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Sales Promotion

Friend Rate (during Low season) – Send an after checkout thank you email offering a unique discount they can pass on to their friends. They email their friends a special offer, which has to be booked within the next two to four weeks.

Special offer (during High season) – Make a package at a slightly higher price than the room rate and add additional services or features that is something new and other hotel don’t offer to the offering. The important thing is we don’t try to sell the hotel again for example dinner because they won’t have dinner in our restaurant every night if they are visiting India as tourist. They want to get out and experience Varanasi, city of temple. So the package includes a bicycle or a citywide museum ticket. We create promotion by use our Varanasi destination and create an offer that differentiates our hotel from other because our promotions sell experience.

Same product-different message

The room category and service standard is the same between Thailand and India but the message is difference. In India the promotion we use are differences from Thailand for example the sale promotion in Thailand we include a city bus tour ticket. But in India there is no service like that so we have to include a bicycle for our guests to ride and sightseeing India by themselves.

Travel agency

Contract with travel agency to offer lower price for them, we will co-operate with travel agencies in the countries that most visit India especially in Japan, Thailand, UK, and etc. offer lower price for them. We choose travel agencies because it can be more accessible to customers, and especially help us reduce advertising cost. Besides, our hotel will receive more sale volume, and simultaneously increase brand awareness through them

Website

Create the user-friendly website in many languages; we will create the website in many languages to serve international customers, who do not use English language as the mother language, such as Japanese, Thai, Japanese, and English.

To attract more tourists from many countries, and if they understand our hotel information clearly, they will be more interested to stay at our hotel.

Environment and Culture closeness activities

We create more activities for tourists who like to experience India environment and culture closely. That’s not same as their countries. They will experience something new and have a good relationship with the hotel and come back in the future.

Industry Rivalry : Highly Fragmented Industry

• Organized hotel group would barely have 15-20 % of the market.
• Most of the organized hotel groups are present in both metro and semi-metro.
• Hotel Rivalry in Varanasi is not so intense because of the high levels of product differentiation, the large demand and high fix cost.

Threat of substitutes: Threat of substitutes is low

• Varanasi still has low substitutes of hotel such as; b&b, service apartment and motel.
• List of hotel in Varanasi is still not so intensive compare to big city like Mumbai.

Buyer Power: Buyer are fragmented, switching cost is high

• Diverse retail buyers, corporate and tourist agency buyers profile.
• Switching cost for buyers is high because most of hotel have to pay some part of the price if book in advance.

Suppliers Power: Accessibility and availability of suppliers

• There are so many suppliers that willing to sell supply to Varanasi.
• Also the easy accessibility of suppliers given to the good transportation of Varanasi such as; Airport and Train.
• Because the dramatic improvement in all forms of communication, especially the Internet. Today many websites exist to fulfill our request for finding a supplier for hotel. For example, www.indiamart.com, www.exportersindia.com and trade-india.com

Barriers to Entry & Exit: While the barriers to entry & exit are low, difficult to do so because of high start up cost.

• Foreign regulation of 100% directs FDI make the barriers of entry low.

SWOT Analysis

STRENGTHS

Good Reputation

Good Service mind Our Baiyoke Boutique hotel concept is Warmest Service Therefore in order to do so, we will recruit majority staff and employees that involve the service part from Thailand. This will ensure a perfect transfer of the warmth and charm of traditional Thai hospitality that other hotel in Varanasi doesn’t have.

Experience in Foreign Expansion

The Baiyoke Group of hotel also had an experience with foreign country operations, we expansion a hotel in Myanmar before. So the company had a firsthand experience in expansion in foreign country.

Boutique hotel

We expand the Baiyoke Boutique hotel in                   India, which is 3 stars hotel. So we don’t                   have to pay the 10 % hotel luxury tax. This                   is one of our competitive advantages while                   other luxury hotel pay 37% tax, we pay 27%

WEAKNESS

No experience in India The Baiyoke Group of Hotel never engage in India business before. We still new to the India market and customer preference. So this is the part that we need to improve to be one of the strongest hotels in Varanasi or even expansion our hotel chain into other part of India in decade.

No one to share risk with Due to the Baiyoke Group of hotel Entry India by The Wholly owned subsidiary, which mean there’s no one to share risk with us. Also this is Baiyoke group have to invest 100 percent of our own capital to invest in this project.

OPPORTUNITIES

Good Location Vast Geography of Varanasi will directly benefit Baiyoke Boutique hotel, Varanasi. Varanasi can attract a large number of people from all over the world. Because there are many famous place that can attract billion of tourists over a year such as; Asoka pillar (National emblem of India), Dhamek Stupa and the famous Gengas river.

Accessibility Varanasi is easy to access from all parts of the country and the world, due to the domestic and international airport. It also has the train system that cut though the city. With this accessibility of Varanasi for both the tourists and the supply chain.

Knowledge of English by the Local employee

Because of a lot of Indians already can speak English and our hotel have to serve the foreigners. So we don’t need to train them with English course anymore.

Increasing in privatization Lately the India government have set a lot of policy to support the private investment. That will increase in a lot of infrastructure and also make India become more civilization. This will draw a lot of tourists come to India more too

THREATS

Economic slowdown Due to the economic crisis around the world has affect to many businesses around the world. Because of that our Baiyoke group might got some affect from that crisis direct or indirect way.

Better facilities by other hotel

Sometimes the other hotel might offer the better facilities that Baiyoke don’t have. That might be one factor that will rip off our customers.

Terrorism About the previous security concerns due to the Kashmir situation that already recover and the issue on the terrorist bomb also can chase the tourists away.

From the pie chart above show that tourist market in Uttra Pradesh has a high potential to growth and foreign tourist market is the 4th on most visits city in India. As well as domestic tourist market, Uttra Pradesh is the 2^nd most visits city in India. These show that Varanasi hotel market have a high potential in leisure traveling including domestic travelers and foreign travelers.

Varanasi is one of the most important cities in Uttar Pradesh State of India. Varanasi is being the oldest city of the world, a place where an important Hindu pilgrimage center, Buddhism and Jainism. Varanasi attracts a large number of people from all over the world. For centuries, Varanasi is famous for spiritualism, mysticism, Indian philosophy and Hinduism. All these are reflected in numerous sects, temples, Ashrams and Ghats. So there’re many place for traveling. Famous place include; Asoka pillar, Dhamek Stupa and Genga River.

Varanasi is easily accessible from all parts of the country and the world. The city is very well connected by road, rail and airport (domestic and international). The city provides convenient and comfortable travelling options, which allow tourist to easily travel to and from other cities of India or another country.

The Tourists charge below also show that the tourism market is rapid growth every year. Therefore Varanasi holds a good potential for hotel with the growing market size every year.

With demand-supply disparity, India hotel room rates are most likely to rise 25% annually and occupancy to rise by 80%, over the next two years. ‘Hotel Industry in India‘ is eroding its competitiveness as a cost effective destination.

To be successful in today’s business, the company must become competitor oriented. Company must pursue the right strategies in order to compete with its existing competitors. Therefore, the company should try to avoid strengths of its competitors and looking for the week points in their positions, and then launch the marketing attacks that against those weak points. When company is developed and assessed strategic alternatives, it is important to remember that in the international markets, there would be two opposing forces that it has to confront, are the reduction of costs and the adaptation to local market.

In order to maintain its competitiveness, company must try to lower the costs so that customers will not perceive its services as being too expensive. In responding to the pressure of reducing cost, company must also attempt to take responsibility to the local pressures as well as adapting itself to fulfill the demands of the local market in which company does the business. As a consequence of the above information about the two opposing pressures, there are five different strategies that it can use for competing internationally, including such as home replication, multi-domestic, regional, global, and transnational.

Based on the research information about India, it shown that to start a new hotel in India, company would be likely to confront with the pressures of cost effectiveness as well as the local adaptation. Regarding to the average income per person in India is quite low when comparing to Thailand (India’s per capita income is $1,016 and Thailand’s per capita income is $4,125). According to the hotel is marketed to be more focusing on the local Indians and travelers, so this mean that in order to build up the hotel, company requires the adaptation as a resulting from the different in culture and customers’ preference as well as the different expectation based on each customer’s intension of visiting in particular season.

Therefore, Indian market is best suited with the ‘Transnational Strategy’. The location of the hotel’s assets and capabilities will be based on where it would be most beneficial for each specific strategy. The hotel is expected to contribute actively to the development of the company’s capabilities as well as developing and sharing knowledge with its headquarter in Thailand. Typically, more upstream value chain activities, such as raw materials sourcing, product development, operation, and management will be centralized, while the more downstream activities, such as marketing, sales, and service, will be more decentralized.

Natural Resource and Environmental Sustainability

Geographical

Varanasi is being the oldest city of the world, a place where and an important Hindu pilgrimage center, Buddhism and Jainism. Varanasi attracts a large number of people from all over the world. For centuries, Varanasi is famous for spiritualism, mysticism, Indian philosophy and Hinduism. All these are reflected in numerous sects, temples, Ashrams and Ghats. So there’re many place for traveling. Famous place include;

- Asoka pillar (National emblem of India)

- Dhamek Stupa (The Dhamek Stupa is said to mark the spot of a deer park (Rishipattana) where the Buddha gave the first sermon to his five disciples after attaining enlightenment.) which these place attract billion of tourist over a year mostly from Thailand, Japan, and Sri Lanka. This make the stay over rate in Varanasi is high because Buddhism tours are often has an activity for example meditation and walk meditation. These activity often take a long time in some group they book the hotel for a week.

- Genga River, India National River which attract million of tourist each year. The river itself represents India way of life. Many travelers like to ride a boat across Genga River.

- Temple Varanasi is said to be the oldest surviving city of the world. Varanasi is also called as Kashi or Benaras. Being the most venerated pilgrim place in Hindu religion, Varanasi is said to be a museum of temples. Also called the city of temples, Varanasi is home to about 2,000 temples. The list of importance temple temples includes Bharat Mata Temple, Kashi Vishwanath temple and The Bharat Mata temple. This will attract people from all parts of India as well as the world come to Varanasi to visit these temples.

In conclusion Varanasi is the most important of the seven holy cities for Hindus and the importance place of Buddhism, which every day 70,000 pilgrims come into the city to visit its holy places.

Varanasi is easily accessible from all parts of the country and the world. The city is very well connected by

Road – 3 national highways and 4 major roads

Rail – Varanasi is a major rail junction receiving trains from all the major cities and metros of India.

Airport – Babatpur Airport (domestic and international) caters travelers to visit Varanasi city directly from India and another country around the world. Domestic direct flights connect Varanasi Airport with Delhi, Lucknow, Mumbai, Khajuraho and Kolkata.

As we can see the city provides convenient and comfortable traveling options, which allow tourist to easily travel to and from other cities of India or another country. Not like some part of India, Varanasi is located in a good geographical area and very well transportation system, which make Varanasi reachable and no transportation obstruct when doing a supply chain managements.

To understand the labor forces, the company would be able to gain the competitive advantage over its competitors in the market. The basic labor forces are include such as the labor quality, labor quantity, labor mobility, minorities, labor markets, and labor unions. Due to the company’s perceive of efficient, profitable, and competitive, therefore, the quality and quantity of the labor force become great importance. For labor quality, it could be defined as the attitudes, education, and skills of available employees.

This consideration would lead to the importance of labor quantity. Labor quantity is the amount of available prospective employees that have the skills required to help meet the businesses needs. For labor mobility, it is the movement of people from country to country or area to area in order to get jobs. Therefore, to obtain that information would be benefits the company before deciding to go international business in India. In order for the company to take advantages over the labor forces in India market, it is necessary for the company to have below information.

In 2008, India’s active labor force totaled 516.4 million, which is approximately 23% in the services industry. For India’s working hour, there is limited by law to 48 hours per week for adults with eight hour days. Minimum wages are set according by law, based on a lost of living allowance. Due to the information from the Government of National Capital Territory of Delhi, Labor Department, it shown that the wage rates can be divided into three categories such as un-skilled, semi-skilled, and skilled. The minimum wage rate for un-skilled labor is around 140 Rupees per day or around 3,633 Rupees per month, for semi-skilled labor is 146 Rupees per day or 3,799 Rupees per month and for skilled labor is approximately 156 Rupees per day or around 4,057 Rupees for month. Therefore, the average minimum wage is around 147 Rupees per day or 4,420 Rupees per month ($3.07 per day or $92.16 per month).

Minister of Labor, Govt. of Uttar Pradesh

Minister of Labor, Govt. of Uttar Pradesh

In Thailand, the average minimum wage is currently 203 Baht per day or around 6,090 Baht per month ($6.02 per day or $180.6 per month) in Bangkok, the capital city and slightly less in the provinces. When comparing India and Thailand, the average minimum wage in India is much less than Thailand by almost 50%. Therefore, deciding to construct the hotel in India would provide the company to be able to take advantage on the lower cost of labor, as well as leading to a competitive advantage on total cast as company’s variable cost is decreased.

Since English is an International language, it is very important for customer services staffs in service industry to be very fluent in English. Fortunately, as India used to be colonized by British English, so most Indians are very well fluent in English. By comparing to other countries to invest in, this is a relevant competitive advantage of investing the hotel in India. With this competitiveness of Indian labor force, as a business owner, we do not have to invest in language training or give extra incentives to English fluent speaking Indians.

According to the banking industry in India has changed from an era of rigid controls and government interference to a more market-governed system. This scenario will attract new private banks and also foreign banks to enter the country. This new changed will directly benefit The Biyoke group of hotel in our financial system.

India also has the substantial capital inflows; the foreign exchange reserves situation for India has improved due to the liberalization policy. Today the Reserve Bank has a foreign exchange reserve exceeding two hundred billion US dollars. So we can foresee that if in the future the world is facing the monetary crisis, India will be one of the top countries that can come out from that scenario faster and get recover faster than other countries. That will only do good to our business because we don’t get struck-up because of the failure suppliers. For example, during the economic downsizing some of the suppliers such as hotel amenities, might get bankrupt but if our business is in India, we can ensure that our business run smoothly.