Business Essays – Sunway Customer Employee
Sunway Customer Employee
3.0 Industry Background
Sunway Corporation has changed to a more customer and employee based industry, fulfilling both customers’ needs and employees’ desire, maximizing the strengths and opportunities, knowing that employee is part of the important resources of the industry, by integrating customer relationship management and supply chain management.
The following are awards achieved by Sunway resort hotels within the past few years’ relevant to the SBU:
- Best Employers in Malaysia – 2001, In Partnership with Hewitt Associates, The Asian Wall Street Journal & Far Eastern Economic Review
- FIABCI Prix d’ Excellence 2001, 1st runner up in the leisure category
- FIABCI (Malaysia) 2001 – Winner of the Best Hotel Development
- Tourism Malaysia Award 2001 – Outstanding Contribution to Tourism – Sunway Lagoon Resort
- Investors in People Worldwide Standard Certification (IIP Worldwide) 2002 – By Malaysian Institute of Quality Assurance (MIQA) – Excellence in workforce development; making the Hotel one of the best places to work in Malaysia.
- National Excellence OSH Award – December 2004 & February 2007, Winner: Hotel & Restaurant Industry Category, Successful implementation of occupational safety and health management system (OSH-MS) towards self-regulatory compliance; Awarded by National Council for Occupational Safety & Health (NCOSH)
- Minister’s Award for Human Resources Development – September 2005, Winner: Large Enterprise Category (Service Sector) – In recognition for significant contributions and achievements in the field of Human Resources Development; Awarded by the Ministry of Human Resources and Pembangunan Sumber Manusia Berhad (PSMB)
- Award of Excellence in Hospitality Asia’s Platinum Awards – November 2005
Winner: Best 5-star M.I.C.E. Hotel – Organized by World Asia Publishing (WAP), the award recognised the Hotel’s successful implementation of events innovation and offerings, service delivery, diverse facilities options, integration of services and facilities, customer response methodology, processes and work-flow in the area of Meetings, incentives, conferences and exhibitions (M.I.C.E).
- Best New Spa – December 2006 – Winner: Mandara Spa Sunway Resort Hotel & Spa
Organized by Malaysia Spa & Wellness Award, (Sunway Resort Hotel& Spa: About Us. 2007.)
4.0 Corporation & SBU Background
4.1 Corporation
The Sunway Group stands as one of Malaysia’s foremost, well-diversified conglomerates in leading position in several industries.
Since its foundation in 1974 as a tin mining company, The Sunway Group has continuously aimed at excellence in every field of its operations as it diversifies and grows in tandem with national progress. This, the Group has made possible through strategic alliances with the government and private sector both on the home front and internationally.
The Group’s outstanding achievements are the result of the vision of Tan Sri Dato’ Seri Dr. Jeffrey Cheah, Founder and Chairman of The Sunway Group who built the organization from a mining company with a paid-up capital of RM100,000 into the thriving conglomerate that it is today. To date, the total shareholders’ funds for the Group are around RM1.5 billion.
The Group’s core activities comprise construction; property development and investment; building materials; quarrying; trading and manufacturing; toll concession; higher education; healthcare; leisure, entertainment and hospitality and information technology.
The Sunway Group is made up of three public listed companies, each consisting of divisions and classified by the nature of the business. They are listed on the Main Board of Bursa Malaysia Securities – Sunway Holdings Incorporated Berhad (SunInc), Sunway City Berhad (SunCity) and Sunway Infrastructure Berhad (SunInfra). SunInc is an investment holdings company while SunCity is involved in the property development and investment, and hospitality industry. On the other hand, SunInfra’s subsidiary, Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd (SILK) is the toll concessionaire for the RM1.25 billion Kajang SILK Highway.
Underlying this worthy corporate endeavour is the Group’s business philosophy of giving back to the community it serves. The Group’s social responsibility goes beyond and is clearly evident in education through the creation of The Sunway Education Trust Fund and countless of fund-raising and charitable activities.
The Group’s flagship project – the multi-billion ringgit Bandar Sunway development – where it took an engineering miracle to transform 800 acres of disused and derelict mining land into an integrated, self-contained resort township surrounded by lush greenery, has received awards and international recognition as a tourism landmark that it is today.
(Sunway Resort Hotel& Spa: Profile. 2007.)
Vision
To be a leading conglomerate providing world-class and competitive products and services that enhances stakeholders’ value.
Mission
To provide innovative quality products and services that exceeds customers’ expectation. To continuously attract, retain and develop human capital, to achieve market leadership and operating excellence in every business segment.
(Sunway Resort Hotel& Spa: Group vision. 2007.)
4.2 Sbu
Incorporated in 1990 in Hong Kong, Sunway International Hotels & Resorts (formerly known as Allson International Hotels & Resorts) is a Malaysian-based hospitality group and the management arm that operates hotels and resorts under two hotel brand names; namely the Sunway Hotels & Resorts and Allson Hotels & Resorts in Cambodia, Indonesia, Malaysia, Singapore, and Vietnam representing over 3,000 guestrooms.
The Hospitality group, a subsidiary of Sunway City Berhad and a member of The Sunway Group in Malaysia, is driven by a vision of providing attractive returns and capital appreciation to the stakeholders and investors, and is to be recognised for extending exceptional customer satisfaction and memorable experiences in each of its Hotels.
The Sunway International Hotels & Resorts portfolio of hospitality products and services ranges from 5-star hotels with world-class convention, meeting and exhibition facilities, luxurious villas, serviced apartments, a range of 4- and 3-star hotels, to technical services, travel services, franchise management as well as hotel marketing affiliation services.
The flagship of the Sunway Hotels & Resorts brand is the 1,234-room Sunway Resort Hotel & Spa in Kuala Lumpur, Malaysia. The integrated iconic “Resort-within-a-City†landmark features five hotels, a massive conference and convention facilities that includes over 50 indoor function rooms and a range of outdoor themed venues, and immeasurable leisure and business facilities that includes a theme park, a mega shopping mall, entertainment district, a medical centre, and educational facilities. This Hotel commands amongst the highest occupancy and average rates in its category of hotels in Kuala Lumpur.
(Sunway Resort Hotel& Spa: About Us. 2007.)
5.0 SBU Situation Analysis
5.1 SBU Culture/ Resources/ Stakeholders/ Performance
It is often important for a company to understand the market, its competitors and what kind of situation is the company facing. Hence, in order to ensure that Sunway Corporate is able to shine out from its competitors in the market, we will first do a corporate appraisal to identify the present situation of the company.
Corporate appraisal looks at the company’s business entity as an independent party and connecting it to the necessity and challenges that the others places on it. (Bernus, P., Nemes, L., Schmidt, G., 2003) Hence, through corporate appraisal we will be able to identify the key strength of Sunway Corporate and its position in the market which will make it easier for us to analyze and strengthen the position of the company in the market. In order to obtain the best possible information which was needed for analysis, several question had to be asked to obtain the strategic understanding needed. Such questions are as follows:-
- What did Sunway Corporate did in the past and what is the company doing currently?
- Why the company had performed as needed and not better?
- Is the company ready for further changes?
- What are the strength and weakness in the company which had to be addressed?
However, to develop a proper corporate appraisal, several aspects had to be acknowledged:
- 1.Senior Management – Skills, Values and Attitudes
- 2.Corporate Culture
- 3.Corporate Publics / Stakeholders
- 4.Corporate Resources
- Scope of Corporate Appraisal
- External Environment
- Corporate Resources
- Corporate Publics
- Value Orientation of Top Management
- Past Performance of Business Units
- Business Unit Mission
- Corporate Strategy
- FEI- Federal Equestre Internationale General Assembly
- 20th Asia Pacific Academy of Ophthalmology (APAO) Congress
- Merck Sharpe& Dohme (MSD) Incentive Conference
- 3rd Academy of Medicine National Conference on Intensive Care
- Asia Pacific Liver Update Conference
- Asia Human Resources Development Congress
- Hewlett-Packard India Convention
- Pepsi India Convention
- Unilever Asia Pacific Conference
- Veritas Asia Pacific Conference
- 7th World Chinese Entrepreneurs Convention
- Women’s Federation of World Peace
- Amway China
- 12th Asia-Pacific Military Medicine Conference
- IFSA/ IFCA Asia Pacific Conference
- World Islamic Economic Forum
- Top Companies for Leaders 2007 under the Asia-Pacific category
- Malaysia Spa and Wellness Awards 2006
- Award of Excellence in Hospitality Asia’s Platinum Awards November 2005
- Minister’s Award for Human Resources Development September 2005
- Tourism Malaysia Award August 2005
- National Excellence OSH Award December 2004
- KL International Gourmet Festival Best Marketed Restaurant September 2004
- Malaysia Tatler Best Restaurant Award
- MPSJ Landscape Award 2003, 2004, 2005
- ASEANTA Award for Excellence 2003
- Investors in People Worldwide Standard Certification (IIP Worldwide) 2002
- Tourism Malaysia Award 2001
- FIABCI (Malaysia) 2001
- FIABCI Prix d’ Excellence 2001
- Best Employers in Malaysia 2001
- 5-star hotel accreditation: Ministry of Tourism, Malaysia
- Segment the market
- Identify one or more target group within the segment
- Concentrate on such target group’s needs and demand
- Customer benefit of product function- efficiency of services, enjoyable stay, friendly staff.
- Customer group or level- tourist from all over the world
- Technology used to deliver such benefit- online booking services
- Customer Segmentation
- Served Market
- Market Boundary Definition
- Market Emergence
- Customer Need
- Potential market is the possible demand for a product in a given environment
- Available market refers to a market where the customer with the necessary income and fall within the firm’s existing distribution structure
- Qualified market is an available market who meet pre-requisite criteria
- Served market is the market currently targeted by the organization
- Penetrated market refers to existing customers. (Jain, S.C., 2004)
- Variation on customer’s demand
- Customers often want to enjoy better services with minimum charges.
- In order to remain loyal to the organization, customers would want incentives in return
- Growing market for foreign tourist, etc. China and Saudi Arabic.
- Due to the recent political issue many foreign tourist had cancel their visit to Malaysia
- Increasing numbers of resort had emerge all around Malaysia
- Target market available is limited.
- Able to shine out in the market
- Ability to attract more foreign tourist
- Widen the market served for those tourists that would like to run way from the hectic lifestyle and demand something different.
- The present market served had decrease due to the increase in new resorts around Malaysia
- Increasing numbers of foreign travelers in the market especially from China and Saudi Arabic.
- Tend to choose the same accommodation if service provided are good.
- Target markets have to be clearly identified.
- The main customer at the meantime is those from China and local tourist.
- Services provided are very important
- Tourist can be very demanding
- Put in more effort in promotional strategies
- Improve the name of the resort
- Sponsor in several activities to be known
- The number of resorts in Malaysia had increase
- Bad publicity
- Increasing demand emphasis on customer services.
- Summit Hotel USJ
- Sheraton Subang
- Holiday Villa Subang Hotel
- Within Malaysia:- (listing only Major Competitors)
- Berjaya Resorts
- A’ Famosa Resort Hotel
- Westin Langkawi Resort & Spa
- Awana Genting Golf & Country Resort
- Direct Competitors
- Within PJ area.
- Summit Hotel USJ
- Sheraton Subang
- Holiday Villa Subang Hotel
- Whole Of Malaysia
- Berjaya Resorts
- A’ Famosa Resort Hotel
- Westin Langkawi Resort & Spa
- Awana Genting Golf & Country Resort
- Indirect Competitors
- Sunway corporation, 2007, About us, http://www.sunwayhotels.com/aboutus/aboutus.asp (accessed 18th April)
- Sunway corporation, 2007, Investor relation, http://www.sunway.com.my/sunwaygrp/investor/listComp.asp (accessed 18th April)
- Bernus, P., Nemes, L., Schmidt, G., 2003. Handbook on Enterprise Architecture. Springer
- Enriching Human Capital, n.d, http://www.sunway.com.my/sunwaygrp/investor/sunHold/2004/SunInc_AR04_ehc.pdf (accessed 22 April 2008)
- Jain, S.C., 2004. Marketing: Planning& Strategy. United States of America
- Lawson, R. B., & Shen, Z. (1998). Organizational psychology: Foundation and applications. New York, NY: Oxford University Press.
- Lee,K., 2007. Sunway Targets 10% -15% Revenue Growth in 2008. http://www.theedgedaily.com/cms/contentPrint.jsp?id=com.tms.cms.article.Article_6ae5d683-cb73c03a-1d4d4930-cc20eca4&paging=0 (accessed 22 April 2008)
- Our People Our Strength, n.d, http://www.sunway.com.my/sunwaygrp/investor/sunHold/2006/OurPeopleOurStrength_34-37.pdf (accessed 22 April 2008)
- Rashid, M. Z. A., Sambasivan, M., & Johari, J. 2003. The influence of corporate culture and organizational commitment on performance. Journal of Management Development, 22(8), 708–728.
- Schein, E. H. (1992). Organizational culture and leadership. San Francisco: Jossey-Bass.
- Sunway Resort Hotel& Spa: About Us. 2007. http://kualalumpur.sunwayhotels.com/bottomnav/aboutus.asp?type=awards&photo=awards (accessed 22 April 2008)
- Tse Min, Loong, 2007, Drawing the crowd: Sunway City Expects 2.5 Million Visitors to Sunway Pyramid. http://malaysiapropertyonline.blogspot.com/2007/12/drawing-crowd.html (accessed 22 April 2008)
- Julan http://www.emeraldinsight.com/Insight/ViewContentServlet?Filename=Published/EmeraldFullTextArticle/Articles/0410160108.html
- http://www.hotels.org.my/guidelines_newhotels.php
- http://cqx.sagepub.com/cgi/content/abstract/38/5/88http://books.google.com.my/books?id=fm1g5CL1_FkC&pg=PA93&lpg=PA93&dq=bargaining+power+of+buyers+in+the+hotel+industry&source=web&ots=d7eCX2QPEO&sig=tMvmC2Swrnv3ZbXKNF6r163i_k0&hl=en
5.1.1 SBU Culture
Many author and researcher had defined corporate culture in countless ways. However, many would agree that corporate culture refers to a set of values, beliefs and behaviors patterns that form the core characteristics of the organization and aid in determining the employee’s behaviour.
(Rashid et al., Lund, Pool, Schein, 2003) on the other hand, corporate culture also can be known as the unifying model that are shared, learnt and aggregated at the group level, and internalized only by organizational members. (Lawson and Shen, 1998). It is also a pattern of basic assumption discovers or developed by a specified group as it learns to handle its problems of external alteration and internal incorporation (Schein, 1992). Such values are educated to new members in the organization as the right way to believe and feel in relation to those problems.
Sunway Corporate adopt a corporate slogan ‘Our People are Our Strength’ (The Group) emphasize the organization’s viewpoint that the employees in the company cooperatively establish the group’s power, personality and presentation. In Sunway Corporate, the culture of the organization encourages the employee to interact with the management level for a better establishment in performance. The organization constantly encourages the education, expansion and increase the knowledge of such culture in the organization. With such culture, Sunway corporate was rewarded for their breakthrough ideas for their products and services. (Our People Our Strength, n.d,)
The Group Human Resource in Sunway corporate endeavors to produce an optimistic working condition where employees take pleasure in their work and go all-out to achieve their full talent. Apart from that, the Group is also dedicated to magnetize and preserve capable, devoted and faithful employees.
This is because in the Group’s eyes, the employees are the treasure to the organization, hence, various programs and initiatives have been carried out to ensure that the human capital is prepared with the persona and skills to bring the Group to greater heights through continuingly emphasis on performance management, employees’ development and improvement in employee’s welfare. (enriching Human Capital, n.d, )
5.1.2 SBU Resources
For the time being, Sunway Hotel and Spa is carrying out a progressive RM80 million renovation where the convention facilities had been refurbished and access to the hotel had been wholly improved. Hence, according to the managing director of property investment Ngeow Voon Yean, the hotel is anticipated to see a double digit revenue expansion for financial year 2008 and 2009.
The rate of the hotel also increased from the original RM 231 in the last financial year to RM 309 in financial year 2008 and 2008. Regardless of the partially closed hotel in Sunway Resort& Spa, a total of around 90,489 rooms at a normal room rate of RM295 were occupied at the peak season during June July and August which signifies an increase of 14% in room revenue compared to previous year. (Tse Min, Loong, 2007)
According to the group’s founder and chairman, the group is confident in achieving a 10% to 15% revenue growth next year in industries such as education, healthcare and tourism. Due to the increasing oil prices, the forecast of revenue had been lowered because there might be some unexpected circumstances that need to be foresee. Sunway Group had invested RM1.6 million yearly in management advancement and executive training such as a mentor and coaching program, where high potential employees are given a choice to work closely with a mentor outside their own department, and join forces with universities to offer internship and industrial training.(Lee,K., 2007.)
5.1.3 SBU Stakeholder
In order to boost the sales of the organization, Sunway Group will have to identify the required target groups whom have interest on the services provided by the organization. It is often crucial for us to recognize these stakeholders as they are the person the organization is selling the services to and the marketing strategies carried out will focus on such target group. Hence, the summary of the stakeholders are as follows:-
Sunway Group
The stakeholders under the organization consist of those in the management level and the shareholders of the company. Shareholder’s interest focuses on the payout and equity of the company while the management’s interest focus on monitoring the changes in stock price as they need to take care of the shareholder’s interest.
Customers
The stakeholders will be more concern about the pricing, services provided and facilities of the resort hotel. Foreign tourist will be more concern about the pricing, activities provided and the location of the resort hotel- whether it is located near a shopping mall or near to the city where they can explore.
Employees
Employees of the company are also one of the stakeholders which are more concern about the monetary rewards they will acquire; recognition by working for the company, challenges faced while carrying out their task and also the advancement to the top of the position in the company.
Suppliers
Such stakeholders will be more concern about the stability and financial condition of the organization because they are afraid that the organization is unable to pay them back if the organization is in debt. They too are concern about the credit period of the organization.
Banking Community and Other Lenders
These stakeholders will need to know the financial position and the SWOT analysis of Sunway Group before lending money to the organization. On the other hand, they will have to calculate a suitable interest payment and repayment principle that are able to match the organization’s current position.
Government
The government will charge taxes according to the earnings of Sunway Group and be aware of the activities carried out by the organization as to whether it meets the law or not.
Immediate Community
These group of stakeholders will take note of the changes in the economy and efficiency of Sunway Group as they would like to know whether the organization provides good job opportunities or not.
Society at Large
This stakeholder will be apprehensive on the municipal revitalization expansion, civil rights, pollution abatement, etc. in other words, such group involves activists and groups that care for the community.
5.1.4 SBU Performance
Financial Position
Sunway Group’s financial report is shown as below:-
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FINANCIAL HIGHLIGHTS – Key Financial Data 31/03/2007 |
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The revenue earned in the individual period is RM275, 155,000 compare to cumulative period of RM839, 067,000; and profit earned before tax is 67,495,000 for individual period and 193,509,000 for cumulative period. However, the financial report on Sunway Hotel and Spa cannot be found. Kelab Sukan Sunway had been set up with recreational facilities like gymnasium; sauna; squash courts; snooker table; Astro; table tennis; and carom set for the employee to use.
Employees that wish to further studies in Sunway College and Monash University will get tuition fee discounts. Such discount scheme also extended to the immediate family member’s of the employees which is in tandem with the Sunway Group’s emphasis on caring for its employee’s welfare. Employee Tuition Assistance Scheme was introduced to the employees where they can look for financial assistance to take external course which are relevant to their job, leading to certificate, diploma, graduate degrees and post graduate.
Employee’s Welfare
The management in the company will constantly have communication with the employees through different channel such as coffee session, hang loose night, tea session (with non-executive staff), annual manager’s conference, e-bulletin, Sunway portal, plasma television insertion and etc. employees in Sunway Group is encourage to work in a happy environment regardless of their nationality. Employee’s thoughts and ideas are being appreciated and they can also take part in several decision making process.
Apart from that, sports and social activities had been carried out so that the employees of the company are able to have fun during their free hours and foster better relationship within the employees. (Our People Our Strength, n.d,)
Sunway Group’s Past Performance
In the past, Sunway Resort and Spa had host several big events which win them this international standing now, such events includes:-
Apart from that, Sunway resort and Spa also won several awards which made them more recognize in the market.
(Sunway Resort Hotel& Spa: About Us. 2007.)
5.2 SBU Customers
In the business world, firms will tend to come out with products which will meet the demand and expectation of the consumer. However, different type of consumer will demand different criteria of goods and services hence, the business unit cannot provide what all consumer expects equally hence it must distinguish a clearer target group from the whole market. In order to do so, several steps had to be carried out. Such steps are:-
Furthermore, there are three dimensions to define the market and enable the public to identify the competitors, customers and key market issues and trends, such dimensions are:-
Sunway Resort Hotel caters for foreign tourist from China, Saudi Arabia, Japan, etc and local tourist as well. Recent month, there are more and more tourist entering Malaysia for holidays hence, this is an advantage to Sunway Resort and Spa as many of the travel agency would align with Sunway Resort and Spa to grad more tourist’s attention by allocating them to enjoy services provided there.
Despite the increase in room rate from the original RM 231 in the last financial year to RM 309 in financial year 2008 and 2009, a total of around 90,489 rooms at a normal room rate of RM295 were occupied at the peak season during June July and August which signifies an increase of 14% in room revenue compared to previous yea
While some of the foreign tourists have not recovered from the recent turbulent events such as political changes in Malaysia or the hindraf incident, the tourist entering Malaysia did not vary much. Hence this adds a plus point to Sunway Resort and Spa as the company might be the next destination for foreign tourist.
5.2.1 Identifying Markets to Serve
In order to identify the market to be served, there are five different levels that need to be look into. Such levels are potential market, available market, qualified available market, served market and penetrated market. All are different and serve different purposes.
5.2.2 Analysis of market servedÂ
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OPPORTUNITIES Customer Need Market Emergence |
THREATS Customer Need Market Emergence |
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Market Boundaries Market Served Customer Segmentation A border range of customer segmentation would make it easier for Sunway to target the desire market by viewing at the strength they had. |
Market Served Customer Segmentation Becoming more complicated to segment customers as efficiently in the past because lines between clear customer groups are becoming more vague |
5.2.3 Customer analysis
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STRENGTHS |
WEAKNESSES |
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OPPORTUNITIES |
THREATS |
5.3 SBU Competition
‘Porter’s model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change.’( Recklies 2007). The purpose of conducting Porter’s five forces analysis is to analyze almost everything from the intensity of competition to the profitability and attractiveness of an industry and to identify the most common threats faced by the firms in this industry
5.3.1 Threat of New Entrants
In Malaysia the threats of new entrants is considered moderately high. The reason for this is because it would be easy for another hotel or motel to open in the marketplace. Stated in Guidelines for New Hotels ‘Accommodation premises such as hotels, lodging houses, boarding houses, rest houses and inns (with 10 rooms and above) or hostels (with 50 beds and above) that offer lodging or sleeping accommodation are able to apply. And it only cost RM20.00 for the processing fee and a further registration fee of RM50.00 is imposed and shall be submitted after the registration is approved.’ (http://www.hotels.org.my/guidelines_newhotels.php). Other factors such as Visit Malaysia 2008 may increase the threat of new entrants as competitors see it as an opportunity in business. As stated in 5.4.5 regulations, Malaysia government do encourage more development and expansion of business in the country by further reduction in corporate taxation up to 25% in 2009.
‘However the threat will be low due to huge amount of investment required to build a building and a need for a national service network plus poor infrastructure facilities and scarcity of land’ (emerald).
5.3.2 Bargaining Power of Buyers
The level of bargaining power of buyers may differ on different occasions. ‘Customers who purchase larger volume of bed and who have a low switching cost have a stronger bargaining power in this competitive environment. For example tour agencies who book thousands of customers into hotels maybe able to demand lower prices from hotels.’(google).
However individual customers who consume hospitality products have little or no bargaining power. The only thing that they are able to do is to search for better prices or search for different alternatives. But ‘due to technology advancement the bargaining power of buyers are increasing where travelers/tourist are able to make reservation from anywhere around the world.’(Emerald).
And depending on which firm in the industry you’re referring to. Big name companies or international firms will have more bargaining power than a small firm because of their economies of scale.
5.3.3 Bargaining Power of Suppliers High, Moderate or Low?
The bargaining power of suppliers appears to be low because there are a large number of suppliers and no single supplier dominates the hotel industry (except for monopoly suppliers. Eg. Electricty and Water). There are many different suppliers for the needs of this industry. This industry is a service industry where there are numerous suppliers for the needs of producing their service.
5.3.4 Threat of Substitute Products and Services
The threat of substitutes seems to be high. Examples of substitutes such as travelers staying with friends, motels, budget inns and service apartment are important competitors for the hotel industry.
Technology advances too may pose a threat to the hotel industry. For example teleconferences using video equipment or telephone also can affect lodging operators by reducing opportunities of business travelers’ room nights. This threat of substitutes is one of the major factors that intensify competition in the lodging industry.
5.3.5 Intensity of Rivalry among Competitors
The intensity of rivalry is definitely high in Malaysia due to the ‘Malaysia’s government focusing more tourismindustry, which could soon become the nation’s number-one sourceof foreign exchange.’ (The rise of Malaysia Tourism Industry). There is also not much of a difference too choose from in this industry, where all lodging operatives provide almost similar products and services, and it will be most likely to be high where there is a threat of substitute products; and existing power of suppliers and buyers in the market.
There are a number of organisations that pose a threat for Sunway Corp.
Within the Subang Jaya and Sunway Area are:-
SBU Competition SWOT Analysis
Hotel owners need to keep in mind that the emergence of alternative forms of competition will affect the value of their hotel investments. There has been a significant rise of indirect competition in the form of furnished apartments, condominiums or budget hotels in major markets.
This competitor has taken market share from hotels in the fairly profitable extended stay segment. The real estate in which these businesses operate is typically residential affording these entities a significant tax advantage over hotels.
This is a growing industry in many markets and is establishing structure but is not easily tracked. Owners need to monitor this and other forms of non-traditional indirect competition.
5.4 Environmental Scanning
5.4.1 Political
The latest election in 2008 was jus over. The political party controlling the government is Barisan Nasional. However, in the recent election the opposition parties won a few states therefore there might be new laws imposed. In the Budget 2008, —
5.4.2 Economy
The Economist Intelligence Unit expects real GDP growth to average 5.8% a year in 2008. The overall of Malaysia economic have growth confidently due to the energetic performance in major sectors and the assist of government. As noted in the Ninth Malaysia Plan, we can see that there is going to be a significant growth in the hospitality and tourism industry in Malaysia. Therefore it is a guarantee bright future for Sunway Hotel to expand further in these coming years.
5.4.3 Socialcultural
Malaysian is seeking for higher standard of living and quality lifestyle. Customers expect their houses to be safe, modern, and with technological infrastructure. This is the basic aspects customers look into when come to accomodation. Hospitality industry needs to have continuous innovation to meet the targeted segment’s demands.
5.4.4 Technology
Once again according to Budget 2008 noted that the country will continues to improve infrastructure and technological facilites. As technology is becoming part of humans’ lifestyle, hotel need to be equipped with these for security or being connected to others via broadband. In the older days, a PIN code is required to be keyed in before entering a place, and then it was thumbprint sensor and now is eyeball sensor though not widely being used yet.
If Sunway can come out with a unique security system, Sunway should get it patented so that it is the only company with that special technology. Besides that, as technology improves Sunway Hotel will also see the chances and opportunities of development and improvement, whether in the physical building of the hotel itself to be built with technology of convenience or the improvement in terms of products and services provided to our guests through innovations.
5.4.5 Regulations
According to the budget 2008, Malaysia government do encourages more development and expansion of business in the country by further reduction in corporate taxation up to 25% in 2009. However, there are lots of rules and regulations in managing a resort especially an international chain resort.