Research Korner: Customer Care Practices

Assessment of Customer Satisfaction in Governmental Organization

Customer Satisfaction in Governmental Organization   In every part of America, taxpayers are giving their satisfaction rating to the government employees along with their services rendered to the people.   This kind of survey enables the US government to monitor which part of the federal government is not doing its job and responsibilities to the public.   It also reveals how the employees in the federal government treat their customers or public based on the satisfaction level of the public.  In this regards, there have been 30 federal agencies that serve more than 90 percent of the American people --   they will be randomly surveyed to determine levels of satisfaction with the services they receive from these government agencies. This customer satisfaction policy   has been started in the implementation of Executive Order 12862 in 1993, which instructed federal agencies to establish customer service standards, report on their customer service activities, and develop customer service standards. Putting people first means ensuring the federal sector provides the highest quality service possible to the American people. In moving the government-wide survey initiative from the drawing board to actual contact with taxpayers is a significant achievement.  Moreover, the  Federal Advisory Committee for Excellence in Customer Satisfaction, which composed of industry, academic, consumer groups, and government agency leaders, oversees the survey. Aside from that, the committee is focusing on the best methods for institutionalizing a customer service culture in the federal government, the committee works with the High Impact Agencies to target catalytic changes necessary to improve the services provided to the American public. Other initiatives will be done in order to identify and to share the best practices for improving and delivering customer service among federal employees. Improving customer service is an essential ingredient to promote a high level of trust among the public towards government employees. (http://govinfo.library.unt.edu/npr/library/announc/survey.html) Correspondingly, the federal government has also established a customer focus, expectations and loyalty program that are designed to address all public’s concerns and complaints regarding government customer service or products.   In this center, the customers are being accommodated by the officer on duty, and see to it what the most immediate response is to be initiated.   Next,   any government organization must see to it that they encourage their customers to voice out or express their complaints to the concerned agencies or employee, in order to improve the quality  customer service of they offer to the public.  Similarly, this is also an effective way to ensure that the government organization will find ways to develop an customer serviced enhance their products and services.   There is correspondence, on bills, and in the telephone directory. Some offer discount coupons to encourage customer feedback. Many publish information on how they can be contacted in more than one language. They publish 1-800 and other numbers for the company where consumers are most likely to see.  Companies also market their complaint handling systems in conferences , meetings,  annual reports, newspapers, association circulars, videos, audio tapes, letters, press releases, speeches, training sessions and thru email.  Accordingly, there are government companies that really go out of their way just to please the customers.   A good example of this public firm is the insurance company with an excellent staff.    The insurance staff can greatly deal with the needs of grieving spouses.  Majority of the government  companies in the United States have been given  their leading employees  authority  to  provide any  cash incentive or in-kind award to the customers who have complaints with the products, coupon or even in  monetary issues, this is being done just to resolve  any complaint from the customer.  Relatively, the U.S. Postal Service is giving $ 20 in stamps whenever it is needed for the customer’s concern and satisfaction.  In the same token,  the government agencies are distributing supplement surveys among American people who complain on the routine. These government organizations  are giving surveys of a people who have complain with the routine and mostly extensive data collection tools.  By this, the  government personnel  will understand the level of satisfaction with  the existing customers. (http://www.customerexpressions.com/cex/cexweb.nsf/(GetPages)/fb0e21c03e1a1fbb85257011006e6396) The government –company partners focus on clear customer target groups. One company that serves a wide variety of customers decided to focus on its high-volume business customers. Three months after a high-volume business customer has complained, the company follows up to find out whether they are still using their services and, if not, the reasons for dissatisfaction. In addition, the company routinely solicits feedback before, during, and after service. It conducts focus groups and has established a Customer Advisory Council to drive decisions related to this key target group.  All these organizations   try to anticipate the needs and problems about a product or service.  In the same time, the government organizations has been educating their customers. (http://www.customerexpressions.com/cex/cexweb.nsf/(GetPages)/fb0e21c03e1a1fbb85257011006e6396)   References: (http://govinfo.library.unt.edu/npr/library/announc/survey.html) (http://www.customerexpressions.com/cex/cexweb.nsf/(GetPages)/fb0e21c03e1a1fbb85257011006e6396) (http://www.customerexpressions.com/cex/cexweb.nsf/(GetPages)/fb0e21c03e1a1fbb85257011006e6396)

Assessment of Customer Satisfaction in Governmental Organization

Customer Satisfaction in Governmental Organization In every part of America, taxpayers are giving their satisfaction rating to the ...

Final Proposal_An action plan of Customer Retention Using the distinctive Strategies of IT/IS; A Case Study of Exploration and Production in Oil & Gas Industry

PROJECT PROPOSAL   Student name:                                                                                         Student No:         Email Address:                                                                           Award Name:  MSc in Technology Management   Site Name:      Apiit Malaysia   Title of project:        An action plan of Customer Retention Using the distinctive Strategies of      IT/IS; A Case Study of Exploration and Production in Oil & Gas Industry   Proposed Supervisor:   Please record which modules your topic is related to: Marketing (MKT). E-marketing         Introduction Today the most important business sector in the world is the oil & Gas industry which offers a benefit for every individual, group of people and government sector, given the high commodity prices and increasing the profit of economic. the dependency on oil and gas products, the every day materials and resources from oil and gas are evident in all aspect of our daily lives (University of Aberdeen, 2006) and by exploration and production of oil and gas in order to impact upon many areas of the workforce it will help to sustain the oil and gas industry because without oil and gas exploration and production the world would literally grind to a halt (University of Aberdeen, 2006). Recent rises in petroleum prices have spurred many new exploration activities. Spending on world wide exploration and production is estimated to have risen 30 percent in 2006 by US$ 268 billion (Upstream, 2007). For example crude oil and petroleum products are widely traded and effectively have a single price after allowing for transportation costs and quality differences in more clarification in 1960 would have been worth 6.6 times more in 2005 this mean that the average oil price of $1.9 a barrel in 1960 is equivalent to $ 12.59 a barrel when expressed in 2005 U.S. dollars (World bank, 2007). The reason behind successful oil & gas companies and becoming world wide business is because the ability to provide a clear approach of products, services, advance technology and successful customer feedback which can offer a higher profit for industry and providing a close-loop process for gathering customer feedback to continuous improve business practice (Parasuraman et al, 1985). Customers in Oil & Gas industry should be seen as on-going opportunity, to better understand the rational behind this theory and to face the challenge of building customer loyalty, Hunter (2007) identified five types of customer such as: loyal customers, discount customers, impulse customers, need-based customers, and wandering customers. Ahmad & Buttle (2002) stated that the organization should focus on existing customers because those are the once who can not only provide feedback about products and services, but also work together with suppliers to add-value to a particular service by improving the process. Through successful customer care or creating an effective customer focus, Oil & Gas industry will be able to provide an opportunity to increase the customer satisfaction/retention, increasing the sales and revenue and creating value for Oil & Gas industry shareholder (Greenberg, 2004). Focusing and identifying on customers which is the most important factor in Oil & Gas industry because through it Oil & Gas industry will be able to provide a successful program of customer retention plan and ability to retain its customers and satisfy them.   Project background According to Eriksoon & Lofmarck Vaghult (2000) customer retention is central to the development of business relationships, is specific to the context of each firm, and this is rarely recognized in models for customer retention. Customer retention is important to most companies because the cost of acquiring a new customer is far greater than the cost of maintaining a relationship with a current customer (Ro King, 2005) which have a significant advantages in the form of lower prepayments, increased revenue, improved pricing on securitizations, customer retention has been shown to be a primary goal in firms that practice relationship marketing (Gronroos 1991, Coviello et al, 2002) which mean satisfied and properly served customers are more likely to return to an organization than are dissatisfied customers who could choose simply to go elsewhere (Ovenden, 1995). The main challenge faced by the mortgage industry  is the continued price sensitivity of their consumers as  a result the main objectives for many companies is to employ customer retention and development programs that will serve to reduce this price sensitivity and therefore reduce the flight risk of customers (Davis et al, 2007). In additional customer retention programs allow companies to collect data about their customers, this data can be used to better understand target market, and communicate with customers or to customize future interactions with customers and also can be a relatively inexpensive means of making customers feel special, increase their purchases and recommend prospects (Ro King, 2007). However, successful implementation of customer retention has to be carefully planned, executed, maintained, and measured it also need to be accompanied by customer service, product development, and product deliver strategies that aligned with the targeted customer base (Davis et al, 2007). Globally the major players in the petroleum industry are Exxon and Shell group, who account for roughly 20% of the world’s production (AL-Ghamdi & Suhail, 2006) and according to Passemard & Kleiner (2000) that the competitiveness of some firms arises from macro economic phenomena directed by exchange rate, deficit of the national budget or interest rate.   The major competitors of oil and gas industry had a good leadership, competent project team, willingness of management to take risk and make changes, technology solution and successful implementation of energy management program will lead the oil and gas industry to be more competitors and providing a successful products and services to its customers (Davis, HA. & Chan, EKS., 2001), Petrochemical industry of Saudi Arabia  can be an example of competition in petroleum industries sector which is primarily a petroleum economy with oil revenue representing 90-95% total Saudi export earnings 70-80% of state revenue and around 40% of countries gross domestic product (GDP) (AL-Ghamdi & Suhail, 2006). Besides the competitive challenges, the Saudi Petrochemical industry faces a number of other challenges. Some of the significant ones relate to a high dependence on a skilled expatriate work-force, high costs of technology transfer, low levels of productivity of the Saudi workforce due to a lack of motivation to work, and the emergence of regional competitors (AL-Ghamdi & Suhail, 2006), The key strength of Saudi petroleum industry lies in the low-cost of feed-stocks as well as cost of utilities which make the average variable cost lower than of its competitors (AL-Ghamdi & Suhail, 2006). Ahmad et al (2001) identify the following six economic benefits of retaining customers such as: savings on customers’ acquisitions, a guarantee of base profits, growth in per-customer revenue, reduction in relative operation costs, free of charge referrals of new customers from existing customers and finally price premiums as existing customers do not usually wait for promotions or price reductions before deciding to purchase. Through customer retention plan Oil & Gas industry can achieve its planning by colleting data and information about its customers which can enhance the Oil & Gas industry to enhance its operation and enhance its position in marketplace. Previous research into customer retention has focused on the opinion that retaining customers are easier to work with and that a lot of vital feedback can be gained from these customers (Isaksoon & Suljanovic, 2007) and potential advantages of pursuing strategies for satisfying or retaining customers rather than on the concepts themselves (Eriksson, Lofmarck Vaghult, 2000) which will lead the Oil & Gas industry to gain many advantages such as:: employee retention and satisfaction (Reichheld, 1995) providing a long-term relationship strategy between Oil & Gas industry, opportunities for new business, increasing the sales and creating value  for Oil & Gas industry’s shareholder (Greenberg, 2004). Customer retention can be an important factor in Oil & Gas industry because through customer retention, Oil & Gas industry can increase the opportunities to industry and its customers and ability to increase the customers’ profitability in higher level of performance.   Project Aims The aims of this project are to provide a successful action plan of customer retention plan using the distinctive strategies of IT/IS in Oil & Gas industry, also exploring how individuals and groups in Oil & Gas able to offer a clear structure and ability to provide higher-level of customer retention plan this will lead to an understanding of how the benefits of customer retention plan can drive Oil & Gas industry to be more competitive and to retain its customers.     Project objectives   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> To examine difference customer care program in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> To examine the importance of customer retention in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> To examine the improvement of customer retention in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> To examine the distinctive strategies of IT/IS that enables Oil & Gas industry measure the customer behavior and attitude.</li> </ul>       Research program   Stage-1 (Duration one month) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Gather an appropriate materials and resources in Oil & Gas industry. This would include journals, articles, and academic research.  </li> <li class="MsoNormal" style="text-align: justify"> Analyzing the case studies such as: Microsoft, BMW, Shell Company and Petronas Company.</li> <li class="MsoNormal" style="text-align: justify"> Select the customer retention area in case studies </li> </ul>     Stage-2 (Duration one month) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Identifying a development program such as: customer loyalty program, customer retention program and customer satisfaction program.</li> <li class="MsoNormal" style="text-align: justify"> To identify a development program in order to increase customer loyalty and decrease turnover in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> To understand first hand knowledge from specific numbers of customers from the Oil & Gas industry based in overseas industry.</li> </ul>   Stage-3(Duration two month) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Identify the most profitable customer and customer segment.</li> <li class="MsoNormal" style="text-align: justify"> Exploring how individuals and groups serving the concepts of e-customer retention.</li> <li class="MsoNormal" style="text-align: justify"> Understanding the process of using the IT/IS strategies in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> Exploring how individuals and groups serving the concepts of e-customer retention.</li> </ul>   Stage-4(Duration two month) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Developing the frame work of customer retention plan in Oil & Gas industry through stage-1 and stage-2.</li> <li class="MsoNormal" style="text-align: justify"> Evaluating the concepts of e-customer retention in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> Testing the frame work of e-customer retention plan from the interview in Oil & Gas industry.</li> </ul>     Stage-5(Duration one week) <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Finish documentation.</li> <li class="MsoNormal" style="text-align: justify"> Printing document.</li> <li class="MsoNormal" style="text-align: justify"> Submitting documents.</li> </ul>   Deliverables   <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Deliver a successful frame work of customer retention plan in order to retain customers, and to establish new information and control system.</li> <li class="MsoNormal" style="text-align: justify"> To deliver a difference customer care program for various industry.</li> <li class="MsoNormal" style="text-align: justify"> To analyzing the implementation of customer retention in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> To evaluating the need of customer retention in Oil & Gas industry.</li> <li class="MsoNormal" style="text-align: justify"> To evaluating the need of IT/IS in customer retention in Oil & Gas industry.</li> </ul>     Commercial/industrial Collaboration   No applicable       Resources   To offer successful project of customer retention plan in Oil & Gas industry the following resource are required: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify"> Oil & Gas company experts.</li> <li class="MsoNormal" style="text-align: justify"> Experts of customer service.</li> <li class="MsoNormal" style="text-align: justify"> Marketing experts.</li> <li class="MsoNormal" style="text-align: justify"> Public and APIIT library.</li> <li class="MsoNormal" style="text-align: justify"> Online journals </li> </ul>       The list of references   Ahmad & Buttle 2002, Customer retention management: a reflection of theory and practice, [online], Sydney, Australia, Available from http://emeraldinsight.com/0263-4503.htm, [Accessed 2 December 2007].   AL-Ghamdi & Sohail 2006, Sustaining Competitive advantage in the global petrochemical industry: a Saudi Arabian perspective, International Business and Entrepreneurship Development, 3(1/2), pp. 4-17.   Ahmad et al, 2001, Customer retention: a potentially potent marketing management strategy, Journal of Strategic Marketing, No. 9, pp. 29-45.   Coviello et al 2002, How firms relate to their markets: an empirical examination of contemporary marketing practices, Journal of Marketing, [online], 66(3), Available from http://www.emeraldinsight.com, [Accessed 2 December 2007].   Davis, H.A. & Chan, EKS. 2001, Facilities, [online], 19(7/8), Available from http://www.emeraldinsight.com, [Accessed 2 December 2007].   Davies et al 2007, Customer Retention in the consumer Finance Industry, [online], Available from http://www.pwc.com, [Accessed 2 December 2007].   Eriksson, K. & Vaghult, AL. 2000, Customer Retention, Purchasing Behavior and Relationship Substance in Professional Services, Industrial Marketing Management,[online], 29(4), pp. 362-372, Available from http://www.emeraldinsight.com [Accessed 2 December 2007].   Gronroos, C., 1991, The Marketing Strategy Continuum: toward a marketing concept for the 1990s, Management Decision, [online], 29(1), Available from http://www.emeraldinsight.com, [Accessed 2 December 2007].   Greenberg, P. 2004, CRM at the speed of light: Customer Relationship Management, Essential Customer Strategies for the 21st Century, 3rd ed, McGraw-Hill, United States of America   Hunter 200, The 5 Types of Customer: Increase Your Loyal Customer to Increase Your Sales, [online], Canada, The New York Times Company, Available from http://sbinfocanada.about.com/od/customerservice/a/customertypesmh.htm, [Accessed 2 December 2007].   Isaksson, K. & Suljanovic, M. 2001, Customer Retention in Service Firms: Three case studies of companies in the Transport-Logistic Industry, [online], Lulea University of Technology, Department of Business Administration and Social, Available from http://www.emeraldinsight.com, [Accessed 2 December 2007].   Ovenden, A. 1995, Keep your customers happy and your competition will slowly fade away, The TQM magazine, [online], 7(1), pp. 46-49, Available from http://www.emeraldinsight.com. [Accessed 2 December 2007]. Parasuraman et al 1985, a conceptual Model of service quality and its implication for future research, Journal of Marketing, [online], Vol 49, PP. 41-56, Available from http://www.emeraldinsight.com, [Accessed 2 December 2007].   Passemard, D. & kleiner, B.H. 2000, Competitive advantage in global industries, Management Research News, 23(7/8), pp. 111-117.   Reichheld, FF. 1995, Loyalty and the renaissance of marketing, Marketing Management, 2(4), pp. 10-21, Available from http://www.ermeraldinsight.com, [Accessed 2 December 2007].   Ro King 2004, Customer Retention Programs, [online], New York, The Alexander Group, Available from http://www.saleslobby.com/Mag/0601/FERK.asp, [Accessed 2 December 2007].   University of Aberdeen 2006, Overview of the North Sea Oil and Gas Industry: A key business training event for non-specialists, [online], UK, Available from http://www.abdn.ac.uk/northseaoverview/intor.shtml, [Accessed 2 December 2007].   Upstream 2007, E& P players plan New York firework, [online], Available from http://siteresoruces.worldbank.org/INTOGMC/Resources/cambodia_oil_gas_newsletter_1, [Accessed 2 December 2007].   World bank 2007, Introduction to Oil and Gas, [online], Available from http://siteresoruces.worldbank.org/INTOGMC/Resources/cambodia_oil_gas_newsletter_1, [Accessed 2 December 2007].     Project plan: (refer to appendix for project plan).

Final Proposal_An action plan of Customer Retention Using the distinctive Strategies of IT/IS; A Case Study of Exploration and Production in Oil & Gas Industry

PROJECT PROPOSAL Student name: Student N...

A Strategic Analysis of Ocean Park of Hong Kong

Distance Learning   MSc Hospitality Management   Strategic Management                                 Prepared by :              A Strategic Analysis of Ocean Park of Hong Kong   (FIT) the purpose is to discover the environmental forces and the resources that need being developed to address them in order for the Park to perform better than its competitors.     TABLE OF CONTENTS           Page A. Executive Summary 4       B. Introduction 4       C. Strategic Position           - Market Segmentation & Life Cycle of Ocean Park 5-6   - Strategic Capabilities & Resources 6-7   - Expectation & Purpose 7-8       D. Strategic Choices 8         - Corporate Level 9-10   - Business Level 10-12       E. Strategy In Action           - Structure 13   - Process 14   - Relationship 15-16       F. Conclusion 17         Appendices 1 – 7 18-28         References 29-30           A. EXECUTIVE SUMMARY   This paper attempts to analyze the business environment that Ocean Park (OP) operates and employs the FIT approach to discover the environmental forces that drive changes in this theme park.  It has to build on the existing resources through the design lenses to formulate strategies at both the corporate and business levels.  It already possesses the strategic capabilities of having a convenient location, high service standard and good quality staff. The main change is to adopt the strategy of product diversification, i.e. to develop the spa and resort facilities.  We also recommend it to penetrate the current market by strengthening its supremacy in leading wildlife and marine education tour to complement the service rendered to its the family clientele. It is important for the park to focus in PLOY, by maneuvering the existing resources to maximize the business results.  We also review the configuration employed by OP which adopts the multidivisional structure to align the process and relationship together.  All in all, the Park should then position itself as the complementary experience to that of the soon-to-be opened Disneyland rather than engaging in a direct competition.     B. INTRODUCTION   OP, the first theme park in Hong Kong, was established in 1977 as a non-profitable public organization, 100 percent wholly owned by the Hong Kong SAR government. With its long history and unique image, it becomes one of the icons in Hong Kong. It is also the possession of Hong Kong people and part of the community heritage. Its mission is to firstly provide local and overseas visitors with experiences that combine entertainment and education, secondly, to assist in the understanding and practice of wild life conservation.   Given the dynamic of global business environment, fierce competition and many other influences, OP has encountered a few years of deficit. To improve its financial performance, OP continuously expands and improves the entertainment facilities and service standards, seeks and introduces new educational programs and opportunities to promote lifelong learning, strives to deliver the highest standard of quality service and customer care. With the opening of Hong Kong Disneyland this year and to sustain its competitive advantage, OP must re-develop its strategy to cope with the challenges in the external and internal environment.   C.    STRATEGIC POSITION   To understand the business environment that OP is operating, we will examine it by means of the PESTEL Framework, Porter’s Five Forces and the SWOT analysis (Appendix 1).   Market Segmentation and Life Cycle of OP   In view of the current market segmentation of OP (Appendix 2), the main market segment is overseas visitors of which Mainland visitors are the main target. Looking into the life cycle of OP, it is estimated the local visitors has reached the declining stage while the Mainland visitors is at the growth stage. The performance of each strategic business unit would be analyzed by the BCG matrix(Appendix 3). The theme-event, like the Halloween Blash is in the “STAR” box which was proven to increase the admission rate. The rides, collection of marine and animals are in the “CASH COW” that maintains their business in OP.   Looking into business of theme-events and rides, the potential for growth is in doubt. To reinforce the park’s role in the Hong Kong community and outperform their competitors, OP has to re-position itself, look for new local market, such as, the young married with and without children and develop new products, like resort and spa and wedding facilities.   Strategic Capabilities and Resources   Management and Human Resources OP has a strong management team with 27 years of experience in managing theme park. The board is rejuvenated under the leadership of the new Chief Executive whose strength, diversity and commitment have been invaluable to OP. They had made a remarkable turnaround in 2003-2004 with the support of the experienced and well-trained human resources. Their standards of service and product knowledge are credits to the Hong Kong’s image. They had received the Hong Kong Award of Services in 2000 by Hong Kong Tourist Association. OP employees work stoically through the difficult SARS months, and shared significantly in the restructuring costs. They not only manage the difficult period, but also play an invaluable and creative role in ensuring the success of the recovery plan, such as, theme-events.   Marine Collection and Animal Care In the theme park industry, OP matches the world’s best in terms of the range of marine collection, quality and breadth of animal care that arises out of their commitment to education and conservation of the natural world and marine environment.   Location The location of OP is supreme which has a stimulating setting, visual containment and interesting outlook. Also, it is easy to access and well served by road.   Good Value Chain OP has developed a strong good relationship with the Chinese Travel Agency and Hong Kong Tourist Association. In 2003-2004, OP sales staff plays 15 separate sales visits to more than 240 Chinese travel agents in 30 Mainland cities, while the executive team met Mainland media in Guangzhou, Shenzhen, Beijing and Shanghai. All these contribute to good reputation and appeal of OP across the Mainland (2004).   Improving Financial Performance OP has an improving financial performance with visitors up by 25 percent at 3.7 millions, revenues up 25% at HK$536 million and a surplus of HK$96 million for the year, reversing the deficit of HK$4 million in 2002-2003 and marking OP’s second most profitable year on record. The reasons are due to not only the emergence of visitors from Mainland, account over half of all the park’s visitors, but also, the carefully-focused development of special events and intensive and carefully-targeted promotional activity. These have brought visitors to the Park more often and encouraged them to stay longer every time they come (Annual Report 2004).   Expectation and Purpose   Corporate Governance OP has strong local roots and a wide range of home grown strengths nurtured over the 27 years of operation. Their core commitment to education and conservation remains solid. They also have a strong Corporate Social Responsibility. 100,000 senior citizens visited the park free of charge in 2003-04. They provide fee of charge of kindergarten tours and heavily subsidize on-site educational tour programs.   In summary, the strengths and weaknesses of OP are as follows:   The strengths of OP are its unique image and reputation to Hong Kong community and the tourists. It is situated in a supreme location with high accessibility. Besides, OP benefits most from its intellectual capital, excellent value chain and organization knowledge. The drive of management and the sponsorship of government lead to great potential for further development.   However, OP also has a number of weaknesses. The operating cost is high and the growth of local market is still declining. It takes a long period of time to develop new ride or other facilities. The product feature is not innovative enough to enhance the attractiveness as a major tourist destination to the local market.   Strategic Lenses As Design   In order to formulate a clear strategic direction, the top management uses the Design Lenses to view the strategy development. They look at the forces and constraints imposed on OP through a rational, analytical, structured and directive process so as to optimize the limitations or constraints ( 2005).   To sum up the above analysis, the inbound tourism in Hong Kong is booming. With government support on tourism, economy upturn, change of life style, demand of spa and beauty facilities, flexible wedding arrangement, as well as strong capabilities, there are great opportunities for OP to develop. As a result, it has to accelerate its innovation, and reposition itself, capture the new markets and develop the new products to sustain its competitive advantage.       D.    STRATEGIC CHOICES   After numerous analysis made on OP’s external and internal factors, it is clear that OP needs an innovative plan to reposition itself on the market to maintain its attractiveness and differentiate itself among competitors.  To begin with our strategic formulation, we will adopt the staircase model (2005) to assist us in linking our different levels of strategies: Corporate and Business, in a systematic way.     Corporate Level   To map the blue print of our total strategy, we need to set and identify new vision and mission for OP.  Being a “must-see” destination is the new vision for OP.  How to translate and implement this vision is through its new mission: create an image for OP where people can celebrate and share the important moments of their life.   In order to realize this vision and mission, we need to draw out an action plan.  Under the current circumstances, we believe a FIT strategy approach is more appropriate since it is the most effective in a known and stable environment where success is built on existing competences.    As the study shows, OP has gone through several phases of changes with similar result.  Base on Porter’s theory, OP can design its strategy by using a differentiation (2003) method to substantiate its new features in the market.   OP is unique of its own (1) having a spectacular view and close to the nature, (2) prestige location in the south side of the HK Island, (3) isolated from major city activities yet easy accessible, (4) famous in its expertise on nurturing animal, marine and wildlife, (5) a place where entertainment and education are coherent and (6) ”ranked among the top 25 theme parks with regard to attendance in the world” (People’s Daily Online).   To align with our FIT strategy approach, we will maximize its existing capabilities to diversify its product/service focus (Appendix 4) to a new frontier.  We believe our new strategy will add value to our customer “over the long run by consistently meeting their needs better than the competitor does” (5/19/05).     Based on our findings, we recommend OP to develop a new business unit of Spa & Resort concept hotel to make full use of its resources with the nature and to capture the latest living trend of HK.  Since OP is lack of expertise in the hospitality industry, we suggest them to bring in strategic alliance (2005) where the name can speak for itself.  “Banyan Tree” is our first choice to select as a strategic partner since it has extensive experience in managing various Spa & Resort hotel worldwide.   To name a few, they have existence in various Asian countries such as Singapore, Malaysia, Indonesia, Thailand and China (Banyan Tree).  With this reference, we believe this partnership can bring benefits to both parties where expertise and resources is shared to nurture the best outcome.   In the meantime, we are counting on this new business unit to bring in revenue and new opportunities to OP’s current product mix.  With the potential of this Spa & Resort unit, we categorize it as a STAR in a BCG matrix (Appendix 5), we expect this business unit will stay and enjoy its growth for a long period of time.  Our confidence comes from the study of the 3 critical success factors, being (1) acceptability, (2) suitability and (3) feasibility of this concept project. (Appendix 6)     Business Level   At this level, strategies are formulated in a more operational manner.  To maintain its competitive edge, we need to constantly ask ourselves the questions: Who are our target segment? Where do we want to go?  How to achieve the expected result?   We will use the ‘PLOY’ features in strategic formulation to lead us towards our goal (Appendix 7).   To answer the question of “Who are our target segment”, we tend to expand our clientele to those segments that have high disposable income, educated and treasure the quality of life as well as to get close and preserve the nature. “Where do we want to go” is relatively easy to understand by making OP as the must- see attraction for people to share their important moments together.  As for the question of “How to achieve the expected result”, we will organize and conduct various programs to cater for different customer segments.  Categorization of the customers is as below:   Family   Provide a relaxed environment for adult while a safe environment to children.  Parents can encourage their children to join various educational tours that offered by OP on wildlife and marine animals. This frees parents to have their private moment.   Children   Cater for family segment, educational tours to the marine and wildlife sections of the park can divert their attention from their parents to other areas.  In turn, it provides a more delicate type of babysitting service.  With years of experience, OP has earned the trust from general public to be a safe and educational place for children where they can find an ongoing excitement.   Young Couple   Since the Government has relaxed on the rules and regulations in organizing wedding ceremony, this Spa & Resort Hotel can offer special arrangement for wedding, such as wedding banquet and special theme wedding ceremony for the newly weds.  Under the management of Banyan Tree where it is famous for its “blend of romance, rejuvenation & exotic sensuality”, the hotel can offer special honeymoon package to encourage the newly weds to spend their sweet moments in the resort.    Corporate   Nowadays, many corporations are in favor of organizing off-site conferences and seminars.  We can offer similar facilities and package to cater for the needs of this target segment at an affordable rate.  These corporate customers are expected to generate new income on a more regular and stable fashion.   Furthermore, we can introduce the idea of club membership or loyalty programs to those repeat customers.  Special package to the management of the corporate clients is a very power and useful tool to establish a client base.   Outdoor Sports Activities   This new business unit is situated in a beautiful water front where it is near to the nature, the Spa & Resort Hotel can organize a variety of outdoor activities for in-house customers, such as water sports, sports, beach activities, hiking, cycling etc… to promote and portrait a healthy environment to build a positive image.         E.  STRATEGY IN ACTION   The New Configuration of OP   Employees who are the most important resource of an organization play the key roles in the implementation of the strategy.  The interactions and relationships among people can lead to the success or failure of the strategy.  After the right strategy is formulated, the next step is to configure OP so that the structures, processes and relationships are aligned and coherent to the new strategy.         a.    Structure   With the implementation of the new strategy, the structure of OP should be changed to multidivisional structure, which consists of separate divisions on the basis of products and services (2005).  Each division responds to the specifications of its product or market strategy with its own functional department.  For instance, the strategic alliance with Banyan Tree will require a new division set up to focus mainly on the market of resort and the new services provided.  This allows each division to develop a specific competence on a particular customer group.  The divisional structure is also flexible for OP to add, dissolve or combine divisions in response to the changes in circumstances.  The head office of OP is able to control its divisions by setting performance standards and targets.  The divisional managers are accountable for their own divisional strategies.  As divisions are so specialized and self-sufficient, it is crucial to establish cross-communication and co-operations among divisions to enhance collaboration and knowledge sharing within OP.  For instance, the Resort Division can work closely with the OP Academy division to explore new education tours or events for the kids of the resort customer.  The central service such as finance, human resources, and legal should be well trained to understand the specific needs of each division so as to provide the necessary support.    One way to make change more effective is through fair, open and honest communication ( 1987).  Before setting up the new structure in OP, it is recommended to ensure the managers and the employees are clear about the purpose of the new structure.  Training should be offered to each level in OP so that managers and employees have the competence to meet with the new requirements of the new structure (2000).  Clear roles and responsibility can shape the behaviour of employees and can achieve the expected outcomes.  Flexibility among division should be encouraged to allow divisional managers to explore and follow new opportunities as market needs change (Whittington 2005).  New and complex collaborations among divisions may need particular skills so proper trainings are required to ensure successful collaborations (1999).   b.    Process   The formal and informal organizational processes are the key drivers that make the organizational structure works.  The processes are the controls: inputs or outputs, direct and indirect on the organization’s operations and can help and hinder the translation of strategy into action.  For OP, it is suggested to adopt the combination of processes in planning and performance targeting. The former is the archetypal administrative control focusing on the organization’s input, which can monitor the implementation of strategy. The latter is the performance processes, which focus on the outputs of an organization such as service standards, revenues and products.  By adopting these two processes, it is intended to strike the balance between the control mechanism over output and input.   i.      Planning Processes   Such is focused on the standardization of work processes, which are essential for OP who is committed to provide world-class service to its visitors.  By introducing the e-commerce operations, OP can enhance its global presence.  Visitors from overseas can reserve the resort room and admission tickets through the Internet.  This allows OP to plan ahead for the peak seasons and to design promotion packages during low seasons to maximize the allocation of its resources.  Also, the bottom-up planning from business units is a vital process (2005).  Divisions could have their own planning within the corporate guideline.  As they are the most directly involved in the operation, they have better understanding of what resources and budgets are required for the coming fiscal year.  Through careful planning, the Head Office of OP can have a much clearer picture about the operations of the divisions and can adopt proper control as circumstances change.       ii.     Performance targeting processes   These are introduced to ensure alignment of the performance targets.  Head Office of OP sets performance target to control the divisions while allowing divisions sufficient autonomy to manage their divisions ( 1979).  The performance targets can help OP to evaluate its outputs of it service quality and profits facilitated by a clear set of role and responsibilities.      c.    Relationship           i. Internal relationship   According to , the multidivisional structure focuses on the structural relationship between the headquarters and the divisions, between the strategic apex and the top of the middle line (Mintzberg 1979).  In order to make the structure, process and relationships coherent to each other, strategic control, which concerns with shaping the behaviour in business units and with shaping the context within the divisions will be the main strategy style of OP under the new structure (2005).  Under this style, divisions will have their business plans formulated within the corporate guidelines, which are set by the Head Office.  The divisional managers have to understand the corporate logic and should have the competence to think strategically.     ii.     External Relationship   As strategic alliance with Banyan Tree will be constructed, the success of the strategy is relied on the cohesiveness and compatibility of this “marriage”. It is important for OP to balance between the best sources of specialist knowledge and the competence to integrate the specialist knowledge to create a best-value service to customers (2005).  Such connection offers OP and Banyan Tree an option of opening new doors and unforeseen opportunities by collaboration rather than mere exchange (2002).  Commitment and trust are the two key ingredients of forming the alliance, which is similar to the marriage of man and woman.  The expectations of two parties must be aligned to achieve the different interests of two parties.    With the diversified business of OP, the one-stop shops, one of the network relationships will be the other focus of OP.  The one-stop shop network offers customers to have a coherent and joined-up service, which is the ultimate goal of OP’s new strategy.  Under this network, OP offers a complete package of services: resort, spa, riders and educational experiences- exciting, relaxation, wild adventure to its visitors.     F.  CONCLUSION   OP has reacted to the diversified environment by capitalizing on its strength while exploring product / services that would appeal to the new market segment, e,g. spa & resort visitors and promotion of wedding reception and honeymoon packages.  By adopting these changes in the business and corporate level and supported by the right configuration as outlined above, we are confident that it will continue to be one of the top theme parks in the world and be able to do well in face of the opening of the Disneyland.       Appendix 1   Macro-Environmental Forces – PESTEL Framework Political   In the past few years, both Hong Kong and China are living in a politically stable environment. With the launch and progressive extension of the Individual Visit Scheme, there was 4.3 million Mainland visitor arrivals to Hong Kong under this scheme in 2004, accounting for over one-third of overall visitor arrivals which renders an important invigorating force to Hong Kong inbound tourism. In addition, Hong Kong government will continue to expand tourism in the Southern District and link Aberdeen with OP. In 2005, the government has launched a new policy on marriage registration. Marriage ceremony is no longer limited to take place in the Marriage Registry. The marrying couple can choose different locations for marriage ceremony with advance application for officiating minister. All these give opportunities for OP the opportunities of other business development.    Economic   In 2004, Hong Kong economy entered into a full-fledged upturn which was broad-based, marked by thriving exports and offshore trade, vibrant inbound tourism, strong pick-up in consumer spending and visible bounce-back in investment. The gross domestic product (GDP) grew by a remarkable 8.1% in real terms, distinctly faster than 3.2% growth in 2003. In 2005, the GDP is expected to attain growth of 4.5%-5.5% in real terms. The adjusted unemployment rate fell from a high of 8.6% in the second quarter of 2003 to a near three-year low of 6.5% in the fourth quarter 2004. Hong Kong consumer spending maintained notable growth throughout the year since they are optimistic of the economic outlook and improving labour market conditions. The growth of Private Consumer Expenditure as a whole is 6.7% in 2004. The prospect for the Hong Kong economy is bright which reinforce its existing strengths and identify a new era for development.   Sociocultural   In 2004, the birth rate was quite low in Hong Kong. There were 47,900 newborn babies compared to 51300 in 1999. It is because Hong Kong people prefer to have late marriage and fewer children. Also, the population is aging and there are more female than male. The ratio is 51.8% to 48.2%. More working women in the business world create a potential market for business opportunities. Nowadays, Hong Kong people are better educated. Their life-style is changing. They seek for a balance of work and life and willing to spend more resources and time on recreation, entertainment and the development of their children   Environmental   With increasing awareness and concerns on environmental protection, the Hong Kong Government continues to streamline their effort in controlling the pollution and protecting the natural resources by public education and organizing different activities and programs, such as, Rechargeable Batteries Recycling program. Besides, they make an effort to improve the street landscape by putting more green plants in order to give a pleasant pedestrian environment. This coupled with the growing trend of eco-tourism provide opportunities for tourist industry.               Competition in the Theme Park Industry – Five Forces Framework (Michael Porter)   The Threat of Entry   The barrier to entry in the theme park industry is very high due to high capital cost. The total fixed asset is around HK$706 million for initial capital requirement. For instance, Abyss Turbo Drop costs around HK$17M. Besides, potential site for development of theme park is very limited due to scarce supply of land.   The Threat of Substitute   In 2005, the main threat of substitution will be Hong Kong Disneyland, a new international theme park that expected to become another major tourist destination in Asia. Apart from this, there are other forms of substitution. From the education side, Hong Kong people can switch to go to Cultural Centre, Mai Po Wetland, Hong Kong Zoological and Botanical Garden. For entertainment purpose, they can visit the Karaoke, Cinema, Game Centre, or have a day trip to China.   The Power of Buyers   The buying power of consumer is high since they have many choices as mentioned above. The switching cost is relatively low. Also, Hong Kong people like new experience and their loyalty to the product is generally low.   Competitive Rivalry   The global competition is great in the industry. There are 342 parks with 500,000 visitors or more per year all over the world in 2002. OP ranked at the top 25 in the world. With the opening of HK Disneyland in 2005 as well as other existing small-scale parks in Hong Kong, such as, Lai Chi Kok Park, Snoopy’s world, Teddy Bear Kingdom, Winter Carnival at Hunghom/Hong Kong, Spring/Summer Carnival at Tamar Site, these competitive rivals possess the challenges to OP.   Opportunities and Threats   The above environmental and competition influences provide OP the following opportunities and threat:   Opportunities for New Product and New Market   With more and more working women as well as the need of better quality of life, the demand for Spa and Beauty is increasing. There is a market for resort developments. Whilst a spa would be a main element within the resort, it would have to have other attractions to be viable, such as child caring service and eco education tour for children.   Owing to the fact of increasing importance of Chinese Medicine, the Spa offering traditional Chinese Medicine, and medical/clinical based spas (comparable to Swiss’s health and beauty treatments) are likely to be attractive to tourists not only in local market, but also overseas market through the year.   Spa resorts have continued to develop through South East Asia, such as, Thailand, Indonesia and Malaysia. The market is increasingly competitive. However the brand name of OP would attract visitors and bring certainty to the products offered.   Due to the flexibility of holding marriage ceremony, OP can develop new business, like, wedding and honeymoon facilities and arrangement to make use of its unique image and supreme location.   Threat   The opening of Disneyland poses a strong threat to OP in addition to the other substitutes. Also the war for talent and aging workforce can bring negative impact on its operation. To survive in a more favourable environment and sustain its role in Hong Kong community, there is strong need to rejuvenate its reputation by capturing the new market and develop new products which can strengthen the strategic position of OP and cope with the challenges externally.   Appendix 2   Market Segmentation of OP   Appendix 3       BCG Matrix                         STAR QUESTION MARK       　   　     　       　   　     　     High 　 Theme Event 　     　       　 　     　   Market Growth Rate   　   　     　     　   　     　     　 　 　 　 　 　     　   　     　       　 Rides 　     　       　   　     　     Low 　 Animal & Ocean 　     　       　 　     　       　   　     　       　   　     　       CASH COW DOG                           High     Low                               Relative Market Share                             Appendix 4     Ansoff’s Product/Market Expansion Grid                                           Current Product                               New Product                 Current Market                     New Market           Viewing the current products and services of OP, there is not much room for OP to increase its market share with its existing facilities.   Therefore, an alternative for growth is to enter into a new market with a new product/service to differentiate itself from competitors.  As a result, the new plan falls under the diversification strategy of Ansoff’s Corporate Strategy where the major characteristic of this strategy is to expand its market share by stimulate the market with new product (1) with existing capabilities, (2) new capabilities and (3) beyond current expectations (2005).   By inviting Banyan Tree, the famous brand name for Spa & Resort, OP is entering into a whole new hospitality industry to fully utilize its resources related to nature. Appendix 5   BCG Matrix for the new Spa and Resort Hotel                                                               Relative Market share                                                         Market Growth          Rate                This Spa & Resort business unit of OP is expecting to capture new market share from the new market segment.  Since the life style of the local people is changing, people are more aware and conscious of the quality of life.  Accompanied with the increase of consumption power and limited spa and resort hotel available locally, we expect this concept will draw much attention among the local and overseas visitors.   In addition, alliance with Banyan Tree and the attractive and convenient location of the resort will give an alternative to those who are seeking for a “one-stop-shop” of holiday retreat for family.    Furthermore, expansion in corporate client for conference will add additional value for this business unit.   Appendix 6   Acceptability   The life style and mentality of the local people is changing.  As observed, (1) spa & resort services are in substantial demand, (2) people are more health conscious with enhanced awareness on relaxation and quality of life, (3) limit competition on local level, (4) convenient location, (5) increase in consumption power and (6) the awareness of environmental friendliness.  Banyan Tree can offer the solutions to all the identified issues ().    Suitability   The infrastructure of the hardware and software (people and other contingency issues) of OP can assist this new business unit to capture new potential local market while collaborating and aligning with the concept of the theme park.     Feasibility   By conducting the feasibility study, we identify that OP has the resources to carry out the proposed strategy. In light of (1) strong and sound stakeholders, (2) reputable strategic alliance to guarantee on high service and quality of product and management, (3) limit competition in local market (one head on rivalry – The  Gold Cost Hotel in Tuen Mun), (4) the noticeable demand on the service. Appendix 7   Concept of Strategy Formulation   Consistency                                                                                                  meaning                                           Winning                                                                                                         focusing         Because changing in environment, the new economy industries, the configuration of strategy contents, has changed significantly from traditional industries.  Instead of emphasizing on plan and position, it now changes to focus more on ploy and perspective (2005).    In the case of OP, in order to stay competitive and increase its sustainability, it decides to adopt a FIT strategy approach when formulating its strategy plan.   By understanding the environment, it can then maximize its resources to design different programs to ultimately win against its competitors.

A Strategic Analysis of Ocean Park of Hong Kong

Distance Learning MSc Hospitality Management Strategic Management ...