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Banyan Tree

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João Gonçalves

on 2 December 2012

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Transcript of Banyan Tree

João Gonçalves
José Rodrigues
Tiago Costa Nov 2012 Analysis SWOT Competition Marketing Mix Porter's Five Forces Strengths - High quality and recognition of their brand
- Provide good experiences to their customers based on local culture
- Social Responsibility as a brand value
- Know-how in hotels and resorts’ management
- Product diversity and customization
- Risk management
- Easy access to the hotels
- Centralized Services Weaknesses - Resorts’ geographic location is mostly in Asia

- High vulnerability to worker’s strikes (specially in Thailand)

- Required Training and Education for a Hotel Management Career Opportunities - World wide expansion (specially Europa, America Latina)

- Create a new brand to penetrate in other business segments

- Partnership with international airways

- Partnership with local guides in order to organize local cultural events

- Incorporate gaming activities in the resorts Threats - High seasonality related to the business
- Natural disasters (tsunamis, earthquakes, fires…)
- Competition (e.g. late arrival to new location)
- Low qualified human resources
- Diseases
- Government legislation; NGO’s
- Economic instability
- Cannibalism between the two brands (Angsana and Banyan Tree)
- Lose the core values (diluting the brand) Product Price Place New competition - Necessity of high initial investment;
- Hard to build the brand’s value;
- Entrance of big resorts in Banyan Tree’s business area; Substitute products or services - Low cost hotels
- Different concept of luxury hotels
- Rent a house Bargaining power of customers (buyers)
Travel agencies rent high amount of rooms increasing their power to negotiate prices (travelling packages)

Easy access to information Bargaining power of suppliers - Banyan Tree can easily find supplier substitutes - low bargaining power from suppliers
- Possibility of monopoly supplier - high bargaining power from suppliers Intensity of competitive rivalry - There are 6 main competitors of Banyan Tree meaning they have similar resort’s size and services provided. The concept is also very similar. Trekking Romance Family Golf Diving Skiing Price maker price taker Can be 10x higher than in the local hotels & resorts Higher prices concordant with their targeting policies Promotion + 500
accolades website Partnerships wholesalers and other partners more than 1,000 wholesalers website Spa Geographical Expansion Exploring Safaris and Natural beauties in Africa Kenya Namibia Tanzania Botswana South Africa Best Places to Safari in Africa Exploring Snow and Glaciers Exploring South America tourism attractions Galapagos islands Laguna colorada Amazon forest Salar de uyuni Machu Picchu Los Roques Iguacu falls Enter in city hotels segment Paris Tokyo Berlin New York Main competitors Main functions: - Places to go;
- Cultural information;
- Check in system;
- Unlock room door;
- Pre-order dinner before going to the restaurant;
- Booking system (spa, hotels,...)
- Look for available items in Banyan Tree Galleries;
- Reserve a golf camp without reception bureaucracy; Future Master in Business Administration Nov 12 Professor Rui Vinhas da Silva Contents • History
• Banyan Tree Concept
• Sustainability
• Strategic Vision and Financing
• Segmentation, Targeting and Positioning
- Porter’s 5 forces
- Marketing Mix
- Competition vs Banyan Tree
• Conclusions and Suggestions History Mr. Ho bought 600 acres of land in Pucket Bay, Thailand Dusit Laguna
Resort 1985 1987 Banyan Tree Group was created by Mr. Ho and his wife, Claire Chiang and also Mr. Kwon Cjan 1992 Banyan Tree’s 1st resort opening at Pucket Bay 1994 2000 Angsana Brand was created It’s all about providing a place where clients:

Can rejuvenate their body, mind and soul

Each Resort’s design reflects the landscape and architecture of the destination giving unique experiences to the clients Banyan Tree Concept $126m
(-14%) $76.6m
(+49%) $51.05m
(+14%) "Embracing the Environment,
Empowering People" Segmentation Targeting Positioning Segmentation, Targeting and Positioning Geographic region South-East Asia North-East Asia Indian Oceanian Rest of the World Business segments Behavioural & Demographic Highly affluent travelers wanting a luxury retreat where they would experience romance, intimacy and rejuvenation Mainstream brand, less exclusive than Banyan Tree, targeting younger customer with slightly lower purchasing power, and more focused on young families Niche resort, hotel and spa market segment Hotels, spas and galleries reflected the natural environment, culture and heritage of their locations Offering unique experiences Prime mover rather than a follower “Angsana brand was created to precisely compete with the Sheratons of the World…” CEO Banyan Tree http://www.angsana.com/ http://www.banyantree.com/ Why?

spread of the risks of natural catastrophes

reduce of the impact of cyclical seasonal fluctuations in the tourism industry The strategic vision and financing: the geographic expansion Customer mix Banyan Tree had expanded the existing resorts using the cash obtained from property sales

The Banyan Tree residences were a new property sales initiative. The strategic vision and financing: Resort Expansions
and Residential Property Sales Advantages of Property sales:
increase the availability of funds of the company

Disadvantages of Property sales:
political instability and foreign ownership laws in some Asian countries
government restrictions on the sale of residential property in China. The strategic vision and financing: Resort Expansions
and Residential Property Sales PESTEL Political - Political stability

- Low corruption level

- High investment on education, public security and health care Economic - Economic crisis;

- High quality in service sector Social - High qualified workers
- High cost of labour
- Social stability
- Some terrorist activities (e.g.: September 11 attack in EUA)
- Low birth rate Technological - Very good technological structure;
- Very high investment level Environmental - High seismic activity; Legislative - High environment legislation and initiatives

- Efficient juridical system Between Banyan Tree Resorts and other Hotel operators

Between Angsana Resorts and other Hotel operators

Between locations Types of Competition All this resorts operate in several countries from different continents offering similar services to the banyan Tree’s services. Between Banyan Tree Resorts and other Hotel operators Between Angsana Resorts
and other Hotel operators Angsana brand was created to compete with the mainstream Hotel operators where Banyan Tree resorts have strong presence. Between locations There are several factors that affect the location’s attractiveness :

political stability
social conditions
market perceptions
accessibility of the location, local culture,
the location’s success promoting itself as a tourism location
Others North America
& Europe PESTEL Political - Political instability

- Very high corruption level

- Implementation of new political approaches

- Low investment on education, public security and health care Economic - High adventure tourism demand

- Low quality in services sector

- Very high growth rate Social - Low qualified workers

- Low cost labour

- Social instability

- High criminality rate

- High birth rate

- Some terrorist activities Technological - Very weak technological structure

- Low investment expectations Environmental - Good environmental conditions
- Low seismic activity
- Health risks
- Low fire risks
- Relative tropical storms
(5 big storms in the last 10 years) Legislative - Weak labour legislation

- Low environmental legislation

- Very inefficient juridical system Africa PESTEL Political - High corruption level

- Relatively stable governments

- Low cost labour Economic - High growth rate

- High tourism demand

- Prudent macroeconomic management and good debt management

- High rate of unemployment Social - Low qualified workers

- High criminality rate

- High social divergences Technological - Weak technological structure

- Low Internet access Environmental - High seismic activity

- Sustainable economic growth over the last few years

- Subtropical weather Legislative - Improved fiscal control, despite of the high bureaucracy South America Price-takers

Private clients rent few rooms at each time – low power + -
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