Friday, April 5, 2019
A Political Economic Social Technology Analysis Of Malaysia Tourism Essay
A semipolitical sparing Social Technology Analysis Of Malaysia Tourism Essay0.0 IntroductionNowadays supranational calling is a vital aim for either firm despite slight firm or magnanimous firm and they be moving toward to outside(a) bank line for the sake of foreseeable future of their dividing line. Besides, world-wide personal line of credit is known to be fear dealings crossing national b commits at every stage of the relations which included trading such as import and export activities that course out by the small and large firm from domestic to internationalistic merchandise across the institution (King, 2008 Aneff, 2010). Moreover, at present, international business fanny be acknowledged as global business whereby the firms father to adapt their businesses to the outside dry land in different markets that the firms seek and approach to and deal with many different cultures that concern in every argonna (Nakate, 2010 King, 2008). With the changing liberali zation st governgy in the whole world, a lot of firms are gaining benefits from international trade and investments. On top of that, an agreement of GATT (General Agreement on Tariffs and Trade) was introduced to get program line over the rate charges of the tariff and trade barriers (Geneva, 1986). In contrast, after the formation of GATT, in year 1995 followed by the formation of the universe of discourse Trade Organization (WTO). Besides, there are 2 substantial forces that drive a business to international business which are the technological development and the disappearance of a substantial part of the communist world (Lausanne, n.d.).Shangri-la Asia Limited is a company with the principle activity of investment holding which focusing on the business and operation of hotels as one with associated real estate properties with providing hotel management or related run (Bloomberg, 2009 promised land Asia Limited, 2009). The company brinyly focuses in in operation(p) hotels and leasing spaces for commercial and residential. Shangri-la was incorporated in Bermuda and its important headquarters is located in Quarry Bay, Hong Kong. Further more(prenominal), Shangri-la Asia Limited was founded in year 1971 and until now, Shangri-la has been in operating in the industriousness for 39 years and operates its hotels in the company of promised land, Rasa, Trader, spend Palace, and Shang Palace. Moreover, the company managed 65 hotels at the end of 2009 with 47 hotels invested as the integrity which managed by its subsidiaries. Besides, as of year 2009, Shangri-La hotel employs rough 260,000 employees in the Asia countries (Shangri-La Hotels and resorts, 2010).1.0 Macro Environment1.1 political EnvironmentIn china, the governing body attaches great importance to the tertiary industry in their acres and there was positive political relation policies advance tourism in station to build tertiary industry to be one of their pillar industries (Lew, Yu, Ap, Zhang, 2003). Besides, the hotel and tourism industry in chinaware had rapidity raise after the entry of World Trade Organization (WTO) to the domestic market in mainland China. As concord to the announcement from China National Tourism Administration (CNTA), with the entry of WTO in China, it brings the contrasted international hotel industry to invest and set up hotel in China and the government of China sanctioned the application of setting up wholly impertinent-owned travel agencies in China thence, demand for hotel industry boosted up (Xinhua, 2004). Moreover, base on the Chinese governments policy of long bourn goal, the inbound tourist arrivals to China impart achieve 210 million by the year of 2020 in which this would benefit the hotel and tourism industry in China to gain more profit on the tourist visit. For instance, base on the nurture published by the Shanghai Tourism Commission (STC) in China, the entry of abroad travel companies would patron to stimulat e and find of the business of the local tourism industry in the facial expression of SARS that happened ripely in China in 2003 (China Daily, 2004). On the early(a) hand, the political issue would be on political tension in the midst of Taiwan and Mainland China and these panics would be considered as the unforeseen event that the hotel developer and investor will take into account (Guo, et.al., 2004).1.2 frugal EnvironmentIn 1992, China expanded its economicalal reform along with the open door policy, accordingly bring benefits to the business activities and international tourist arrivals to China continued to emergence and thus hotel investment is stimulated. In contrary, China government also ensured that overseas hotel do not dominate the market in which the expunge taken is to obstruct the rise of competitiveness between local companies and unknown companies in the benefit of their professionalism, stimulate and vision advantages. Thus, to avoid economic leaka ge, Chinese government had implemented the policy of encouraging Chinese Hotels to settle in the clownish itself and also in foreign countries for Chinese to use with the association between Chinese Airlines and Hotels industry in battle array to retain the money from outflow to opposite countries (Zhang, Pine and Lam, 2005). Moreover, Chinas sound economic releaseth stimulates the Hotel and tourism industry. As mentioned above or so the openness to outside world had befriended economy grow rapidly. The GDP of China in 2009 was RMB 33, 535.3 billion where RMB 14, 291.8 billion contributed by the tertiary industries with the growth rate of 8.9 matchs with the previous year (Chin energy, 2009). An impressive economy growth will generate enhancement in infrastructure for hotel development, however, the sustainability of the economic boom are concern in the chore of bad-loan that commonly faced by state-owned banks. To overcome this bother, government necessarily to counter a soft landing for the rapid growing economy otherwise an unhoped-for of potential economic slowdown would occur and certainly bring close to negative effects to the hotel industries in the country (Yu and Gu, 2005).1.3 Social EnvironmentSocial environment concern is an important issue for the business developer and investor in China as Chinese used to practice the relationship and network of Guan Xi in their day-after-day life which including during the business dealing process. In fact, Guan xi can be an influential practice compare with the Western-based business practice which westerners or foreign investors are not eligible to gain interest on this practice as such practice would be commonly focus on the motive of profit. Thus, foreign companies gather up to corporate with the local Chinese companies as partner in order to enjoy the permit with the support of Chinese partner to avoid some(a) actual and future legal control and international trade rules. For instance, the f oreign owner of the properties moldiness depend on the local labor and partner in turn to get the reliable power supply and water supply (Zhang, Pine and Lam, 2005). On the other hand, hotel industries benefit from vacation and vacation when residents take passs and this would lead to higher demand on the tourism and hotel industry in which the people shifting their lifestyle and get off from work with take effect on the domestic consumption. For example, in China, the government had intentionally increased the public holidays where made 3 weeks long holiday per year such as each during the Spring Festival, May sidereal day Festival and the National Day holiday (Lew, Yu, Ap and Zhang, 2003).1.4 Technology EnvironmentalGenerally, a good quality service to guest is the most important factor that makes the hotel to be more outstanding than others and to get more attraction from guest accordingly this would submit the guests to make decision on the selection of which hotel is the most worthy and preferable to consume with the most atonement among those entire hotels that available in the area. Besides, with the acknowledgement of gaining better profit margins and fiscal returns, the hotel industries in China wildness on the implementation of IT facilities in order to mend with efficiency daily operation and meanwhile to baffle benefits such as operational cost reduction and enhancement of service quality deliver to customer (Law, Giri and Michigan, 2005). In fact, in Hong Kong, China, the use of IT to conduct daily operation is generally practicing by the hotel industries in country since year 1997 (Law and Au, 1998). Besides, in China, the adoption of Computer Reservation System (CRS) and hotel Property Management System (PMS) which go for by hotel that graded 3 stars and above was introduced to bring the companies into the market and to improve the interconnectivity by promoting about finishing, information about their company and additionally assi st on the efficiency and accuracy of internal information contagion and effectiveness of management. Meanwhile, the use of Information Communication Technology (ICT) within the hotel industries in China which focused on the front office functions such as reception, reservation, catering, merchandise, customer relationship management and others had brought benefit to the operation of the industry (Ma, Buhalis and Song, 2003).2.0 The International Consideration2.1 OperationShangri-La Hotel and Resort operated almost in all over the office in the world where headquarter is in Hong Kong. Shangri-La Hotel and Resort is a well known distinguish which the brand name is so recognizable and respected by the people around the world. Besides, the groups main activities are emphasis on the ownership, operation and management of the hotels. At present, the group holds and operates 68 hotels under the trademark of Shangri-La, Trader brands, Rasa, Summer Palace, and Shang Palace in different co untries with a room inventory of over 30, 000 in which operation gestate out among Asia in current year which included of China, Japan, Malaysia, Hong Kong, India, Indonesia, Thailand, Taiwan, Republic of Maldives, Philippines and Myanmar. Furthermore, the company had expanded their company to inwardness East countries such as Sultanate of Oman and United Arab Emirates Europe country in France North America country in Canada Oceana countries in Austria and Fuji Island. In addition, in year ended 2009 the company had equity interests in 49 operating hotels containing 24,432 of guest rooms (Golden Circle, 2010) Moreover, the company will develop and build up 29 more hotels in various countries in which final cause development of 1 hotel in Paris in 2010, 11 hotels will be establish in China, India, Singapore, Macau, Qatar, Austria in 2011, 9 hotels in China, India, Mongolia, United Kingdom, bomb and Canada in 2012 and nevertheless 7 hotels in China and Russia in 2013 and 1 hotel i n Philippine in 2014 (Shangri-La Hotels and Resorts, 2010)2.2 The PEST in Malaysia2.2.1 Social and Culture EnvironmentalCommonly, Malaysia is known as an Moslem country therefore certainly Malaysia is involving in the Halal food industry and Malaysia is the major exporter of proper product to Organization of Islamic Conference (OIC) countries such as AEAN and Middle Eastern markets in 2008. Malaysia has made an integrated long term plan to develop the halal industry which including the goods and service related sectors namely, meat and meat-based product, processed food, cosmetic and ad hominem care products and pharmaceutical products (Sadek, 2010). Thus, the halal certification would be the main requirement for the tertiary industries in Malaysia that unavoidable conforming to it especially on the food and beverage which play an important role in boilersuit satisfaction take aim such as halal dining is a necessity for Moslems. In fact, according to Department of Islamic Deve lopment Malaysia (JAKIM), the statistic shows that out of 991 hotels in Malaysia, there are only 10.19% of the hotels which amount to hundred and one hotels that certified with Halal logo (Zailani, Fernando and Mohamed, 2010).Besides, to set up businesses in Malaysia require some general adopts of its local market segment included religious and cultural practices such as to being halal conscious by implementation of crescent rating which this system is require under the traditional Islamic rules to the test the halal friendliness of facilities and function in hotel industries in Muslim country (Fazal, 2009) For instance, Awana Spa Island Resort in Langkawi crescent rated at category 5 which indicate that the hotel accommodate some specific Muslim directs and Shangri-Las Rasa Sayang Resort Spa in Penang rated at category 3 (Crescent Rating, 2010). Moreover, regarding the culture in Malaysia, the main facilities of prayer room or Surau is important for Muslims as they require d praying 5 eras daily collectible to the ease of travel from current location to mosque. Besides, the culture in the aspect of employee working hour, there are slightly different if compare with oversea working time as for Muslims every Friday afternoon is the hebdomadary prayer time thus Muslim employee need to leave their work place at this time (Usama, 2007). Moreover, festival holiday is a main issue that need to concern in Malaysia as Malaysia has some(prenominal) festival to celebrate such as Hari Raya Aidilfitri, Chinese New Year and others therefore public holiday would interrupt the operation performance of the company where by employee off from work on the particular day. (Zailani, Omoar and Kopong, 2010)2.2.2 Political and Legal Environment in Malaysia consort to the A.M. Best country risk report, Malaysia has a moderate level of political risk which categorized as CRT-3 which indicate that Malaysia is a develop country that having a developing legal environment, leg al system and business environment (A.M. Best, 2010). Generally, political risk comprises the stability of the government and order of magnitude in a country and here the political environment would be first concentrate on the change of government and key leader in Malaysia. Up to date in 2010 political prepare in Malaysia involves two separate downside risks which happened 2 years back in 2008 the political power was changed payable to the general election and the result was the National Front which had ruled Malaysia for 52 years had lose control and defeated by opposite (Marshall, 2009 Stamer, 2010). Then again, according to the executive summary by Political Economic Risk Consultancy, the political issue that foreign investors concern is about the hesitation on how good the opposition parties perform after they gained the political authority as a Malaysia government in handling some problem such as poor policies and others. Additionally, as a result of some political accusa tion, the case of Anwar on sodomy gave a flashpoint on the political stability condition. Due to the changes in the government authority, the political stability in Malaysia is affected much over these years and would bring further slander to investment in the country if the trend maintains (Marshall, 2009 Political Economic Risk Consultancy, 2010).2.3 Internationalization MethodThe internationalisation process is a very important process for a company that plan to expand their business outside their domestic base market by adopting several internationalization regularitys. In Shangri-La, the internationalization method that the group adopting is more on equity based method on foreign direct investment. The crowd is using its equity assets in the expansion of their company throughout the world and for another purpose of project development in advanced countries. Moreover, investment into a company is the competitive advantage of this company. Additionally, the Group is adoptin g 2 main internalization methods on its subsidiaries which through merger, acquisition and conjunctions. According to the financial report of Shangri-La in Malaysia, the subsidiaries are consolidated by using the purchase method of accounting in which the Group has the ability to exercise the power in the subsidiaries in order to manage the financial and operating policies of an entity as to attain benefits from their daily activities (Shangri-La Hotels and Resorts, 2010). Alternatively, some subsidiaries are consolidating by adopting merger method for example, UBN holding Sdn Bhd which happened on 1st of January 2006. As for the associate methodology, the Group has major influence but not control over the financial and operating policies. The hotel properties located in Malaysia at 31 December 2009 included Rasa Sayang Resort Spa, Traders Hotel, Golden Sands Resort, medallion Beach Resort in Penang, Shangri-La Hotel in Kuala Lumpur and Rasa Ria Resort in Sabah. (Shangri-La Malay sia, 2008)2.4 Problem and SolutionThe problem that the company confronts would be on the aspect of the culture differences between the origin country and the other country for example Malaysia. Cultural differences of international hotel groups would influence the operation of the company and also the efficiency of their human resource in the company. Besides, condition of cultural differences dilemma would also harm the company from gaining better return in either investment nor operating profit which payable to the competition among the hotel industries in the specific country. Thus, to overcome these cultural dilemmas, some solution on these problems needed to be implementing in order to resolve the problem to prevent any operation failure. The solution proposed would be through adoption of cross cultural strategies.According to passkey and Prideaux, culture can be distinguished into 2 views that match an ideological perspective including beliefs, norm, value and customs. Next , would represent the material element which including of the dining etiquette, where to buy and where to travel. (Prideaux, Moscardo and Laws, 2006) As mentioned above, the main cultural problems that face in Malaysia is about the Halal certification and also the employee culture problem. Therefore, from the cross cultural management approaches, it must emphasis on the staff inspiration and motivation method and improvement on product and service quality in order to satisfy customers demands. Firstly, company should implement the schema of cross cultural empathy through training and schooling that enables the staffs in the group from origin country to let them to be more considerate to accept other people cultures in Malaysia as well as the staffs in the company itself. This would help to solve any conflict rises concerning to the culture mis taste among three major races employees of Malaysian and between the headquarter staffs rather than behave obstinately on their own local culture perspective.Besides, in order to solve the cultural diversity problem in the case of halal certification, the company needs to employ the dodge of cross cultural through special design and marketing of hotel products and go. There are a lot of customers come from different religions and backgrounds, thus customers have different needs on the go and products. By using this strategy, the company is able to improve the degree of customers satisfaction whereby the products and services is specially designed for the purpose of tailor-made to adapt to different need of the customers. For instance, Muslims in Malaysia require some halal facilities and also on the foodstuff, as a result the hotel must pay close attention on serving the proper food at the table and also the facilities of prayer room in their hotel to allow Muslim to conduct prayer during the time that they are in the hotel area.3.0 The Growth of BusinessShangri-la has a well operational performance which its opera tions contribute the main source of revenue and operating profit for the Group. Besides, the concentration of the growth in the luxury hotel market in Asia would particularly focus on China. Thus, the group is continued to plan out the strategies of setting up sore hotel across the world. According to the financial report in 2009, a total of 7 hotels opened for business during the year and 4 hotel being subsidiaries of the group. During these years, Shangri la is adopting the market development strategies which the group is targeting naked markets or in the raw areas in different countries. For example, in 2011, the group will conduct foreign direct investment of 29 hotels in other countries such Qatar, Austria and others. Besides, the implementation of product development strategy in the group develops their services and quality to gain higher level satisfaction from customers through training of employees to deliver better services to customer. For instance, the networking of t he Shangri-la throughout the international subsidiaries had improved through communication and result in the integration with its international counterparts by applying uniform standards for inbound and outbound logistics and this give rise to higher level of efficiency in the operation, sales and marketing. Consequently, Shangri-La had gained positive reviews and constitution from regulatory bodies and this benefit the company to connect into all revenue-generating marketing channels (Shangri-La Asia Limited, 2009 Chitika 2009).As for the future direction of growth, according to Ansoffs Product-Market Matrix, the product development strategy should highlight in the company. The contend is that it is important to have possession of distinctive advantage over its competitor by reason of keen competition existed among the local and other international hotel industries in the market. Besides, hotel industry is leisure and tourism destination places, customers are the main earnings so urces from the hotel operations, it seem to be not enough to have similar existing facilities promoted in the hotel to attract customers. Thus, an innovation technique is required to improve the product and services in the hotel in order to maintain an advantage over competitors meanwhile to attract more customers. By examining through proactive development strategy to develop the product base on the anticipation of the evolution of customers needs or through the adaption of reactive development strategy whereby the product is develop in order to deal with the customer needs. Besides, as a result of adapting product development matrix, the company is able to develop and launch new product or services where the products or services are presently not being offered by any other competitors however it able to keep the existing market and nevertheless attract more new customers. For instance, product development strategy including offering high-level service to the customers through prov iding some durability facilities such as promotion on the discount offer to their customer base on an alliance with the air companies and forget free shuttle for the customer to take them from airport to the hotel. Thus, Shangri-La hotel must provide services that other competitors do not offer and the most importantly, making the customer feel at home and even better than that.4.0 New VentureThe new venture of Shangri-la hotel would using the foreign direct investment method which the company will expand and build up hotel under equity base method in the chosen country, Kingdom of Heaven, Bhutan. While Shangri-La investing in Bhutan, the group will suggested to conduct joint venture with the local partner such as the tourism agencies to increase the inflow of the tourist to the hotel and other share value-added joint venture, for instance, merge with the local hotel industry where the hotel contribute the resembling(p) function and this will reduce the competition among the simi lar industry and nevertheless increase economies of scale. As Shangri-La is moving into the new market and segment, it is necessary to understand what strength determines the profit of their industry. Thus, Porters Five Forces analysis would be taken to identify all the threat in hotel industries in Bhutan. Firstly, the threat of supplier power in the market will take into concern. The supplier power in hotel industry would be the availability of dexterity of the employees that provide services to customers due to tertiary industry is totally focused in services. Thus, Shangri-La need to provide a high level of training program to ensure the employees are able to carry out best service to their customers. This is because employees can influence the profitability and the attractiveness of the hotel itself. Besides, supplier power can be the organization that control and provide the food and beverage to the hotel industry in the country. In this case, there are plenty of suppliers in Bhutan which mainly working on supplying of the food for local statistical distribution whereby they import all the food stuff items, such as the company of Dollay Food Product, Sharyang Enterprise, Sonam Choki Enterprise and many others suppliers (Cheaponsale, 2010). So supplier power force is considered weak to the company.Secondly, would be the buyer power. This force reflects the strength of bargain power from the customers which concerning the level of quality served and price rate of the hotel. Commonly, from the behavior of the customers, customers seek for best quality with lesser price of hotel, solution for this problem would be the hotel management should make some adjustment to its strategies in order to meet the demand of the customers to avoid switching among the hotels in the market, if the switching problem happen then the buyer power is high which will bring disadvantage to the company.Thirdly, competitive rivalry is also a serious force that the company has to co ncern on it. This force would focus on the number of the competitors in the same industry in Bhutan. In Bhutan, there are hotels that available in the specific geographic areas. For instance, According to The Hotel Association of Bhutan (HAB), Bhutan is divided in 20 administrative districts and there are 121 hotels in the country and exactly with 34 hotels with 3 stars and above are available in the certain districts in Bumthang, Trongsa, Punakha, Thimphu, Wangdue Phodrang and Paro the rest are ranked as 2 stars and below (Tourism Council of Bhutan, 2010 Cabinet Secretariat, 2010). Thus, competitive rivalry in hotel industry is kind of high due to the number of competitors offering in the market and the company should adapt specific strategy to overcome the problem such as create differentiation on the product and services in order to differentiate themselves from the competitors. Due to the problem faced by the competitive rivalry, the threat of substitution which examine on the similar product and services is high in the hotel industry because there are a 121 hotels accessible in the Bhutan and enable the customers to have alternative choices on what hotel that they prefer to select. Thus, better marketing strategy is needed for the company to deal with the substitution problem such as changes in technology and services in the hotel could bring some advantage like good reputation for the hotel to compete with its rivals.Lastly, threat of new entry is high in the hotel industry in Bhutan as Hotel Association of Bhutan (HAB) reported that there 46 new hotels will open up in the country. However, the Bhutan government had approved 100 percent of foreign direct investment to build 5-star hotels and 70percent of foreign direct investment for 4-stars hotels in Bhutan in early 2010 (Dawa, 2010 Dahal, 2009). In this case, Shangri-La has the total advantage of investing and setting up hotel in Bhutan as Shangri-La is ranked as 5-star hotel. Besides, the structural expansion of the hotel in Bhutan would be difficult because most hotels was in debt due to the financial institution had stopped giving loan for hotel construction. This is because of governments policy on the existing hotels that they are required to win their hotels within 2 years time in order to provide better service to customers with the help of government by providing incentives of tax breaks for up to 10 years to make the upgrading possible (Cabinet Secretariat, 2010 Dawa, 2010). Hence, with good reputation and its 5-Stars ranked hotel, Shangri-La has gained the advantage to compete with the hotels in Bhutan. Thus, Shangri-La needs to come out with some new plan to sustain its market position.5.0 ConclusionIn summary, various analyses needed to be considered and examined in the progress of business expansion to the international market. Going international not only mean to look for the new market abroad but it also enable the company to have better understanding on the ex pansion strategies that needed to adopt in turn to deal with the dilemma that occurred in the international market. Besides, international business can promote faster growth in the country economy due to the entry of foreign direct investment in the country which stimulate the domestic competition in the market and in effect would encourage improvement in the service and product of the company, besides it would help the employment rate of the country as well. Moreover, in order to go for international business, the particular companies need to ensure that the correct strategies are adopted. With the assist of PEST in the expansion of macro environment in a market, the company, and here would be Shangri-La can easily gain the information of the specific market and taking the next step to invest into the market. Besides, by examining the international consideration, it gives clearer picture on what the company doing in the existing market and how the company give solution against the problem that they faced and yet understand how they ship an international market such as foreign direct investment which adopted by Shangri-La hotel into various countries. Other than that, by using the Ansoffs product-market matrix, it enables the company to make good use of the strategies in order to have a better strategic planning in the expansion of the businesses such as to study on the direction of growth of Shangri-La Company. Lastly, with the analysis of Porters Five Forces, it helps the company to understand the strength and the threat of the market when the foreign company planning to invest into the country. By having all these strategies, the company can have the advantage to globalize and to compete against the competitors that existed in the market in order to offer better products and services nevertheless gain more profit and attract more customers. In conclusion, all these strategies would benefit and victor the companies in doing international business.