Hotel And Hospitality Management

Discuss about the Hotel And Hospitality Management.

Hospitality Industry mainly depends on customer so the industry focuses on customer satisfaction compared to other industries. In the service industry, the hospitality industry is a very huge field which includes accommodation, transportation, event plan, restaurants and many other things within the industry. The hospitality industry has divided into two parts which are accommodation with entertainment and food. Hospitality Management can be described as to control over the whole thing like to manage hotels, restaurants, lodges and travel operators in this industry. In this field, marketing is very important to introduce agencies, tourist spots and restaurants with the help of social media. Similarly Human Resource Department are also needed for this industry. The national revenue of this sector generally comes from tourism management. Tourism marketing considered as a marketing planner for tourists who come for explore the places in a short span of time. In this report, competitive analysis will be done in order to understand the various forces that drive the market forces and strategies in context of the chosen dining outlet and bar, The Bridge Room, situated in Sydney, Australia. Moreover, the value chain analysis will also be used in context of The Bridge Room along with Menu engineering 

Brief Overview:

The Bridge Room is a three-hatted restaurant in Sydney, which owned by Ross and Sunny Lusted. They offer throughout Europe and Asia’s famous dishes in a royal style. The Bridge Room hotel has founded in 1930 in the Heritage listed building. They are famous for their quality of food and their finely decor dinning (The Bridge Room, 2016).

Porter’s Five Force Model (Competitive Analysis): 

 The five force model was developed by Michael E. Porter which is very much relevant and appropriate in today’s market structure. The corporate strategy has to fulfil the coming opportunity and threats of the organization (Grant, 2016). Porter’s five force model is a structured frame that describes the various level of competition within the industry. This competitive analysis has five level of competitive forces included the competitors entry, the substitutes of threat, the buyer’s bargaining power, Supplier power and the rivalry among the competitors (Magretta, 2013).

Threat of New Competitors:

Hospitality industry always faces cut-throat competition to sustain in this industry. The factors that can be threats for the newcomers of hospitality industry when already existing companies has captured the market share. The factors are current loyalty for renowned brands, fixed price, lack of resources in hospitality, requirement of capital to build the infrastructure, Economical differentiation of hospitality services. The travel and tourism trends can influence the hotel industry (Dobbs, 2014). Although the newcomers can enter into this industry to open a small size of hotel, this capital base industry needs large scale investment for infrastructure and furnishing. Sometimes, leasing and management property may create legal issues. The Bridge Hotel in Sydney which is very famous for cuisine and bar in Australia, determines how easier or critical the things for customers to switch over the particular services. They always look for their hard core competitors like Albion hotel, ATTICA, Dry Rock Hotel and many more. New entrants always can interrupt the performance of The Bridge Hotel. Some factors that are seems to be threatened for The Bridge Hotel are disadvantage of moderate cost, less expensive of business and costs of low switching (Cheng, 2013). The low switching cost identifies that consumers will switch over from The Bridge Hotel. This dining cum bar hotel run their business with a moderate cost and that is the biggest financial challenge for newcomers.

Threat of Substitutes:

Porter’s has explained that substitute services can affect the entire services. Hence, the hospitality industry is not threatened by substitute products like in recession time, some domestic flights can be replaced by international flights which is more cost effective. In hospitality, restaurants are always come into the picture along with the hotel industry (Ahmad & SHERMAN, 2016). The modern and comfortable chains of Hotel and Restaurant agencies always face competition with the luxurious hotel in famous places. Every hospitality industry has to be powerful in terms of choose marketing strategy. Restaurants may not appear in any vulnerable places. In the case of The Bridge Hotel cum bar, determines the effect of substitute cuisine cum bar. For the cost of low switching, consumers can easily choose other substitutes. This substitutes can give the satisfactory level of consumers through their price, quantity as well as quality, taste and many more (Moreno, Ramón, & Perles,  2016)

Buyer Power:

Consumers has affected from The Bridge Hotel cum bar. The bargaining powers of consumers are very high for this hotel. The switching cost is very low to transfer the consumers from The Bridge Hotel cum Bar to others. This factor highly affected in the business of this particular cuisine. The bargaining powers of buyers are increasing in the presence of consumer organizations. For the business of bar, the hotel should meet the consumers demand. In Sydney, there are many choices to switch over from this particular cuisine (Mok, Sparks  & Kadampully, 2013).

Supplier Power:

Suppliers have affected the provider of well-service industries and the variables which are responsible for all these things are price and control of supply. The poor bargaining power of The Bridge Hotel cum Bar can affects their business. In Sydney, the supplier faces so many competitions in terms of raw materials and other ingredients of The Bridge Room and Bar. This is for thousands of options are available in Sydney for suppliers also. Sometimes they do not control the work properly where distribution are really much needed (Ruhanen, Mclennan & Moyle, 2013). As because of availability of suppliers this hotel can get the benefit from suppliers. Thus the element like raw materials and others are a biggest issue for The Bridge Hotel.

Rivalry Among Competitors:

The Bridge Hotel cum Bar in Sydney faces hard core competition as because this type of market’s saturation is very high. The value chain is a combined activity of production, marketing and distribution of the particular business. For any company’s, value chain starts from the production of goods and end up with the process of sell to the customers (Patiar & Mia (2015). It consists each everything from top to bottom. The main aim of value chain is to communicate with each and every stage as they can help to increase sells.  With the help of Porter’s model, The Bridge Room tackles the competition within the present situation of this industry. This restaurant’s cum bar has plenty of chains in all over the world hence; the price of this hotel is too high to switch over the other options. The five force analysis shows that the competition is the most important issue of this business (Refer to appendix 1).

Value Chain Analysis:

Porter introduced value chain analysis and suggested to use within the organization to create value of the services within the industry. The organization always gets in touch with the revenue with the help of competitive advantage (Fearne, Garcia & Dent, 2012). The activities which are done by the industry should be goes through at maximum level. If the organization run successfully, the customer always get back to the particular organization.  As per Porter’s five force model, organization should divide into primary and support activities.

Competitive advantage cannot give any transparent picture of all over the industry. Many activities are done which is not as much as worthy in terms of producing, delivering, marketing and designing the services also. Porter suggests applying value chain analysis to give more value of their products or services that the company produces before and in this way firms can get the maximum level of competitive advantage. In spite of switching over the company, customers will return back for the quality and prices. The two elements of porter’s Value Chain are primary activities and support activities.

Primary Activities: Primary activities directly show the innovation, sales and maintenance of The Bridge Room hotel cum Bar.

Inbound Logistics: In Inbound logistics, The Bridge Room hotel involves in receiving the raw materials from the suppliers, storage and ultimately distributing it in their internal departments. In this case, they should maintain a good relationship with suppliers and it builds value of the industry.

Operational Activities: Operational systems can build value through transform the inputs like raw materials, ambience and behavior with the consumer into outputs. Outputs are like getting profit and maintain the quality service.

Outbound logistics: Outbound logistics means the activities where The Bridge Room hotel deliver their services to customers. In this process, collection and distribution can come (Monczka et al. 2015).

Sales and Marketing: In this section, this hotel has to bring their customers in their place instead of their competitors like Dry Dock Hotel and so on.

Support Activities: Generally this activities support the support activities in terms of marketing and sales with the outbound activities.

Human resource management: In this point, the above mentioned industry recruits, give rewards; motivate their workers to get the better work. The authority of The Bridge Room gives value to their workers and meets their demand also. In this way, they can achieve the market share. They always keep the advantage of practicing proper HR.

Procurement: In this stage, the above mentioned industry gets their resources at the time of requirement. They always want to get the well known suppliers and of course, negotiation has come into this case.

Infrastructure: Like other business, The Bridge Room has its own supportive system that functions properly when daily transaction is happen. This hotel has their well infrastructure to operate legal and administrative part (Logan, Lewis & Scott, 2016).

In order to find out the value chain of this company, they have to follow some steps like to identify the sub activities which are in primary activity, support activity, for opportunities to gain value, and links identification.

Primary activities has chosen some of sub activities which are worthy in nature. The various type of sub-activities are direct, indirect, and quantity assurance activities. In direct activities, The Bridge Room follows to value creation by their service provider. Indirect activities looks on the direct activities whether the business run successfully or not. Lastly, in quality assurance, the industry assures whether the direct and indirect activities fulfil the mentioned standards or not.

In order to find out the sub activities, human resource management gives more value to the inbound, outbound and logistics operation of The Bridge Room hotel. The HRM department of the company find out the value in their infrastructure. They always cross check the overall functional area (Molina et al. 2015).

At the time of links identification, the above mentioned company find out the links between sales volume and sales force from The Bridge Room.

At the time of reviewing, sub activities and links of the company should change in order to optimize the value that offers from The Bridge Room to their customers.

The Bridge Room hotel cum bar always create their value chain in this way to show their general business strategy transparently. At the time of setting value chain they always think about the competitors who are the key players of this industry. They always choose the strategies according to their priority basis. Their analysis of value chain gives a unique picture of this case and their approaches are very relevant.

Description:

From the analysis of Porter’s model, it shows the rivalry depends on the numerical size. Though The Bridge Room hotel cum bar is an independent chain of the hospitality industry, hence, rivals also capture the market. This is happen because of business growth of this company is not matched with the industrial growth. The rivalry of this company becomes high as because the costs of switch over to other hotel industry is very low. Holiday season and weekend time has the most precious time for this industry. Except those times, The Bridge Room should cut off their prices to keep their customers. Sometimes social norms can affect the strategies what they follow in capture the market share. The value chain analysis can be identified by the strategists of The Bridge Room hotel cum bar and they prioritize the most important factors. The prioritization is the most effective impact on this hospitality industry. After making the prioritization, the owner of this business usually check all the things to run their business successfully. This company has the requirement of the resources which are cost effective in nature. In order to get revenue from the economical scale, this hotel should build more room in proper size as because they can handle the pressure of holiday and weekend rushes. Like other hospitality industry, industrial growth affects The Bridge Room also.

 In Sydney, there are so many ranges of hotels like pocket friendly hotels to luxurious hotels. In this point, the above-mentioned hotel should create customer loyalty, which is very important, and build their images like a brand image (Azzopardi & Nash, 2013). The main factors, which can differentiate the hotel industry among others, are proper location for the target market and the quality services what they provide. The Bridge Hotel always maintains those things properly but their range of services are too high compared to others. Any of the customers whether small or bulk customers, they always are willing to change their supplier if not they charge extra to switch over. In order to maintain sustainable development in business strategy, The Bridge Room has to maintain an advantage of cost over their existing customers. Buyers have to be powerful when the size of purchase represents their well proportioned total cost. Sometimes, buyers will gain low margin products and at the time of price sensitivity, they are not willing to pay the increased cost.

In The Bridge Room hotel industry some group of buyers try to exercise the bargain power when they wants bulk sizes of hotel rooms or bulk quantity foods and beverages. As foods and beverages is the most important sourcing of income in this industry, The Bridge Room hotel cum bar serves their food in a buffet style and they planned everything for it. They attract the consumers to show their banquet facilities. In the other hand, exhibition and conference room give a high rental price to the industry. In the surroundings of this mentioned hotel, theatres and shopping complex are there to receive heavy amount of revenue. In Sydney, the reaction of competitors are very much haphazard and not signifies the present market.

They had to overcome all those issues in a specific manner. The question of profitability is a huge issue as because it diversifies the profit and sometimes they change their goals and strategies to achieve success.

The Bridge Room hotel cum bar is very famous for its lunch, pre theatre and lists of wine. Through this menu engineering, this restaurant always gets benefit from other restaurants (Mohanty & Rout, 2015). In Bridge Room, they serve lunch as from one course meal to six course meal. They offer oysters, shallot, roasted snapper, organic beetroot and many more Australian famous dishes, which attract the customer easily. Even on their beverages, they include variation of tea and coffee and last but not the list, The Bridge Room offers huge range of dessert wines, cocktail, Calvados and so on. Through this multi range of menu engineering, they earn huge profit margins. In special occasion, they also give attractive offers in Buffets and Drinks.

The Bridge Room hotel uses some technologies like Cloud POS and other technologies, which can give dynamic outcomes for the restaurants and bar. Through this operating tool, they can easily drive sales as well as gain the loyalty of their customers (Leung & Law, 2013). The Bridge Room has better position in the Australian market compared to others as because the other hotels has not offers attractive menu engineering and multi type of beverages. The technology that they use, through it they gain more customer along with the existing customer. (Refer Appendix 3)

However, being situated at one of the populated city in Australia with customers from various cultural backgrounds and from varied generations, The Bridge Room has the advantage of serving their customers without going too deep with menu engineering. Moreover, the less use of menu engineering by The Bridge Room will help in serving the repeated customers as well as those customers having dietary restrictions.

Conclusion:

The main two factors are location of the company and quality service what they offer for their customers in terms of the target customers. These factors can differentiate each of the hotel industry from others. Another thing is to provide good management and proper trained workers who serves better for their target customers. The Bridge Room always try to cross- sell and up sell their services to get more benefit. They have the variety of sections in their surroundings as like restaurants where they offers high quality of foods and beverages, another floor for pubs, entertainments as like theatre, exhibitions and many more things. The Bridge Room enables high range of profits according through their staff, location, management and other important factors. The quality of decoration of each of their rooms, fittings and furniture, interior design and so on, that is also can be a noticeable factor for this company. In the standard of economy, the target markets of hotels are much more durable than tourism market. For The Bridge Hotel, price advantage is a huge problem to get benefit so they forced to eliminate the high price. 

References:

Ahmad, N., & Sherman, H. (2016). The Home Away From Home: An Analysis of the Lodging Industry IN 2015. American Journal of Entrepreneurship, 9(1), 60-81.

Azzopardi, E., & Nash, R. (2013). A critical evaluation of importance–performance analysis. Tourism Management, 35,pp.222-233.

Cheng, D. S. (2013). Analyze the hotel industry in porter five competitive forces. Journal of Global Business Management, 9(3), 52.

Dobbs, M. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.

Fearne, A., Garcia Martinez, M., & Dent, B. (2012). Dimensions of sustainable value chains: implications for value chain analysis. Supply Chain Management: An International Journal, 17(6), 575-581.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Leung, R., & Law, R. (2013). Evaluation of hotel information technologies and EDI adoption the perspective of hotel IT managers in Hong Kong. Cornell Hospitality Quarterly, 54(1), 25-37.

Logan, T. M., Lewis, E. H., & Scott, C. (2016). A Time Series Analysis of the Impact of International Sporting Events on International Arrivals: Melbourne, Australia and Jamaica. International Journal of Economics and Finance, 8(6), 267.

Magretta, J. (2013). Understanding Michael Porter: The essential guide to competition and strategy. Harvard business press pp.87

Modern Australian Cuisine Sydney NSW, Fine dining restaurant | THE BRIDGE ROOM. (2016). Thebridgeroom.com.au. Retrieved 6 September 2016, from http://www.thebridgeroom.com.au/

Mohanty, P. P., & Rout, H. B. (2015). Menu engineering-a hospitality marketing strategy for profitability and sales enhancemnet. ZENITH International Journal of Multidisciplinary Research, 5(7), 100-112.

Mok, C., Sparks, B., & Kadampully, J. (2013). Service quality management in hospitality, tourism, and leisure. Routledge pp.450

Molina-Azorín, J. F., Tarí, J. J., Pereira-Moliner, J., López-Gamero, M. D., & Pertusa-Ortega, E. M. (2015). The effects of quality and environmental management on competitive advantage: A mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning pp.56

Moreno-Izquierdo, L., Ramón-Rodríguez, A. B., & Perles-Ribes, J. F. (2016). Pricing strategies of the European low-cost carriers explained using Porter’s Five Forces Model. Tourism Economics, 22(2), 293-310.

Patiar, A., & Mia, L. (2015). Drivers of Hotel Departments’ Performance: Evidence From Australia. Journal of Human Resources in Hospitality & Tourism, 14(3), 316-337.

Ruhanen, L. M., Mclennan, C. L. J., & Moyle, B. D. (2013). Strategic issues in the Australian tourism industry: A 10-year analysis of national strategies and plans. Asia Pacific Journal of Tourism Research, 18(3), 220-240.

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