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Last Part Legend Villas

Improve the information system

To get more feedback from the customers

Operation Division

Give discount during the lean season period

To increase sales during lean season period

Marketing and Promotion  Department

Advertising in print ads and TV programs

To increase brand awareness and sales

Marketing and Promotion Department

Place a reception desk at arriving area in the airport

To give information to visitors and those who want to book on a hotel

Marketing Department

Joining exhibits or trade shows

To be updated on latest IT trend

Marketing Department

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Controls

 

The following areas will be examined for the attainment of the plans and objectives:

 

1. The current organization’s strategy must be restudied.

2. The goals with actual results must be compared to measure organizational performance. This will be done through employee evaluation and analyzing progress form previous year’s performance.

3. The rules and regulations set by the company must be implemented more effectively and take corrective actions if necessary.

4. Monitor customer feedback on the proposed products and services through customer feedback forms.

5. Evaluate the effectiveness of marketing promotions through progress on actual sales on the succeeding years.

 

Financial Implications

Through maintaining its affordable rate and effective marketing promotions, there will be an increase in sales and brand awareness because Legend Villas will become more familiar to the people.

With the improved research and development, Legend Villas can modify their products and services to meet the current needs and demands of its target market.

 Bibliography

 Books:

Fred R. David, An Introduction to Strategic Management, 11th Edition, 2007

Michael E. Porter, Competitive Strategy: Techniques for ANALYZING Industries and Competitors, 1980

 

Websites:

www.legendvillas.com.ph

http://www3.pids.gov.ph/ris/taps/tapspp0105.pdf

http://www.nscb.gov.ph/

http://www.census.gov.ph/

http://www.google.com.ph

http://ww.yahoo.com.ph

http://www.travelmart.net/

 

APPENDIX

 

 

 

 

 

 

 

Part 6 Legend Villas

OPPORTUNITIES

1.     Annual family income increase

0.10

4

0.40

4

0.40

2

0.20

2.     Tourism growth rate and development

0.10

4

0.40

3

0.30

4

0.40

3.      Demand for hotel accommodations

0.10

3

0.30

3

0.30

4

0.40

4.      Increase number of tourists coming to the Philippines

0.10

4

0.40

3

0.30

4

0.40

5.      Country’s strategic locations

0.10

3

0.30

3

0.30

4

0.40

THREATS

1.     Political instability

0.10

3

0.30

3

0.30

1

0.10

2.     Continuous decrease in occupancy rates of hotels in the Philippines

0.10

2

0.20

4

0.40

3

0.30

3.     3. Increase number of substitute services in the market

0.10

4

0.40

3

0.30

4

0.40

4.     4. Lack of tourism technology for the country

0.10

1

0.10

1

0.10

2

0.20

5.      Stiff competition

0.10

4

0.40

4

0.40

4

0.40

SUB TOTAL

1

 

3.20

 

3.10

 

3.20

SUM TOTAL ATTRACTIVENESS SCORE

 

 

6.20

 

5.80

 

5.50

 

AS=Attractiveness Score; TAS=Total Attractiveness Score

AS: 1-not attractive; 2-somewhat attractive; 3-reasonably attractive; 4-highly attractive.

Basis: Industry Analysis, EFE, IFE and TOWS Matrices

 

 Based on the matrix, the total attractiveness score of market penetration, product development and market development is 6.20, 5.80, and 5.50 respectively. The highest TAS is market penetration that would mean it is the most attractive strategy among, product development and market development

 

Market penetration strategy seeks to increase market share for present products or services in present markets through exerting greater marketing efforts. This includes increasing advertising expenditures, publicity efforts or offering extensive sales promotion items to enhance brand awareness. Product development is a strategy that seeks increased sales by improving or modifying present products or services. Product development usually needs lots of research and development to fit into the needs of the customers at the current trend. Market development is a strategy that involves selling present products or services in new markets. Managers take actions like targeting promotions, opening sales offices and creating alliances or joint ventures.

 Summary

The aim of this paper is to identify the strategies that Legend Villas uses and to know what the strategies may affect the company Legend Villas are. Some of the strategies that affect the company are market penetration, product development and market development.

The company considers different forces that may affect their performance like demographic, economic, technological and political forces.  Growth of the tourist arrivals in the country, hotel occupancy rates, the lifestyle of the customers, technological improvements, and political threats and opportunities are some of the factors included in the analysis.

The Legend Villas is a Philippine Village Hotel located in the developing commercial, retail and entertainment district of Mandaluyong perfect for banquet socials because of its inspiring, Filipino-themed ambiance.

                Strengths and weaknesses are established based on the interview. These are the internal factors. The researchers also established the external factors that are opportunities and threat in the company. Base on the QSPM matrix, the total attractiveness scores result in the following strategies; product development, which seek increase sales by improving and modifying the new products this is where they improve the product so that they can know what can be the necessary improvement and the services for the benefits of the company and customers; market penetration which seek increase in the market share for present products in the present markets, this is where the company proposed a present product in a present market so that customer can have the willing to go for the product;  and market development, which introduces present products in the new geographic areas, this is where they proposed new product in the geographic areas where they can customer is in it.

Conclusion

 

                The researchers therefore conclude that market penetration is the best strategy among product development and market development as seen in the QSPM.

                Legend Villas needs to increase their market share using the market penetration strategy to continuously gain a competitive advantage over competitors. This will be done through promotion of current products to current markets and offering competitive pricing strategies such as giving discounts during season period to increase brand awareness.

                The company also employed the product development strategy by modifying and improving their current products to offer more various products and services that may appeal to customers. 

                And lastly, Legend Villas also employed the market development strategy by expanding on another market to increase brand awareness.

                If Legend Villas has properly executed their market penetration strategy, they can definitely gain a competitive advantage over competitors and increase their sales.

  STRATEGY RECOMMENDATION

Based on the discussion in Strategy Formulation under the section that presents the QSPM, Legend Villas’ strategic marketing and financial objectives are as follows:

Financial Objectives

·         To consistently increase sales by 5%

·         To consistently have a good liquidity ratio to meet short-term debt obligations

 

Recommended Business Strategies

 

Market Penetration

 

Market penetration strategy can be implemented by increasing sales force, increase distribution and promotion of products, more expenditure in marketing and advertising activities will results in increasing sales.

 

Increasing the number of customers and brand awareness

 

Based on our CPM, Legend Villas acquired a rating of 2 under advertising aspect; therefore Legend Villas should invest more in advertising nationwide to promote brand awareness as well as the products and services being offered. Aside from having an own website, the hotel must also advertise using TV advertisements, internet, print ads and radio advertisements.

Discount during lean season period

Demand for the hotel sub-sector services particularly that of accommodations, peak in the months of November, December and January. Foreign visitor arrivals are at its highest in the last and first months of the year, accounting, on the average, for 18% of the total. Peak season for balikbayan arrivals, on the other hand, is during the months ofNovember and December, accounting for 36% of the total. During this lean season period, discounts on room rates will be given to provide customers who are price sensitive satisfaction. 5% discount will be given for a room per night.

  

http://www.3drivers.com/upload/iblock/b14/reception-desk-c-01.jpg.jpeg

 

 

 

 

Reception desk at arriving area in the airport

A reception desk giving information about Legend Villas will be placed at an arriving area in the airport. The nearest airport to Legend Villas is the Ninoy Aquino International Airport (NAIA), located 6 kms form the hotel. The reception desk will placed on the airport concessions in Terminal 1 along with banks (with foreign exchange), post office, and telephones, restaurants, coffee shops, and bars. The airport has also two duty-free shops, located on the North Wing of the Departure’s Level and on the North Wing of the Arrivals Level of Terminal 1, which will help the reception desk to be easily noticed and attract potential customers. Informed employees and brochures about Legend Villas products and services and will be provided in the reception desk. This strategy is to increase the brand awareness of Legend Villas.

To improve brand awareness and increase sales, the company will use the following action plans:

 §  Conduct market research and viability analysis for all potentially- good areas

§  Use customer feedback form to get feedback on services and products. Based on the result of the feedback, the hotel can improve the service and product.

§  They can also distribute some brochures or pamphlets that indicate their room accommodations and current products and service offerings.

Product Development

The strategy of product development involves creation of products with new or different characteristics that offer new or additional benefits to the customer. It focuses on the improvement of the physical structure of the hotel, the quality of the food in the restaurant, and bedroom facilities and furnishings. Healthier menus such as vegetarian dishes can be offered, to be in the popular trend towards healthier lifestyle. Children’s menu will be also offered to cater the needs of families who want to spend their vacation with their children.

An additional facility for children may be also provided. Research shows that the services tailored to the needs of children (child friendly or safe room, swimming pool with lifeguard, children’s menu) is one of the factors that affect foreign and domestic household consumers’ decision in choosing hotels and other lodging facilities, along with competitive pricing and free services.

 

Market Development

Market development is a strategy that focuses on attracting new market segments or completely changing the customer base. Examples of market development efforts include reaching new segments and market expansion.

            An effective strategy for a hotel to gain more market share is through expansion. Adding branches to rural areas can lead to more customers and increase in brand awareness.  At present, only one of the hotel chains of Legend Hotels is located in a rural area, which is in Palawan.  Another expansion on a rural area with many domestic vacationers is a great opportunity for Legend Villas to gain more market share especially that Legend Villas has a competitive pricing.

Fred David’s 9 Criteria

Criteria

Present?

Inclusive Statement

1.    Customers

Who are the firm’s customers?

Yes

“Always, the customers take center stage. Their wellness, on top of mind, and constantly, the customers get the longer end of the deal – more than what they bargain for.”

2.    Products and Services

What are the firm’s major products and services?

No

(Not specified)

3.    Markets

Geographically, where does the firm compete?

No

 

(Not specified)

4.    Technology

Is the form technologically current?

No

(Not specified)

5.    Concern for Survival, Growth and Profitability

Is the firm committed to growth and financial soundness?

No

(Not specified)

6.    Philosophy

What are the basic beliefs, values, aspirations and ethical priorities of the firm?

Yes

“Here in LHI, the customer’s satisfaction takes precedence over the organization’s comfort. Its energies, time, and focus are centered on the consumer’s well-being.”

7.    Self-concept

What is the firm’s distinctive competence or major competitive advantage?

Yes

“Legend Hotels International is not simply a business but a calling to serve and touch the lives of its guests.”

8.    Concern for Public Image

Is the firm responsive to social community and environmental resources?

Yes

“To be a chain of super value hotels that provides the best of the Filipino in service that is anchored on God-centered values.”

9.    Concern for employees

Are employees’ valuable assets of the firm?

Yes

“In surrendering, he discerned a clear vision of the role his hotels and their employees were to take.

 Critiquing the Vision and Mission Statement

1.    Customers

Legend Villas was able to specify the first criteria set by Fred David which are the customers. It is important to include in the mission statement the customers because they are the reason why the business exists for. The company should always maintain the customers in the statement to know what the organization is all about.

 

2.    Products and services

The products and services are not indicated in the statement. It is necessary to state the products/services that a company offers to its customers.

 

3.    Market

It was not specified in the mission statement. Legend Villas’ market is the hotel industry. The company must indicate what specific place they are competing in.

 

4.    Technology

The company does not include their technology. They must indicate that they are technologically current to attract potential customers.

 

5.    Concern for Survival, growth and profitability

As a three-star hotel, Legend Villas did not specify in the mission statement its concern for survival. Legend Villas should add that it will continue to operate excellently in order to give customer satisfaction and be the first hotel among competitors in the minds of competitors.

 

6.    Philosophy

The philosophy was mentioned in the statement that Legend Villas’ energies, time and focus are centered on their customer.

 1.    Self-concept

It was specified. It stated that Legend Hotels International is not simply a business but a calling to serve and touch the lives of its guests.

 

2.    Concern for public image

It was specified in the statement that Legend Hotels want to be a chain of super value hotels that provides the best of the Filipino in service that is anchored on God-centered values.

 

3.    Concern for employees

The employees were included in the mission statement. Employees are the keys in a company’s success. They must be a part of it to make them feel belongingness.

 

Recommendations

1.    Customers (Retain)

Legend Villas has already specified that their customers are their center and that they will continue to provide satisfaction to the customers in the best way the company can offer.

2.    Products and Services Offered (Modify)

The hotel must indicate that they will offer quality products and services for their customers.

3.    Community (Modify)

The hotel must also include that they will also provide activities for the community where they belong. Adhering to corporate social responsibilities will provide advantage for the people around the community toward improvement.

4.    Government (Modify)

Legend Villas should also incorporate in the statement that they will adhere to all policy, regulations and laws of the country to operate successfully.

Revision of the Mission Statement

 

 

Legend Hotels International is not simply a business but a calling to serve and touch the lives of our guests.

 

To be a chain of super value hotels that provides the best products and accommodations and the best Filipino in service that is anchored on God-centered values. That is the essence of LHI’s values.

 

To provide a service with utmost integrity, excellence, and commitment as responsible corporate citizens. This vision is the wellspring of wisdom in nurturing the people toward the pursuit of excellence in service.


Always, the customers take center stage. Energies, time and focus are entered on the consumer’s well-being. Every individual in the organization is also valued to provide everyone a sense of belongingness to work together in giving a total satisfaction to our customers and community we served with.


 ACTION PLANS

All strategies must be well executed. To implement a firm’s desired positioning effectively, every aspect of the store must be focused on the target market. Merchandising must be single-minded; products must appeal to the market prospect; advertising must be continuously present; personnel must be knowledgeable; and customer service must be designed with the target customer in mind.

Activities

   Objectives

Person/s Involved

Analyze the recommended strategies

To determine the feasibility of strategies

Marketing and Promotion department

Improve the physical appearance of the hotel, quality of food, and bedroom facilities

To attract potential customers and improve customer satisfaction

Chief Operating officer

 

Continues training of employees

For better performance

Human Resource
Department

Improve the information system

To get more feedback from the customers

Operation Division

 

Part 5 Legend Villas

Above is the TOWS Matrix of IPS, keeping in mind its SWOT analysis. Following is the detailed analysis of Legend Villas TOWS matrix:

 

Based on the analysis, the company uses the following strategies: Market Penetration, Market Development, and Product development.

 

For Market Penetration, the company seeks to increase their market through intensifying their marketing strategies and programs as wells as putting advertisements in the internet.

 

In Product development, the company seeks to increase sales by improving their services through hiring competitive employees and products through offering various menus and improving the structure of the hotel and bedroom facilities. Also the company improves their services by improving their website and improves the information system in the management.

 

For Market Development, the company branch out to different areas to increase their brand awareness and market share.

 

 

 A.   Internal-External (IE) Matrix

 

The IFE Total Weighted Score

IFE 2.15

EFE 3.3

STRONG

3.0 to 4.0

AVERAGE

2.0 to 2.99

WEAK

1.0 to 1.99

HIGH

3.0 to 4.0

I

II

III

MEDIUM

2.0 to 2.99

IV

V

VI

LOW

1.0 to 1.99

VII

VIII

IX

 

 

 

The EFE

Total

Weighted

 Score

 

 

 

 

Based on the EFE and IFE matrices in the previous chapter, with the resultant scores of 3.30 and 2.80 respectively, the combined effect of the external and internal analysis falls in cell II for the IFE total Weighted Score of 2.80 and cell I for the EFE Total Weighted Score of 3.30. The company falls into cell II which is described as grow and build from Fred DAVID’S Criteria. Intensive (market penetration, market development, and product development) or integrative (backward integration, forward integration and horizontal integration) strategies can be most appropriate for this dimension.

 Strategic Position-Action Evaluation (SPACE) Matrix

 

Conclusion

Internal strategic position

External strategic position

 

 

Y-axis

 

Total y-axis score:

1.75 + (-3.67) = -1.92

 

 

Financial Strength (FS)

(score: +6 best, +1 worst)

 Profitability                      +2.00

Liquidity                            +1.00

Solvency                          +2.00

Asset Turnover                 +2.00

 

Average: +1.75

 

Environmental Stability (ES)

(score: -1 best, -6 worst)

Economic Instability               -4.00

Competitive Pressure             -3.00

Rate of inflation                      -4.00

 

 

Average: -3.67

 

 

 

 

X-axis

 

Total x-axis score

3.33+ (-1.00) = +2.33

 

Competitive

Advantage (CA)

(score: -1 best, -6 worst)

 

Strategic Location           -1.00

Competitive Price              -1.00

 

Average: -1.00

 

Industry Strength (IS)

(score: +6 best, +1 worst)

 

Growth Potential                 +5.00

Profit Potential                     +4.00

Ease of Entry

into the market                    +1.00

Average: +3.33

  

 

 

 

 

 

 

 

 


http://www.travelsmart.net/ph/hotels/Legend_Hotel/logo(new).gif

 

 

 

 

 

Legend Villas under the competitive quadrant with a value x-axis of +2.33 and y-axis of -1.92 which implies staying close to the firm’s basic competencies and not taking excessive risks. Firms under quadrant, backward integration, market penetration, and market development, product development and joint venture are respective strategies.

A.   Grand Strategy Matrix (GSM)

 

 

 

 

 

 

 

 

 


http://www.travelsmart.net/ph/hotels/Legend_Hotel/logo(new).gif

 

 

                                                                                                               

 

Basis:  IFE and EFE Matrices

Analysis:

According to the graph above, Legend Villas falls under the competitive quadrant of the SPACE Matrix. It is located at the coordinates of +2.33 for the x-component and a y-component of -1.92. It shows that Legend Villas has a competitive position but in a slow growth industry.

The Grand Strategy Matrix of Fred David has become a popular tool for formulating alternative strategies.  Legend Villas, as previously stated to be under competitive quadrant of the Space Matrix, falls under quadrant IV. Legend Villas alternative strategies are market development and product development.

A.   Boston Consulting Group (BCG) Matrix

 

star.jpg

 

http://www.clipartheaven.com/clipart/education_&_schools/cartoons/question_mark.gif

 

Big event accommodation

(Industry team building)

(big convention)

 

 

 

 

 


http://wwwdelivery.superstock.com/WI/223/1538/PreviewComp/SuperStock_1538R-52523.jpghttp://www.hopnews.com/dog_clipart.jpg

 

 

 

Room accommodation

Overnight accommodation

 

 

 

 

 

 

 


STARS - Stars use large amounts of cash. Stars are leaders in the business; this is why they should also generate large amounts of cash. Accommodating such a big event will cause the legend villas to use a big amount of cash, but in return it will also give a big amount of cash.

CASH COWS - In cash cow profits and cash generation should be high. Because of the low growth, investments which are needed should be low. Room accommodation, this service of the Legend Villas serves as its foundation.

Outcomes of Techniques in Matching Stage

Alternative Strategies

IE

GRAND

SPACE

BCG

TOWS

TOTAL

 

Forward Integration

 

 

 

 

1

 

Backward Integration

 

 

 

2

 

Horizontal Integration

 

 

 

2

 

Market Penetration

5

 

Market Development

5

 

Product Development

5

 

Related Diversification

 

 

 

 

1

 

Unrelated Diversification

 

 

 

 

 

0

 

Retrenchment

 

 

 

 

1

Divestiture

 

 

 

 

1

Liquidation

 

 

 

 

 

0

 

 A.   Quantitative Strategic Planning Matrix (QSPM)

 

STRATEGIC ALTERNATIVES

 

PRODUCT

MARKET

MARKET

 

DEVELOPMENT

PENETRATION

DEVELOPMENT

KEY FACTORS

WEIGHT

AS

TAS

AS

TAS

AS

TAS

INTERNAL FACTORS

 

 

 

 

 

 

 

STRENGTHS

1.     Good location

0.10

3

0.30

4

0.40

4

0.40

2.     Competitive price

0.10

3

0.30

3

0.30

3

0.30

3.     Organized management and employee

0.10

1

0.10

1

0.10

1

0.10

4.     Quality information system

0.10

4

0.40

3

0.30

3

0.30

5.     Excellent employees and quality service

0.10

3

0.30

3

0.30

2

0.20

WEAKNESSES

1.      Brand awareness is low

0.10

3

0.30

4

0.40

3

0.30

2.     Bedroom facilities and furnishings are dated

0.10

4

0.40

2

0.20

2

0.20

3.     Lack marketing promotional activities

0.10

1

0.10

4

0.40

3

0.30

4.     Poor physical structure of the hotel

0.10

1

0.40

1

0.10

2

0.20

5.     Quality of the food in the hotel restaurant

0.10

4

0.40

2

0.20

2

0.20

SUB TOTAL

1

 

3.00

 

2.70

 

2.30

EXTERNAL FACTORS

 

 

 

 

 

 

 

Part 4 Legend Villas

Internal Factor Evaluation (IFE Matrix)

IFE Matrix is based on the evaluation of the company’s internal strength and weaknesses that they should emphasize on.

 

 

Key Internal Factors

Weight

Rating

Score

      STREGNTHS 

1.       Good Location

0.10

4

0.40

2.       Competitive Price

0.10

4

0.40

3.       Organized Management

0.10

3

0.30

4.       Quality Information System

0.10

3

0.30

5.       Excellent Employees and Quality Service

0.10

3

0.30

       WEAKNESS  

1.       Brand awareness is low

0.10

2

0.20

2.       Bedroom facilities and furnishing are dated

0.10

2

0.20

3.       Lack marketing promotional activities

0.10

3

0.30

4.       Poor physical structure of the hotel

0.10

2

0.20

5.       Quality of the food in the hotel restaurant

0.10

2

0.20

TOTAL

1.0

 

2.80

 

Basis: Questionnaire and Company Profile

Analysis:

 

The highest possible score for the IFE Matrix is 4.0 and the lowest possible score is 1.

Legend Villas scores 2.70 on the IFE Matrix. This indicates that the company is strong internally.

 

Key strategic issue of the company

Legend Villas is located in the developing commercial, retail and entertainment distinct of Mandaluyong City. In spite of strategic location of the hotel, tight competition in the market would affect the company.

Competitive price is also strength of the company, for it offers their products and services on an affordable but reasonable price. The quality information system is provided through their website which help their customers get information about their company and make online reservations.

Legend Villas has experienced employee and quality service but still need to improve on their food services, which does not only caters Filipino but also for tourist guests. Improvement of the physical structure and bedroom facilities are also needed for offering products and service to meet guests’ expectations. TO increase sales, the company needs to emphasize on marketing promotional activities such as attending exhibits and trade shows to increase brand awareness.

I.              Strategy Analysis

A.   TOWS Matrix

 

Strengths

1.     Good location

2.      Competitive price

3.     Organized management and employee

4.     Quality information system

5.     Excellent employees and quality service

Weaknesses

1.     Brand awareness is low

2.     Bedroom facilities and furnishings are dated

3.     Lack marketing promotional activities

4.     Poor physical structure of the hotel

5.     Quality of the food in the hotel restaurant

Opportunities

1.     Annual family income increase

2.     Tourism growth rate and development

3.      Demand for hotel accommodations

4.     Increase number of tourists coming to the Philippines

5.     Country’s strategic locations

SO

 

1.     Modifying and providing various product to improve competitiveness – product development (S1,01,02,05)

2.     regular training  hours for employee-product development  (S3,02,03)

3.     Improve information system for visitors of  company’s websites-market penetration (S4,S5,02)

WO

 

1.     Product development (W2,W4,W5,01,02,03,04,05)

2.     Market penetration (W1, W3,02,03,04,05)

3.     Product development (W, 01,03)

Threats

1.     Political instability

2.     Continuous decrease in occupancy rates of hotels in the Philippines

3.     Increase number of substitute services in the market

4.     Lack of tourism technology for the country

5.     Stiff competition

ST

 

1.     Improve information system-market penetration (S4,T4,T5)

2.      Give discount  during lean season period market –penetration (S2,S5,T1,T2)

 

WT

 

1.     Join exhibits and other related trade shows-market penetration (W1,W2,T2,T3,T5)

2.     Improve the physical appearance of hotel –product development (W2,W4,T3,T5)

3.     Improve the quality of food in the restaurant-product development (W5,T3,T5)

Part 3 Legend Villas

Analysis:

 

v  Industry Rivalry

At the center of the five forces model is industry competition arising from the rivalries among existing firms. Defining an industry can be described as drawing a line between the established competitors and the substitute products offered by competitors outside the industry.

Profile of Competitors

We have identified 2 major competitors of Legend Villas: Lancaster Hotel Manila, and New Horizon Hotel.

 

Lancaster Hotel Manila

Lancaster Hotel Manila, ranks as no. 1 recommended hotel in Manadaluyong, is a prestige condominium hotel that stands tall in its 42-story stature along Shaw Boulevard, in the heart of Mandaluyong City in Metro Manila; with stunning views of WackWack Golf & Country Club and within close proximity to world-class malls, exclusive schools and state of the art medical centers and hospitals. Its strategic location makes it accessible to the Ninoy Aquino International Airport, a few minutes ride to and from the business, commercial and shopping centers in key cities of Metro Manila; apart from it being at walking distance to OrtigasCenter. Transportation line includes Metro Rail Transit (MRT), and other public utility vehicles. 

Lancaster Hotel Suites is an epitome of luxury and conventional caring at no extra cost. It has opulent and outstanding ambiance for work or leisure. 

New Horizon Manila

Located in the bustling city of Mandaluyong, New Horizon Hotel is a business hotel that stands along the metro’s major thoroughfare. The hotel’s prime location gives you easy access, to the nation’s capital of Manila as well as country’s business triumvirate – Makati Central Business District, Ortigas Business Center and Fort Bonifacio Global City. The city of Mandaluyong is poised to be the next center of business and commerce in the country, it is home to a number of malls, restaurants and sports facilities to cater to your business and leisure requirements and these are all conveniently close to New Horizon Hotel. New Horizon Hotel Ortigas boasts of “bigger-than-usual” guest rooms that ensure optimum comfort and convenience. Where other hotels in Ortigas or Manila only offer 25-square meter standard rooms, New Horizon Hotel’s guest rooms start at a spacious 40 square meters with suites measuring up to 84. Apart from its amazing location, New Horizon Hotel also offers high-quality accommodations with personal service — a rarity in other Manila and Ortigas hotels.

v  Potential for New Entrants

 

The entry barriers to the hotel industry are relatively high. An expensive startup cost consisting of property, hotel, and staff are just the beginning. In order to compete against many of the corporate leaders, one would need extensive amounts of advertising and marketing campaigns. Rivalry that occurs within this industry is becoming more intense as the number of new entries increase. Some of the potential entrants in hotel industry are Miramar Hotel and New Solanie Hotel.

Entering the hotel industry is fairly difficult because of the high costs related to the purchase of facility, governmental barriers, and brand recognition. Many hotel companies are combining to become bigger players in the industry.

We have identified two new hotels in the country: Miramar Hotel and New Solanie Hotel.

Miramar Hotel is strategically located within minutes of Manila’s business establishments and cultural destinations. It is a stone’s throw away from the American Embassy, The Metropolitan Museum, MuseoPambata (Children’s Museum), Rizal Park, Manila Ocean Park and is a few minutes drive from the Walled City of Intramuros. Shopping at the Mall of Asia (the country’s largest), dining and shopping at Blue Wave night market, hunting for trinkets at New China Town, and haggling in Binondo are all quick rides fromMiramar. The domestic and international airports are just a mere 20 minutes from Miramar. 

 

New Solanie Hotel was first known as Casa SolanieApartelle. Its unique name was derived from its first proprietors, a proud Ilonggo couple, Sofronio and Melanie Javelosa, formerly known as one of the finalists of Ms. Spain. A year of renovation followed, resulting in a total facelift. New Solanie is a transformed classy hotel and duly accredited by the Department of Tourism as a 3-Star Hotel and a member of Philtoa. 

 

v  Bargaining Power of Suppliers

 

Suppliers can exert their bargaining power over hotel firms by threatening to raise prices, limit availability of resources, or reduce the quality of products delivered. It also affects the intensity of competition in the industry when there is a large number of a supplier. Both the suppliers and producers are in the best interest to help each other in pricing reasonably and improving quality. There are potential hotel suppliers which include kitchen supplies, bar supplies, banquet supplies, housekeeping supplies and concession and catering supplies. To meet higher satisfaction for their customers, hotel firms choose those products with higher quality from their certain suppliers.

 v  Bargaining Power of Buyers

 

Hotel industry is a service-oriented industry. It is important to know on how the hotel will offer quality products and services that will best suit the demand of their customers. The force of the buyer’s bargaining power is proportional to the ability of buyers to force down prices, bargain for higher-quality products or more services, and pit rival organizations against one another. Main customers are professionals, investors / businessmen, travelers/ tourists, delegates/ conventions as well as ordinary people who want to stay in a hotel for some reasons like having a place for a comfortable rest and a time for pampering and relaxation. It is in the buyer’s discretion on which brand to purchase. They have the power to decide which hotel to stay or not.

 

v  Substitute Products

 

Another force which acts upon an organization and is included in Porter’s five forces model is the threat of substitute products. Substitutes are the indirect competitors of the key players in the industry. Another contributing factor to the high rivalry within this industry is the fact that there are few differentiating factors between hotels. Within the different segments there factors such as price, quality, service, and reward attributes, but all of these are easily copied limiting a sustainable competitive advantage. The number of close substitutes are rising due do this increase in rivalry. For each segment there are several competing companies who offer the same attributes making differentiation difficult.  Substitute for hotels are motels, apartels and tourist inns.

 

Motel is a public lodging establishment for automobile travelers. Motels have traditionally differed from hotels in that the former have facilities for free parking on the premises, are seldom more than three stories high, and offer occupants direct access to rooms without having to pass through a lobby. Motels are also generallysmaller and farther away from urban areas, and they offer fewer services than hotels. The distinction between motels and hotels, however, is very difficult to make, especially in the case of the so-called motor hotels, which combine the characteristics of both types of establishment.

 

An apartel (also Apartment Hotel, ApartHotel, Apart Hotel, and Apart-Hotel) is a type of accommodation, described as “a serviced apartment complex that uses a hotel style booking system”. It is similar to renting an apartment, but with no fixed contracts and occupants can ‘check-out’ whenever they wish. Apartels are flexible types of accommodation; instead of the rigid format of a hotel room, an apartel complex usually offers a complete fully fitted apartment. These complexes are usually custom built, and similar to a hotel complex containing a varied amount of apartments. The length of stay in these establishment is varied with anywhere from a few days to months or even years. Prices tend to be cheaper than hotels. The people that stay in apartment hotels use them as a home away from home; therefore they are usually fitted with everything the average home would require.

 

Tourist inn is a lodging establishment catering to transients which does not meet the maximum requirement of an economy hotel.

 A.   Competitive Profile matrix

CRITICAL SUCCESS FACTORS

WEIGHT

Legend Villas

Lancaster Hotel Manila

New Horizon Hotel

 

 

 

Rating

Score

Rating

Score

Rating

Score

1. Advertising

0.15

2

0.25

4

0.60

4

0.60

2. Service/Product Quality

0.15

3

0.45

4

0.60

3

0.45

3. Price (rate) Competitiveness

0.20

4

0.80

3

0.60

3

0.60

4. Management

0.15

3

0.45

4

0.60

3

0.45

5. Financial Position

0.10

2

0.20

4

0.40

3

0.30

6. Customer Loyalty

0.10

3

0.30

3

0.30

3

0.30

7. Ambiance

0.10

2

0.20

1

0.30

3

0.30

8. Market Share

0.05

1

0.5

2

0.10

2

0.10

TOTAL

 

1.00

 

2.70

 

3.50

 

3.10

Basis: Company Profile, Industry Analysis and Questionnaire

 

Based on the CPM Analysis, Lancaster Hotel Manila got a total score of 3.50, and its major competitiveness are service quality, advertising, experienced management and strong financial position. Legend Villas hotel is weak in the competition, because of the lower advertising and market share. In order to increase the competitive position, Legend Villas should emphasize on advertisement to improve the brand awareness, and attract more potential customers and improve the geographic coverage to gain more market share.

 A.   External Factor Evaluation (EFE Matrix)

                 

EXTERNAL ANALYSIS

 

 

 

 

 

 

 

 

 

 

 

 

Basis: Industry Analysis

 

 External Factor Evaluation (EFE Matrix)

 

EFE Matrix is based on the evaluation of general environment analysis of the external factors affecting the business to get the potential opportunities and threats for Legend Villas.

 

Basis: Industry and Company Profile           

 

Analysis:

 

The highest possible score for EFE Matrix is 4.0 and the lowest possible score is 1.0.

The company scored a 3.30 on the EFE Matrix. This means that Legend Villas has adequately positioned itself to take advantage of opportunities which may arise as well as to be able to handle and cope with threats.

Key strategic issue of the company

As an effect of increased annual family income, people tend to engage with travel and therefore, there is an increase in demand for hotel accommodations. The tourism growth rate also has a good impact for the industry.  Moreover, businesses generally prefer to hold seminars, conventions and other business meetings despite the popularity of telephones, faxes and e-mail, that’s why demand for hotel services is expected to increase. Country’s strategic location also encourages foreign tourists to travel to the Philippines.

Political instability which includes issues on hostage takings, scandals and other immoral acts discourages investors and tourists, the lifeblood of the hotel industry. Another threat is the difficult economic situations that raise financing costs that limit technological improvements for hoteliers. Increase number of substitute services in the market such as apartel, motel, and tourist inn imposes a threat that would affect to the industry especially a decrease in occupancy rates because of the lower rate they offer.

Company need to have strategic concern for those threats to overcome and survive in the industry such as increase quality of tourism technology and providing varieties on products and services with reasonable price to address to the competition.

 I.              Internal Audit

A.   Company profile

 

The Legend Villas, a hotel that is a perfect home base for those who want to do their business combined with leisure by spending time with family, friends or by doing some shopping, is in the developing commercial, retail and entertainment district of Mandaluyong, and is within walking distance of 2 large shopping centres. About 10 minutes drive from the Legend Villas Hotel is the Ortigas business area where the SM Mega Mall and Robinson’s Galleria are sited. Rooms are elegant and homely and fully equipped to ensure a pleasant stay.

It is 100% Filipino owned and one of the hotel chains of Legend Hotels Corporation. It is an elegant hotel with amenities and services well beyond its old world charm. Legend Hotels International Corporation is a chain of super value hotels that provides above standard accommodations to a wide range of clientele - company executives, families, OFW’s, balikbayans provincial business travelers, students, local and foreign tourists.

Fig.1 Map


  It is strategically located in Mandaluyong, a city situated right in the heart of Metro Manila, it is best known as the “City of Malls” and the new base of progress and development - the area that is envisioned to become the ideal business district of the 21st century. The Legend Hotel is a perfect business and leisure haven. 

Within the vicinity are the Ortigas business and commercial district and the country’s largest and most modern Shopping Malls which house fine restaurants, sports facilities, and top-of-the-line specialty shops and many more. Three of the country’s Golf Courses and the headquarters of the Asian Development Bank (ADB) are only a few minutes-drive. The famed Greenhills section is on the opposite side while Makati’s business and commercial district stretches just a little towards the south. Ninoy Aquino International Airport (NAIA) is six (6) kilometers.

 

A “villa in a city’, The Legend Hotel is designed to provide guests a total refreshing ambiance. Enjoy 5-star hotel services and amenities at standard (3 stars) hotel prices. Our gracious, attentive and adept staff makes sure you get the highest level of personalized service.

 

The Legend Hotel boasts of 117 lavish guestrooms and elegant suites. These are expansively spread out in seven clusters in a unique resort-like lay-out surrounded by well-manicured gardens. The rolling terrain affords hotel guests ample area for a leisurely walk or jog. The ambiance is tropical, unhurried and casually elegant.

 

Affiliations

Legend Hotels International Corporation is affiliated with the following groups:
Hotel and Restaurant Association of the Philippines (HRAP)

v  Hotel Sales and Marketing Association (HSMAI)

v  Hotel Sales and Marketing Association (HSMAI)

v  Hotel and Restaurant Cost Controller Association of the Philippines (HRCCAP)

v  Philippine Travel Agencies Association (PTAA)

v  Philippine Tour Operators Association (PHILTOA)

v  Palawan Tourism Council

v  Association of Credit Executives in the Tourism Industry (ASCETI)

v  Philippine Marketing Association (PMA)

v  Mandaluyong Chamber of Commerce and Industry(MCCI)

v  Purchasing and Materials Management Association of the Philippines (PMMAP)

 

Also accredited with:

 

v  DOT (Department of Tourism)

v  Philippine Convention & Visitors Corporation

 

 

A.   Mission and Vision Statement

 

Mission Statement

 

“We are God’s host nurturing the lives of our guests..”

 

Vision Statement  

In his search for inner peace, he found his calling. In surrendering, he discerned a clear vision of the role his hotels and their employees were to take. Legend Hotels International is not simply a business but a calling to serve and touch the lives of its guests. To be a chain of super value hotels that provides the best of the Filipino in service that is anchored on God-centered values. That is the essence of LHI’s values.

 

For Wyden King, owner and chair of Legend Hotels International Corporation, this vision is the beacon that guides him and his people in running the business - from the choice of amenities and facilities to setting up the systems and processes. More importantly, this vision is the wellspring of wisdom in nurturing his people toward the pursuit of excellence in service.


Always, the customers take center stage. Their wellness, top of mind.and constantly, the customers get the longer end of the deal - more than what they bargain for. Here in LHI, the customer’s satisfaction takes precedence over the organization’s comfort. Its energies, time and focus are entered on the consumer’s well-being.

In this age of commercialism, where values are sometimes compromised for the sake of expediency, Wyden King believes with a passion that business founded on God’s principles can flourish.

Corporate Core Values

Love and Service.
What these values translate to is quite simple. Love compels the achievement of the highest standards of work and service. When the heart is right, the work will be right.

Service is the product of the love and passion one brings to one’s work… that drive to go the extra mile to delight a hotel guest. This is the passion of LHI’s service. This is what sets them apart from the other players in the hotel industry.

A.   Products and Services Offered

 

v  Accommodations

Superior Room

Ideal for the busy businessman and couples.

Room Features :  

  Two (2) double-sized    beds

  Bedside control pane

  Telephone

  Cable Television

Villa Suite

Exceptional Bi-Level, extended stay apartments allow the utmost in luxury in a very homey setting, complete with kitchen facilities.

Suite Features :

  Two Queen-sized beds

  Living and Dining Area

  Kitchenette

  Electric Pot

  Mini Bar   

  Cable Television on ground and upper floors

  Two (2) Telephone units

  Bedside control panel

  Executive desk

  Two (2) Toilets and Bath

  FullyAirconditioned

 

Team Suite

Great for seminar participants, business associates, student groups or barkada, our bi-level Team Suites can comfortably fit a group of six. 

Suite Features :

  Six (6) single beds with individual closets

  Living and Dining Area

  Kitchenette

  Electric Pot

  Mini Bar

  Cable Television on ground and upper floors

  Two (2) Telephone units

  Bedside control panel

  Two (2) Toilets and Bath

  FullyAirconditioned

  Two (2) Working Tables

v  Services and Facilities

 

Lola Maria Coffee Shop 

 

With varied twists and flavors of our homegrown cooking that will keep you coming back for more. Each dish is a testimony of just how much we value you as our guests.

Savor our variety of a la carte and buffet offerings…from festive to regional Filipino, home-style cooked meals by our Filipino Chefs. The best of Filipino.

Swimming Pool

Take a dip in our outdoor pool. Or better yet, revitalize your senses in poolside Jacuzzi while enjoying a cool drink.

Banquet Socials

The Banahaw and Raja Ballrooms are the ideal settings for wedding ceremonies and receptions, debutante balls, anniversaries and all of life’s occasions in the style that’s close to your heart. Simply choose the date and we’ll take care of the rest.

 

Business Center

Located by the Front Office, the Business Center provides full secretarial services along with mailing, fax services and parcel delivery. Guests can also enjoy high speed WiFi Internet connection in guest rooms, function rooms and in almost all public areas of the hotel.

Fitness Gym

Stay healthy and fit without the hassle of the going out of the hotel. Fitness gym has the basic equipment that will help you sweat it out.

v  Function Room

 

Fil-Hispanic-inspired Function Rooms


Welcome to the Del Pilar, Luna and Jacinto - function rooms designed with Old Manila as inspiration. We have 12 function rooms and two ballrooms that can be re-arranged to complement perfectly your size requirement. Fil-Hispanic or Mindanao-influenced in architecture and design, our rooms lend ease and comfort to business participants and party guests.

 

Mindanao-inspired function rooms


The Raja, Kudyapi, Kulintang and Kubing - Mindanao-inspired function rooms made for the success of your business.

 

Outdoor Socials 

If you want to party outdoor, try our Lanai or Datu Function Room. Here you get a perfect blend of exotic ambience set against a lush and refreshing backdrop.

Patio
Located right beside the pool, it is undeniably the best located for a more casual business meeting or social event.

A.   Internal Factor Evaluation (IFE) Matrix

 

 

Text Box: Strengths 1.	Good location 2.	 Competitive price  3.	Organized management and employee  4.	Quality information system 5.	Excellent employees and quality serviceText Box: Weaknesses 1.	Brand awareness is low 2.	Bedroom facilities and furnishings are dated 3.	Lack marketing promotional activities 4.	Poor physical structure of the hotel  5.	Quality of the food in the hotel restaurant

 

 

 

 

 

 

 

 

 

 

 

 

 


Basis: Interview and Questionnaire

Part 2!

 

Labor force

The national economy of the Philippines is the 48th largest in the world, with an estimated 2009 gross domestic product (nominal) of $161 billion. 

A newly industrialized country, the Philippine economy has been transitioning from one based on agriculture to one based more on services and manufacturing. Of the country’s total labor force of around 38.1 million, the agricultural sector employs close to 32% but contributes to only about 13.8% of GDP. The industrial sector employs around 13.7% of the workforce and accounts for 30% of GDP. Meanwhile the 46.5% of workers involved in the services sector are responsible for 56.2% of GDP.

The unemployment rate as of July 2009 stands at around 7.6% and due to the global economic slowdown inflation as of September 2009 reads 0.70%. Gross international reserves as of February 2010 are $45.713 billion. In 2004, public debt as a percentage of GDP was estimated to be 74.2%; in 2008, 56.9%. Gross external debt has risen to $66.27 billion. The country is a net importer.

 

Social Context

 

Despite the popularity of telephones, faxes, and e-mail, a face-to face meeting is still the foundation of business relationships. Moreover, businesses generally prefer to hold seminars, workshops, conventions, and training sessions outside their respective companies. Thus, demand for hotel services is expected to increase.

 

 

A.2. Technological Environment

Technology has been at the forefront of practically every industry, helping improve businesses and making processes more efficient. The hotel industry is no exception to this, as it has been quite adaptive of new technology in order to bring the business to greater heights.

One of the biggest factors that have to do with the technological evolution of hotel services is, without a doubt, the Internet. With the widespread use of the Internet as a convenient tool for people to gain easy access to products and services, even the hotel industry has used the World Wide Web to improve the business.

The advantages of the Internet are tremendous. Online booking sites have been quite prolific. All the data is readily available-info on room rates, special promos, locations, services can be obtained right away with an Internet connection.

Hotels and their marketing arms have also turned extensively to social networking-particularly with the tremendous popularity and usefulness of Facebook. This allows hotels to reach out to previous clients as well as potential guests by bringing the information straight to their computers or mobile devices. Many hotels have capitalized on this marketing thrust, and pretty soon almost all hotels will likely follow suit.

Taking advantage of the internet technology will be helpful. A website will help customer to know more about the company and make online reservation.  Legend Villas has its own website which is www.legendvillas.com.ph. Because of the increasing number of computer users, having an own website will provide a great advantage for the hotel to be known worldwide and increase their brand awareness.

 

 Moreover, regular participation in local and overseas tradeshows and hotel and restaurant shows provide hotel operators with opportunities to update themselves on the latest equipment and IT systems trend in the industry.

A.3. Economic Environment

 

A huge increase in the occupancy rate among the first class, standard and economy hotels in Metro Manila was also noted by DoT. Based on the reports submitted by hotels, the growth in occupancy rates could be attributed to the increase in the arrivals of foreign tourists and local guests, bigger group bookings, live-in seminars and conventions held in hotels but this growth rate is threatened by the increasing number of substitutes in the market.

Among the standard class hotels, the highest growth in the occupancy rate was attained by Millennium Plaza Hotel with 86.01 percent. On the other hand, the Kabayan Hotel registered the highest occupancy rate of 89.27 percent due to the influx of OFW and local tourists. Moreover, Aloha and Hotel Las Palmas recorded substantial levels at 89.00 percent and 88.02 percent, respectively.

Competitive pricing, and its impact on revenue, is a mainstay of marketing in the highly competitive hotel industry. The emergence of the Internet as a sales tool is changing the rules when it comes to pricing, and in the process, elevating the strategic importance of responsive rate management.

Online distribution channels now dominate the landscape for web booking companies, online travel agencies and lodging properties of all types, giving consumers easier access to rate-related market information.

With globalization, and the proliferation of product lines and distribution channels, the hotel industry is increasingly volatile, fragmented and dynamic. Through the use of Internet, the number of potential vendors, distribution channels and product alternatives has mushroomed.

GROSS NATIONAL PRODUCT AND GROSS DOMESTIC PRODUCT
BY INDUSTRIAL ORIGIN: 
2nd Quarter 2009 and 2nd Quarter 2010 
At Current Prices

INDUSTRY/INDUSTRY GROUP 

Q2 2009

Q2 2010

Growth Rate
(%)

AGRI.FISHERY,FORESTRY

245,244

248,232

1.2

INDUSTRY SECTOR

561,749

674,986

20.2

SERVICE SECTOR

1,052,888

1,166,206

10.8

 

 

GROSS DOMESTIC PRODUCT

1,859,880

2,089,424

12.3

Net factor income
from the rest of the world

290,521

325,853

 

GROSS NATIONAL PRODUCT

2,150,401

2,415,277

12.3

Source: National Statistics Coordination Board (NSCB)

For the second consecutive quarter, the Industry sector strongly supported by Services was the main driver of economic growth. GNP and GDP grew by 12.3 %.  Manufacturing sustained its first quarter production in response to the improved domestic and external demand and was shored up by Trade, Government Services and Private Services, particularly recreational and business services.

 

Family Income

From 2006 to 2009, average annual family income in all deciles increased. In 2009, this average ranged from P41 thousand for the first income decile (lowest ten percent) to P728 thousand for the tenth income decile (highest ten percent). The average annual family income of families in the tenth decile was about 18 times that of those in the first decile in 2009 while 19 times in 2006 (Table 2b). This shows that

 

income gap between families in the tenth and the first decile narrowed. Income decile is the distribution of families into ten groups in terms of annual family income. The first decile has the lowest income and tenth decile has the highest income.

 

Tourists Arrivals

Increase international tourist arrivals with the following targets:

2004 - 2,300,000 
2005 - 2,668,000 
2006 - 3,068,200 
2007 - 3,528,430 
2008 - 4,022,410 
2009 - 4,505,099 
2010 - 5,000,660

Visitor arrivals

Source: DOT

http://www.nscb.gov.ph/stats/statdev/2009/tourism/arrivals.jpg

 

 

 

 

 

 

 

Source: National Statistics Coordination Board (NSCB)

 

 

 

Address

Rate

Legend Villas

 

 

60 Pioneer Corner Madison Streets, Mandaluyong, 1550Philippines

$44 - $68

Avg. price/night

Lancaster Suites Hotel

 

 

622 Shaw Boulevard, Mandaluyong, Luzon 1550,

$56 - $116

Avg. price/night*

·          

New Horizon Hotel

 

 

778 Boni Avenue Cor.Edsa
Lungsod ng Mandaluyong 1550

$65 - $90

Avg. price/night*

 

Among the three competing hotels, Legend Villas has the lowest price rate, of $44-$68 but it is not parallel to the quality of the products and services offered. Legend Villas offers a quality accommodation, yet, on an affordable price. Lancaster Suites Hotel, being a no.1 hotel in Mandaluyong, offers a higher price rate and also a high quality of service. New Horizon Hotel is at the middle with a price rate that ranges from $65-$90 per night.

A.4 Political, Governmental, & Legal Environment

The political environment is where the rules and regulations are being made, approved and implemented. 

      President Benigno S. Aquino III has assured players of the local carriers that opening the country’s sky to international aviation industry will definitely provide opportunities for them that will redound to further boost the country’s tourism industry and the economy. The President said adding that once the open sky policy is implemented, local carriers would benefit from it because more visitors from the neighboring countries will be coming in. We expect more international airlines to enter the market from neighboring countries. Having a good tourism industry can also lead to a good hospitality industry. Tourists coming in the country who want to stay in hotels will give Legend Villas hotel an opportunity to have more customers.

      According to the hotel code of the republic of the Philippines, this are the rules and regulations governing the accreditation of hotels, tourist inns, appartels, resorts, pension house and other accommodation establishments in pursuant to the provisions of Executive Order No. 120 in relation to Republic Act no.7160 otherwise known as The Local Government Code of 1991 on the devolution of DOT’s regulatory function over tourist establishments, the accreditation of accommodation establishments are hereby promulgated.

Section 1.Definition. For purposes of these Rules, the following shall mean:  Hotel - a building, edifice or premises or a completely independent part thereof, which is use for the regular reception, accommodation or lodging of travellers and tourists and the provision of services incidental thereto for a fee.

Section 2.Classification of hotels. For purposes of accreditation, hotels are hereby classified into the following categories namely: Deluxe class, First class, Standard class, Economy class.

Section 3. Requirements for a standard class hotel. The following are the minimum requirements for the establishment, operation and maintenance of a standard class hotel: the locality and environs including approaches shall be suitable for a very good hotel. the architectural features and general construction of the building shall be of very good standard. There shall be reception/information counter providing a 24-hour service and attended by qualified and experienced staff.There shall be a well-appointed lounge the size of which shall be commensurate with the size of the hotel.There shall be a duly licensed and authorized foreign exchange counter.Mailing facilities including sale of stamps and envelopes shall be available in the premises. Housekeeping shall be of good standard.There shall be at least one dining room facility which is well-equipped and well-maintained and serving good quality cuisine and providing entertainment. Adequate security on a 24-hour basis shall be provided in all entrances and exits of the hotel premises. These are some laws for a 3 star hotel that Legend Villas are following. 

Moreover, the Philippines is situated in the center of Asia, home of the fastest growing economies in the world, which gives opportunities for hoteliers because of the strategic location.

            Also, strong support of industry associations and trade unions such as Hotel and Restaurant Association of the Philippines (HRAP) and National Union of Workers in the Hotel Restaurant & Allied Industries (NWHUI) enable the hotel industry, among other things, to undertake programs and projects that upgrade and professionalize the sector and to influence government regulatory policies/laws/rules affecting the industry.

 

A.   Porter’s Framework

 Porter’s competitive forces model includes the five forces that need to be analyzed. In order to become successful within this industry one must examine several outlying forces. These forces include the intensity of rivalry form traditional competitors, threat of substitute products and services and bargaining power of suppliers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis: Industry Analysis

To further explain and analyze the Porter’s framework, we can see that an arrow is pointing upward form the competitors to the new entrants. This explains that the competitors or existing hotels have an edge over new entrants because they have already established their name and captured the market.

 

The arrow that points upward from the substitutes and vice versa means that no one is dominant over the other because the choice whether to stay in a hotel or on the substitute product relies on the decision of customers.

 

 The arrow that points from the supplier to the competition and vice versa means that both are dependent on each other because quality products from suppliers are needed by the hotels for them to survive and compete in the industry.

 

Lastly, the arrow that points from the consumer or buyers to the competition means that buyers also influence the hotel industry for they have the power to choose on what hotel to stay in.

 

 

   

 

                   

Legend Villas

Acknowledgement

We would like to give our most sincere appreciation and thanksgiving to those who help us in making this study possible, complete, and excellent.

To our Almighty God, for giving us the opportunity to experience this kind of challenges that develop our skills and ability.

To our families, for giving us unconditional love and support especially in terms of financial.

To Professor Sofronio “Toti” Dulay, for sharing us moral support and unceasing guidance all throughout the making of this research. As well as motivating us through her teachings and made us a responsible students.

To the Securities and Exchange Commission Mandaluyong branch, for giving us Legend Villas’ company and financial information to make our research possible.

To the author of the websites that we used for gathering data, for giving the most essential information for this study.

The researchers are very glad for they cannot do this research using their own knowledge. Because of the presence of your help, this significant study will serve as a contribution to the field of study. Thank you.

Table of Contents

 

I. EXECUTIVE SUMMARY………………………………………………………………….….3

II. EXTERNAL AUDIT

A.   Industry Analysis………………………………………………………………….…5

A.1 Social, Cultural & Demographic Forces

A.2 Technological Forces

A.3 Economic Forces

A.4 Political, Legal, & Governmental Forces

B.   Porter’s Framework………………………………………………………………..13

C.   Competitive Profile Matrix (CPM)………………………………………………..17

CPM Analysis

D.   External Factor Evaluation (EFE) Matrix………………………………………………………………………………..18

EFE Analysis

III. INTERNAL AUDIT

A.   Company Profile……………………………………………………………………19

B.   Mission and Vision Statement……………………………………………………21

C.   Services Offered……………………………………………………………………22

D.   Internal Factor Evaluation (IFE) Matrix………………………………………….24

IFE Analysis

IV. OBJECTIVES………………………………………………………………………………25

V. STRATEGY ANALYSIS

A.   TOWS Matrix………………………………………………………………..……..26

                        Recommended Strategies

B.   Internal- External (IE) Matrix………………………………………………………31

IE Analysis

C.   Strategic Position Action Evaluation (SPACE) Matrix…………………………32

SPACE Analysis

D.   Grand Strategy Matrix (GSM)…………………………………………………….34

GSM Analysis

E.   Boston Consulting Group (BCG) Matrix…………………………………………36

BCG Analysis

F.    Quantitative Strategic Planning Matrix (QSPM)………………………………..38

QSPM Analysis

VI. STRATEGY RECOMMENDATION

A.   Strategic Objectives……………………………………………………………….40

B.   Financial Objectives……………………………………………………………….40

C.   Recommended Business Strategy………………………………………………40

VII. STRATEGY IMPLEMENTATION

A.   External Action Plan…………………………………………………………….…45

B.   Internal Action Plan…………………………………………………………….….46

C.   Controls……………………………………………………………………………..47

APPENDIX

I.              Executive Summary

 

One of the fastest growing economies is the hotel industry. Hotel today not only cater to the basic needs of the guest like food and shelter but provide much more than that, like personalized services. Hotels today are “Home away from home.”

 

The Legend Villas Hotel, Manila is in the developing commercial, retail and entertainment district of Mandaluyong, and is within walking distance of 2 large shopping centres. Rooms are elegant and homely and fully equipped to ensure a pleasant stay. It is 100% Filipino owned and one of the hotel chains of Legend Hotels Corporation. Legend Hotels International Corporation is a chain of super value hotels that provides above standard accommodations to a wide range of clientele - company executives, families, OFW’s, balikbayans provincial business travelers, students, local and foreign tourists.

The company considered external factors that may affect them, such as demographic, social, technological, economic and political forces. Internal strengths and weaknesses are also analyzed to make further improvements for the hotel. The intensity of rivalry among its competing firms is analyzed, and also, the effect of new entrants, substitutes, and bargaining power of suppliers and buyers are included.

 

Based on the CPM Analysis, Legend Villas major competitors are Lancaster Hotel Manila and New Horizon Hotel with total scores of 3.50 and 3.10 respectively. In order to increase the competitive position, Legend Villas should emphasize on advertisement to improve the brand awareness, and attract more potential customers and improve the geographic coverage to gain more market share.

The company scored a 3.30 on the EFE Matrix. This means that Legend Villas has adequately positioned itself to take advantage of opportunities which may arise as well as to be able to handle and cope with threats. Legend Villas scores 2.80 on the IFE Matrix. This translated into the fact that the company is strong internally.

Based on the SWOT analysis, the company uses the following strategies: Market Penetration, Market Development, and Product development. For market penetration, the company seeks to increase their market through intensifying their marketing strategies and programs as wells as putting advertisements in the internet. For market development, the company branch out to different areas to increase their brand awareness and market share. In product development, the company seeks to increase sales by improving their services through hiring competitive employees and products through offering various menus and improving the structure of the hotel and bedroom facilities.

The company falls under cell II, with the combined effect of the external and internal analysis falls in cell II for the IFE total Weighted Score of 2.80 and cell I for the EFE Total Weighted Score of 3.30. The company falls into cell II which is described as grow and build from Fred DAVID’S Criteria. Intensive (market penetration, market development, and product development) or integrative (backward integration, forward integration and horizontal integration) strategies can be most appropriate for this dimension.

Legend Villas under the competitive quadrant with a value x-axis of +2.33 and y-axis of -1.92 which implies staying close to the firm’s basic competencies and not taking excessive risks. Firms under quadrant, backward integration, market penetration, and market development, product development and joint venture are respective strategies

 

According to the Grand Strategy matrix, Legend Villas falls under the competitive quadrant of the SPACE Matrix. It is located at the coordinates of +2.67 for the x-component and a y-component of -1.92. It shows that Legend Villas has a competitive position but in a slow growth industry.

Based on the QSPM matrix, the total attractiveness score of market penetration, product development and market development is 6.20, 5.80, and 5.50 respectively. The highest TAS is market penetration that would mean it is the most attractive strategy among market development and product development

A.   Industry Analysis

                       

A.1. Social, Cultural, & Demographic Environment

 

Geographical structure and Population

Philippines is an archipelago comprising 7,107 islands, the Philippines is categorized broadly into three main geographical divisions: Luzon, Visayas, and Mindanao. Its capital city is Manila. With an estimated population of about 92 million people, the Philippines is the world’s 12th most populous country. An additional 11 million Filipinos live overseas.

The first official census in the Philippines was carried out in 1877 and recorded a population of 5,567,685.By 2009, the Philippines has become the world’s 12th most populous nation, with a population of over 92 million. The population growth rate between 1995 to 2000 of 3.21% decreased to an estimated 1.93% for the 2008 to 2010 period, but remains a contentious issue.

 

 

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