct on a daily basis.

Formulation of Potential Growth strategies

Two Growth strategies

The availability of growth strategies to maximise business expansion and opportunities are considered to be important long-term non-financial factors that would allow Oak Tree Inn to capacitate high business credentials in the industry and the market. As per narrations and illustrations of Clauss et al. (2021), the two growth strategies that could be emphasised by organisations are deemed to be price and promotion backed strategies. Pricing can be employed as a viable growth strategy for encouraging lowering of price points and to potentially minimise customer acquisition costs in the future. Hence, lowering the price and availing high quality services would attract a high proportion of customers with Oak Tree Inn, thereby magnifying its business sustainability in the hospitality industry. Promotion can also be used as a vital strategy by Oak Tree Inn where emphasis could be laid on better marketing and advertising of business. This can be further encouraged by implementation of technological tools and driving business through online and digital sources.

Navigation of strategies to tackle present and future challenges

The navigation of strategies for tackling present and future challenges is also considered to be an important part and parcel of the strategic composition of business that is needed to be focussed by the concerned management of Oak Tree Inn. The primary adherence that is needed to be capacitated consists of allowing a higher degree of business flexibility to ensure that present and future challenges can be coped with by tweaking organisational vision and mission. As stated, and idealised by Zahoor et al. (2022), the second navigation could be considered with respect to allowing organisational motivation especially to internal stakeholders to ensure business continuity is not compromised. Hence, both these navigation strategies can be employed by Oak Tree Inn in order to stay afloat with present and future organisational challenges.

Critical evaluation of strategies and recommendations for strategy

• Critical evaluation: The critical evaluation of the price backed strategy is considered to be associated with dilution of financial resources which could minimise profitability and scalability options for Oak Tree Inn. As critically stated, and idealised by Kale et al. (2019), the critical aspects of promotion backed strategies are deemed to be associated with spillage of high costs and time constraints which could ultimately hamper business propositions for an organisation.
• Recommendations: In order to capacitate healthy business strategies, continuity and long-term market dominance, it is recommended to the management of Oak Tree Inn to select promotion backed strategies for growing business. The justification offered for selecting promotion backed strategies are mostly associated with encouraging healthy business promotion through advertising channels where role of digital technologies and social media platforms are needed to be maximised by Oak Tree Inn.

Reference List

Journals

Ahammad, M.F., Glaister, K.W. and Gomes, E., 2020. Strategic agility and human resource management. Human Resource Management Review, 30(1), p.100700.

Clauss, T., Kraus, S., Kallinger, F.L., Bican, P.M., Brem, A. and Kailer, N., 2021. Organizational ambidexterity and competitive advantage: The role of strategic agility in the exploration-exploitation paradox. Journal of Innovation & Knowledge, 6(4), pp.203-213.

Doz, Y., 2020. Fostering strategic agility: How individual executives and human resource practices contribute. Human Resource Management Review, 30(1), p.100693.

Elali, W., 2021. The importance of strategic agility to business survival during corona crisis and beyond. International Journal of Business Ethics and Governance, 4(2), pp.1-8.

Kale, E., Aknar, A. and Başar, Ö., 2019. Absorptive capacity and firm performance: The mediating role of strategic agility. International Journal of Hospitality Management, 78, pp.276-283.

Shams, R., Vrontis, D., Belyaeva, Z., Ferraris, A. and Czinkota, M.R., 2021. Strategic agility in international business: A conceptual framework for “agile” multinationals. Journal of International Management, 27(1), p.100737.

Xing, Y., Liu, Y., Boojihawon, D.K. and Tarba, S., 2020. Entrepreneurial team and strategic agility: A conceptual framework and research agenda. Human Resource Management Review, 30(1), p.100696.

Zahoor, N., Golgeci, I., Haapanen, L., Ali, I. and Arslan, A., 2022. The role of dynamic capabilities and strategic agility of B2B high-tech small and medium-sized enterprises during COVID-19 pandemic: Exploratory case studies from Finland. Industrial Marketing Management, 105, pp.502-514.