Banyan Tree Case Study Essay

banian tree tree diagram offers a unique attend with its hotel and spa experiences in the southward East Asian percentage. Labeling itself as an aspirational instigator, the comp all was established by the Ho family in 1992 and has boasted a raw profit of $52. 1 million in 2006. Its superior rating, excellent bodied social responsibility practices and its careful investment and expansion strategies attribute to its success. As the company goes commonplace it faces the in the buff possibilities, offered through increased capital, and new repugns much(prenominal) as demands imposed by shareholders.How will the company ex operate to lucubrate its gainfulness while preventing blur dilution through everywhereexpansion? Key issues Branding banian tree guide is an exclusive brand, catering to affluent travellers. In value to develop its guest base, Banyan maneuver launched a brand, Angsana, which meets the inevitably of a broader customer base. Angsana does non cur rently bunk in the same regions as Banyan Tree hotels, this separation has occurred to prevent cannibalization and dilution of the brand. While being effective, this reduces the number of locations in a given area.Spreading the companys resources and knowledge over many regions may not be cost effective. Banyan Tree should continue to be cautious in expansion but not over cautious as to limit the brands profitability. The brand has overly been all-inclusive to offer spa operates, retail outlets and other shops. The company continues to manage its brand portfolio while preserving its distinctive identity and strong brand orbit. The strong brand image has allowed Banyan Tree to open 3 brands of spas throughout the world. break spas is one way Banyan tree can build an image, contact regional knowledge and assess profitability prior to opening a resort in that area or location. Banyan Tree relies on customer experience as its strongest promotional tool. Delivering a consistent re aping may be challenging in the service industry because of the products intangible product nature, employees must be properly trained in order to continue to deliver superior service. As Banyan Tree continues to perplex it must ensure through recruitment and training that the services delivered continue to be consistent, a challenging and important issue in any service offering.Corporate Social Responsibility (CSR) Banyan Tree operates at a lower place strong CSR principles including building and run resorts with minimal environmental damage and booking in community development and environmental projects. Banyan Tree is an world(prenominal) company, it is important that it continues to gain the endorse of local governments, who will assist and support Banyan Tree, should any conflicts arise. The CSR principles also affect the brands image, and the company should continue to operate under these principles to deliver a consistent, positive brand image.These CSR efforts are pro nounced in developing countries and the media coverage has helped build the brands image and credibility. These guiding principles should continue to be implemented as the entire brand communications strategy has been based on third party endorsements and pipeline and public relations. Business operations Banyan Tree operates a manikin of profitable business segments, including hotel investment and management, spa operations, gallery operations, property gross gross sales and design and other services.The largest fortune of profits comes from hotel investment and the second largest percentage is derived from property sales. Banyan Tree conducts property sales primarily in Thailand, where laws prevent extraterrestrial beings from owning land, Banyan Tree sells resort residences on the land, and leases the land to the buyers allowing foreigner investors to own property in Thailand under local law. Property sales can be volatile and risky, it is an important factor in the profita bility of Banyan for any given year, but the company should continue to regard that hotel investment and other business segments are the core of the companys operations.Currently Banyan Tree resorts are almost exclusively in the conspiracy East Asian region. The concentration of business in this region exposes the company to risk should natural disasters or other crises occur in the area. Banyan Tree has a in(predicate) business model which could be replicated in other emerging tourist destinations globally. Banyan Tree should exaggerate its operations outside of the area in order to diversify its operating risk. As Banyan expands its locations it must continue to ensure that hotels and spas are strengthened surrounded by natural beauty, as this continues to be a draw part of brand distinction.Initial Public Offering (IPO) Banyan Tree was recently offered as a publically traded company. This will allow an expansion of the companys capital in order for it to continue expansion. It also changes the operating atmosphere the company faces. The shift from private investment to public investment requires some change in operating procedures as rise up as new demands from shareholders. Banyan needs to manage and meet these new demands while maintaining its core values and company image. Competition As South East Asia gains popularity as a tourist destination, both Banyan Tree and Angsana are facing increased emulation.The Banyan Tree resorts face opposition from other niche hotels, customer preference in this product sept include quality, brand recognition, location and the scope of the amenities. As competition increases, customers tend to become more price sensitive as the number of options increases. whizz way to ensure that Banyan Tree highlights its exclusivity is to draw the attention of critics in order to increase the rating of their resort locations. The Angsana resorts are facing competition from mainstream luxury hotel chains, such as four season s and Shangri-La Hotels and resorts.These competitors are huge, parade over 50 hotel locations, their size allows them to maintain a stronger brand image. dodging and Conclusion Banyan Tree has consistently offered customers a unique experience at both its resorts and spas. The unique design highlights the characteristics of the natural beauty ring its select locations. It continues to meet the needs of this high end, niche market with its superior service. Previously run exclusively by the Ho family, after the sign public offering, must ensure that its brand image and exceptional service delivery are not diluted by shareholder demands for high profit margins.Branding and corporate responsibility will continue to be an important factor in the companys operations and trade strategy. Banyan Tree should continue to use the Angsana brand to broaden its customer base but focus on retaining Banyan Tree as its core brand because of its limited competition and premium profit margins. This successful brand continues to expand its operations, currently the company operates heavily in the South East Asian region, Growth strategy 1. Resource allocation tradeoff. The challenge is to balance two distinct brands Banyan Tree and Anagsana.And differentiate them without diluting either, the prima(p) brand Banyan Tree in particular. 2. Banyan Tree needs to keep innovating and exceeding customer expectations which require substantial resources, management focus, and manoeuvre of the brand portfolio to stay relevant and competitive. 3. Although the entire brand is based on the unique Asian touch and cultural heritage, Banyan Tree has to rate its relevance and sustainability carefully as it enters new territories. It can localize its offerings to repair suit the local tastes and environments, but Banyan Tree should be aware about the extent of localization.