Strategic Management - Target Market Segments - Assessment Answer


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Question: Strategic Management

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Strategic Management Assignment

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strategic management

strategic management

strategic Management

strategic management

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IntroductionHospitality implies offering the service to others and demonstrating the quality and consistent excellence. Most of all, hospitality is considered as a place, in which people can be treated as individuals and they can even try to extend their style and their personality (Akbaba 2006). The purpose of this report is to analyse the strategic service vision of the company. It will also explain the service concept of the hotel industry and even explore the future and present implications. It will include Heskett’s strategic service vision model to discuss the target market segment of Hotel Stay in Australia.

This report will analyse the company, its services as well as servicescape in section 2. In the next section, target market segment of Hotel Stay with be analysed with the help of Heskett’s strategic service vision model. It will even discuss the customers that will be targeted by the hotel. In section 4, current and future implications of the company will be debated. It will also include three issues faced by the hotel, along with factors that had future impacts and the strategies for mitigating the problem. In section 5 that is based on service concept will explain about service design, and how one can bridge the needs of customers that are determined by target market, and even perceived by clients and stakeholders. The last section is the conclusion that will discuss the all the important points discussed in the report and come up with the conclusion.

Organization Overview

Hotel stay is a kind of hotel which offer a fine dine service to the customer from the various parts of Australia as well as international tourist. The hotel is fully renovated which offers luxurious accommodation with quality food and service to all level of customers. The hotel offers the world-class facilities to their customers and ensures that the clients have comfortable stay over there. Hotel Stay makes use of the services related to outsourcing, as operating strategy can support in saving the operating cost and enhance the better output as well as hotel efficiency. For instance, Hotel Stay located in Sydney is available for all 24 hours, and offer the facility of fast food outlets like CIMB ATM, Subway, and money changing service along with various another part of outsourcing. Through implementing the effective operating strategy, Hotel Stay can help in saving the huge amount of cost and can support Hotel Stay in enhancing the better productivity and production efficiency and effectively of the hotel.

Hotel Stay offers better service that could meet the needs of the customers. For example, Hotel Stay provides clean environment and housekeeping services. Moreover, Hotel Stay consider the safety and include 24 hours application of security system. Moreover, the hotel had also tried to introduce the insurance of Hotel Stay in Australia, and in the global market. Hotel Stay holds the modern décor as well as advanced technology. The hotel also recommends for expanding the visitor parking, give training to employees, make use of promotional channels, provides guest with a diverse menu, enhance the decor and lightening, and try to enlarge the room size as well as improve the chamber’s service cleaning.

Target market segments

Target market is one of the most important components of strategic service vision (Heskett, 1986: p,7).There is a requirement for the management tools that could support the business in becoming competitive, represent and develop their strategies, and even analyse the appropriate strategic level (Clark, Hartline and Jones 2009). The Heskett’s strategic service vision is hugely adopted in several literature, but the same could be considered as a disadvantage. According to family size, age, sex, location and income are the main areas to segments the demographic dimensions of hotel stay. Psychographic dimensions can also use in order to segmentation of target market. The aim of this research critically addresses the criticism by making use of Heskett model, as it is helpful in creating the managerial framework.

Hotel stay offers a different packages to the family, adults and different age group. There we can found a various level of services according to the different age group like adults 40 years to 60, children between 10-11 years and old above 60 years. The different groups of people came from various parts of the Sydney as well as from different countries because of its extra ordinary facilities and services. Most of the tourist are rich and educated according to the data. Hotel stay target the rich customers and educated like frequent travellers, affluent, achievement oriented who have the high knowledge of internet so that they can encourage others to travel to hotel stay. Hotel Stay has tried to implement the innovative and creative concept that can be used in Australia, and the same can differ as per the competition, so no other hotel had claimed in the similar market segment.

Selecting the objective for the organization relies on upon variables, for example, the section measure, its needs and the extent to which they are being met or not, and the capacities of the establishment to address those issues (Heskett, 1986:p.11).

Current and future implications

It is expected that clients will be more demanding in future and to engage with the hotel; it is important for hotels to offer world class facilities to them. Hotels are expected to capture the information and need to be fast in targeting the guest for the purpose of personalizing the experience of customers (Claycomb 2001).

Tourism and hospitality business is also severely impacted by the high rate of taxation in this industry. Customers these days have to pay heavy tax while booking the room, paying for airline ticket, renting cars and services. This type of tax, most of the time discourage people from traveling to various tourist destinations (The Tahiti Traveller, 2015)). At few places, taxes are so high that a middle class person can’t afford to visit it. Only the families who are highly affluent can easily afford the high cost of living at certain places in Australia, and the one from not wealthy background cannot visit such places. In result to that, many hotels and tourist companies failed in attaining the main purpose of attracting the tourist or guest.

Another most significant current issue is related to money matter. As we all know that Sydney is one of the most expensive city for people who are young to take a risk while establishing the new company or organization. When starting a business has the risk profile of a Game of Thrones character, how we will find the entrepreneurs to start up the start-ups, asks Dominic Knight (Dom knight, 2016). It is very hard to manage the company effectively by the young people in result they fail to target the customer in their organization. Hotel stay is also located in the heart of Sydney which is very expensive place so everyone can’t afford to stay here in the hotel stay.

Health issues is also one of the most vital part which directly affect the organization and tourist destination. Legionaries’ disease, a life threatening form of pneumonia caused by the bacteria legionella, is not contagious (Dye 2016). This is a kind of disease which is affecting the numbers of old people and those with chronic lung diseases and mostly smokers. This kind of issue is directly hampering in generating the numbers of tourist. Because of panic tourist hold their intention to travel in the affected destination due to disease outbreak which directly affect the hotel industry like hotel stay.

The company tries to set the future-oriented objectives to predict as well as assess the organization's future trend and to devise the way for ensuring to meet the set goals. It is quite challenging to predict the trends of the market due to the happening unexpected situations (Claycomb 2001). For instance, a natural disaster might create various market trends that could be a key drawback for the model

The future implication of hotel stay can related with the globalization of market. It is expected that with globalization, everything will be available at any place; therefore uniqueness of certain place might not be considered as unique, as people can get the same thing from anywhere like competitors will be grow, similar services, foods and quality will be available all over the organization which will create a major problems in generating the tourist in hotel stay. Company have to deals with the changes in market as the result of globalization may be challenging (von Bergner & Lohmann, 2014; p.180). At the same time the overall expenditure and cost of operation may increase higher in comparison to income which will result negatively for the organization so company may run in loss. If the operation cost is high company can’t generate a lot of income which will directly affect in profitability of company.

There are few other issues that might occur in near future like the issue related with security and terrorist attack, where most of time tourist is targeted. In past many terrorist attacks had been taken place in Australia that’s the reason, tourist afraid in visiting such places. Terrorism is impacting many countries of the world and this had hampered the tourism and hospitality business of such countries. This might even reduce the tourist visit nearby future.

Hotel Stay has adopted the overall cost leadership strategy. This program mainly stresses over the little cost producers existing in the industry (Mullins 2001). Establishing the price low might create influence on the way customers think, where reduced cost might leave the negative perception on customers about quality and company brand image (Claycomb 2001).

Service Concept

Hotel Stay way of providing the service is unique, as compared to other competitors, and the hotel even operates their services within limited service concept, in which they provide the double and single room for the customers. The hotel has five-star beds that are given in every room and even feature the high-quality mattress, along with other essential needs like bed sheets, pillows, and pillowcase. Every room includes the private bathrooms along with the minimal rate of the room and heated power showers. Hotel Stay even has the central, strategic and convenient location that is quite near to the shopping areas, food and beverage, ATM services and entertainment outlets. Moreover, Hotel Stay also provide the 24 hours facility of security that secure and safeguard the hotel surroundings. It is very important for all kinds of company to match customers’ needs with the strategic vision to avoid the complaints and problem of poorly comprehend services (Ponsignon, Smart & Maull, 2011: p.326).

Hotel Stay is categorized as the service qualifier as it offers the better service that could meet the needs of the customers For example, Hotel Stay had claimed about the clean environment, whereby they offer the housekeeping services to ensure the safety and cleanliness of consumers in the surrounding environment. Moreover, Hotel Stay consider the safety, and include 24 hours application of security system, that could be used as the electronic key card for the purpose of accessing in room, round the clock duty of the reception employees, services of CCTV cameras, along with no accessing in the principal lobby without making use of key card pass in midnight .

In case Hotel Stay gets fails in delivering the requirements of the customers, it might come under the category of service losers. Service loser happens when the hotel fails in fulfilling the expectations of customers (Hall, Timothy and Duval 2003). Hotel Stay need to implement the new strategy for marketing, as the hotel can give tough competition to the competitors that could threat for them. According to the customers review it is rated as five star among the primary and secondary competitors within the market of Sydney.


The main purpose of this report is to provide the overview strategic service vision of hotel stay and to identify the service concept, its target market segments and future and current implications. Hotel stay is offering the luxurious accommodation in Sydney along with high quality service for all level of guest from all over the world. Overall, the Hotel Stay is adopting the efforts for the purpose of reaching the audiences through implementing the hotel concept of no-frills. As the hotel is new on the market, it should try to apply the new ideas that could easily expose their brand name and can easily win the perception of local customers and also adopt the name. It should also focus on the services they offered to the customers.

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