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0 Introduction Provides an introduction to the case study organisation and the report - this should summaries the development of the business from start up through its current situation to future development, and the structure of the report. Best Western International Inc. is one of the world's largest hotel chains especially in Europe and US. The founder of Best Western was M.K.Guertin which he started his business on 1946. In 1963, Best Western was the largest hotel chains in the world by having 699 hotels around the world. And until now, It has 4195 operate hotels in over 100 countries. Best Western Hotel was very successful in Western countries and currently are moving and up scaling their market into Asia. In the year 2011, Best Western changes their name to Best Western Plus and Best Western Premier. Unlike others hotel chains, Best Western operate their business as nonprofit membership associate where all of the franchisee are able to vote as a member of association as a marketing cooperative. 2.0 Internal Audit 2.1 Operation Best Western Premier Dua Sentral located at very strategic location which will be fully develop in 3 years. The location are very convenience with public transport especially KTM which provided train service within the country and also KL Monorail which provide monorail service within KL areas. This brings very large advantages for the guests in Best Western Premier Dua Sentral. Most of the peoples around the area are from corporate companies and also Government. Best Western targeted costumers and sales are mainly contribute by them. The remaining small group of costumers are leisure costumers. Therefore, the hotels offer facilities like conference rooms, meeting rooms and seminar rooms. These facilities are very important for those corporate companies and Government because they often need a place to have meeting and train their staffs. Besides that, they also offer banquet facilities for those companies to have their annual dinner. 1

Others than that, they also have their buffet restaurant, Kembali Kitchen which bring the convenience to the guests who want to have their meals in the hotel. Beside Kembali Kitchen, the hotel also having another restaurant call Grill 582 which provided quality and delicious foods, the guests can enjoy their meals there at the same time they are able to have their wine at a very good atmosphere area. For those customers who want to relax and enjoy the music, they can visit the hotel Punch Bar and Lounge where they can order some drinks and snacks for chilling at the same time enjoying the music there. Nearby the Punch Bar and Lounge, there is a cigar lounge which selling variety of good quality cigar for those big businessman. Another unique facility of the hotel is the all-in-one television control system. Every television at the hotel rooms enable the guests not only to fulfill the basic function of the television but also they are able to check their bills, ordering foods and beverages, communicate with other room guests, playing games and many more. As for the businessman, the hotel provided business centre with fax and photocopying services and also Wi-Fi internet access to enable them to work at the hotel. Laundry, ironing, and dry cleaning services also provided for the guests 2.2 Marketing Market Communication Current Target Market Corporate and government. [Has great facilities and abundant space for events and meetings as it is the hotels key focus (Best Western, 2013). According to Mr. Saiful (senior manager) a total rooms have 360, 10% of the rooms are long term stay business (9 months to 1 year) Distribution Channel

Channel Connect via (CRS)

Search and Meta-serch engine

Booking Engine
Best Western Premier Voice Agent

Hotel Website Social Network Mobile Website Video Sites

Hotel Central Reservation


Walk In

Travel Agent

Level of recognition within the market place and image

Their level of recognition within the Malaysian market place is not very strong as they just open their hotel in 2012. Nevertheless, they are well-known among the western countries. Effectiveness of website Knowledge about their rooms, facilities, restaurants, and basic information are provided in the website page. Marketing communication Facebook, SMS plus, Banner, Twitter, TV, media

Feedback forms
i. Customer feedback forms are placed in each rooms and restaurants counter. ii. Feedback forms are also given to customers who used the meeting room. iii. Word of mouth between customers and staffs.

Corporate social responsibility (CSR)

i. ii. Participated in eco-friendly program. Community involvement such as visitation of orphanage, old folks home. Also, food donations and clothings are given to the needy. iii. They plan to continue their CSR such as mention, during every festive season.

2.3 Finance Hotel Profit According to Mr. Saiful the breakeven point of the hotel is RM6 000 000. This high breakeven generally does not affect the hotels profits as much as they are financially assisted by their mother company to cover up to 20% of expenses. Sources of income The hotel enjoys income from F&B sales and room sales. But this is not the only source according to the sales and marketing managers. He hotels most important source of income is their base business which is having contracts with travel agencies that earn the hotel up to RM 3 000 000 a month. This is substantial towards their sustainability and profit margin. The hotel has up to 5 travel agencies on contract.

During off peak season, hotels tend to suffer in achieving high profits, Best Western hotel focuses on keeping rooms at a standard price and signing 4

contracts with government and football teams that pay in advance to use the hotel. The hotel charges food and beverages at 3 times the mark up price to cover up for expenses maintain profit and purchase new stock.

2.4 Human Resource The requirement and the process in order to recruit employees in Best Western Premier that are firstly, candidates must above age which is stated in Malaysian Labour Law where the required minimum age that an organization or company recruit is 18 years old. Second, the candidates must have at least some experience and knowledge on how to serve and interact with the customers. This will help to reduce the time undergo the training and straight stationed at the front line of the operation with of course, some training. Third, when the candidates have required these two requirements, the next process is to interview each of the candidates and provide questionnaires for candidates to answer depending on which department the candidates applying which usually takes thirty minutes to one hour. If the candidates applying for the management position, the candidates will be interview by heads of department that are Human Resource, Front Office, Sales and Marketing, Housekeeping, and General Manager. After successful gone through these process, they will be providing trainings in order to improve the candidates productivity and performance in order to meet the Best Western Premier service standard. For example of the trainings are in service, food safety and security. For the managers position will provide training such as skill development, team building and team bonding. These managers will be trained in Acedemy Best Western at Bangkok. According to Mr Saiful from Best Western Premier Senior Sales Manager, the staff turnover for this hotel is quite high. The reasons are this hotel is rather new which have been developed only for one year. The environment and the management are new and this may cause the employees feel unease with working environment here. In order to maintain their employees, they are recommended to implement intrinsic and extrinsic reward which could motivate the employees to stay working in Best Western Premier. If the Best Western 5

Premier lacking of employees, they will recruit the foreigners such as Nepal and Bangladesh that have contract from Malaysia Association Hotel or ask from the selected college or university to work for Best Western Premier Hotel. Furthermore, the Human Resource Department implementing friendly and positive workplace for the employees to feel comfortable working and communication with each other in order to achieve the companys goals and objectives. 3.0 External Audit 3.1 Market Segment Analysis

40% 30% 20% 10% 0% Corporate clients Government group Leisure guests

Table 1: Best Westerns Market segment analysis Best Western is using demographic factor which is occupation to look for their target markets. It segmented their customers into three groups which are corporate clients, government group and leisure guests. Table 1 showed the highest targets they aimed are corporate clients and government group because they dependant on these groups as their base business. The reason is businessman nowadays are increasingly and establish their business around develop places especially Kuala Lumpur after management team interview Mr. Saiful who is senior manager of Best Western. Hence, conference rooms

become important places for businessman to have meeting with their clients and

Best Western always is their first choice because the location is quite convenient for them to reach as it placed at Kuala Lumpur Sentral. Other than that, there is always 10% earnings out of 360 rooms are for those customers who having long term stay business at least 9 months to 1 year period (Mr. Saiful, 2013). Seems corporate and government groups are assisting Best Western to gain lots of profitability, the leisure guests are obviously lower. So, to be more balance the profits for the hotel, Best Western should implement some extra facilities such as mini pool and spa to attract more leisure guests to visit the hotel. 3.2 PESTE Analysis 3.2.1 Political Every industry especially hospitality industry do apply service charge on customers. Government Service Tax (GST) is legislated tax at rate 6% and it efficient from January 2011 which enforced under the Service Tax Act 1975 (Jackie, 2013). Besides, Jackie (2013) said that this collected service tax will going to paid to government once every two months hence the nature of businesses and type of services subject to licensing and payment of service tax may refer to Second Schedule of Service Tax Regulation 1975. This rule definitely will directly influence customers purchasing power. When price of product increasing after GST has fully applied, it continuously considered as extra another burden for residents especially for those who stay in high living costs mainly in big cities such as Kuala Lumpur, Penang, and Johor Bahru (Palil and Ibrahim, n.d.). Hence, Best Western which located in Kuala Lumpur also might get influenced because of this higher service charge. 3.2.2 Economical

Table 2: Malaysia unemployment rate Source: Malaysia unemployment rate 2013, Table 2 showed Malaysia unemployment rate fluctuated through the year. Factor of hiring cheaper cost of foreign labour is relatively to this unemployment rate. Lower salary for foreign labour become an attractive reason for employers to hire them as they can help the company to reduce expenses compare to local employees (Insider Asia, 2009). Other words, high unemployment rate could influence companys productivity hence performance especially when relate to significant positions in organizations (Salleh, e al., 2012). Lack of employees or knowledgeable foreign labour may lead to inefficiency outcomes for a task for example a banquet organized in the hotel. The banquet couldnt go well and it will bring negative effect of reputation for the hotel. 3.2.3 Socio-cultural

Figure 1: Outlook 2012 Asia Source: ITB World Travel Report 2011/12, ort_komplett_web.pdf From figure 1, there is 32% of people claimed that they will travel more in 2012 than in 2011 while 37% also had the similar wants and only 19% people want to lesser their travel (IPK International, 2011). Seems that people lifestyle has been changed. So, it would help in hospitality industrys profitability as well as Best Westerns performance. This is because increasing of tourists visit to hotel will lead to higher earnings for the hotel even greater profitability for its future. However, Best Western target on corporate and government groups as their base business as they are able to attract those businessman to choose Best Western by provide enough conference rooms for them to meeting with clients. 3.2.4 Technological

The fast pace of technology advancement make hotel always win customers demands. Online booking, for instance become a common issue in every industry including hospitality industry. As usual Best Western also applies online booking on customers. Indeed, this online booking create convenient for customers especially those come from abroad hence it help Best Western to reach its competitive advantage. Since every hotel using online booking, Best Western implement Online Booking Bonus Promotion for customers who apply online booking between November 19, 2012 and June 30, 2013 to attract more customers switch their alternative hotel to Best Western (John, 2012). Other than that, Best Western also employ Early Internet Special which discount between 15% - 30% for customer planned arrival date and this program is not allow for cancellation or shortened the period of staying even full or partial refund from hotel as this is the their terms and conditions (TripAdvisor, 2013). These strategies that used by Best Western will lead to higher profitability for the hotel. 3.2.5 Environmental Environment issue such as air pollution which is haze problem from Indonesia is happening currently. The haze spread north in Malaysia and it influenced air quality in Kuala Lumpur, the capital, and in some neighbouring areas getting serious into unhealthy zone (John and Nusatya, 2013). Hence, it may lead to low earnings for hospitality industry as lesser customers visit to hotel as they are more concern their healthy and choose to stay home. Conversely, there is no influence for Best Western when management team got information from Mr. Saiful during interview. He claimed that quantity of customers in Best Western still maintain during air pollution recently as well as customers prefer stay in hotel rather than going out from rooms. 3.3 Competitor Set Analysis 10

Identify the case study organisations competitor set (minimum of two direct competitors); compile and justify a positioning map for the organisation in relation to its competitor set using criteria that are determined by your group as most appropriate.

High Price Hilton

Cititel Mid Valley

High Quality

Best Western Primer

Low Quality

Low Price

Picture: Best Western Primer KL Sentral Positioning Map


4.0 SWOT Analysis 4.1 Strengths a) Consist of wide range of food and beverage outlets supported by internationally trained culinary experts (Kembali Kitchen, Grill 582, Punch Bar & Lounge and HUGOs).

b) Has great facilities and abundant space for events and meetings as it is the hotels key focus.

c) Function rooms are modernly designed and equipped with up-to-date audio visual equipment catering to the needs of todays digital technology in organizing events.

d) Largest chain hotel in the world. And there are well-known among western countries. 4.2 Weaknesses

a) Poor efficiency front desk and housekeeping (Appendix 1).

b) Poor brand awareness in Malaysian Market.

c) Toilets and bathrooms has a modern design, however it do not suit Malaysian culture. For example, if someone is taking a shower it is possible to see a blurry image and shape of that person. 12

4.3 Opportunities

Table: Tourist arrivals and receipts to Malaysia (Tourism Malaysia, 2013). a) The table above shows a constant increased in tourist. b) Located at a strategic place where transportation (KL central, Pudu Central and KLIA) and point of interest are located nearby (China town, little India, Mid Valley Megamall.. etc).

c) People are actively using media such as social network.

4.4 Threats a) Intense competitions as there are many hotels located around the vicinity. (Konam hotel, Hotel Classic Inn, My hotel, Hilton, Boulevard hotel, Cititel Mid Valley, palace of the golden horses, aloft , Le Meridienetc.)

b) Technology turnover is high. Have to keep up to date result in high cost.


5.0 Key Factors for Success Identify and justify two key critical success factors. These factors should be based on a logically from the situational audit. Their accounting and control department Best Western Primer uses their


own designed system name Comache system by Asia Bangkok (Best western inc.) to run their billing/account, thus they are able to achieve full prompt payment from customer, control expenditure or expenses efficiently, and monitor their sale and budgets according to their target.

Mr Saiful emphasizes that the cash flow for every hotel is important. This is because without any cash flow the business will not be able to run next month. Thus, to ensure a constant cash flow they develop an account for their customer under the hotel, so that customer can put in large quantity of money into the account for future use. Therefore when the customer come to stay the hotel will deduct the money from the account. This lump sum of money can also act as a cash flow for the hotel.

3) Strategic location

4) their target market is corporate governance. 5) top selling is meeting rooms.

6.0 Mission Statement A mission statement is important process in developing companys strategic plan while it always is a goal to be achieved through the project (Alave and Karami, 2009). Regarding to interview, Mr. Saiful mentioned that Best Western created their mission statement which is embarked on a mission to lead the hotel industry in 14

customer care. Other than that, they also wanted to build the worlds largest family with the hotels and employees sponsoring children who need help especially from orphanage in future. Though our analysis, Best Western should enhance their mission statement to always serve people first while provide high quality service to customers and strive for success. Fully believe that it would more motivate employees in Best Western by having clear target to achieve for the hotel. 7.0 Positioning Statement and Target Market Identification Company Philosophy The hotel is focused on the customer. There is also a desire for the company to sponsor children in need in the forms of donations and charity functions. Business Definition The business is focused on catering to corporate and government customers. The government would have to pay in advance for use of the facilities. The hotel sells meeting rooms, conference rooms that are spacious and well managed Distinctive Competencies Event rooms are constantly refurbished and up to date which is essential for keeping up with current day technology and being on par with competitors. Best Western also takes pride in offering catering services to anywhere around Malaysia Future Market Position Future looks bright with expansion projects planned around melacca and ipoh Corporate Objectives


To create awareness I the Asian market , to achieve their main objective to become the worlds largest chain

8.0 Gap Analysis and Ansoff Strategy Formulation 9.0 Marketing Mix Objectives 9.1 Product 9.2 Price 9.3 Place 9.4 Promotion 9.5 People 9.6 Physical Evidence 9.7 Process 10.0 Monitoring, Control and Contingency Planning


References [Accessed 28thJune 2013].

Tourism Malaysia (2013) Research. [Online] Retrieve from: [Accessed 29th June 2013]. Palil and Ibrahim (n.d.) The Impacts of Goods and Services Tax (GST) on middle income earners in Malaysia. [Online] Retrieved from: th [Accessed 27 June 2013]. Jackie (2013) Malaysia Service Charge Vs GST. [Online] Retrieved from: [Accessed 27th June 2013] InsiderAsia (2009) Foreign labour keeps Malaysia unemployment low. [Online] Retrieved from: foreign-labourkeeps-malaysian-unemployment-low.html [Accessed 30th March 2013] Salleh, R., Nair, M.S. and Hrun, H. (2012) Job satisfaction, organizational commitment, and turnover intention: A case study on employees of a retail company in Malaysia. [Online] Retrieved from: [Accessed 27th June 2013]. 17

IPK International (2011) ITB world travel trends report December 2011. [Online] Retrieved from: [Accessed 27th June 2013] John (2012) Best Western Online Bookings Bonus of 250 points. [Online] Retrieved from: [Accessed 27th June 2013]. TripAdvisor (2013) Early Internet Special- Hotel Discounts. [Online] Retrieved from: [Accessed 27th June 2013] John, O. and Nusatya, C. (2013) Singapore smog eases as Indonesian planes waterbomb fires. [Online] Retrieved from: [Accessed 27th June 2013] Alavi, M.T. and Karami, A. (2009) Managers of small and medium enterprises: mission statement and enhanced organisational performance. Journal of Management Development, Vol. 28, No. 6, pp. 555-562.


Appendix 1
Location Map


Appendix 2
Organisational Chart

General Manager

Executive Assistant Manager Human Resource Sales & Marketing Housekeeping Front Office Food & Beverage Finance Maintenance Security


Appendix 3 Questions and Answers

Appendix 4 A. Code of Conduct B. Team Meeting Ground Rules: Participation C. Team Meeting Ground Rules: Communication D. Team Meeting Ground Rules: Problem Solving E. Team Meeting Ground Rules: Decision Making F. Team Meeting Ground Rules: Handling Conflict H. Meeting Procedures:



Appendix 5 1st Meeting Minutes

Appendix 6